Monday, August 5th, 2019
Indices: US stocks suffered their worst day of 2019 today with the Dow Jones Industrial Average closing down 767 points or 2.90%. The Nasdaq was the weakest of the major indices, dropping 3.47%.
Sectors: All 11 sectors of the S&P 500 were lower. Utilities led, but still fell 1.43%. Technology lagged falling 4.17%.
Commodities: Crude Oil futures slipped 1.74% to settle at $54.69 per barrel. Gold futures surged to another multi-year high, gaining 1.30% to $1,476 per ounce.
Currencies: The US Dollar Index fell 0.58%.
Interest Rates: The US 10-year Treasury yield fell to 1.718% – a multi-year low.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day comes from a blog post by Michael Batnick of Ritholtz Wealth Management (@michaelbatnick). It’s a chart of the S&P 500 index going back to 2009 when stocks bottomed. Michael calls this chart the “Wall of Worry” because it illustrates the numerous reasons to sell over the past decade. Despite these bearish headlines, the bull market persisted and the index is up 257%. The chart emphasizes our belief that news follows price. In his blog post, Michael uses this great quote from Bill Gates: “Headlines, in a way, are what mislead you, because bad news is a headline and gradual improvement is not.” The media attributed today’s loss to escalating trade tensions between the US and China. These headlines make it seem like the world is ending, however, this chart serves as an important reminder of the dangers of trying to trade the news. While we may see more turbulence in the short-term, longer-term the trend is still up and the structural bull market is still intact.
Quote of The Day
“When the time comes to buy, you won’t want to.”
Easy as Yuan, Two, Three – The Chart Report
In this report, we highlight what some of the top-technicians are saying about the relationship between the Chinese Yuan and the US Dollar.
Why the Stock Market Must Go Down – The Reformed Broker
Here’s a great read from Josh Brown of Ritholtz Wealth Management. In the blog post, he explains why stocks need to go down in order to go up, saying: “Without the threat of losses, the gains never show up.”
Gold Higher and Dollars Lower – All Star Charts
In this video from All Star Charts, JC Parets and Steve Strazza of The Chart Report discuss the recent moves in both the Dollar and Gold.
Silver to Gold Ratio About to Send Monster Bullish Message? – Kimble Charting Solutions
Chris Kimble examines an important risk metric for the precious metals market, the Silver/Gold ratio. He tells readers to keep an eye on this ratio as a breakout in Silver relative to Gold would be bullish for the precious metals space.
Stock Market Back at Pivot-al Level – Dana Lyons
Dana Lyons of J. Lyons Fund Management takes a look at the Value Line Geometric Composite, an index that tracks the “median” stock in the US stock market. He points out that this index is at a key inflection point right now.
Top 10 Tweets
The stock market fell because if it only went up there would be no risk and if there’s no risk there’s no return, and if there’s no return people will sell, so the stock market fell. The end.
— Morgan Housel (@morganhousel) October 25, 2018
— Michael Antonelli (@BullandBaird) August 5, 2019
Dow Jones Industrial Average Weekly line chart. it hasn't really violated that rising trend line in almost a decade. still in a structural up trend if we're above that trend line IMO $DIA $DJI pic.twitter.com/amJ7PROD5Z
— BostonCharts (@bostonchaahhts) August 5, 2019
I hate a flat 200 day avg. It's like a magnet 🧲. Should be rising soon regardless as we move away from late 2018. pic.twitter.com/dizUR4JrGv
— Stephen Eckhardt📍 (@seckhardt) August 5, 2019
— Yuriy Matso (@yuriymatso) August 5, 2019
— Brian Shannon, CMT (@alphatrends) August 5, 2019
— DailyFX Team Live (@DailyFXTeam) August 5, 2019
— TM 📉🧐📈 (@TraderMentality) August 5, 2019
— John Kicklighter (@JohnKicklighter) August 5, 2019
Two weeks ago, I called $USDCNY 7.00 "the most important price in the world" – that level has now broken, suggesting that the US-China trade tensions may be prolonged and could get worse before they get better. pic.twitter.com/NMsbjSxt6c
— Matt Weller CFA, CMT (@MWellerFX) August 5, 2019
You’re all caught up now. Thanks for reading!