Monday, February 24th, 2020
Indices: US stocks suffered their worst day in over a year, with the Dow Jones Industrial Average falling 1,032 points or 3.56%. The S&P 500 and Nasdaq dropped 3.35% and 3.71%, respectively. The Russell 2000 outperformed the rest of the major indices but still closed down 3.01%.
Sectors: All 11 sectors closed lower by more than 1%. Utilities led, but still fell 1.17%. Energy lagged, falling 4.62%.
Commodities: Crude Oil futures dropped 4.13% to $51.26 per barrel. Gold futures rose 0.96% to $1,662 per ounce.
Currencies: The US Dollar Index was flat.
Interest Rates: The US 10-year Treasury yield moved lower to 1.367%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The S&P 500 averages more than five 2% drops per year (median of 3).
Even had 5 last year.
Doesn't feel good, but this is actually fairly normal. pic.twitter.com/w15rusFVxT
— Ryan Detrick, CMT (@RyanDetrick) February 24, 2020
Today’s Chart of the Day was shared on Twitter by Ryan Detrick (@RyanDetrick). The chart shows the frequency of 2% drops in each year since 1950. The S&P 500 fell over 2% today for the first time since late August. Today’s price action certainly felt jarring, given the lack of volatility over the past few months. However, Ryan explains that 2% drops are fairly normal, “the S&P 500 averages more than five 2% drops per year.” Last year was a stellar year for stocks with the S&P 500 gaining nearly 30%, and even then, the index experienced five 2% drops. If history is any guide, this probably won’t be the last 2% drop we see in 2020.
Quote of the Day
“Markets take the stairs up and the elevator down.”
– Wall Street Adage
We’re Due for a Correction, Says Ralph Acampora – Financial Sense Podcast
In this podcast, legendary market technician Ralph Acampora explains why he’s bearish in the short-term but remains bullish longer-term.
Gold Will Climb to $1,750, Hedge Fund Telemetry’s Thornton Predicts – Bloomberg
Tom Thornton of Hedge Fund Telemetry made an appearance on Bloomberg today to lay out a bullish options trade on Gold futures.
Some Distribution in the Market – Momentum Monday
In their weekly video, Howard Lindzon and Ivanhoff highlight some of the strongest stocks and trends.
Dividend and Treasury Yield Spreads at Multiyear Highs – Bespoke
Bespoke takes a look at the decline in US Treasury yields as the yield on the 30-year Treasury Bond slips to its lowest level ever.
Gold, Rates, and Uncertainty – Murphy Charts
Shane Murphy shares his thoughts on some of the most significant technical developments in the market right now.
Top 10 Tweets
— Neil Blalock, CMT (@NeilBlalock) February 24, 2020
— BostonCharts (@bostonchaahhts) February 24, 2020
— J.C. Parets (@allstarcharts) February 24, 2020
Gapping up/down at the start of trading for any particular session, is rare, (3.1% incident rate for $SPX). Unfilled gaps are exceedingly rare (incident rate of 0.2%). 9 unfilled gaps occurred in the past 5 months -we believe they will be filled sooner than most want to believe. pic.twitter.com/dN7ZHARlwW
— Carter Braxton Worth (@CarterBWorth) February 24, 2020
— Charlie Bilello (@charliebilello) February 24, 2020
Gold has been strong under shadow of negative real rates, but it does exhibit seasonality, with March being one of its weakest months historically. We believe in trends and momentum, but there are always tactical nuances. pic.twitter.com/7wLwNcBhJi
— RenMac: Renaissance Macro Research (@RenMacLLC) February 24, 2020
The gap between gold and copper hit the widest since 2012. Usually the wider the gap, the more bearish the signal. pic.twitter.com/poAlDG5pkS
— Lisa Abramowicz (@lisaabramowicz1) February 24, 2020
— Tarek I. Saab (@FibLines) February 24, 2020
— Matthew Timpane, CMT (@mtimpane) February 24, 2020
Just a reminder that the S&P 500 posted five one-day drops of 2% or more in 2019, en route to 29% gain.
Volatility happens, but you can control how you respond to it.
— Callie Cox (@callieabost) February 24, 2020