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Today’s Summary
Thursday, September 23rd, 2021
Indices: US Stocks continued to rebound in today’s session. The Dow closed higher by 507 points or 1.48%. The S&P 500 and Nasdaq rose 1.21% and 1.04%, respectively. The Russell 2000 outperformed, gaining 1.82%.
Sectors: 9 of the 11 sectors closed higher. Energy led by a wide margin, rising 3.50%. Utilities lagged, falling 0.53%, marking an 11-day losing streak for the sector.
Commodities: Crude Oil futures moved higher by 1.48% to $73.30 per barrel. Gold futures dropped 1.63% to $1,750 per ounce.
Currencies: The US Dollar Index fell 0.36%.
Interest Rates: The 10-year US Treasury yield jumped to a two-month high of 1.432%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Intriguing move here in yields – after repeatedly topping out around 1.38% over the last two months, the benchmark 10-year treasury yield is peeking above that level for the first time since July$TNX pic.twitter.com/RSkyxpj1pe
— Matt Weller CFA, CMT (@MWellerFX) September 23, 2021
Today’s Chart of the Day was shared by Matt Weller (@MWellerFX). It’s a daily candlestick chart of the US 10-year Treasury yield over the past six months. The 10-year yield broke out to its highest level in more than two months today, and it’s now back above the widely watched 1.40% level. Stocks don’t have to fall just because yields are rising, but rising rates will likely influence which areas of the market outperform. Cyclical sectors like Financials, Energy, and Industrials are likely to benefit from higher rates. On the other hand, it could prove to be a headwind for bond-proxy sectors like Utilities and Real Estate, and growth-oriented sectors like Tech. Watch for follow-through over the next few days to confirm this breakout. But as of today, the market is telling us that yields want to resolve higher.
Quote of the Day
“Education is the ability to listen to almost anything without losing your temper or your self-confidence.”
– Robert Frost
Top Links
Mid Week Update – The Chart Report
Steve Strazza and Patrick Dunuwila discuss the recent pullback in Stocks and the breakout in Treasury yields.
Wake Me Up When the Data Changes – Potomac Fund Management
Dan Russo checks up on market breadth.
Market Trend Analysis: Bearish or Bullish – TD Ameritrade Network
In this clip, David Keller shares his thoughts on the current market environment.
Individual Investor Sentiment Bounces Back – Bespoke
Bespoke breaks down the results of the latest sentiment surveys.
Bitcoin’s Bear Trap – All Star Charts
Louis Sykes takes a look at a potential failed breakdown in Bitcoin.
Top Tweets
This is the relief rally of all relief rallies.
The S&P 500 hasn't jumped this much on a day when the 10-year yield rose 10 bps or more since the March 2020 COVID bottom.
…and it's happening within 2% of record highs!
— Callie Cox (@callieabost) September 23, 2021
The streak that no one cares about:$XLU Utilities down 11 straight days…
… tied for most (Oct'16) in its history (inception 12/98).
— Frank Cappelleri (@FrankCappelleri) September 23, 2021
4 previous holds of the 50.
5th time expectations thru the roof.
Breaks 50, holds 100, back above 50.
This is 'trading' pic.twitter.com/Cvwj9SDuRS
— Arun S. Chopra CFA CMT? (@FusionptCapital) September 23, 2021
Price action on #SPX so far: filling the gap and re-testing the broken trend channel lower boundary. pic.twitter.com/MPsQdKHsjz
— Aksel Kibar, CMT (@TechCharts) September 23, 2021
$ES_F S&P 500 Index Futures
We're above diagonal resistance and saw a bullish 21/50 EMA crossover on the 130min chart. pic.twitter.com/aYIKWwQFCP
— Shane C. Murphy (@murphycharts) September 23, 2021
$FFTY so very strong. pic.twitter.com/JtV0rEOEul
— Venky Srinivasan (@sssvenky) September 23, 2021
Potential breakout for the 10-year yield this week.
This is a weekly chart, so tomorrow matters a lot, but this is on the verge of moving higher it looks like.
Higher yields should help financials, which would be a tail wind for value (and likely small caps). pic.twitter.com/iODcrS57r4
— Ryan Detrick, CMT (@RyanDetrick) September 23, 2021
If you're thinking about how to position your portfolio for a rising rate environment (which you should be)…
Financials & Energy are a good start $XLF $XLE pic.twitter.com/RXZrSYE2CM
— Steven Strazza (@sstrazza) September 23, 2021
With 10yr yields breakingout today, it's a good time to understand/review historical industry group sensitivities to yields. In a word: #cyclicality pic.twitter.com/JCbnqCEi8o
— RenMac: Renaissance Macro Research (@RenMacLLC) September 23, 2021
Relationship between Tech $XLK and 10-yr. yield $TNX
Yields rising produces tech underperformance, yields falling finds tech outperformance with respect to $SPY
Hence, Tech underperforming today as yields rise sharply. Underperform does not necessarily mean Tech goes down. pic.twitter.com/khINrnbPJ2
— Seth Golden (@SethCL) September 23, 2021
$QQQ vs $IWM
Nasdaq 100 vs Russell 2000
This relationship has stalled out at the .618 retracement and is now losing a rate of trend with RSI divergences. pic.twitter.com/RUTuk3vaxz— Pratyush Tulsian (@PrattyCharts) September 23, 2021
Get ready for the inflation chatter to heat back up if this relationship continues higher… pic.twitter.com/sXh8Yg6OgQ
— Ian McMillan, CMT (@the_chart_life) September 23, 2021
BREAKING! #Brent Crude #oil futures settle at the highest level since October 2018. #Commodities. pic.twitter.com/Od5NPdNcfX
— jeroen blokland (@jsblokland) September 23, 2021
short keto? pic.twitter.com/8xqMQl1IYL
— Louis Sykes (@haumicharts) September 23, 2021
You’re all caught up now. Thanks for reading!