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Today’s Summary
Monday, January 31st, 2022
Indices: Dow +1.17% | S&P 500 +1.89% | Nasdaq +3.41% | Russell 2000 +3.05%
Sectors: All 11 sectors closed higher. Consumer Discretionary led, gaining 3.85%. Consumer Staples lagged, but still rose 0.38%.
Commodities: Crude Oil futures moved higher by 1.53% to a seven-year high of $88.15 per barrel. Gold futures rose 0.55% to $1,796 per ounce.
Currencies: The US Dollar Index dropped 0.59%.
Interest Rates: The US 10-year Treasury yield inched higher to 1.780%
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day comes from by Ari Wald of Oppenheimer (@AriWald). It’s a weekly bar chart of the S&P 500 over the past two years. The S&P 500 fell 5.26% in January, marking its worst month since March 2020. To be fair, the index has pretty much doubled since then with little interruption, so a corrective period could be viewed as healthy in the long run. Ari uses Elliot Wave theory to show that this appears to be the start of a three-wave correction that could last through the first half of the year. According to Elliot Wave theory, corrective phases are made up of three distinct waves – A, B, and C. January’s price action formed what looks like the initial A-Wave. We could be in the midst of the B-wave now, which is a deceptive sucker rally. The C-wave that follows is the final washout of the corrective phase, which we could see in the coming months. On a brighter note, Ari points out that another leg lower “should create the secular bull market’s next big opportunity.”
Quote of the Day
“Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.”
– Michael Carr
Top Links
Massive Month-End Buying of Biggest Losers – Bespoke
Bespoke points out that the rally over the past few days has been led by beaten-down stocks.
Who Let The Bears Out? Most Pessimistic Investor Sentiment Since 2013 – LPL Financial Research
The team at LPL Financial Research takes a look at how the S&P 500 has historically performed following extremely bearish sentiment readings.
Living on a Prayer – All Star Charts
JC Parets tells readers to keep an eye on the October lows in the major indices.
Hopium – The Weekly Trend
In this podcast, David Zarling and Ian McMillan discuss some of the most important technical developments across the markets right now.
Weekly S&P 500 Chart Storm – TopDown Charts
Callum Thomas highlights 10 noteworthy charts.
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Top Tweets
Now, for the good news:
? The Nasdaq just rallied 3% in two consecutive days for the first time since December 2008.
? The S&P 500 just hulk smashed through its 200-day moving average.
? Bitcoin has rallied ~8% from its January lows.https://t.co/ztzLC8Ko4R— Callie Cox (@callieabost) January 31, 2022
Rough January for stocks.
Worth remembering though that January is usually down in a midterm year. pic.twitter.com/rSUQV60IfR
— Ryan Detrick, CMT (@RyanDetrick) January 31, 2022
The 10 worst Januarys in the history of the S&P 500… pic.twitter.com/M4QZlq6rch
— Carter Braxton Worth (@CarterBWorth) January 31, 2022
Techtionary up huge. $XLY $XLK pic.twitter.com/KJvB8hkcbd
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) January 31, 2022
$ARKK w/ serious bounce today, up 9.3%, fourth best one-day return ever and now up 13.5% since the Cramer Signal (which should prob be part of the CMT exam at this point). Context imp here tho, ARKK still down 20% YTD and 45% over 1yr altho up 240% over 5yr pic.twitter.com/VPdBiT6xsr
— Eric Balchunas (@EricBalchunas) January 31, 2022
We've been vocal $ARKK bears, but even the weakest trends can rally sharply in mean reverting markets. Nasdaq 100 had two 50% rallies in 2001… both went on to make lower-lows, but tested the faith of the shorts along the way. We'd back away from shorts right now… pic.twitter.com/stAVP7U22j
— Chris Verrone (@verrone_chris) January 31, 2022
Lot of extremes this month, XLE best month relative to spy, RPV (value ETF) best performance ever relative RPG (growth) and incredibly, first month in nearly a year of KWEB over QQQ, relative performance below. Year of tiger? pic.twitter.com/vKTFafnPYO
— Danny Kirsch, CFA (@danny_kirsch) January 31, 2022
January sector-level returns: Energy had a pretty good year last month, everyone else would like a do-over. pic.twitter.com/aNdekXSVMp
— Willie Delwiche, CMT, CFA (@WillieDelwiche) January 31, 2022
BREAKING: S&P500 hits New 2-Year Lows Relative To CRB Commodities Index $CRB $SPX pic.twitter.com/vRZZxA3uyQ
— J.C. Parets (@allstarcharts) January 31, 2022
Here we go again. A rally from support. #goldstocks $GDX #Gold pic.twitter.com/J4MVPb2yVI
— Greg Rieben (@gregrieben) January 31, 2022
$ETH has a big battle ground ahead… if we resolve higher, I'd expect a high momentum #Ethereum move… if it fails… likely more pain ahead. pic.twitter.com/1PXBo2BvOR
— Sam McCallum ??????? (@honeystocks1) January 31, 2022
"when the market crosses the 200-day moving average, I change my mind. What do you do sir?"
— StockCats (@StockCats) January 31, 2022
You’re all caught up now. Thanks for reading!