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Today’s Summary
Wednesday, January 25th, 2023
Indices: Russell 2000 +0.25% | Dow +0.03% | S&P 500 -0.02% | Nasdaq 100 -0.27%
Sectors: 8 of the 11 sectors closed higher. Financials led, gaining +0.78%. Utilities lagged, falling -1.35%.
Commodities: Crude Oil futures were flat and continue to trade at $80.15 per barrel. Gold futures rose +0.28% to a 9-month high of $1,943 per ounce.
Currencies: The US Dollar Index fell -0.27% to a 7-month low of $101.64.
Crypto: Bitcoin rose +1.62% to $23,006. Ethereum rose +2.54% to $1,596.
Interest Rates: The US 10-year Treasury yield inched lower by 3.447%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Offense-defense ratio clearly breaking out of an 8 month base on equal-weighted basis. Things you want > things you need, and that's a bullish sign. $XLY $XLP $RCD $RHS pic.twitter.com/CtSccVqVWb
— David Keller, CMT (@DKellerCMT) January 25, 2023
Today’s Chart of the Day was shared by David Keller (@DKellerCMT). It’s a ratio chart of the Consumer Discretionary Sector vs. the Consumer Staples Sector over the past two years. The equal-weight version (lower pane) provides a broader representation, as heavyweights like $AMZN & $TSLA distort the cap-weight version. This ratio is used to gauge the health of the broader market. The idea is, Discretionary stocks sell the things we all want (think $AMZN, $TSLA, $NKE, etc.). On the other hand, Staple stocks sell the things we all need and will continue to buy no matter how poor the economy is (think toilet paper, toothpaste, and cigarettes – stocks like $PG, $CL, $PM). If the things we want are outperforming the things we need, it’s a sign of a healthy consumer and economy. David points out the equal-weight version of this ratio is breaking out of an eighth base. This ratio warned of impending weakness when it peaked two months ahead of the S&P 500 in November 2021. Today, it’s hinting at impending strength.
Quote of the Day
“After a stock market decline, people may perceive more risk than before when, in fact, the decline may have taken some of the risks out of the market.”
– Robert Shiller
Top Links
Bellwether – Trading Adventures
Andrew Moss gives a mid-week update on the markets.
Potential Levels of Future Interest – All Star Charts
JC Parets lays out some key levels to watch in the US Dollar Index.
Just Another Bear Market Rally – PFT Trading
Greg Rieben highlights several noteworthy charts to keep an eye on.
S&P 500 Market Breadth Signal Sounding – Schaeffer’s Investment Research
Rocky White examines some of the recent improvements in market breadth.
United States Natural Gas Fund (UNG) – Fairlead Strategies Idea Generator
The team at Fairlead Strategies outlines a trade idea on the Natural Gas ETF, $UNG.
Top Tweets
Daily Mkt Mood: Neutral
1. Stocks basically stage bullish reversal
2. $MSFT, $TSLA pare/reverse >4% losses
3. Bank of Canada 'hold plan' may have helped
4. Yields lower/in sweet spot
5. 'Animal spirits' at work'Don't fight the trend' comes to mind. S&P 'wants' to go higher.
— Abigail Doolittle (@TheChartress) January 25, 2023
$SPY Chart Update:
As traders we don't want to be perma anything. We have to accept what is in front of us. And right now, price action closing 3 days in a row above the MOAT is worrying for the bears.
Momentum still favors the bulls, for now.
That is all I gotta say. pic.twitter.com/PQcEVmhiGP
— Heisenberg (@Mr_Derivatives) January 25, 2023
Cue the ‘Golden Cross’ chatter.
The Russell 2000’s 50-day moving average closes above its 200DMA for the first time since Jan. 18, 2022.
@CNBC $RUT pic.twitter.com/ecvBKBub2F
— Carl Quintanilla (@carlquintanilla) January 25, 2023
So goes January, goes the year?
There's some truth to it.
When stocks are up in Jan, the rest of year is higher 86% of time and up 11.9% on avg. If lower? Only 2.1% and 60%. (Jan was lower last yr fyi)
A big Jan (5% or more) is even better, up 14.2% and 85.7% of time higher. pic.twitter.com/RkZZbwf2sy
— Ryan Detrick, CMT (@RyanDetrick) January 25, 2023
New highs – new lows on the nasdaq this is starting to look much different than other attempts this year pic.twitter.com/MrcVO4ybfC
— George Tkaczuk (@jurijt) January 25, 2023
At this rate, we will have as many days with new highs > new lows in the first month of 2023 as we had all of last year. https://t.co/kHWIgrOKkp pic.twitter.com/95nnd937EY
— Willie Delwiche, CMT, CFA (@WillieDelwiche) January 25, 2023
$XLF Financials:
2 bullish patterns > 1 bullish pattern pic.twitter.com/KfqlnwZ23A
— Frank Cappelleri (@FrankCappelleri) January 25, 2023
Chart of the Day: Financials are trying to resolve from ranges on both an absolute and relative basis pic.twitter.com/cFucslbGjg
— Grindstone Intelligence (@GrindstoneIntel) January 25, 2023
$XLB up by 7% YTD, making it 4th best of 11 major S&P sectors so far. ETF, looks very similar to $XLF, nearing cup with handle and this group has more going for it than just Gold. Doing a note on the sector today. DM me if you would like a full copy. #gold #copper #steel #paper pic.twitter.com/RB47sjbTHH
— Douglas Busch CMT (@chartsmarter) January 25, 2023
Returns over last 3 Months…
Gold ETF $GLD: +17%
US Dollar Index ETF $UUP: -9% pic.twitter.com/giQBd3tZcG— Charlie Bilello (@charliebilello) January 25, 2023
#GC_F, monthly
Gold loves big round numbers 😉 pic.twitter.com/anDHgDrIMl
— Yuriy Matso (@yuriymatso) January 25, 2023
The story continues…….$QQQ #Bitcoin $BTCUSD pic.twitter.com/zfHOh0l89N
— Larry Thompson (@HostileCharts) January 25, 2023
You’re all caught up now. Thanks for reading!