Wednesday, January 5th, 2022
Indices: Dow -1.07% | S&P 500 -1.94% | Nasdaq -3.34% | Russell 2000 -3.30%
Sectors: All 11 Sectors closed lower. Materials led, but closed flat. Real Estate lagged, dropping 3.25%.
Commodities: Crude Oil futures rose 1.12% to $77.85 per barrel. Gold futures gained 0.58% to $1,825 per ounce.
Currencies: The US Dollar Index slipped 0.10%.
Interest Rates: The US 10-year Treasury yield continued higher to 1.709%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day was shared in a note by John Roque of 22V Research. It’s a ratio chart of the NASDAQ vs. the S&P 500 over the past 24-years. The chart on the bottom is the same ratio, just zoomed in over the past 5-years. The Tech-heavy NASDAQ has dominated the S&P for much of the past two decades. However, just like the Growth/Value chart we looked at yesterday, this long-term trend appears to be reversing. As you can see, this ratio is being rejected at resistance from the dot-com bubble highs, while momentum is deteriorating at the same time. John explained, “The NASDAQ vs. S&P Ratio peaked in Feb ’21 and has been distributing, cresting, rolling, and topping since. We continue to think it works lower with NASDAQ underperforming relative to the S&P. Near-term and intermediate-term momentum indicators for this relationship are oversold, but a long-term version is not close to an oversold reading.”
Quote of the Day
“Remember, good stories are for books and movies, not for picking stocks.”
– Ian McMillan
Santa Came to Town and 5 More Charts to Watch – LPL Financial Research
The team at LPL Financial Research breaks down the results of this year’s Santa Claus Rally and more.
Will Tech Stocks Under-Perform In 2022? Watch This Ratio! – Kimble Charting Solutions
Chris Kimble points out that the NASDAQ looks poised to underperform the S&P in the coming months.
Ark Innovation (ARKK) Now Underperforming QQQ Since the Pre-COVID Peak – Bespoke
Bespoke examines the continued weakness in the ARK innovation ETF, $ARKK.
Banks Bounce as Spreads Widen – All Star Charts
Ian Cully explains that bank stocks should continue to benefit from a steepening yield curve.
— 🔴 I. Vodenitcharov CFA CMT (@iv_technicals) January 5, 2022
— Aksel Kibar, CMT (@TechCharts) January 5, 2022
Over the last 10 trading days there have been twice as many advancing stocks in the $SPX as declining stocks. The last 2 times this occurred (June & Oct 2020) was just before minor pullbacks: pic.twitter.com/Tn6DhvBSug
— Optuma (@Optuma) January 5, 2022
— Kevin Marder (@mardermarket) January 5, 2022
After today, NASDAQ Composite is ~6% of its peak. More than 2/3 of its stocks are at least 20% below their highs and nearly 40% have been cut in half. pic.twitter.com/oX9YVp2Z0g
— Willie Delwiche, CMT, CFA (@WillieDelwiche) January 5, 2022
The ARK Innovation ETF is now 44.5% below its high in Feb 2021, its largest drawdown since inception in 2014 (it fell 42.5% during the covid crash).
— Charlie Bilello (@charliebilello) January 5, 2022
— Steven Strazza (@sstrazza) January 5, 2022
Bank new highs spiking pic.twitter.com/16XAMBlkr9
— Strategas (@StrategasRP) January 5, 2022
If you're out there wondering why Tech is being hit with a valuation reset, whilst Financials and all the boring names are doing well… this might be part of the answer you're looking for. $QQQ $SPX $XLK $XLF $SPY pic.twitter.com/UvrqZYju9f
— Sam McCallum 🏴 (@honeystocks1) January 5, 2022
— Tom White (@TomWhite_TDAN) January 5, 2022
— Chris Ciovacco (@CiovaccoCapital) January 5, 2022
— Ian Culley (@IanCulley) January 5, 2022
Bitcoin is tumbling. Below 45K. pic.twitter.com/6Fh12wkzxG
— Joe Weisenthal (@TheStalwart) January 5, 2022
26K off the high tic- That’s a 38% haircut. I’m sure you’ll feel better the next time you see the Matt Damon Commercial 🙂
— Chris Robinson (@cer_hedge) January 5, 2022
You’re all caught up now. Thanks for reading!