EB Daily Market Report - Tuesday, July 2, 2024
ChartLists Updated
We've updated 2 more ChartLists that you should be able to download into your StockCharts.com account (or view if you're not a StockCharts.com member):
- Short Squeeze (SSCL)
- July Seasonality (SEASCL)
Executive Market Summary
- Futures were mixed overnight with a bit of relative strength in small caps (IWM)
- That changed at the opening bell as the NASDAQ quickly regained leadership as technology (XLK, +0.25%) rebounded from early weakness
- Apple (AAPL, +1.39%) and the computer hardware ($DJUSCR, +1.24%) were primarily responsible for the turnaround, though software ($DJUSSW, +0.45%) continues to build bullish momentum
- Discretionary stocks (XLY, +1.73%) are having another solid days, led once again by autos ($DJUSAU, +7.64%) and broadline retailers ($DJUSRB, +1.19%)
- Tesla (TSLA, +9.00%) is enjoying another HUGE day after reporting quarterly deliveries that exceeded expectations
- The Volatility Index ($VIX, -2.70%) is at 11.88, threatening to close below its lowest closing level (11.86) since November 27, 2019 - before the pandemic began
- Commodities are mixed with crude oil ($WTIC, -0.55%) dropping just below $83 per barrel
- Fed Chief Powell spoke earlier today, citing the improvement in inflation, but again saying the Fed is awaiting more confidence that the inflation fight is over
- The 10-year treasury yield ($TNX) responded by initially spiking at 10am ET, before moving a bit lower this afternoon
Market Outlook
Let's take a quick look at the cryptocurrencies.
Bitcoin:
Bitcoin ($BTCUSD) has been stuck in a wide trading range between 58000-73000, literally trading back and forth between these two key levels since mid-March:
The intermediate-term resistance (horizontal red arrows) highlight the critical resistance at 73000. The declining red arrows mark short-term resistance along the 20-day EMA. In order for bitcoin to begin trending higher, it will first need to negotiate this short-term moving average. It's been unsuccessful multiple times over the past month.
Etherium:
Etherium ($ETHUSD) also is trading in a wide range and just beneath its declining 20-day EMA:
Neither of these 2 look good in the short-term, but that can change quickly. A close back above the 20-day EMAs is the first step in repairing the technical damage inflicted since May tops.
Monero:
In the short-term, Monero ($XMRUSD) has performed well and has been rising on a relative basis (vs. bitcoin) since April:
Monero continues to fail at key overhead price resistance from roughly 181-187. It's trading closer to a breakout than a breakdown, however, and that's more than either bitcoin or etherium can say. I did use a 2-year chart here, so that you can see monero's 3 months of relative strength comes after 16 months of horrible relative performance. I'm ok with monero in the short-term, but if that relative strength line rolls over, bitcoin is likely the much better play.
Sector/Industry Focus
In last Wednesday's DMR, I pointed out that the XLY was on the verge of a big breakout due to sudden strength in Amazon.com (AMZN) and Tesla, Inc. (TSLA), easily the two largest holdings in the XLY. They now represent over 38% of the discretionary ETF. TSLA has really caught fire, trading up 20% over the past couple trading sessions as it speeds towards its next quarterly earnings report and AMZN hit 200 this morning for the first time in its history. Here's an updated look at the XLY:
Today, we're getting that breakout, unless we see a big reversal this afternoon.
ChartLists/Strategies
From our SECL, SFECL, SADCL, and RGCL, there are 38 stocks (on one or more of these 4 ChartLists) that are setting new 52-week highs today. As a momentum trader, I love to see our fundamentally-sound stocks breaking out. Here are those breaking out with SCTR scores below 95:
Here are my favorites off this list:
AMZN:
The breakout was made at 190 about one week ago. I see a continuing move to the upside for AMZN:
JEF:
Another recent breakout and this one was on exceptionally-heavy volume. Best entry would be a pullback to test the top of gap support:
JPM:
Well, I guess the market is done pouting about Jamie Dimon's plans to retire within 5 years as the stock has just broken through the price resistance level that it resided at when the announcement was made:
SYF:
Strong trading volume came in on the last trading day of June to accompany a big breakout here. SYF is a leader among consumer finance stocks ($DJUSSF) and its AD line is soaring:
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 notable 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 that you own or are considering owning.
Tuesday, July 2:
MSM, SLP
Wednesday, July 3:
STZ
Economic Reports
May JOLTS (Job Openings and Labor Turnover Survey): 8,140,000 (actual) vs. 7,900,000 (estimate)
Happy trading!
Tom