Thursday, July 2nd, 2020
Indices: US Stocks ended the week on a positive note with the Dow Jones Industrial Average advancing 92 points or 0.36%. The S&P 500 and Nasdaq rose 0.45% and 0.52%, respectively. The Russell 2000 rose 0.32%.
Sectors: Materials led, gaining 1.88%. Real Estate lagged, slipping 0.34%.
Commodities: Crude Oil futures moved higher by 2.08% to $40.65 per barrel. Gold futures rose 0.57% to $1,790.
Currencies: The US Dollar Index inched higher by just 0.07%.
Interest Rates: The US 10-year Treasury inched lower to 0.675%.
**Reminder: the US Stock Market and Bond Market will both be closed tomorrow, July 3rd, in observance of Independence Day.**
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
NASDAQ making higher highs from a price perspective, but momentum and breadth heading in the opposite direction (% of stocks > 50-day actually contracted yesterday). pic.twitter.com/ltsV6RImbe
— Willie Delwiche, CMT, CFA (@WillieDelwiche) July 2, 2020
Today’s Chart of the Day was shared on Twitter by Willie Delwiche (@WillieDelwiche). The Nasdaq closed at an all-time high for the fourth of July! As we know, new highs are just about the most bullish thing that can happen. However, Willie points out that market internals have been deteriorating over the past month, while price has been printing new highs. Momentum indicators, like the MACD (above), and RSI (not shown), have been negatively diverging from price. Breadth indicators like the % of stocks above their 50, and 200-day moving averages have also been weakening. Bulls want to see these breadth and momentum indicators hitting new highs along with price, rather than diverging like they are now. It’s hard to be aggressively bearish with price hitting new highs, but it’s important to be aware that there are signs of weakness under the surface.
Quote of the Day
“There, I guess King George will be able to read that without his spectacles!”
– John Hancock
What Weak Breadth? – All Star Charts
Steve Strazza offers a different perspective on market breadth. He argues breadth is improving, rather than deteriorating like many suggest.
Nasdaq 100 Relative Strength Testing 2000 Highs – Kimble Charting Solutions
Chris Kimble takes a look at a long-term ratio chart of the Nasdaq 100 vs. S&P 500.
Is the Growth Theme Broadening? – Chaikin Analytics
In this video, Dan Russo updates his thoughts on the current market environment.
China’s Shanghai Composite Approaching 52-Week Highs – Bespoke
Bespoke discusses the breakout in Chinese equities.
Stock Market Video Analysis for Week Ending 7/2/20 – AlphaTrends.Net
Here’s Brian Shannon’s weekly analysis video, in which he breaks down this week’s price action, and highlights some key levels of interest to be aware of.
Top 10 Tweets
Bitcoin, gold, and the Nasdaq-100 continue to lead in 2020. pic.twitter.com/5ui141Fxey
— TradingView (@tradingview) July 2, 2020
Weekly $SPX update: stocks rebounded this week back towards the 5yr linear regression line. Feels like it wants to spend some time tethered there while things get sorted, but prevailing direction still up. pic.twitter.com/NfLqqgtnPt
— Michael Turvey (@MikeTurvey_TDA) July 2, 2020
Explosive rally in tech has pushed NASDAQ Internet Index's 14 week RSI to *extremely high* levels
Over the past 2 years this led to pullbacks & major corrections in tech stocks
Some traders have made a killing recently loading up on growth & tech stocks. Mean reversion ahead? pic.twitter.com/3iKfxhe5nS
— Troy Bombardia (@bullmarketsco) July 2, 2020
$NDX Daily Sentiment 21dma in the top 3% most overbought days in history (20 years).
Few days ever reached this level – could hold up a bit longer, but history suggests time's running out.
Monitor closely for signs of a reversal. I'll revisit this chart in time – stay tuned. pic.twitter.com/A1A6eBilNc
— Macro Charts (@MacroCharts) July 2, 2020
— Grant Hawkridge (@granthawkridge) July 2, 2020
The % of retail investors who say they are bullish is at the lowest level of the year. All it took was the best qtr since 1998 and spiraling coronavirus cases… pic.twitter.com/dFJYoFgucu
— Dani Burger (@daniburgz) July 2, 2020
Surprised? (We are)… Chinese stocks breaking out. pic.twitter.com/F3VKdxW1Z3
— Strategas (@StrategasRP) July 2, 2020
— Nautilus Research (@NautilusCap) July 2, 2020
— Bhagyashree Urdhwareshe, CMT (@sunsofttech) July 2, 2020
This is another one of those times when being a mindless chart trader is the superior strategy. And there are many of those times. Typically the smarter you are, the more likely you are to mess it up.
— Dow (@mark_dow) July 2, 2020