Sponsored By:
Today’s Summary
Monday, April 20th, 2020
Indices: US Stocks kicked off the week on a sour note with the Dow Jones Industrial Average dropping 592 points or 2.44%. The S&P 500 and Nasdaq fell 1.79% and 1.03%, respectively. The Russell 2000 closed lower by 1.28%.
Sectors: All 11 sectors closed lower. Healthcare led, but still closed down 0.79%. Utilities lagged, falling 3.78%.
Commodities: Front-month Crude Oil futures collapsed into negative territory for the first time in history. The May contract plunged a record 306% to -$37.63 per barrel. Yes, you read that correctly, negative thirty-seven dollars per barrel. However, it’s important to note that the May contract expires tomorrow and the June contract is still trading above $20 per barrel. Gold futures moved higher by 0.73% to $1,711 per ounce.
Currencies: The US Dollar Index rose 0.14%.
Interest Rates: The US 10-year Treasury yield fell to 0.616%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
How much blood will be on the street b/c of Crude Oil?
Bankrupt trading firms
NYMEX — margin calls not met
Futures Commission MerchantsThis is going to be ugly. Books will be written about today. $CL_F pic.twitter.com/toADhdLWC2
— Peter Brandt (@PeterLBrandt) April 20, 2020
Today’s Chart of the Day was shared on Twitter by Peter Brandt (@PeterLBrandt). It’s a chart of the May 2020 WTI Crude Oil futures contract over the past month. Crude Oil futures imploded today. The May contract plummeted into negative territory for the first time ever, reaching as low as -$40 per barrel. This bizarre and unprecedented move essentially means that futures traders must decide between accepting physical delivery of 1,000 barrels of Crude Oil per contract or exiting their position at a massive loss. Since most traders are not willing or able to physically store that much Cude Oil, the obvious choice is to exit their position, causing forced selling. To be clear, this contract expires tomorrow, and the June contract is still trading above $20 per barrel. None the less, this is truly historic price action. As Peter points out, there will likely be some negative implications as a result of today’s bloodbath. Peter was way ahead of this crash. At the end of February, he pointed out that price was breaking below a key support level around $50 per barrel…and here we are.
Quote of the Day
“Never confuse the bottom of the page with support!“
– David Keller (Technical Analyst)
Top Links
Oil Implodes – Crossing Wall Street
Here’s a quick explanation of what happened in the Oil market today, from Eddy Elfenbein.
US Crude Oil Collapses to Negative -$37 Per Barrel – Why and What Does it Mean? – DailyFX
Here’s a more in-depth explanation of today’s unprecedented crash in Crude Oil futures. The article requires some prior knowledge of Futures trading, but it’s worth a read.
Why The Recent Strength Has Bulls Smiling – LPL Financial Research
The team at LPL Financial Research points out that strong gains in S&P 500, like what we’ve seen in recent weeks, have historically lead to further gains 6-12 months later.
What the Stock Market Needs is Mouthwash – Libertas Wealth Management
Adam Koos of Libertas Wealth Management shows that the recent rally has been led by a handful of Mega-cap names and lacks broad participation.
Crude Oil & Interest Rates Keep Crashing – All Star Charts
JC Parets takes a look at the curious relationship between Crude Oil and US Treasury Bond yields.
Top 10 Tweets
Negative Crude Oil before negative Interest Rates. Who had that in their 2020 forecast? #markets #crudeoil #bonds
— Frank Cappelleri (@FrankCappelleri) April 20, 2020
Big bearish divergence on the Hourly chart. Looks like we could be running out of steam here, at least over the short-term. Let's see how it plays out. $SPX pic.twitter.com/fRkSMtk09I
— Ian McMillan, CMT (@the_chart_life) April 20, 2020
$SPX into the fib retracement box. Length of rally A = length of rally C. ABC three wave counter trend correction complete. Market remains below 200D and overbought at Friday levels. Let’s watch closely. pic.twitter.com/al3YAmT43F
— David Cox, CMT, CFA (@DavidCoxWG) April 20, 2020
Two words: overhead supply $IPAC $ACWX $VGK pic.twitter.com/KIsBNhXNB2
— Louis (@haumicharts) April 20, 2020
The biggest five stocks in the S&P 500 now account for more than a fifth of the index's total market value — a higher concentration than even the tech bubble of 2000. Via BofAML: pic.twitter.com/mCtjpvcPQq
— Tracy Alloway (@tracyalloway) April 20, 2020
I might need to save this #oil chart. $CL #WTI ? pic.twitter.com/Gglf2spQJd
— Tarek I. Saab (@FibLines) April 20, 2020
Since I've answered a lot of questions on this today.. $USO has not held the May futures since April 13th. The fund started it's rolling process on April 7th pic.twitter.com/e4CxvjJ9C6
— James Seyffart (@JSeyff) April 20, 2020
If only I had storage capacity. #oil #OilPrice pic.twitter.com/tWWmHJDAhg
— jeroen blokland (@jsblokland) April 20, 2020
Still very few talking about tanker stocks… #OOTT #oil $STNG $NAT pic.twitter.com/oQGzx2sPzp
— Greg Rieben (@gregrieben) April 20, 2020
Finally found something that's done worse than pot stocks https://t.co/b8UnDhOWfd pic.twitter.com/ENb1CoBZoS
— Hipster (@Hipster_Trader) April 20, 2020