Wednesday, February 5th, 2020
Indices: US stocks closed higher in today’s session with the Dow Jones Industrial Average jumping 483 points or 1.68%. The S&P 500 and Nasdaq gained 1.13% and 0.43%, respectively. The Russell 2000 rose 1.52%.
Sectors: 10 out of the 11 sectors closed higher. Energy led significantly, gaining 3.76%. Real Estate was the only sector to close lower, slipping just 0.08%.
Commodities: Crude Oil futures rebounded 3.48% to $51.17 per barrel. Gold futures inched up 0.19% to $1,560 per ounce.
Currencies: The US Dollar Index rose 0.30%.
Interest Rates: The US 10-year Treasury yield moved higher to 1.649%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
— David Zarling (@AdaptivCharts) February 5, 2020
Today’s Chart of the Day was shared on Twitter by David Zarling (@AdaptivCharts). It’s a daily candlestick chart of the Small-Cap Russell 2000 ETF, $IWM. The chart serves as a textbook example of a concept in technical analysis known as the principal of polarity, in which former resistance becomes support. During the most recent bout of volatility, The Russell 2000 pulled back over 5%, which was more than the rest of the major indices. Relative weakness in the Russell 2000 tends to spook chart watchers as Small-Caps are often thought of as a barometer for risk appetite. However, the index was able to find support at a former resistance level. This level acted as a brick wall for the majority of 2019. After numerous failed attempts, price finally broke out in December. As David points out, it’s quite common to see price test former resistance after a breakout like this. The fact that the index was able to bounce here is yet another feather in the hat for the bulls. The next test for the Russell 2000 will be to see if it’s able to join the other major indices at all-time highs.
Quote of the Day
“The foolish man seeks happiness in the distance. The wise man grows it under his feet.”
– James Oppenheim (Poet)
Three Must-See Charts on the S&P 500, High-Beta Stocks and Financials – Bloomberg
Ari Wald of Oppenheimer joins host, Abigail Doolittle to present three charts that are worth keeping an eye on right now.
Has Tesla Peaked? A Historical Chart Study – Andrew Thrasher
In this piece, Andrew Thrasher compares the surge in Tesla ($TSLA) to several other stocks that have made similar parabolic moves.
Energy vs. Tech Could Be the Monster Mean Reversion of a Lifetime – The Reformed Broker
Josh Brown shares a ratio chart from respected technician, Jonathan Krinsky that highlights the massive disparity between the Energy sector and the Technology sector.
Podcast withChris Cain, Senior Quantitative Researcher at Connor’s Research – Technical Analysis Radio
In this podcast, JC Parets sits down with Quantitative researcher, Chris Cain. They discuss the value of using an automated trading system to help eliminate behavioral biases.
Russell 1000 Most Heavily Shorted Stocks – Bespoke
If you’ve been watching Tesla over the past week, you probably know what can happen when short interest gets too high. In this piece, Bespoke lays out some of the most heavily shorted stocks in the Russell 1000 right now.
Top 10 Tweets
This is only the 3rd time in history the S&P 500 futures gapped up at least 0.35% three mornings in a row to close at an all-time high.
The first was in Apr 1999, the 2nd in Jul 2016.
The buying interest is just cray cray.
— SentimenTrader (@sentimentrader) February 5, 2020
So here's what happens during the year when the S&P 500 is higher in January versus lower in January.
2020 didn't fall in January by much, but it was negative. pic.twitter.com/Upp6LxBIot
— Ryan Detrick, CMT (@RyanDetrick) February 5, 2020
S&P 500 beats the NASDAQ by the most since last summer pic.twitter.com/CX180LrCX2
— Joe Weisenthal (@TheStalwart) February 5, 2020
NYSE's FANG+ index set its first new high relative to the S&P 500 since June 2018. The 10-stock benchmark is up 18% for the year compared with a 2.5% rise for the S&P 500: @johnauthers via @TheTerminal pic.twitter.com/wnaBMEqJfp
— Lisa Abramowicz (@lisaabramowicz1) February 5, 2020
— Dana Lyons (@JLyonsFundMgmt) February 5, 2020
— Greg Rieben (@gregrieben) February 5, 2020
Here’s how i’m seeing Bitcoin/USD
•above 200, 50 and 21 day MA’s
•20 & 60 period CMF are positive
•highest daily close since 9/23/19
•weekly MACD bullish crossover (not shown)
— Shane C. Murphy (@murphycharts) February 5, 2020
— David Keller, CMT (@DKellerCMT) February 5, 2020
— Nautilus Research (@NautilusCap) February 5, 2020
— Brian Shannon, CMT (@alphatrends) February 5, 2020
How long is the bull market going to run?
I have no clue – no one does. But I do know the amount of cash on the sidelines is crazy! FOMO may kick in at any moment.
$135.50 billion of outflows from stock funds in 2019. Blew 2008 out of the water! pic.twitter.com/PN8VNYOKyU
— Brett Pattison (@brettmpattison) February 5, 2020