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Today’s Summary
Wednesday, January 13th, 2021
Indices: US Stocks were mixed in today’s session. The Dow Jones Industrial Average was flat. The S&P 500 and Nasdaq rose 0.23% and 0.43%, respectively. The Russell 2000 underperformed, falling 0.75%.
Sectors: 6 of the 11 sectors closed higher. Utilities led, gaining 1.95%. Materials lagged, falling 1.02%.
Commodities: Crude Oil futures fell 0.56% to $52.91 per barrel. Gold futures moved higher by 0.58% to $1,855 per ounce.
Currencies: The US Dollar Index rose 0.27%.
Interest Rates: The 10-year US Treasury yield fell to 1.087%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Important level for $DXY $USD $UUP @TheChartReport pic.twitter.com/nhLcC4VT2S
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) January 13, 2021
Today’s Chart of the Day was shared on Twitter by Mike Zaccardi (@MikeZaccardi). Yesterday, we discussed why a sharp move higher the US Dollar is one of the biggest potential risks to Stocks in the near-term. Today we have a weekly candlestick chart of the US Dollar Index over the past 20-years. Mike points out that we’re approaching an important level around $88.50. As you can see, this level has acted as a key inflection point several times over the past decade+. If the Dollar is ever going to mean revert higher, this would be a logical level to see that happen. If the Dollar slices below this level instead, it would likely be a bullish development for Stocks and other risk assets. Either way, the Dollar looks like it’s about to give us some valuable macro information. So, it would probably be wise to keep an eye on how it behaves around this level over the next few weeks.
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Quote of the Day
“History shows us, over and over, that bull markets can go well beyond rational valuation levels as long as the outlook for future earnings is positive.”
– Peter Bernstein
Top Links
The Stealth Correction – All Star Charts
Many are patiently waiting for the market to correct, but JC Parets points out that some of the largest Stocks in the market have been correcting under the surface for months now.
Frank Cappelleri: Bullish Patterns Persist as SPX Pauses – TD Ameritrade Network
Frank Cappelleri of Instinet offers his technical perspective on the S&P 500, Bonds, and the US Dollar.
3 Big Market Surprises in 2021 – CNBC
Chris Verrone of Strategas Research outlines three potential market risks to keep an eye on.
The Dow’s Return By Day of the Month – Crossing Wall Street
Eddy Elfenbein breaks down the Dow’s performance during each day of the month. He found that the first six days of each month tend to be exceptionally strong.
Bitcoin is Unlike Any Other Bubble We’ve Seen So Far – BNN Bloomberg
Here’s an interesting take on Bitcoin’s price action over the past decade.
Top Tweets
A good start to the year can be a sign of better times ahead.
The first 5 days of 2021 saw the S&P 500 up a very impressive 1.8% YTD.
Historically, when the first 5 days are up >1.5% the full year has been up 15.6% on average and higher more than 90% of the time. pic.twitter.com/o0TQoE4O3y
— Ryan Detrick, CMT (@RyanDetrick) January 13, 2021
Micro Cap stocks are off to their best start of a year since at least 2007. https://t.co/ioGhFexVEV pic.twitter.com/LYmXcXDCNY
— Bespoke (@bespokeinvest) January 13, 2021
This earned a "wow" from us. pic.twitter.com/gJW8UrgPi6
— Strategas (@StrategasRP) January 13, 2021
Medical Devices vs. Broad Market ???? $IHI $VTI pic.twitter.com/f8TwYg7dOW
— Drew Wells, CMT, CIMA® (@DrewTheCharts) January 13, 2021
$VIX topping tails really piling up pic.twitter.com/8f5xQpWf6H
— ATMEmergingMarketsCharts (@ATMcharts) January 13, 2021
Stunning analysis from @JoeSaluzzi via BBG:
– Individual investors are trading penny Stocks aggressively, especially the lowest-priced
– Five penny Stocks were nearly a fifth of Monday's total volume
– Broker/App trading Volume now higher than Exchangeshttps://t.co/GEXwS9zAvj pic.twitter.com/bClp7FfZQR— Macro Charts (@MacroCharts) January 13, 2021
More than 1 trillion served.
Even before another spike in recent weeks, there were more than 1 trillion shares traded in penny stocks in December .
That's trillion with a "t.". A 1 with 12 zeros. pic.twitter.com/nTEWQbaNKD
— SentimenTrader (@sentimentrader) January 13, 2021
If we do see the dollar strength from here, holding above the prior 2018 low, then you'd expect to see the back-end of the Treasury curve strength relative to shorter-dated bonds.
Chart shows 20yr vs. 3-7yr as an example. $UUP $TLT $IEI $USD pic.twitter.com/jljq0Tus4v— Andrew Thrasher, CMT (@AndrewThrasher) January 13, 2021
#Corn hit a circuit breaker yesterday after a 25 cent move, and was halted below the 423.6% Fibonacci expansion level. The daily price limit has been increased to 40 cents, and price is currently trading well above that 423.6% expansion level. Next stop 623^0. $ZC_F pic.twitter.com/M8N25pGRxF
— Ian Culley (@IanCulley) January 13, 2021
Crude prices have been rising for the longest streak in two years, climbing to the highest in almost 11 months. https://t.co/kZ06ShciaX pic.twitter.com/YNBACLUlmO
— Lisa Abramowicz (@lisaabramowicz1) January 13, 2021
Here comes agflation.
Corn prices highest since July 2013.
Soybeans highest since June 2014.
(via @pboockvar) pic.twitter.com/8huuxSS7zs
— Carl Quintanilla (@carlquintanilla) January 13, 2021