Daily Summary – June 8, 2021 - Small Caps Breaking Out?

 Daily Summary – June 8, 2021 - Small Caps Breaking Out?

Lots of conference calls again today so again please excuse any typos or missed content.  Rest of the week should be better.

Small caps had another strong today, again led by the growthier variety, with the RUT up 1%, Naz third of a percent, while NDX and SPX were ever so slightly green.

Style box broadly consistent. 

Major Market Technicals

Again, only thing to note today is RUT which continues to look very good technically and with today's push moved to within striking distance of its ATH.  Momentum looks very strong and technicals look very good.  My money is on it doing it soon.



SPX Sector Flag

SPX sector flag improved a bit today with six green sectors (four yesterday) but none up over 1% again (discr was right there though).  None down more than 1% (one yesterday).  Also much less defensive tone today then yesterday.



SPX Sector Technicals

Not much to note on the sector charts.  RE and comm's hit ATH's.  RE continues to look exceedingly overbought.  Also new recovery high for energy.  Tech sector continues to look very good.  

Subsectors

After very strong day yesterday bios gained a bit more.  Joining them in the green were transp, homebuilders, and retail (retail only one up over 1%) while semi's were red.  

Breadth

Breadth positive again today with 59% of volume positive NYSE and 65% on Naz.  Pretty decent numbers given SPX was flat and Naz was only up three tenths.  Issues good also at 61 and 59% respectively. 

Commodities/Currencies/Bonds

Bonds - 10-yr yield did end up closing at that lowest level since March 11 at 1.528%.  It is barely hanging on to the range of the past few months.  10-year auction tomorrow.



Dollar - Despite yields moving down was able to close green right on the 20-DMA just above the 90 level.  

VIX - Pushed up a bit to 17.07.

Crude - Ended up breaking that $70 (WTI) barrier today to finish just above ($70.03, although did hit $70.27).  Let's just say the oil bulls are excited.  

Helping crude of late has been some back and forth on the Iranian sanctions.  This type of statement from the US is not what the Iranian hard-liners are looking for.



Also after the close we did get API which for a second week showed a decent crude draw but big builds in gasoline and distillates.  We'll get EIA tomorrow, but API has been pretty accurate last few weeks.  I have a feeling those gasoline builds will be turning to draws soon.  I'm not sure why distillates keep having builds though so I'll see if I can find info on that.



Nat Gas -  So noted this morning it broke over that trendline dating back to last October, but ended up pulling back to finish just below.  So could be a false breakout.  Tomorrow will be important.

Gold - Reversed from green to turn mildly red.  Technicals have started to turn though so we might see some consolidation in this 1900 area.

Copper - Pushed up to 21-DEMA but couldn't get through, trading in same range as last few days.

Lumber - continues its correction (I guess bear market now).




U.S. Data

Wrote on NFIB and April trade in morning report.  I didn't get to JOLTS report today (so now I owe you two reports), but it once again crushed estimates on the job openings line (which is what most people follow) hitting the highest level ever.  US JOLTS Job Openings Apr: 9286K (est 8200K; prev R 8288K).





I will try to get reports on that and consumer credit out sometime this week.

But as a spoiler, one thing I always like to look at is the number of quits as that is a sign of a healthy labor market (people don't quit unless they're confident they will find another job).


Next 24

Overnight we'll Chinese price data, German trade data and few other things followed by mortgage apps, EIA, and a 10-year note auction in the US.

We do also get Gamestop reporting tomorrow.  Somehow I feel that will get some coverage.

Overall

Overall, I continue stick with my "June Script" - "I would expect a lot of drifting around this month but I continue to have a bias for upside versus downside.  I'll keep posting the progress versus last earnings season until we get to the two month mark (where the "last earnings" chart stops)."  That "stops" date is June 14th FWIW.  

Last earnings

SPX





Misc.

Some other random stuff.  

Short interest back to multi-decade lows.




And looks like talks between the WH and Republicans have broken down.









As an investor darling runs into trouble.



And I mentioned it appeared the call buying in individual stocks paired with puts on the indexes to offset was back.  




And if you had trouble connecting to a website this morning, you weren't alone.


And hmm.




To see more content, including summaries of some of today's economic reports and my morning and nightly updates go to https://sethiassociates.blogspot.com

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