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Today’s Summary
Thursday, May 6th, 2021
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average gaining 318 points or 0.93%. The S&P 500 and Nasdaq rose 0.82% and 0.37%, respectively. The Russell 2000 underperformed, closing unchanged.
Sectors: All 11 sectors closed higher. Financials led, gaining 1.49%. Health Care lagged, but still managed to close higher by 0.13%.
Commodities: Crude Oil futures fell 1.17% to $64.86 per barrel. Gold futures powered higher by 1.75% to $1,816 per ounce.
Currencies: The US Dollar Index dropped 0.41%.
Interest Rates: The 10-year US Treasury was unchanged at 1.570%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Seeing several names entering Stage IV.
A weekly chart w/ the 30 MA can be a useful tool in evaluating cycles.
For a more in depth discussion of Stage Analysis, I'd recommend reading Stan Weinstein's Secrets For Profiting in Bull & Bear Markets. pic.twitter.com/SpyX4K3iam
— RowInvesting (@RowInvesting) May 6, 2021
Today’s Chart of the Day was shared by Row Investing (@RowInvesting). With Growth stocks getting smoked this week, it’s probably a good time to review Stage Analysis. Stage Analysis was popularized by Stan Weinstein in his 1980’s book, Stan Weinstein’s Secrets for Profiting from Bull and Bear Markets. The four main stages are simply; 1.) Base, 2.) Uptrend, 3.) Top, and 4.) Downtrend. Stage 1 is the base-building phase in which institutions accumulate a position. Stage 2 is the rip-roaring uptrend phase in which the public jumps on the bandwagon. Stage 3 is when price begins to lose momentum and distribution begins. Finally, Stage 4 is when the downtrend forms and price enter into a sustained bear market. Obviously, it isn’t so clear-cut in real-time. But, it does help you tune out the noise and give you an idea of the typical lifecycle of a trend. As @RowInvesting points out, a lot of last year’s high-fliers are below a declining 30-week moving average and appear to be entering into that painful Stage 4. So, be careful buying dips on last year’s winners!
Quote of the Day
“The most contrarian thing of all is not to oppose the crowd but to think for yourself.”
– Peter Thiel
Top Links
DeFi & Technical Analysis | My Conversation w/ Jim Bianco, CMT – All Star Charts
Here’s a great podcast in which JC Parets and Jim Bianco discuss the Decentralized Finance movement or DiFi.
Individuals, Writers and Managers All Still Bullish – Bespoke
Bespoke analyzes the results of the latest AAII Sentiment Survey.
What Does it Mean to be Extended? – Potomac Fund Management
Dan Russo demonstrates how to use Z-Scores to quantify how “extended” prices are.
While Everything is Going Digital, This Stock is Breaking Higher – StockCharts.com
Julius de Kempenaer takes a look at the strength in the Materials sector.
Typical May Trading: A Roller Coaster Ride – Almanac Trader
Seasonality expert, Jeff Hirsch examines how Stocks typically fare throughout May.
Top Tweets
The Nasdaq is trailing the S&P 500 for the eighth straight day. pic.twitter.com/jR5CSyuF9d
— Eddy Elfenbein (@EddyElfenbein) May 6, 2021
The DIRECTION of the 50DMA is more impt than closing above or below it.
In the $SMH prices have closed below the DECLINING 50 DMA every day this week, this hasnt happened since March of 2020
#dontbuythedip pic.twitter.com/AJQwIaUya9
— Brian Shannon, CMT (@alphatrends) May 6, 2021
Usually leave T.A. chart reading to others (consider myself more of a historical/quant/CFA hybrid) but it's interesting the Russell 1000 Growth/Value ratio broke 8-month support, fell to next support, rallied to old support (now resistance). June 2020/March 2021 support seems key pic.twitter.com/5JaV04lXYj
— Ed Clissold (@edclissold) May 6, 2021
$ARKK that's a fresh 2021 low now down 14.7% for the year pic.twitter.com/DMdfFWhwGu
— Tom Hearden (@followtheh) May 6, 2021
Slight uptick in @AAIISentiment bull-bear spread this week … overall, bullish sentiment reigns, which has been case for better part of past couple months pic.twitter.com/mJFWfLyCiK
— Liz Ann Sonders (@LizAnnSonders) May 6, 2021
Gold making another attempt at getting out of the weekly channel. #GC_F pic.twitter.com/dXKZYWEUBJ
— Michael Turvey (@MikeTurvey_TDA) May 6, 2021
It's too bad technical analysis is voodoo and concepts like double bottoms and divergences doesn't work and shouldn't be practiced by an real market professional.$GLD pic.twitter.com/0tLOjZ9lGf
— Andrew Thrasher, CMT (@AndrewThrasher) May 6, 2021
You guys remember gold? Anyway it appears to be breaking out…I’m long..#gld #gca pic.twitter.com/V33rgRhTyQ
— jim iuorio (@jimiuorio) May 6, 2021
Whole lot of technicians all over this one.
Didn't want Lumber to surpass it… $GLD $GDX pic.twitter.com/SbNytGhMh6
— J4 (@J4_doji) May 6, 2021
Copper, this break out could create a new range for the next 20 years if it holds. pic.twitter.com/wBe8gE8ZFc
— Jason Perz (@JasonPerz138) May 6, 2021
#Ethereum is on a heater. Not just a little hot streak but a 10 day winning streak, something it has never done before. Over this 10 day street, #Ethereum is +~43%. @TheChartReport @coinbase pic.twitter.com/Kmj4BnczSF
— Matt Harris, CMT (@MattHarrisCMT) May 6, 2021
You know you are involved in a MAJOR bull market when you repeatedly catch yourself saying:
"I sold some way too early"
or
"I could have been a millionaire if only ____(fill in the blank)_____________________ $ETH pic.twitter.com/9P5fxx1XWc— Peter Brandt (@PeterLBrandt) May 6, 2021
One of the great comebacks in stock market history: Crocs back all-time highs after 14 years and a 99% drawdown…$CROX
Charting via @ycharts pic.twitter.com/L1Dfut7Dl9
— Charlie Bilello (@charliebilello) May 6, 2021
You’re all caught up now. Thanks for reading!