Sponsored By:
Today’s Summary
Friday, March 27th, 2020
Indices: US Stocks closed lower in today’s session, but managed to post their biggest weekly gain since 2009. The Dow Jones Industrial Average dropped 915 points or 4.06%. The S&P 500 and Nasdaq fell 3.37% and 3.79%, respectively. The Russell 2000 was the weakest of the major indices, closing lower by 4.09%.
Sectors: Utilities led for the second day in a row, rising 0.54%. Energy lagged, falling 6.78%.
Commodities: Crude Oil futures dropped 5.78% to $21.84 per barrel. Gold futures moved higher by 0.88% to $1,654 per ounce.
Currencies: The US Dollar Index fell 1.16%.
Interest Rates: The US 10-year Treasury yield moved lower to 0.75%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
How many bull and bear markets can you count here? pic.twitter.com/qzOxgORM76
— The Chart Store (@TheChartmeister) March 27, 2020
Today’s Chart of the Day was shared on Twitter by The Chart Store (@TheChartmeister). It’s a chart of the Standard & Poor’s Composite during the Great Depression of 1929-1932. Yesterday there was some noise from the media that we had just entered into a new bull market. Here’s a headline from a prominent financial news outlet: “Breaking: A new bull market has begun. The Dow has rallied more than 20% since hitting a low three days ago, ending the shortest bear market ever.” We think headlines like this are misleading and premature, at best. For starters, they are measuring price on an intraday basis rather than a closing basis. On a closing basis, the S&P 500 was up less than 18% from Monday’s low. Secondly, it’s quite common to see massive rallies within a prolonged downtrend. As you can see from the chart, the index bounced more than 20% on five separate occasions amid an epic 86% decline. It may seem extreme to use The Great Depression as an example. However, crashes like 1929 and 1987 are some of the only historical comparisons that match the size and magnitude of the recent decline.
Quote of the Day
“Only when it is dark enough can you see the stars”
– Martin Luther King Jr. (Civil Rights Activist)
Top Links
Correlations go to One – Alvarez Quant Trading
Ceasar Alvarez examines how correlations have behaved throughout the risk-off environment we’ve been in over the past month.
Country ETFs’ Drawdowns and Rebounds – Bespoke
Bespoke breaks down the best/worst performing country ETFs amid the recent decline.
Bear Market Rallies and Indicators to Watch – StockCharts.com
In this video, Erin Swenlin and Mary Ellen McGonagle discuss bear market rallies and what the technicals are suggesting for the market going forward.
The Keynes Newspaper Beauty Contest: Coronavirus Edition – Andrew Thrasher
Andrew Thrasher explains why it’s better to base your trading/investment decisions on supply & demand rather than fixating on virus headlines.
Stock Market Video Analysis for Week Ending 3/27/20 – AlphaTrends.net
Here’s Brian Shannon’s weekly video in which he recaps this week’s price action and highlights some levels of interest to keep an eye on next week.
The 4th Annual Charting Summit brings together an elite group of professional technicians who will explain to their market process and show you exactly how to apply their methods in the current market environment to control risk and increase profitability.
Top 10 Tweets
Lot of talk how a new bull market started today.
Just remember, the ‘73/‘74 bear saw a 20% bounce.
‘01/‘02 bear had 22%, 25%, 24% and 24% rallies before ultimately falling 51%.
And the ‘08/‘09 bear saw a 27% rally before falling 56%.
We aren’t out of the woods quite yet.
— Ryan Detrick, CMT (@RyanDetrick) March 27, 2020
Don’t @ me about bull/bear market definitions not as simple as +20%/-20% … I get it & agree … but using that simple definition, Dow broke record for fastest bear followed by fastest bull @SPDJIndices pic.twitter.com/Kiwjd5dm2P
— Liz Ann Sonders (@LizAnnSonders) March 27, 2020
A 20% rally off a market low would be consistent with past cycles, including 1987 & 2008, and would get us to around 2650, a standard 38% retracement. We got close to that, so I imagine sellers will come out of the woodwork next week as month-end rebalances are done. pic.twitter.com/j8DKNmDfx4
— Jurrien Timmer (@TimmerFidelity) March 27, 2020
Don't get too impressed with big up days during a bear market. Bull markets have low volatility, bear markets have high volatility. You will see many more 3%+ days during bear markets. The 4-year bull market that just ended had only two days in excess of 3% on the S&P. pic.twitter.com/k99VN0XdjZ
— Mark Minervini (@markminervini) March 27, 2020
Sentiment (rolling 7-day avg) by type of fintwitter and topic:
– perma-bears bullish equities, but liquidity big lingering issue
– economists turn hopeful across board
– journalists worried about consumer and liquidity@TheStalwart @OJRenick @lisaabramowicz1 @LJKawa pic.twitter.com/KsNwWgoCF6— Ben Breitholtz (@benbreitholtz) March 27, 2020
Small-Caps Down 40% – Only 3rd Time Since Inception. pic.twitter.com/PBN1DDMkLk
— Strategas (@StrategasRP) March 27, 2020
If Treasuries break back above recent highs its hard to imagine yields don't retest their lows.. What do you think stocks will be doing in that environment? $SPX
I'm watching 166.50ish in $TLT and looking out for new lows in the 5-yr yield, which looks like absolute garbage $FVX pic.twitter.com/cKvWOCmXWa
— Steven Strazza (@sstrazza) March 27, 2020
Crude #oil down almost 6% again today, nearing USD 20. For a more sustainable rally in #equities a more stable oil price would be helpful. pic.twitter.com/agHQxZtygs
— jeroen blokland (@jsblokland) March 27, 2020
Some sharp cats on stream have been calling for big turnarounds in oil tankers – nice action$FRO $INSW $TNK $NAT $EURN $DSSI pic.twitter.com/1fXZzfZGPq
— Aaron (@ATMcharts) March 27, 2020
Stonks 101.$SPX $ES_F pic.twitter.com/3AQeXMtFMX
— Arun S. Chopra CFA CMT? (@FusionptCapital) March 27, 2020