The Bear put a headlock on the Bull as we head into a traditionally strong pre-holiday week.
Bias here has gone down to a cautionary Yellow Flag. Recent Growth Stock breakouts are working, though road signs flash warning as the uncertainty of a pandemic looms.
For the Week:
- The S&P 500, -2.42%
- The Nasdaq, -2.59%
- The Dow, -2.84%
Don’t look too much into the selling. Despite two clear distribution days, the bias here won’t shift lower as long as leadership and price action hold up above the major moving averages.
Technology continues to pull action higher, though most other sectors continue to struggle under the 200-day averages.
Lighter volume for the NYSE and Nasdaq was’t panic motivated, and was long overdue as a consequence of an “over bought” market.
The coronavirus battlefront threatens further economic impact. Rising infection and hospitalization rates in some regions will thwart business. To what degree is uncertain.
The Fed showed concern for banks when Friday it instructed them to preserve capital by putting a hold on buybacks and paying dividends. Continued high unemployment is worrisome, and will need to be resolved before stimulus wears off.
Another round of government stimulus may very well be in the works, which would be a big boost to market sentiment.
Next week will be a day shorter as the U.S. celebrates the Fourth of July.
It’s window dressing time. Quality names are well bid as being as portfolio managers look to impress customers with their holdings.
Small caps will likely benefit from the annual Russell 2000 realignment on June 29, as well as the 90 day ETF realignment to end the quarter.
The best thing the Bull has going for it is names from the Dow paying dividends four times greater than the 10-year Treasury notes. Smart money will gravitate to this.
The semiconductor index (SMH, -1.87%) is flirting with a failed breakout. Action here is key to the broader market’s direction.
Watch for any weakness in the internet (FDN, -2.01%) and software (IGV, -0.88%) indexes. The Bull has been led from its March lows by these stay at home friendly businesses. Any faltering could pull major indexes in the southern direction that the energy, finance, retail, industrial and transportation stocks have been leaning toward.
Facebook (FB, -8.32%) and Google (GOOG, -5.65%) took dip down to their 50-day moving averages this week, breaking their upward drifts.
Meanwhile, this group of stellar tech names continues to hold bullish form: Apple (AAPL, -3.07%) Amazon (AMZN, -2.24%), Netflix (NFLX, -4.83%) and Microsoft (MSFT, -2%.)
Gold (GLD, +0.45%) remains near highs. The biotechs (IBB, -2%) continue to produce a multitude of growth stock breakouts. See below.
- The S&P 500 is lacking a long-term trend as the 50-day moving average tracks slow the 200-day MA.
- NYSE volume for the week was 5% lighter than last week, and favored the bears with a 0.6 ratio of buyers to sellers.
- Nasdaq volume was 15% higher and showed an even 1 ratio of buyers to sellers.
- Declining issues dominated for the NYSE and Nasdaq with advance/decline ratios of 0.3 and 0.4 respectively.
Growth Stock breakouts are holding, though we’re seeing some erosion in these quality names as fewer appear to be on track for new buy setups.
Fresh breakouts in biotech show optimism for the industry as the pandemic takes center role in the healthcare sector.
|PFSI||PennyMac Financial Services, Inc.||Finance/Rental/Leasing|
|PLMR||Palomar Holdings, Inc.||Property/Casualty Insurance|
|ZM||Zoom Video Communications, Inc. Class A||Packaged Software|
|AMRC||Ameresco, Inc. Class A||Engineering & Construction|
|CHGG||Chegg, Inc.||Miscellaneous Commercial Services|
|TTD||Trade Desk, Inc. Class A||Advertising/Marketing Services|
|VAPO||Vapotherm, Inc.||Medical Specialties|
|ALNY||Alnylam Pharmaceuticals, Inc||Biotechnology|
|OCUL||Ocular Therapeutix Inc||Pharmaceuticals: Major|
|CRSP||CRISPR Therapeutics AG||Biotechnology|
|CRWD||CrowdStrike Holdings, Inc. Class A||Packaged Software|
|EXPI||eXp World Holdings, Inc.||Financial Conglomerates|
|TWST||Twist Bioscience Corp.||Biotechnology|
|AEYE||AudioEye, Inc.||Internet Software/Services|
|RARE||Ultragenyx Pharmaceutical, Inc.||Biotechnology|
|WRTC||Wrap Technologies, Inc.||Industrial Conglomerates|
|CDNA||CareDx, Inc.||Medical Specialties|
|ALBO||Albireo Pharma, Inc.||Pharmaceuticals: Other|
|NBIX||Neurocrine Biosciences, Inc.||Biotechnology|
|NTRA||Natera, Inc.||Medical/Nursing Services|
|XLRN||Acceleron Pharma Inc||Biotechnology|
|BYND||Beyond Meat, Inc.||Food: Major Diversified|
|PAAS||Pan American Silver Corp.||Precious Metals|
|TNDM||Tandem Diabetes Care, Inc.||Medical Specialties|
|STNE||StoneCo Ltd. Class A||Packaged Software|
|LGIH||LGI Homes, Inc.||Homebuilding|
|PAYC||Paycom Software, Inc.||Packaged Software|
|DRNA||Dicerna Pharmaceuticals, Inc.||Biotechnology|
|Z||Zillow Group, Inc. Class C||Information Technology Services|
|IIPR||Innovative Industrial Properties Inc||Real Estate Investment Trusts|
|SILK||Silk Road Medical, Inc.||Medical Specialties|
|SWAV||Shockwave Medical, Inc.||Medical Specialties|
|OR||Osisko Gold Royalties Ltd||Precious Metals|
|AKCA||Akcea Therapeutics, Inc.||Pharmaceuticals: Major|
|EXAS||Exact Sciences Corporation||Biotechnology|
|KERN||Akerna Corp.||Data Processing Services|