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Today’s Summary
Monday, January 11th, 2021
Indices: US Stocks kicked off the week on a sour note, with the Dow Jones Industrial Average slipping 89 points or 0.29%. The S&P 500 and Nasdaq fell 0.66% and 1.25%, respectively. Small-Caps outperformed with the Russell 2000 closing flat (0.03%).
Sectors: 3 of the 11 sectors closed higher. Energy led, rising 1.57%. Consumer Discretionary lagged, falling 1.87%.
Commodities: Crude Oil futures inched lower by 0.11% to $52.18 per barrel. Gold futures rose 0.46% to $1,844 per ounce.
Currencies: The US Dollar Index gained 0.49%.
Interest Rates: The 10-year US Treasury yield moved higher for the fifth straight day to 1.148%
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Is this the moment where we want to be moving clients out of risk assets like equities and putting that capital to work in fixed income?
I don't believe so. pic.twitter.com/7fZ3giIPlr
— Ian McMillan, CMT (@the_chart_life) January 11, 2021
Today’s Chart of the Day was shared on Twitter by Ian McMillan (@the_chart_life). It’s a ratio chart of Stocks vs. Bonds over the past couple of decades (S&P 500 vs. US 30-yr Treasury Bond futures). As a reminder, when this ratio is rising, it means Stocks are outperforming Bonds, and vice versa. Ratio charts are useful because they address the issue of opportunity cost. Which asset will provide the best ROI? As Ian points out, it looks like the alpha remains in the Stock Market, while the opportunity cost continues to be in the Bond Market. In a comment to The Chart Report, Ian said, “I get why someone might be inclined to rotate out of Stocks after the outperformance we’ve seen in recent months. But right now, that trend is not showing any signs of exhaustion. I think it makes sense to continue being overweight Stocks and underweight US Treasuries, as long as this ratio remains above the former highs.
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Quote of the Day
“Water flows in only to flow out.”
– Chinese Proverb
Top Links
There Has Been a Breakout in Breakouts – SentimenTrader
Jason Goepfert points out that the % of new 52-highs in the Russell 2000 just reached its highest since 2016.
Five Charts and Four Themes for the First Half of 2021 – StockCharts.com
Respected analyst Martin Pring shares five things he’s watching in 2021.
Across The Pond – The Weekly Trend
In this podcast, David Zarling and Ian McMillan discuss the most noteworthy technical developments they’re watching this week.
Sleeping Giants – The Rotation Report
Aaron Jackson offers up some attractive chart setups.
The Bull Is Still Strong – Momentum Monday
In their weekly Momentum Monday video, Howard Lindzon and Ivanhoff highlight some of the strongest stocks, trends, and themes across the markets.
Top Tweets
I hate to break it to you but if you're thinking to yourself, "Wow, this market has been really overbought for a long time", the RSI disagrees.
We're juuust now ticking up above 70 on the weekly chart of $VTI
And yes, we can stay there for a long time. Just look at '17-'18 ? pic.twitter.com/Oa3zHxwTaE
— Grayson Roze (@GraysonRoze) January 10, 2021
More stocks are above their 200 day moving average in the Nasdaq since the breadth thrust in 2013. pic.twitter.com/0GrWQpzoBl
— Pratyush Tulsian (@PrattyCharts) January 11, 2021
are financials going to breakout of a 13 year base this quarter to new all-time highs? https://t.co/7XF2rZan3u pic.twitter.com/o8hhOoZOcN
— J.C. Parets (@allstarcharts) January 11, 2021
Look at this setup in the Banks. Ripe. $XLF pic.twitter.com/3FcpKFQabg
— Steve Deppe, CMT (@SJD10304) January 11, 2021
Big Banks have been outperforming the broader financial sector since October. pic.twitter.com/nH33qQ4qAn
— MicroSectors (@msectors) January 11, 2021
Plenty of focus on Emerging Markets ($EEM) finally surpassing the 2007 peak last week. Think its equally important to look at it relative to S&P 500 ($SPY) where a reversal of a decade-long downtrend appears to have only just begun. pic.twitter.com/bU1ena3wf6
— Willie Delwiche (@WillieDelwiche) January 11, 2021
Impressive gains for oil since early November & particularly since beginning of year @Bloomberg @nymex @ICE_Markets pic.twitter.com/OMQub1GeCt
— Liz Ann Sonders (@LizAnnSonders) January 11, 2021
we haven't seen the U.S. long bonds fall below the 65W EMA after an uptrend since 2016… just happened (again). pic.twitter.com/HpyT7C2GEx
— David Cox, CMT, CFA (@DavidCoxWG) January 11, 2021
$TLT is the most oversold since 2018
h/t @bespokeinvest pic.twitter.com/P64wcJfGMU
— Katie Greifeld ? (@kgreifeld) January 11, 2021
Last time there was a bullish divergence in momentun $DXY retested former support. Now with a similar situation brewing, could we see a retest of former support around the 92.00 level? A retest wouldn't change the primary trend or be unreasonable. pic.twitter.com/j4Rb4SB0mB
— Ian Culley (@IanCulley) January 11, 2021
The first signs of a dollar reversal. $UUP pic.twitter.com/3kN0XTWgTw
— Michael Kahn, CMT (@mnkahn) January 11, 2021
BTC = Wide range reversal pattern (V spike after taking out the low of the wide range bar to upside). Careful buying dips after this shift in momentum. – see how it stabilizes after a few days…or not… pic.twitter.com/SD8blnLLok
— Linda Raschke (@LindaRaschke) January 11, 2021
Bitcoin testing the monthly MA. Welcome to volatility new hodlers $BTCUSD #Bitcoin #cryptocurrency #crypto pic.twitter.com/mRWp8bsrJc
— Drew Wells, CMT, CIMA® (@DrewTheCharts) January 11, 2021