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Today’s Summary
Tuesday, May 12th, 2020
Indices: US Stocks closed lower after giving up some of the day’s earlier gains. The Dow Jones Industrial Average fell 457 points or 1.89%. The S&P 500 and Nasdaq dropped 2.05% and 2.06%, respectively. The Russell 2000 was the weakest of the major indices, tumbling 3.46%.
Sectors: All 11 sectors closed lower. Consumer Staples led but still fell 0.84%. Real Estate lagged significantly, dropping 4.25%.
Commodities: The June Crude Oil futures contract moved higher by 6.79% to $25.78 per barrel. Gold futures rose 0.53% to $1,707 per ounce.
Currencies: The US Dollar Index slipped 0.22%.
Interest Rates: The US 10-year Treasury dropped to 0.662%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
#Gold continues to coil and prep for a resolution. My bias here is that price will resolve higher in the direction of the underlying trend. $GLD $GDX $GDXJ pic.twitter.com/3nGiLQr7ry
— Tarek I. Saab (@FibLines) May 12, 2020
Today’s Chart of the Day was shared on Twitter by Tarek Saab (@FibLines). It is a daily candlestick chart of Gold futures. Tarek points out that price has coiled into a triangle pattern over the past few weeks. Think of these triangle patterns like the tightening of a spring, where the potential energy builds up as it is tightened. Similarly, as the range tightens and price makes its way towards the apex, the potential for an explosive move builds. Eventually, price will have to resolve higher or lower from this pattern. As Tarek notes, triangles often resolve in the direction of the underlying trend, which in the case of Gold, is higher. Either way, you can anticipate a strong move out of this consolidation in the near-term.
Quote of the Day
– William O’Neil (Founder of Investors Business Daily)
Top Links
What Happens When Stocks Soar in a Bear Market – SentimenTrader
Jason Goepfert examines what has historically happened when the S&P 500 soars above its 50-day moving average while remaining below its 200-day moving average.
Midweek Stock Market Recap and Technical Analysis – The Trade Risk
In this video, Evan Medeiros breaks down the recent price action in the major indices and sectors.
Quarantined Cash – Topdown Charts
Mike Zaccardi takes a look at sentiment and the amount of cash on the sidelines right now.
Are Your Banks Holding You Up? – StockCharts.com
Greg Schnell assesses the damage in US and European bank stocks.
Podcast with Peter Brandt – Panic with Friends
In this podcast, host Howard Lindzon interviews legendary futures trader, Peter Brandt. Some of the language is not safe for work, but it’s a great conversation with a highy respected market veteran.
Top 10 Tweets
That, my friends, was stocks’ worst puke since March 20*
*the last time the S&P 500 rose during the day, only to close down more than 2%
— Callie Cox (@callieabost) May 12, 2020
US #equities dropped sharply in the final hour of trading today. #NASDAQ down more than 2%. pic.twitter.com/D0xkd4SIAd
— jeroen blokland (@jsblokland) May 12, 2020
Today's 2% drop feels bad, but it's just a part of the 1-month chop – how it breaks is what matters $SPX pic.twitter.com/kQPvIWU2vi
— Abigail Doolittle (@TheChartress) May 12, 2020
$SPX has been getting drunk, hammering the Corona's, and he pulled up to say hi to his 200 day EMA today. He asked her if he could buy her a drink, he may have slurred his words a little.
What do you imagine she said to him? pic.twitter.com/6mYGPVWkMI
— Steve Deppe, CMT (@SJD10304) May 12, 2020
$VVIX has been showing a little more strength than $VIX lately, not matching spot volatility in setting lower-lows. pic.twitter.com/iXW3Kn0omn
— Andrew Thrasher, CMT (@AndrewThrasher) May 12, 2020
3-day equity put/call ratio at its lowest level since the February peak in stocks. Surge in skepticism/fear that accompanied stock market weakness has been completely unwound and we are back to seeing complacency. pic.twitter.com/0t8z3TqJO0
— Willie Delwiche (@WillieDelwiche) May 12, 2020
Beware 40-point drops in put/call #sentiment when $SPX is below 200-day trend. pic.twitter.com/fw5Yi0MWfY
— Mark Ungewitter (@mark_ungewitter) May 12, 2020
Bond Speculators have piled into the largest SHORT position in history.
Similar extreme positioning led to some of the biggest Bond rallies of all time.
With so much riding on recovery/reflation – if markets go back to risk-off/deflation, it could trigger a very painful unwind. pic.twitter.com/JmgB3oSjhb
— Macro Charts (@MacroCharts) May 12, 2020
Countdown begins. Oil's June contract (WTI) expires this time next week.
The market's essentially dumped the June contract for July and August. But someone will still touch the ball last before it goes out of bounds. #OOTT pic.twitter.com/6dyGJ38JoR
— David Ingles (@DavidInglesTV) May 11, 2020
Nasdaq 100 seriously just destroying everything else the last couple years$QQQ $SPY $DIA $IWM $ACWI pic.twitter.com/d1BHwlYvVc
— BostonCharts (@bostonchaahhts) May 12, 2020