Monday, March 30th, 2020
Indices: US Stocks kicked off the week on a positive note with the Dow Jones Industrial Average advancing 691 points or 3.19%. The S&P 500 and Nasdaq rose 3.35% and 3.62%, respectively. The Russell 2000 was the weakest of the major averages but still gained 2.33%.
Sectors: All 11 sectors closed higher by at least 1%. Health Care led, gaining 4.68%. Energy lagged but still closed higher by 1.02%.
Commodities: Crude Oil futures plunged 7.14% to an 18-year low of $20.28 per barrel. Gold futures fell 0.64% to $1,643 per ounce.
Currencies: The US Dollar Index moved higher by 0.75%.
Interest Rates: The US 10-year Treasury yield fell to 0.67%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
— Mr. 🦊 CMT (@topstockcharts) March 29, 2020
Today’s Chart of the Day was shared on Twitter by @topstockcharts. The S&P 500 experienced an infamous “death cross” today. A death cross is one of the first concepts they teach you in technical analysis kindergarten. It occurs when the 50-day moving average crosses below the 200-day moving average. Despite its popularity, there’s a lot of debate among technicians over its effectiveness. It has produced several false signals in the past decade, and many argue that the majority of the damage is usually done by the time it triggers. On the other hand, it acted as a prescient sell signal in past bear markets, such as 2001 and 2008. In short, the death cross has a questionable track record, and it’s not as ominous as the name suggests. However, it’s also not something to scoff at. Like most other indicators and signals, the death cross should be taken into consideration along with other evidence. For more on this, check out this piece that examines the signal’s track record.
Quote of the Day
“All men’s miseries derive from not being able to sit in a quiet room alone.”
– Blaise Pascal (Mathematician)
Presentations from Chart Summit 2020 – Chart Summit
On Saturday, JC Parets hosted the 4th annual Chart Summit. The event raised over $50,000 to help fight the COVID-19 epidemic. In case you missed it, you can watch all of the presentations using this link!
Down Best Six Months Not Encouraging – Almanac Trader
November-April has historically been the best six months for the stock market. In this quick read, seasonality expert, Jeff Hirsch explains that when the market fails to follow seasonal trends, it is a warning sign that there are larger forces at play.
What Comes After a Relief Rally – Momentum Monday
In their weekly video, Howard Lindzon and Ivanhoff run through dozens of charts in order to make sense of some of the wild price action we’ve seen recently.
A Short History on Dead Cat Bounces – A Wealth of Common Sense
The question most traders are asking right now is; have stocks found a meaningful bottom or was last week’s rally simply a ‘dead cat bounce’ within a longer-term downtrend? In this piece, Ben Carlson takes at counter-trend rallies within past bear markets.
Why is the VIX so High? – Bespoke
Bespoke reminds us that the VIX is a measure of volatility and not simply an inverse market index.
Top 10 Tweets
That means we’re about to enter April, one of stocks’ best months of the year!
Since 1950, the S&P 500 has climbed an average of 1.5% in April, its third-best month over that period. https://t.co/d5lpSYEQ0r
— Callie Cox (@callieabost) March 30, 2020
It would take a 51.4% gain to recapture the 33.9% loss in the S&P 500 from February 19 to March 23. In a similar vein, it would take a 100% gain to recapture of 50% loss. With stocks taking the elevator down and the stairs up, getting back to breakeven could take time. $SPX $SPY pic.twitter.com/E57yxjZW07
— Arthur Hill, CMT (@ArthurHill) March 29, 2020
Today the S&P 500 is up over 3% but small caps, equal-weight, and high beta are all under-performing, a negative sign of risk appetite.
This has been normal on counter-trend bounces over the last month. pic.twitter.com/swucLezxcx
— Andrew Thrasher, CMT (@AndrewThrasher) March 30, 2020
Risk factors worth monitoring pic.twitter.com/XxUt1r5yle
— Strategas (@StrategasRP) March 30, 2020
$SPX 'death cross' coming today.
Since 1929, index has struggled to rally when 50-day < 200-day.
Over past decade, by the time of the cross seems like most of the downside damage has been done and index has been up sharply when 50-day < 200-day. pic.twitter.com/Miku8FACmB
— Willie Delwiche (@WillieDelwiche) March 30, 2020
— ukarlewitz (@ukarlewitz) March 30, 2020
#Silver not looking good here (65m chart). Rejected at falling trend line and 61.8% Fib retracement of the drop from March 9th. Not much support until you get back around $13. $SLV $SIL pic.twitter.com/aceMCfUyoM
— Tarek I. Saab (@FibLines) March 30, 2020
— Lisa Abramowicz (@lisaabramowicz1) March 30, 2020
— Charlie Bilello (@charliebilello) March 30, 2020
If you're one of these people who thinks the lows for stocks are in, tell me that these were the leadership groups you were hoping for? https://t.co/11UMy6mIcf $XLP $XLU $XLRE $XLV $IWM $XLF pic.twitter.com/S8KmmNnHb8
— J.C. Parets (@allstarcharts) March 30, 2020