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Today’s Summary
Friday, July 29th, 2022
Indices: Nasdaq 100 +1.81% | S&P 500 +1.42% | Dow +0.97% | Russell 2000 +0.65%
Sectors: 9 of the 11 sectors closed higher. Energy led, gaining +4.34%. Consumer Staples lagged, falling -0.77%.
Commodities: Crude Oil futures rose +1.95% to $98.30 per barrel. Gold futures gained +0.76% to $1,783 per ounce.
Currencies: The US Dollar Index dropped -0.36%.
Crypto: Bitcoin inched lower by -0.37% to $23,766. Ethereum fell -1.15% to $1,706.
Interest Rates: The US 10-year Treasury yield dropped to a 3-month low of 2.654%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Percent of $SPX stocks at 20-day new highs rose above 55% for first time since June 2020 (concept thanks to Jeff DeGraaf). This marks the 3rd breadth thrust signal in the last 8 trading sessions. Broader than off the March and May lows. @WillieDelwiche @RenMacLLC pic.twitter.com/ofhLRPyyv8
— Ed Clissold (@edclissold) July 29, 2022
Today’s Chart of the Day was shared by Ed Clissold (@edclissold). Several technicians have noted that a rare breadth thrust triggered yesterday. The percentage of S&P 500 stocks at 20-day highs spiked above 55% for the first time since June 2020. This signal, popularized by Jeff deGraaf, often marks the start of a multi-month rally. Of course, no indicator is perfect and there have been some notable failures, such as in 2002 & 2011. This doesn’t guarantee that the bottom is in, but it does strengthen the bull case.
Quote of the Day
“Bad times have a scientific value. These are occasions a good learner would not miss.”
– Ralph Waldo Emerson
Top Links
Why Jeff deGraaf Says 20-Day Highs are Important? – Renaissance Macro Research
In this quick clip, Jeff deGraaf explains why the spike in 20-day highs is meaningful.
Nasdaq Month End Analysis – StockCharts
Greg Schnell takes a look at what could be next for the Nasdaq after the index had its best month since April 2020.
US Dollar Forms Large Bearish Reversal Pattern, Weakness Ahead? – See it Market
Chris Kimble points out that the red-hot US Dollar formed a bearish reversal candlestick in July.
When Does it Make Sense to “Buy the Dip” – Research by Potomac
Drew Wells explains how to “Buy the Dip” responsibly.
August’s First Trading Day Weakest of All – Almanac Trader
Seasonality expert, Jeff Hirsch examines how the major averages have historically performed on the first trading day in August.
Top Tweets
Nasdaq +12% in July…
Best month since April 2020!— Caroline Hyde (@CarolineHydeTV) July 29, 2022
This was the best July for the S&P 500 since 1939, up 9.1%.
Of course, it was on the heels of 3rd worst June ever (-8.4%). pic.twitter.com/lHBDLqmmAN
— Ryan Detrick, CMT (@RyanDetrick) July 29, 2022
August and Sept are often dicey in mid-term years $SPY pic.twitter.com/vnAOVL7UZS
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) July 29, 2022
Very good week for bulls. Looks very similar to March at this point. Next couple weeks are important. $SPX $SPY pic.twitter.com/QafCSmPKPp
— Jim Denholm, CMT (@denholm_jim) July 29, 2022
This measure has been making the rounds today… hitting 56% of $SPX components at 20-day highs on 7/28. I understand this to be originated by Jeff deGraaf of @RenMacLLC. I've put the forward returns and drawdowns in a table here. Best R:R out 12 months. https://t.co/70UNVJYU73 pic.twitter.com/hiNs2i5Qbf
— Jonathan Harrier, CMT (@jonathanharrier) July 29, 2022
Not every signal was a home run (tough slog to get back to even after Jul 2011 and Mar 2002 was a stinker) but there has usually been a persistent path higher in the wake of this breadth thrust.
https://t.co/QL67OFbwcA pic.twitter.com/ORxcrEfGbI
— Willie Delwiche, CMT, CFA (@WillieDelwiche) July 29, 2022
No indicator is perfect, or uniquely prescient, but here’s one that’s likely to confirm the next durable advance. pic.twitter.com/LaVj0zBc1S
— Mark Ungewitter (@mark_ungewitter) July 29, 2022
U.S. high-yield bonds have gained 5.1% so far in July, poised for the best monthly performance since October 2011: @theterminal @jackpitcher20 pic.twitter.com/B9mlwyMLjn
— Lisa Abramowicz (@lisaabramowicz1) July 29, 2022
WTI ? #CL_F tried and tried and tried to break support at 95 and couldn't, now looks like ready to start climbing again pic.twitter.com/Wd8A4jpR9m
— Oliver Renick (@OJRenick) July 29, 2022
Big test for Energy here with $XLE right back at that shelf of former highs from 2016-18 pic.twitter.com/L7JDp2N49N
— Steven Strazza (@sstrazza) July 29, 2022
A new filing under "Things that make say hmm"… $JPM has not participated whatsoever in this recent equity rally, from a technical perspective. Something that I would expect/want to see out of a truly robust move higher. pic.twitter.com/V3ArtgOnJA
— Ian McMillan, CMT (@the_chart_life) July 29, 2022
You’re all caught up now. Thanks for reading!