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Today’s Summary
Thursday, April 2nd, 2020
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average gaining 470 points or 2.24%. The S&P 500 and Nasdaq finished up 2.28% and 1.72%, respectively. The Russell 2000 underperformed the other major indices but still gained 1.29%.
Sectors: All 11 sectors closed higher. Energy led significantly, rebounding 9.16%. Consumer Discretionary lagged but still closed higher by 0.37%.
Commodities: Crude Oil futures had a historic day, surging 24.67% to 25.30 per barrel. Gold futures moved higher by 1.98% to $1,635 per ounce.
Currencies: The US Dollar Index gained 0.63%.
Interest Rates: The US 10-year Treasury yield rose to 0.609%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day was shared with us in a note by MarketShark. We call this chart pack, “The Good, The Bad, and The Ugly.” The Nasdaq ETF, $QQQ, is “The Good” because it is the only one whose long-term uptrend remains intact after last month’s historic crash. The S&P 500 ETF, $SPY, is “The Bad” because it broke its long-term uptrend line, which is now acting as resistance. There is still hope for $SPY if it can confirm a failed breakdown this week by closing back above that long-term uptrend line. Lastly, the Dow Jones Industrial Average ETF, $DIA, is “The Ugly” because its the only one of the three trading below the December 2018 lows. Also, its long-term uptrend has been broken for weeks now.
Quote of the Day
“The stock market is the best place to spot emerging trends”
– Howard Lindzon (Venture Capitalist)
Top Links
Sector Relative Strength – Bespoke
Bespoke takes a look at how each of the 11 sectors have performed, relative to the S&P 500.
Why the Market Doesn’t Need to Plummet Further Amid Coronavirus – Yahoo Finance
In this article, Joe Fahmy explains why he remains optimistic on US Stocks despite the coronavirus pandemic.
Keeping Your Winners – MurphyCharts
Shane Murphy discusses some of the challenges of trading in this market environment and points to a few technical developments worth keeping an eye on.
Chart Summit 2020 Review With JC and Strazza – Technical Analysis Radio
In this podcast, JC Parets and Steve Strazza highlight some of the key themes from this past weekend’s 4th annual Chart Summit event.
What a Month – A Simple Strategy – GK Trading
Gregory Krupinski shares a simple trend-following strategy to help swing traders navigate this volatile market environment.
Top 10 Tweets
1- no one knows what is next for the market
2- trend is lower and until that reverses odds favor more downside
3- know your timeframe
4- don't be stupid with your money
5- when in doubt, cash is a position— Brian Shannon, CMT (@alphatrends) April 2, 2020
Long term perspective – a 100+ year look at the S&P 500 $SPX pic.twitter.com/0A5NmVJWb7
— BostonCharts (@bostonchaahhts) April 2, 2020
Some big picture asset allocation trends:
1) Stocks are breaking down relative to bonds
2) Stocks have been in a relative uptrend vs. commodities since 2013
3) Commodities are in a downward trend relative to bonds, indicating deflationary pressure$SPX $VT $BND $TLT $CRB $USB pic.twitter.com/9ogLwKzSvC— Aazan Habib, CFA, CMT (@aazanhabibCMT) April 2, 2020
If you told me that $SPX would be -25% off its highs in just over a month and the chart of $SOX:$SPX would look like this i’d have laughed in your face for 12 minutes straight. pic.twitter.com/Zdj2U48mhh
— Steve Deppe, CMT (@SJD10304) April 2, 2020
GS High Beta Momentum Index vs $SPX now 60% above 200 DMA
This index goes long high-beta high momentum and short high-beta low momentum. By far the widest spread in at least a decade. pic.twitter.com/31QBfzcNb6
— Jonathan Krinsky,CMT (@jkrinskypga) April 2, 2020
Emerging Markets just suffered the most aggressive selling purge on record (like almost everything else).
Flows are starting to turn up again.
Similar inflections marked every Major bottoming phase in 20 years – and preceded ALL of EM's biggest historic rallies.$EEM $MXEF pic.twitter.com/eGRVRzCaxI
— Macro Charts (@MacroCharts) April 2, 2020
This level needs to hold for the bulls. Basic TA tells us the more times a level is tested, the higher the likelihood it breaks, and you do NOT want to own equities if this ratio breaks down. Similar charts of equities relative to $GLD and $TLT have already broken down. $SPY $JXY pic.twitter.com/EqgtIDTSYQ
— Louis (@haumicharts) April 2, 2020
Crude Oil was up 24.7% today, its largest daily gain in history. $WTIC pic.twitter.com/nhy8VQTfof
— Charlie Bilello (@charliebilello) April 2, 2020
So here's the chart of Crude I'm watching.
If we're above 20.50, I think the near-term bias is to the upside and longs can see how this mean reversion develops. pic.twitter.com/T99jq5B72s
— Tom Bruni, CMT (@BruniCharting) April 2, 2020
A reminder on what a 25% move up looks like *after* a more than 70% drop.
Charts > Headlines pic.twitter.com/a6ZWP4hUHA
— Scheplick (@scheplick) April 2, 2020