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Today’s Summary
Monday, July 19th, 2021
Indices: US Stocks continued lower to start the week. The Dow dropped 726 points or 2.09%. The S&P 500 and Nasdaq fell 1.59% and 1.06%, respectively. The Russell 2000 closed lower by 1.50%.
Sectors: All 11 sectors closed lower. Consumer Staples led, but still fell 0.30%. Energy lagged again, dropping 3.53%.
Commodities: Crude Oil futures had their worst day in nearly a year, tumbling 7.28% to $66.35 per barrel. Gold futures fell 0.32% to $1,809 per ounce.
Currencies: The US Dollar Index rose 0.13%.
Interest Rates: The 10-year US Treasury yield continued lower to 1.192%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
$RTY, 4h
2100 is the make it or break it level. pic.twitter.com/p8bRJqA7vF
— Yuriy Matso (@yuriymatso) July 19, 2021
Today’s Chart of the Day was shared by Yuriy Matso (@yuriymatso). It’s a 4-hour candlestick chart of Russell 2000 futures over the past six months. All eyes are on the Small-Cap Russell 2000 right now as it tests a crucial support level. As we know, Small-Caps often lead the broader market higher or lower. The index peaked in March and has been rangebound (between 2,100 and 2,350) ever since. Yuriy points out that we’re currently testing the lower bounds of that range, around 2,100. This level has acted as support three times already this year. Will the fourth test be a success? A bounce here has the potential to stick save the broader market. However, a break below this well-defined level would hint at further market weakness. Either way, the Russell 2000 is about to give us some valuable information, so pay attention to how price behaves around that 2,100 level!
Quote of the Day
“The markets take the stairs up and the elevator down.”
–Wall Street Adage
Top Links
Small-Caps Enter Correction Territory – Bespoke
Bespoke points out that the Russell 2000 briefly entered correction territory in today’s session (-10%).
The Latest Stock Sell-Off is a ‘Healthy Pullback’ and Investors Should Refrain From Panicking, According to One Technical Analyst – Markets Insider
Katie Stockton offers her technical perspective on the recent weakness in stocks.
Rotation, Rotation, Rotation – Means to a Trend
Austin Harrison points out that defensive sectors, like Utilities and Consumer Staples, have perked up recently.
Summertime Sadness? – The Weekly Trend
In this podcast, David Zarling and Ian McMillan discuss some of the most significant technical developments across the markets.
The Peak of the Presidential Cycle – Crossing Wall Street
Eddy Elfenbein explains that we’re approaching a peak in the four-year Presidential Cycle.
Top Tweets
Worst day for the S&P 500 since May 12.
— Eddy Elfenbein (@EddyElfenbein) July 19, 2021
Why's there a lot of fear out there?
Easy, there's a "here we go again" feel to the price action.
Today's like Monday Feb 24th of 2020, when $SPX fell -3.31%.
That's the last Monday to decline -2% or worse & close within -5% of ATH's.
20 days later we were down -30.44%…
— Steve Deppe, CMT (@SJD10304) July 19, 2021
Successful Test of the 50 DMA. Generally as good as it gets? pic.twitter.com/6NND7b6T3g
— David Larew (@ThinkTankCharts) July 19, 2021
for you Dow Theory enthusiasts pic.twitter.com/BMjNGKsFYV
— J.C. Parets (@allstarcharts) July 19, 2021
Did $VLG provide another valuable heads up? #stocks pic.twitter.com/8CwsPWqS03
— Ian Culley (@IanCulley) July 19, 2021
These industry groups were not able to break out of their bases, instead, they are being rejected by overhead supply levels.$FDN $SMH $HACK $IPAY pic.twitter.com/EJKVAMBZcI
— R. Alfonso Depablos (@AlfCharts) July 19, 2021
First new multi-month low for High/Low Beta since last March. pic.twitter.com/uSSCCSMvz2
— Strategas (@StrategasRP) July 19, 2021
The Zweig Breadth Thrust buy signal occurs when the mkt moves from OS to OB in 10 trading days
Most technicians don't use the ZBT signals this way, but my estimate of the ZBT Indicator and the ZBT Indicator using $SPX components (instead of Zweig's NYSE components) are oversold pic.twitter.com/BniMYbiWEo
— Cam Hui, CFA (@HumbleStudent) July 19, 2021
Energy deflected. $WTIC $XLE $SPY pic.twitter.com/IAGHZZCIvv
— Mark Ungewitter (@mark_ungewitter) July 19, 2021
#Oil now with a full backtest of the multi-year breakout at 66.50ish $USO $CL_F pic.twitter.com/1QS2WZ8UR7
— Tarek I. Saab (@FibLines) July 19, 2021
$OIH this would be a likely level of support for oil, will former resistance turns into support, or will it be another false breakout… pic.twitter.com/qobxwTkEFT
— Bailey.Baxter2020 (@BBaxter2020) July 19, 2021
BREAKING! The 10-year US Treasury #yield drops below 1.20%, the lowest level in over five months. pic.twitter.com/6aP0VHmzBu
— jeroen blokland (@jsblokland) July 19, 2021
Copper/Gold & US 10yr Yield – We're seeing the metals ratio and yields recouple after we saw short term (3 month) correlations dropping below -0.50 while the 1yr correlation remained above 0.95 earlier this year. pic.twitter.com/sZ2CfiZ49B
— Bob Sheehan, CMT, CFA (@LighthouseCap23) July 19, 2021
Interesting performance shifts – only six weeks. Bonds +10%, Stocks flat, USD +3%. pic.twitter.com/HscPBtTLBQ
— Frances Horodelski (@fhoro) July 19, 2021
Lumber futures are down 69% from their peak just 2 months ago. They were up 130% on the year in May , adding $35,872 to the cost of an avg new home. Now down 25% on the year & home prices are still at record highs and rising, with extra margin going to homebuilders. pic.twitter.com/FLuJlID9gl
— Charlie Bilello (@charliebilello) July 19, 2021
You’re all caught up now. Thanks for reading!