Tuesday, August 4th, 2020
Indices: US Stocks continued higher in today’s session with the Dow Jones Industrial Average advancing 164 points or 0.62%. The S&P 500 and Nasdaq rose 0.36% and 0.35%, respectively. Small-Caps outperformed with the Russell 2000 gaining 0.69%.
Sectors: Energy led, gaining 2.43%. Health Care and Financials were the only sectors to close lower, slipping 0.44% and 0.41%, respectively.
Commodities: Crude Oil futures moved higher by 1.68% to $41.70 per barrel. Gold futures jumped 1.75% to an all-time high of $2,021 per ounce.
Currencies: The US Dollar Index fell 0.27%.
Interest Rates: The US 10-year Treasury yield dropped to 0.508%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Friendly reminder that overbought is a good thing…
— J4 (@J4_doji) August 4, 2020
Today’s Chart of the Day was shared on Twitter by @J4_doji. It’s a weekly candlestick chart of Gold over the past two decades, with a 14-period RSI indicator in the lower pane. Gold Bugs celebrated another milestone today as price closed above $2,000 an ounce for the first time ever. The recent momentum has pushed the RSI into “overbought” territory, above 70. “Overbought” sounds like a bearish characteristic, however, @J4_doji reminds us that longer-term, the fact that RSI has reached “overbought” territory is actually bullish. Take a look at the period between 2001 and 2011. RSI was in what we call a “bullish regime” – oscillating between 50 and 100 for a decade. Price surged more than 500% in that time, and RSI never reached “oversold” levels. Then, in 2011, price began to stall for about 8-years. RSI shifted into a “bearish regime” – repeatedly hitting oversold levels and failing to stay overbought. The fact that price is currently breaking out to all-time highs and RSI refuses to fall below 50 is evidence that momentum has shifted back into a bullish regime.
Quote of the Day
“There’s no fever like gold fever.”
– Richard Russell
Everything’s Breaking Out To The Upside EXCEPT The US Dollar – Big Trends Monthly
Here’s a great video with Josh Brown and JC Parets. They review several monthly candlestick charts to identify the strongest trends across the markets.
What’s Behind Dollar Weakness? – TD Ameritrade Network
Legendary trend follower, Jerry Parker shares his thoughts on the recent price action in Currencies and Commodities.
Biotech Idea Flow – The Rotation Report
Aaron Jackson shares some bullish chart setups within the Biotech space.
Gold, Silver, USD: Where to Next? – Fibonacci.com
Tarek Saab offers his technical outlook on Precious Metals and the US Dollar.
The Most Lopsided Days – The Irrelevant Investor
Here are some thoughts from Michael Batnick and Jonathan Krinsky on the lack of breadth that many are concerned about right now.
The S&P 500 gained 10.7% the first 5 months of this recession.
Turns out, stock gains during recessions are actually quite normal. pic.twitter.com/b5h6I1HpLd
— Ryan Detrick, CMT (@RyanDetrick) August 4, 2020
— Abigail Doolittle (@TheChartress) August 4, 2020
The Semi's have beaten Small Value by ~66% the last 12 months.
The bifurcation of "markets" continues. pic.twitter.com/dKr3YbuiHQ
— Steve Deppe, CMT (@SJD10304) August 4, 2020
Maybe this is the bottom in Small Cap Value but there is a pretty clear line in the sand to tell you if it is, you don't have "guess." pic.twitter.com/a1p8QGnyID
— Dan Russo, CMT (@DanRusso_CMT) August 4, 2020
Crude oil bumping up against $42, which was a huge support level over the last 5-years. Daily Bollinger Bands also extremely tight — likely indicating a big move either way. $CL_F pic.twitter.com/zhnMjjfRVU
— Matthew Timpane, CMT (@mtimpane) August 4, 2020
✔️ Gold: All-Time High $GLD
✔️ Nasdaq 100… Yup, All-Time High $QQQ
Welcome to 2020 🥳 pic.twitter.com/dGAndR5dbi
— Steven Strazza (@sstrazza) August 4, 2020
— Larry Tentarelli, Blue Chip Daily (@LMT978) August 4, 2020
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) August 4, 2020
— jeroen blokland (@jsblokland) August 4, 2020
A sampling of DM 10yr yields.
Best you can do is Korea and Italy a shade over 1% pic.twitter.com/leDbleOBGh
— Michael Antonelli (@BullandBaird) August 4, 2020
I know `the dollar is collapsing!' panic was last week but look at this chart I was just sent… I'm no technical analyst but that trendline has held for 9 years pic.twitter.com/QwlwJgJoad
— Katherine Greifeld (@kgreifeld) August 4, 2020