Wednesday, February 12th, 2020
Indices: US stocks closed higher in today’s session with the Dow Jones Industrial Average advancing 275 points or 0.94%. The S&P 500 and Nasdaq gained 0.65% and 0.90%, respectively. The Russell 2000 rose 0.71%.
Sectors: 10 out of the 11 sectors closed higher. Energy led, gaining 1.34%. Consumer Staples was the only sector to close lower, slipping just 0.05%.
Commodities: Crude Oil futures moved higher by 3.48% $51.69 per barrel. Gold futures slipped 0.13% to $1,569 per ounce.
Currencies: The US Dollar Index rose 0.30%.
Interest Rates: The US 10-year Treasury yield moved higher to 1.629%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Highest ratio for consumer discretionary to staples since July 2019 on today's close. Some divergences persist across the broader market like RSI and % of companies above 50dma in $SPX, but some are working towards resolution like NYSE common-stock online AD line. Price is king. pic.twitter.com/RPQVsvEcYG
— Michael McKerr (@MikeMcKerr_TDA) February 12, 2020
Today’s Chart of the Day was shared in an article by Michael McKerr (@MikeMcKerr_TDA). It’s a chart of the S&P 500 over the past couple of years. The ratio chart in green shows the Consumer Discretionary sector relative to Consumer Staples. This ratio is often used to gauge risk-appetite, and right now, it’s confirming the new highs in the S&P 500. Michael points out that there are several bearish divergences forming, such as RSI and the percent of stocks above their 50-day moving averages. However, these divergences can persist for a while, and some are working towards resolving themselves higher. It’s important not to get too bearish at first sight of these divergences. Instead, it’s better to wait for price to confirm the divergences by exhibiting weakness. While these developments warrant some caution, the S&P 500 is currently at an all-time high, and price is suggesting that it’s still too early to get aggressively bearish.
Quote of the Day
“It is not the mountain that we conquer, but ourselves.”
– Sir Edmund Hillary (Mountaineer)
Have Stocks Gone too Far, too Fast? – Bloomberg
In this clip from Bloomberg, Todd Sohn of Strategas Research presents three charts that suggest that stocks have gotten overextended.
The Nasdaq 100 Could be Ready to Fall. Here’s Why. – Barron’s
Respected technical analyst Jonathan Krinsky warns that the Nasdaq is set up for a fall.
When the Tide Turns… – Yuriy Matso
Yuriy Matso discusses the extreme reading in the Put/Call Ratio, and why it’s bearish for the broader market in the near-term.
Crude Oil’s Range Remains Intact – All Star Charts
Tom Bruni of All Star Charts breaks down a chart of Crude Oil futures, as well as some other important charts in the energy sector.
Dan Russo on the Case for Growth Stocks – TD Ameritrade Network
Dan Russo of Chaikin Analytics explains why he’s bullish on growth stocks and shares some of his favorite stock picks.
Top 10 Tweets
— Stocktwits (@Stocktwits) February 12, 2020
— Scott Redler (@RedDogT3) February 12, 2020
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) February 12, 2020
— Lisa Abramowicz (@lisaabramowicz1) February 12, 2020
— Strategas (@StrategasRP) February 12, 2020
There are 4 other times the 22-days Call/Put ratio was at a similar level.
— Adrian (@highlevelTrader) February 12, 2020
Total Put/Call ratio's 50 day average is now almost -13% below its 200 day average.
When this happened in the past, $SPX fell EVERY SINGLE TIME over the next 2 weeks.
Stocks remain at risk of a pullback/increased volatility here pic.twitter.com/Qkg9HwU5XE
— SentimenTrader (@sentimentrader) February 12, 2020
— Andrew Thrasher, CMT (@AndrewThrasher) February 12, 2020
— jeroen blokland (@jsblokland) February 12, 2020
— 🔴 I. Vodenitcharov CFA CMT 🦠 (@iv_technicals) February 12, 2020