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Today’s Summary
Monday, September 27th, 2021
Indices: US Stocks were a mixed bag in today’s session. The Dow rose 71 points or 0.21%. The S&P 500 and Nasdaq fell 0.28% and 0.52%, respectively. The Russell 2000 outperformed by a decent margin, gaining 1.46%.
Sectors: 5 of the 11 sectors closed higher. Energy led by a wide margin, rising 3.56%. Real Estate lagged, falling 1.66%.
Commodities: Crude Oil futures continued higher by 1.99% to $75.45 per barrel. Gold futures were unchanged and continue to trade at $1,752 per ounce.
Currencies: The US Dollar Index rose 0.14%.
Interest Rates: The 10-year US Treasury yield continued higher to 1.491%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The tight range in small caps continues.
After a record jump in Q4 last year, it looks like they have simply been consolidating those historic gains all year.
Perfectly normal and likely will breakout higher eventually. Could history rhyme with another big Q4? I think so. pic.twitter.com/T0R588Jvyr
— Ryan Detrick, CMT (@RyanDetrick) September 27, 2021
Today’s Chart of the Day was shared by Ryan Detrick (@RyanDetrick). It’s a weekly candlestick of the Russell 2000 ETF, $IWM, over the past three years. Small-Caps kicked off the week on a strong note today, with the Russell 2000 outperforming the Nasdaq by the widest margin in six months. As you can see, the Russell 2000 has been stuck in a well-defined range for the majority of this year. Prior to this consolidation phase, it had been sprinting higher for nearly a year, so this pause could be viewed as healthy in the grand scheme of things. If price does eventually break out, it has the potential to make another meaningful leg higher given that it has built a six-month base to launch from. You know what they say about big bases….the bigger the base, the higher in space! As Ryan notes, Small-Caps could be setting up for an impressive end-of-year rally, similar to what we saw after the US election last year. But without getting ahead of ourselves, the Russell 2000 needs to break out of this range first. It certainly doesn’t hurt that seasonality becomes a tailwind in a couple of weeks.
Quote of the Day
“Interest has been so low for so long a time that to many people a rising rate produces a sort of alarm, and it is natural to expect a considerable lapse of time before this will disappear under the new conditions.”
(July 24, 1899)
– Charles H. Dow
Top Links
If Small Caps are Going to Break the Range, the Time is Now – Potomac Fund Management
Dan Russo highlights the most important technical developments to watch this week.
Bonds Throw a Tantrum and Banks Cheer – Trend Investor Pro
Arthur Hill takes a look at the relationship between Treasury yields and Bank stocks.
Natural Gas Prices Heating Up, Breakout Would Bring Major Pain! – See it Market
Chris Kimble examines the recent surge in Nat Gas prices.
Energy Equity Analysis – TT Trading
Troy Trentham explains why he thinks the Energy sector will continue higher.
Why Gold Remains Bearish – StockCharts
David Keller points out that the outlook for Gold continues to look dull.
Top Tweets
Today with $IWM (small caps) up while Nasdaq is down, it is a nice improvement under the surface. FANG stocks suck up a LOT of money. If that flows out and into smaller names, that's when things get exciting for active investors. $LC
— Matt Caruso, CFA, CMT (@Trader_mcaruso) September 27, 2021
The $IWM Russell 2000 small-cap fund has enjoyed an average inflow of more than $1 billion per day for the past week.
That's the 2nd-most in over a decade.
The only 5-day stretch with more inflows was in the immediate aftermath of the 2016 election.
— SentimenTrader (@sentimentrader) September 27, 2021
$IWM small caps
market leader today pic.twitter.com/ROnQZYozYG— Keith Kern (@kkernttb) September 27, 2021
$IWM good action today and very much an anomaly in the indices. Is this going to finally be the time it breaks out of this long dead money base? Close over 225.6 would be good start. pic.twitter.com/wv7owj3zSd
— HCPG (@HCPG) September 27, 2021
Don't forget about Micro Caps $IWC $SPX pic.twitter.com/H0VCxRIRSW
— Ian McMillan, CMT (@the_chart_life) September 27, 2021
We are starting to see some money flow back into riskier stocks
Look at the Microcap ETF $IWC
Still range-bound but looks to be headed back up to knock on that ceiling again. pic.twitter.com/Afb438vVRs— Greg Rieben (@gregrieben) September 27, 2021
5-year Treasury yields at the highest level since Feb 2020 pic.twitter.com/ToeUugmogO
— Katie Greifeld (@kgreifeld) September 27, 2021
10y Treasury yield has been trending up since beginning of August (orange), yet Tech sector has not weakened relative to broader market (blue)
@Bloomberg
[Past performance is no guarantee of future results] pic.twitter.com/oqeUHn58Xk— Liz Ann Sonders (@LizAnnSonders) September 27, 2021
Interest rates in an uptrend until proven otherwise, having now regained the range from March-June 2021. RSI > 60 which indicates a rotation to uptrend phase. Hope you all refinanced your home in mid-July! pic.twitter.com/fp0JTI7uip
— David Keller, CMT (@DKellerCMT) September 27, 2021
$TIP investors, know thy bet. pic.twitter.com/w3A7f1S4QU
— Mark Ungewitter (@mark_ungewitter) September 27, 2021
Crude trading higher over $75 – Potential continuation?
Not a Recommendation pic.twitter.com/2XVp7AnW1m
— James Boyd (@JBoyd_TDA) September 27, 2021
$SPGSCI S&P Goldman Sachs Commodity Index
Is the move in commodities just getting started? The GSCI and CRB Index continue to make new highs. pic.twitter.com/HVM5xqtclM
— Shane C. Murphy (@murphycharts) September 26, 2021
Despite what looks like a mild October forecast, #natgas is on the move in a big way this morning. Near $5.50 on the prompt-month. $UNG @enelyst_ #BTFD pic.twitter.com/xnQ1WMTMr7
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) September 27, 2021
Not only is this midstream nat gas operator breaking out of a 5-year base to fresh highs, but it also pays a 7%+ yield… $HESM pic.twitter.com/NrhBEL3jH8
— Steven Strazza (@sstrazza) September 27, 2021
Cotton futures are breaking out of a multi-year base this morning. $CT_F pic.twitter.com/fm2pJz5rQ5
— Ian Culley (@IanCulley) September 27, 2021
The upside resolution of this consolidation has serious potential. ? Alerts set!
$ZCZ22 pic.twitter.com/z3OG9IWrd3
— Dan J. Gorghuber, CMT (@Futures_Runner) September 27, 2021
$XLU now down 13 straight trading days and that's unprecedented.
— Steve Deppe, CMT (@SJD10304) September 27, 2021
You’re all caught up now. Thanks for reading!