EB Daily Market Report - Tuesday, January 19, 2021
Model ETF Portfolio "Draft" Today
At 5:30pm ET today, I'll be unveiling out latest batch of ETFs to be held in our Model ETF Portfolio for the next 3 months. Through Friday's close, our current Model ETF Portfolio is outperforming the benchmark S&P 500 by more than 5 percentage points. We'll be looking to make it 2 winning quarters out of 2 when we announce our draft later today. If you'd like to attend today's event, you can do so by following this room link:
https://us02web.zoom.us/j/83577998427
The room should be open by 4:30pm ET (5:00pm ET at the very latest). If you cannot make today's event, no worries. We'll record it and make it available for everyone later this evening on our website under "ETF Webinars"
ChartList Update
We've updated 3 of our ChartLists today:
- Strong ETF (SETFCL)
- Strong Earnings (SECL)
- Strong Future Earnings (SFECL)
All can be downloaded from our website at your leisure.
Executive Market Summary
- Futures were solid this morning as earnings season began to pick up steam
- There were few disappointments as Goldman Sachs (GS) and Citrix Systems (CTXS) reported excellent top and bottom line results
- There were no economic reports out today and treasury yields were mostly flat
- Energy (XLE, +2.48%) and communication services (XLC, +1.73%) led the action
- Meanwhile, the recent laggards - utilities (XLU), consumer staples (XLP), and real estate (XLRE) - continued to lag as they are the only three sectors in the red
- Carmax (KMX, +8.86%), General Motors (GM, +8.78%), and Etsy (ETSY, +6.91%) are the three top performers in the S&P 500
- Commodities are mostly higher, led by crude oil's ($WTIC) gain of 1%
Market Outlook
The NASDAQ is showing leadership today, though it remains just below its all-time high of 13210. After sideways consolidating, however, a breakout would be supported by a rising hourly PPO:
Unless we break out, I'd simply consider this a very short-term trading range from 12950-13210.
Sector/Industry Focus
Growth stocks have seen their relative uptrend (vs. value stocks) snapped, but key relative support near 1.69 continues to hold. Wall Street certainly hasn't given up on growth just yet. For the record, I believe growth stocks will continue moving higher. It's the relative strength that's in question here. So long as 1.69 holds, I view the longer-term relative move into growth stocks sustainable:
I showed this late last week, but it's worth monitoring closely. We're about to move into a period where many of the stocks that will influence this relative ratio will be reporting. Holding 1.69 relative support and beginning to work our way back towards 1.90 would be extremely bullish. I still believe there's a distinct possibility this occurs.
ChartLists/Strategies
I ran our Downtrend Reversal scan against our SECL, SFECL, SADCL, and RGCL and added a SCTR minimum score of 70. It returned the following 7 stocks (SCTR score in parenthesis):
AMSC (94), NCR (87), SCHN (79), VIPS (79), KURA (79), SEAS (71), and XPO (71). I like the AMSC, SCHN, and VIPS charts:
AMSC:
There's a shot that AMSC sees a test of its 50 day SMA, but I really like the excellent relative strength and the strong AD line/volume trends.
SCHN:
Another excellent relative performer. You can't break a downtrend until you begin to see higher highs print. We got one of those today. SCHN was very overbought, but selling recently has alleviated that. I expect to see SCHN reverse this downtrend somewhere from its current price down to the upper-20s.
VIPS:
I love the AD line on this one. Also, despite recent poor performance in broadline retail, VIPS has somehow managed to crush both its peers and the S&P 500. I believe institutions are accumulating this one - a very good sign. However, if we do fail on that attempted breakout, there's the possibility of further consolidation ahead. That would be an opportunity to accumulate down to 27.
Earnings Reports
Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning.
Tuesday, January 19:
BAC, NFLX, SCHW, GS, IBKR, STT, HAL, JBHT, CMA, ZION, PNFP
Wednesday, January 20:
PG, UNH, ASML, MS, USB, BK, KMI, DFS, FAST, CFG, UAL, CBSH, AA, PLXS
Economic Reports
None
Happy trading!
Tom