Monday, April 6th, 2020
Indices: US Stocks kicked off the week on a positive note, with the Dow Jones Industrial Average jumping 1,627 points or 7.73%. The S&P 500 and Nasdaq soared 7.03% and 7.33%, respectively. The Russell 2000 was the strongest of the major averages, surging 8.24%.
Sectors: All 11 sectors closed higher by at least 3%. Technology led, gaining 8.53%. Consumer Staples lagged but still closed higher by 3.72%.
Commodities: Crude Oil futures tumbled 9.31% to $26.30 per barrel. Gold futures surged 3.57% to a multi-year high of $1,708 per ounce.
Currencies: The US Dollar Index inched up 0.10%.
Interest Rates: The US 10-year Treasury yield rose to 0.677%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Each time the gold/silver ratio moved more than 2 standard deviations away from its 200-week moving average since 1971, it resulted in a mean-reversion move. This ratio is currently at its most extended levels since the 2008 crisis. $gold $silver $GLD $SLV $GDX $GDXJ $SLV pic.twitter.com/3Ess7oHktz
— Aazan Habib, CFA, CMT (@aazanhabibCMT) April 5, 2020
Today’s Chart of the Day was shared on Twitter by Aazan Habib (@aazanhabibCMT). It’s a long-term chart of the Gold/Silver ratio, going back nearly five decades. This ratio helps us gauge the overall risk appetite for Precious Metals as an asset class. Aazan uses Bolinger Bands to highlight the fact that this ratio is extremely stretched right now, and likely due for some mean-reversion lower. He adds that “each time the Gold/Silver ratio has moved more than two standard deviations away from its 200-week moving average since 1971, it resulted in a mean-reversion move.” If history is any guide, we’ll likely see Silver outperform Gold over the next few weeks/months, which would be bullish for Precious Metals as an asset class.
Quote of the Day
“When you arise in the morning think of what a privilege it is to be alive, to think, to enjoy, to love.”
– Marcus Aurelius (Roman Emperor)
Is the Bull Market Officially Over? – The Irrelevant Investor
Michael Batnick explores the possibility that last month’s waterfall decline turns out to be just a cyclical bear market within a longer-term secular bull market.
Is Tech the Next Shoe to Drop? – Momentum Monday
In their weekly video, Howard Lindzon and Ivanhoff look through dozens of charts to identify some of the key themes and trends in the markets right now.
Yes, Healthcare is a Defensive Sector – MurphyCharts
Shane Murphy examines whether or not Healthcare should be considered a defensive sector.
The Trading Pit with Arun Chopra – TrendSpider
Here’s a good webinar from TrendSpider featuring Arun Chopra. He shares his thoughts on the market as well as some potential trade ideas.
Major Stock Indexes are Trying to Stabilize – StockCharts.com
Legendary Technician, John Murphy offers his perspective on the current market environment.
Top 10 Tweets
Big cluster of resistance in the 2800-2900 range. 50dMA, 200dMA and the 50-62% fib retracement levels. Clear break above the 20dMA today as well, and made a new recent high. Good start, but it could still be a bear market rally. RSI and MACD both constructive as well. $SPX pic.twitter.com/5K0RH1xbzb
— Jim Denholm, CMT (@denholm_jim) April 6, 2020
— Andrew Adams CFA, CMT (@DayTraderGator) April 6, 2020
It's easy to get lured into the market on big up days and place undisciplined FOMO trades. But keep in mind, the biggest rally days occur during bear markets. Sustained bull markets have very few +3% up days. Bear markets are dominated by them, but at the expense of volatility. pic.twitter.com/Un1kWQc8N1
— Mark Minervini (@markminervini) April 6, 2020
VIX down 29% last week, largest weekly % implosion since right after the US election in Nov '16 and after Brexit in late June '16. pic.twitter.com/HvAP5svHM5
— Ryan Detrick, CMT (@RyanDetrick) April 6, 2020
— Mark Ungewitter (@mark_ungewitter) April 6, 2020
The recent sell-off in REITS was worse than even October/November 2008.
Via Morgan Stanley: pic.twitter.com/Or712OvKil
— Tracy Alloway (@tracyalloway) April 5, 2020
Commodities ( $crb ) : the big picture
There is a good chance the bottom is already in or we are very close.
Probably good enough for a multi-month bounce, or more likely, a big comeback in the next couple years. pic.twitter.com/CZEEAjLb6m
— Adrian (@highlevelTrader) April 6, 2020
— Bhagyashree (@sunsofttech) April 6, 2020
— Aaron (@ATMcharts) April 6, 2020
— J4 (@J4_fibo) April 6, 2020