Sponsored By:
Today’s Summary
Wednesday, March 4th, 2020
Indices: US stocks charged higher in today’s session with the Dow Jones Industrial Average surging 1,173 points or 4.53%. The S&P 500 and Nasdaq gained 4.22% and 3.85%, respectively. The Russell 2000 was the weakest of the major averages but still rose an impressive 3.04%.
Sectors: All 11 sectors closed higher by at least 2%. Health Care led, surging 5.75%. Energy lagged but still closed higher, gaining 2.37%.
Commodities: Crude Oil futures inched higher by 0.21% to $47.20 per barrel. Gold futures slipped 0.24% to $1,638 per ounce.
Currencies: The US Dollar Index rose 0.23%.
Interest Rates: The US 10-year Treasury yield moved higher to 1.054%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Head scratcher. Chinese tech $KWEB vs. the NASDAQ $NDX $QQQ since the August lows. pic.twitter.com/lKwq88HRB6
— Greg Rieben (@gregrieben) March 4, 2020
Today’s Chart of the Day was shared on Twitter by Greg Rieben (@gregrieben). The chart compares the performance of the Chinese Technology ETF ($KWEB) to the Nasdaq 100 index ($NDX), since the August 2019 lows. Most market participants are convinced that last week’s decline was a direct result of the coronavirus. We think it’s silly to get too attached to the narrative that stocks are selling off because of the coronavirus. If that were the case, then you’d expect Chinese stocks to be underperforming US stocks, as China has been ground zero for the epidemic, right? Well, believe it or not, Chinese stocks have been outperforming US Stocks. As Greg points out, the Chinese Technology ETF ($KWEB) is up about 31% from the August lows, while the Nasdaq is up about 18%. The outperformance of Chinese Stocks vs. US Stocks isn’t just isolated to Tech. It’s happening more broadly, as the China A-shares ETF ($ASHR) is up about 13% from the August lows, while the S&P 500 ETF ($SPY) is up 7% over the same period. Before last week’s crash, there were numerous bearish divergences and technical warning signs suggesting the market was due for a sell-off. All that was missing was a catalyst or narrative. We believe it’s far better to listen to what the market is telling you rather than what the media is telling you.
Quote of the Day
“I never use valuation to time the market. I use liquidity considerations and technical analysis for timing.”
– Stanley Druckenmiller (Hedge Fund Manager)
Top Links
Todd Sohn on Software Stocks – TD Ameritrade Network
Todd Sohn of Strategas Research gives his technical take on the current market environment and shares some individual stocks that he likes right now.
A Historic 7 Days as Sentiment Plunges – SentimenTrader
SentimenTrader takes a look at the wild swings we’ve seen in stocks recently and points out that sentiment has gotten extremely pessimistic.
Copper, Oil and S&P 500 E-Mini Futures Offer Dynamic Signals – Bloomberg
Eric Dugan of 3D Capital Management joins host, Abigail Doolittle, to discuss Copper, Crude Oil, and the S&P 500.
Strongest Stocks In The S&P – All Star Charts
Steve Strazza highlights the stocks in the S&P 500 that are showing relative strength and momentum, as investors look to dip their toes into the market following last week’s sell-off.
The Market Crash of 2020: Where Do We Go From Here? – Fibonacci.com
Tarek Saab of Fibonacci.com gives a technical update on Stocks, Bonds, the US dollar, and Precious metals.
Top 10 Tweets
Anticipated strong rally is happening. Plenty more room to run. Stay long and raise stops. Gap at 3260 next resistance. New all time high is the all-clear signal, which is a long way from here. Break of last week’s lows is the oh shit level. Anything can happen. $SPX pic.twitter.com/aNwvENyJCk
— Jim Denholm, CMT (@denholm_jim) March 4, 2020
The Dow, S&P 500 and Nasdaq Composite all squeezed to their 10 day moving averages at the close. Solid points of reference in the AM $SPX $COMP $DJIA pic.twitter.com/0QzmjD0kPg
— Aaron (@ATMcharts) March 4, 2020
From yesterday: finally an elevated TRIN reading. pic.twitter.com/KNwI5Y93ZL
— Strategas (@StrategasRP) March 4, 2020
Equity put/call ratio on track for highest reading since Q4 2018. pic.twitter.com/mR14bpvS5e
— Luke Kawa (@LJKawa) March 4, 2020
Fins not usually this weak relatively (bottom chart) at the beginning of a bona fide advance, pic.twitter.com/Kd26nrHBRJ
— Walter Deemer (@WalterDeemer) March 4, 2020
$MID and $MDY moved from 52-week highs to 52-week lows in just six days. pic.twitter.com/MAPYqAA5ly
— Arthur Hill, CMT (@ArthurHill) March 4, 2020
If you think the market's recent selloff in the U.S. is bad, check out the recent selloff overseas.
83% of the Nikkei's members are oversold (RSI under 30). This only happened 2 other times:
March 2011
October 2008 pic.twitter.com/hWkMiyFAta— Troy Bombardia (@bullmarketsco) March 4, 2020
$gold : The short-term technical situation remains healthy as long as gold stays above 1560 USD.
A break of 1560 USD would probably trigger a retest of 1480-1500 USD. #trading #investing pic.twitter.com/cb5kphyIpa
— Adrian (@highlevelTrader) March 4, 2020
Credit & equities sent different messages yesterday. While U.S. stocks sold off, high-yield bonds rallied, with spreads going lower & all-in yields dropping the most since Aug. 2019. Also, the biggest junk-bond ETF had its second-biggest one-day inflow ever, of $1.2 billion. pic.twitter.com/gp1za4OspS
— Lisa Abramowicz (@lisaabramowicz1) March 4, 2020
Didn't get much attention given the volatility elsewhere, but the short setup in Sugar has been pretty sweet.
Nearing our downside objective here, probably worth covering some given how constructive this longer-term base is.
Quick 10% move. pic.twitter.com/0QoF3p6J60
— Tom Bruni, CMT (@BruniCharting) March 4, 2020