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Market Busting Out


Only three of the eleven sectors in the S&P 500 were higher on the day. But it was the three most influential sectors powered by the market’s biggest heavyweights. 

S&P 500 Index

+0.84%

 

Communication Services XLC

+1.20%

 

Consumer Discretionary XLY

+1.60%

 

Consumer Staples XLP

 

-1.01%

Energy XLE

 

-1.66%

Financials XLF

 

-0.46%

Health Care XLV

 

-0.02%

Industrials XLI

 

-1.22%

Materials XLB

 

-0.87%

Real Estate XLRE

 

-0.94%

Technology XLK

+2.56%

 

Utilities XLU

 

-1.31%

 

The index has cleared a pivotal resistance point. Still, there were fewer winners at yesterday’s close compared to the June 8th session. That could change today. Moreover, the average gain is beginning to broaden out as the average loss becomes less severe.

S&P 500 Winners:                        

  • 184 average gain: +19.27%
  • The top 20 average gain: +64.53%          

S&P 500 Losers:

  • 321 average loss: -23.77%
  • The bottom 20 losers average decline: -60.53%

The next big resistance point is 3,400. Although, we could see an avalanche of panic buying.

A Broader View

Pulling back even wider than the S&P, we see the same story of winners winning big, as most publicly traded stocks were marking time.

However, there were significantly more winners than losers for the NYSE and the NASDAQ. The NASDAQ had far more up volume than the down volume, as the most motivated market participants were folks chasing hot stocks.

Market Breadth

NYSE

NASDAQ

Advancing

1,347

1,765

Declining

1,650

1,590

52 Week High

112

179

52 Week Low

10

17

Advancing

1.63B

2.47B

Declining

1.68B

1.29B

 

NASDAQ

The NASDAQ is up more than 20% in 2020, and it’s just getting warmed up.

I titled yesterday’s report ‘CheapTech?’ after a week of tough sledding exemplified by Amazon’s (AMZN) 11.4% share price decline. Nonetheless, it was clear even on Friday that buyers started to nibble. Their nibbling  turned into a full-on feast that powered the NASDAQ significantly higher.

 At this point, even detractors that might derisively say, “yesterday was more like a Roman Feast.” will have to lace up their aprons soon.

Also, the NASDAQ is back in the shadow of its record close; and yet, there are still far more losers than winners.

NASDAQ Winners:

  • 422 average gain: +53.39%
  • The top 20 average gain: +456.02%          

NASDAQ Losers:

  • 565 average loss: -28.53%
  • The bottom 20 losers average decline: -72.46%

The Future is Now

I know it’s easy to just say the stock market has lost its mind, and this will not end well. It’s what all the mavens say when they miss big rallies and whine about how dumb everyone else is. However, something is happening in society that the market sees. The future is now. Also, Macy’s (M) holds on for dear life and Shopify (SHOP) keeps sailing higher.

 

Earnings Season

Monday

Tuesday

Wednesday

Thursday

Friday

30

68

157

191

42

 

After the close, International Business Machines (IBM) posted results that beat the Street on revenue and showed a greater cloud business traction. Revenues were still down from a year ago, but it’s clear there is a nascent wind in the company’s cloud sails.

Portfolio Approach

We are closing two positions and adding a new position in Materials in our Hotline Model Portfolio. If you are not a current subscriber to the Hotline, contact your account executive or email Info@wstreet.com.

Today’s Session

I saw a few headlines yesterday that said the market was up on vaccine hopes and I was wondering what market they are watching.  Of course, these are the same folks that say the market is down on increased coronavirus cases, and the next day when there are more cases and the market is soaring, they ignore the prior day’s assumption.

Yesterday’s action was not about vaccines as key vaccine players shares were lower:

  • AstraZenca (AZN) -4%
  • Moderna (MRNA) -13%
  • Novavax (NVAX) -2%
  • Inovio (INO) -6%

Moreover, the industries that stand to benefit the most from a vaccine also saw their shares wobble:

  • Carnival (CCL) -3%
  • United Airlines (UAL) -5%
  • Marriott (MAR) -3%

I do think there was a coronavirus element in the market, and it was lower cases reported.

  • Florida 10,347 +3.0% versus +3.8% 7-day average and down from 15,300 July 12th
  • California 6,846 was smallest in two weeks and down from 11,126 on July 14th
  • Texas 7,300 July 19th from 14,916 on July 17th

Monday tends to have lower tallies, so today’s numbers will be particularly important.  States are moving face to adjust, and more Americans are wearing masks, even those that feel it impinges on their rights. 

Rescue package in Europe is setting the tone this morning, as Congress and the White House move into gear on the next package in America.



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