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Today’s Summary
Wednesday, May 27th, 2020
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average advancing 553 points or 2.21%. The S&P 500 rose 1.48% and closed above its 200-day moving average for the first time in 57 trading days. The Nasdaq clawed back the day’s earlier losses to close up 0.77%. Small-Cap outperformed with the Russell 2000 jumping 3.11%.
Sectors: All 11 sectors closed higher. Financials led for the second day in a row, gaining 4.34%. Technology lagged but still rose 0.57%.
Commodities: The July Crude Oil futures contract fell 4.48% to $32.81 per barrel. Gold futures rose 0.30% to $1,711 per ounce.
Currencies: The US Dollar Index inched lower by 0.07%.
Interest Rates: The US 10-year Treasury yield slipped to 0.693%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Over 90% of stocks are above their 50-day moving averages, an important confirmation of short-term breadth thrust signals from late March/early April. @NDR_Research 1/2 pic.twitter.com/baoJXQIQeq
— Ed Clissold (@edclissold) May 27, 2020
Today’s Chart of the Day was shared on Twitter by Ed Clissold (@edclissold) of Ned Davis Research. Bulls won a major victory today with the S&P 500 closing above its 200-day moving average for the first time in 57 trading days. In addition to this bullish milestone, Ed points out that over 90% of stocks within the index are above their 50-day moving average. The black arrows mark the 19 prior signals where this breadth indicator rose above 90% after dipping to at least 75%. A year later (253 trading days), the S&P 500 was higher 19 out of the 19 times, with a median gain of 16.28%. Even the short-term returns have been positive, with a median gain of 0.79% 10-days later. Ed also noted, “This is an intermediate-term breadth gauge, so it is going to be late. It has fired a median of 1.8 months after bear market lows. This one was 2.0 months.”
Quote of the Day
“It feels good to get your ideas out in the world, leave a little of your imprint around. I have never lost anything by giving ideas away. If people find it useful, it makes me feel good.”
– Gerald Appel (Creator of the MACD)
Top Links
The Losers – Bespoke
As we pointed out in today’s Chart of the Day, 90% of S&P 500 stocks are above their respective 50-day moving averages. In this note, Bespoke takes a look at the other 10% of S&P 500 stocks that remain below their 50-day moving average.
4-minute Mid-Week Update – AlphaTrends.net
In this quick video, Brian Shannon lays out some key levels of interest to focus on throughout the remainder of the week.
Typical June Trading: Early Gains Tend to Fade After Mid-Month – Almanac Trader
Seasonality expert, Jeff Hirsch discusses how stocks have historically performed in June.
How Much of the Bear Market’s Losses Have Been Recovered? – A Wealth of Common Sense
Ben Carlson compares how far the major indices have bounced from the March lows.
ATH…Almost…Kinda, Well, Not Really – Crossing Wall Street
Eddy Elfenbein shares this totally useless, but fun stat: The S&P 500 would be positive right now if you exclude March 16th when the index tumbled nearly 12% in a single day.
Top 10 Tweets
All of market's declines this year have come outside regular trading hours:
Buying SPY at close every day & selling at next day's open: -19.7%
Buying SPY at open every day & selling at close same day: +16.9%@bespokeinvest
[Past performance is no guarantee of future results] pic.twitter.com/jKY3hf9t8g— Liz Ann Sonders (@LizAnnSonders) May 27, 2020
The S&P 500 $SPY generated almost no gains during the day session between 1993 and 2019.
All of the gains in price have been generated by buying and holding overnight ( for decades)
h/t @mikeharrisNY pic.twitter.com/qmg0EYiekU
— Dividend Growth Investor (@DividendGrowth) May 27, 2020
More than 90% of the components in the S&P 500 are currently above their 50-day moving average.
The past 11 times this happened, it was higher a year later 10 times and up nearly +16% on average.
Overbought isn't always bearish. pic.twitter.com/K8k2DyuYkL
— Ryan Detrick, CMT (@RyanDetrick) May 27, 2020
Historically rare (and bullish) to get > 90% of stocks above 50-day moving average. Short-term overbought, but usually found coming off major market lows. Next few months anyone's guess, but another bullish momentum signature to be sure. pic.twitter.com/FFg30DSdGo
— Chris Verrone (@verrone_chris) May 27, 2020
$SPX participation above 50dma (following deep internal trough) has surpassed 90%, indicating durable rally ahead. Confirmation from participation above 50ema >85% would help avoid “bull trap” readings of 2001/02. pic.twitter.com/V7lBcvoR1O
— Mark Ungewitter (@mark_ungewitter) May 27, 2020
Very much worth noting that small caps now in a relative uptrend vs. the $SPX which is a huge change from previous months/years. Mega cap tech trade appears over for now! $IWM pic.twitter.com/ecpGMhMIwW
— David Keller, CMT (@DKellerCMT) May 27, 2020
1/2: Bonds still holding the line in yet another battle. Will they win the war, or will we see a potential head & shoulders reversal of the primary uptrend?
Momentum never hit bearish territory, even during the wild volatility in March.$TLT pic.twitter.com/Byds4QrByM
— Adam D. Koós, CFP®, CMT (@AdamKoos) May 27, 2020
1700 is the level for now. If it holds and breaks the 2012 highs ~1800 looks like blue skies & ATHs for $GLD $GC_F pic.twitter.com/uMsMTGA4P4
— Steven Strazza (@sstrazza) May 27, 2020
It's pretty amazing that the recent depreciation of the Chinese #yuan is not at all reflected in stock markets. #CNY #CNH pic.twitter.com/xgnsI8nl7k
— jeroen blokland (@jsblokland) May 27, 2020
My stream went from breadth is terrible to breath is beautiful in the span of a week.
The low was 45 days ago and the Wilshire 5k is up 35% so a 50-d moving average will show a lot of stocks are above it. That’s how math works
— ukarlewitz (@ukarlewitz) May 27, 2020