Wednesday, May 20th, 2020
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average gaining 369 points or 1.52%. The S&P 500 and Nasdaq rose 1.67% and 2.08%, respectively. Small-Caps outperformed with the Russell 2000 jumping 3.00%.
Sectors: All 11 sectors closed higher. Energy led, gaining 3.99%. Health Care lagged but still inched up 0.12%.
Commodities: The July Crude Oil futures contract moved higher by 4.88% to $33.52 per barrel. Gold futures rose 0.33% to $1,751 per ounce.
Currencies: The US Dollar Index changed fell 0.40%.
Interest Rates: The US 10-year Treasury yield inched higher to 0.690%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The below list is populated by, what we like to call, the usual suspects – dates that even a casual observer of market
history will be familiar with… 1998, 1982, 1975, 1962, etc (i.e., major lows). pic.twitter.com/uBCMankkVD
— Strategas (@StrategasRP) May 20, 2020
Today’s Chart of the Day was shared on Twitter by Strategas Research (@StrategasRP). The S&P 500 is up about 30% in the past 40-days, which is one of the best 40-day performances in recent history. Many argue stocks have gone too far too fast, while others believe the momentum from this sharp rally can push us higher. The table shows the S&P 500 forward returns over the next 20, 65, 125, and 250-days following the best 40-day % gains. On average, both the short-term and long-term returns have been positive, with an average gain of 16.3% over the next 250-days. As Strategas points out, several of these dates coincide with major lows in the S&P 500. 2001 was a clear outlier with the index falling 20.6% over the next 250-days. However, overall returns following some of the best 40-day gains have been pretty strong. Using history as a guide, it’s hard to argue that stocks have gone too far too fast.
Quote of the Day
“The opportunity to secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.”
– Sun Tzu (Military Strategist)
What Happens When the Bear Ends? – LPL Financial Research
Going along with today’s Chart of the Day, the team at LPL Financial Research examines what has historically happened after sharp rallies in the S&P 500.
Bulls, Bears Locked in Rangebound Action, Even As Options Signal Froth Building – Hedgopia
Hedgopia explains that the Put/Call ratio is beginning to show signs of froth in the market.
Commodities Showing Short-Term Strength – SunSoft Analytics
Here’s a good inter-market perspective from Bhagyashree Urdhwareshe.
Stocks Stall, Patience Pays – MurphyCharts
Shane Murphy takes a look at what two important risk ratios could be telling us about the health of the market.
Bond ETFs Breakout – Bespoke
Bespoke points out that several popular bond ETFs ($HYG, $MUB, and $LQD) are breaking out from their downtrend lines.
Top 10 Tweets
Highest close since March 6.
The S&P 500 has now gained 32.8% since the low two months ago.
We're now down 12.2% from the highest close.
— Eddy Elfenbein (@EddyElfenbein) May 20, 2020
— Andrew Adams CFA, CMT (@DayTraderGator) May 20, 2020
— John Kicklighter (@JohnKicklighter) May 20, 2020
Few things represent the market's zeitgeist more than the IPO market. IPO index making a new high today. pic.twitter.com/YCopmCSX0t
— RenMac: Renaissance Macro Research (@RenMacLLC) May 20, 2020
Airlines etc. making headlines when they jump 10+% but let's remember they're coming off of blowout lows. Relative strength still abysmal and I'd rather bet on what's working. Testing its 50-day MA for the first time since Feb though! $XAL pic.twitter.com/4Vzwk9pSlR
— David Keller, CMT (@DKellerCMT) May 20, 2020
— Drew Wells, CMT, CIMA® (@DrewTheCharts) May 20, 2020
— Steven Strazza (@sstrazza) May 20, 2020
The Gold Miner Index is up 77% over the past 2 months.
The only other time this happened?
December 2008, after which the Gold Miner Index still surged another 54% over the next year pic.twitter.com/KITzcWAWTr
— SentimenTrader (@sentimentrader) May 20, 2020
Copper is higher high-ing again today. pic.twitter.com/qz2o5ylVOY
— Willie Delwiche (@WillieDelwiche) May 20, 2020
— J4 (@J4_fibo) May 20, 2020