Thursday, September 24th, 2020
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average inching up 52 points or 0.20%. The S&P 500 and Nasdaq rose 0.30% and 0.37%, respectively. Small-Caps underperformed, ending flat on the day (0.02%).
Sectors: 9 of the 11 sectors closed higher. Utilities led, gaining 1.12%. Health Care lagged, slipping 0.50%.
Commodities: Crude Oil futures moved higher by 0.95% to $40.31 per barrel. Gold futures rose 0.45% to $1,877 per ounce.
Currencies: The US Dollar Index was flat (0.01%).
Interest Rates: The US 10-year Treasury yield inched higher to 0.674%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Ladies and gentlemen, we have a Dow Theory nonconfirmation. Higher highs in one index not confirmed by higher highs in the other. Now both indexes threatening new swing lows. $INDU $DJIA $TRAN $DJIT pic.twitter.com/srXrQ443zV
— David Keller, CMT (@DKellerCMT) September 24, 2020
Today’s Chart of the Day was shared on Twitter by David Keller (@DKellerCMT). On top, we have the Dow Jones Industrial Average and on the bottom, we have the Dow Jones Transportation Average. David points out that we have a classic Dow Theory non-confirmation signal. One of the tenets of Dow Theory is the idea that you want the companies that produce the goods (Industrials) to confirm the trend of the companies that move the goods (Transports). In other words, when one index makes a new high, you want the other index to also make a new high within a reasonable amount of time. As David highlights, Transports printed a new all-time high on Sept. 16th, while Industrials failed to follow suit. Some argue that Dow Theory is irrelevant in today’s modern economy. But just take a look at how these two were behaving in the weeks leading up to the crash in February. It’s important to keep in mind that divergences can persist for a while without any major downside follow-through, and it’s also entirely possible that the Industrials get their act together and print new highs. But until we get that confirmation, be aware that this red flag exists, and proceed with caution.
Quote of the Day
“The time to repair the roof is when the sun is shining.”
– John F. Kennedy
This is No Way to Celebrate – Bespoke
Bespoke points out that the S&P 500 is up more than 45% over the past six months, which is the strongest rolling six-month gain in over a decade.
The Dollar’s Trend Seems To Be Turning, But… – SentimenTrader
Jason Goepfert examines how the US Dollar has historically performed 1-3 months after ending a long streak below its 50-day moving average.
The Reflation Trade’s Upcoming Retest – All Star Charts
Tom Bruni offers an update on the reflation trade.
Key Inflation Indicators Facing Big Test in September – Kimble Charting Solutions
More on inflation! Chris Kimble takes a look at what Commodities, Copper futures, and the Materials sector could be telling us about inflation.
The Chart Report India
We’re just launched The Chart Report India! If you follow the Indian markets, sign up for free!
Six months off the 3/23 lows the S&P 500 added 46.6%, only 6 months in 2009 were better.
Here is what happened after all the times it added >30%.
Hint – not all that bearish. pic.twitter.com/VU6TgNP4Gd
— Ryan Detrick, CMT (@RyanDetrick) September 24, 2020
Most Volatile Years in Stock Market History (updated):
184 days into 2020 (x-axis), Stocks have moved >1% for a massive 87 days (y-axis).
Bad Seasonality now makes it even worse.
Few years ever reached such intense Volatility – ALL remained violent to the end. Stay nimble. pic.twitter.com/6Qa3FTSQh1
— Macro Charts (@MacroCharts) September 24, 2020
— Dan Russo, CMT (@DanRusso_CMT) September 24, 2020
Tech shares’ grip on market starting to loosen … 120-day correlation between tech-heavy NASDAQ 100 & S&P 500 has fallen to lowest since 2018, after touching all-time high in March @Bloomberg
[Past performance is no guarantee of future results] pic.twitter.com/pybrPhfKx9
— Liz Ann Sonders (@LizAnnSonders) September 24, 2020
$RTY ATH was in 2018. It failed to make a new ATH in 2019 and 2020 diverging from NDX and SPX. And now it is dancing on thin ice: 1450 level. The last two times it dropped below it, we saw the 2018 sell off and the first 2020 bear market.
'Make it or break it time' continues. pic.twitter.com/EGD5cvG7Gh
— Yuriy Matso (@yuriymatso) September 24, 2020
— Nautilus Research (@NautilusCap) September 24, 2020
— Ian McMillan, CMT (@the_chart_life) September 24, 2020
Since the Fed intervention and subsequent March bottom, you can see how correlated stocks, gold, and bitcoin have been since.
— Matthew Timpane, CMT (@mtimpane) September 24, 2020
— Adam D. Koós, CFP®, CMT (@AdamKoos) September 24, 2020
Goldman calling for a move into Value.
— Sam McCallum (@honeystocks1) September 24, 2020