Tuesday, October 5th, 2021
Indices: US Stocks rebounded in today’s session with the Dow rising 312 points or 0.92%. The S&P 500 and Nasdaq gained 1.05% and 1.25%, respectively. The Russell 2000 underperformed but still closed higher by 0.49%.
Sectors: 9 of the 11 sectors closed higher. Financials led, gaining 1.96%. Real Estate lagged, falling 0.78%.
Commodities: Crude Oil futures continued higher by 1.69% to a seven-year high of $78.93 per barrel. Gold futures slipped 0.38% to $1,761 per ounce.
Currencies: The US Dollar Index rose 0.19%.
Interest Rates: The 10-year US Treasury yield moved higher to 1.529%
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
October tends to close strongly, despite greater-than-normal drawdown. (Median drawdown and close for all other months since 1990 is -2.0% and +1.2%, respectively.) pic.twitter.com/iA7nmvfywa
— Mark Ungewitter (@mark_ungewitter) October 5, 2021
Today’s Chart of the Day was shared by Mark Ungewitter (@mark_ungewitter). The red dots represent the performance of the S&P 500 in each October over the past 30 years, and the blue bars represent the intra-month drawdowns. As we mentioned last week, October has a spooky reputation because some of the worst crashes in history have taken place in October (1929, 1987, 2008). It’s also one of the most volatile months of the year, with a median drawdown of -3.0% vs. a median drawdown of -2.0% in all other months. Furthermore, October has more 1% moves (up or down) than any other month. Despite the turbulence, Mark reminds us that October has historically finished strong, with a median gain of 1.4% vs. 1.2% in all other months. In other words, it has historically paid off to stay long and strong throughout this challenging month.
Quote of the Day
“A sign of intelligence is an awareness of one’s own ignorance.”
October Strategy Session: 3 Key Takeaways
The team at All Star Charts highlights three charts to keep an eye on this month.
Tech Making a Big Turnaround Today – CNBC
In this clip, Chris Verrone of Strategas Research offers his thoughts on the FANG stocks.
Energy and Financials Emerge As Winners – Potomac Fund Management
Dan Russo identifies the strongest/weakest sectors.
Cotton Catches Fire – Bespoke
Bespoke examines the surge in Cotton prices.
Bitcoin’s Short-Term Momentum Turns Positive as Latest Rally Bucks Equity Sell-Off, According to Fairlead Strategies – Markets Insider
Katie Stockton shares her near-term outlook on Bitcoin.
Four straight 1% moves for the S&P 500, and the net impact on the index has been a decline of 0.3%.
— Bespoke (@bespokeinvest) October 5, 2021
4 consecutive 1% moves for $SPX – that's the most since 7 in a row back in a November.
— Willie Delwiche (@WillieDelwiche) October 5, 2021
For all the recent chatter about how long “the market” has gone without a 10% correction, a look under the hood reveals a heck of a lot of weakness has already occurred (nature of rotational corrections is that performance offsets can keep overall index afloat) pic.twitter.com/9oGNkXV8XB
— Liz Ann Sonders (@LizAnnSonders) October 5, 2021
— Sam Ro 📈 (@SamRo) October 5, 2021
“We thought SPX would get close to 4,200.. while that is still a possibility,.. we don’t want to get ‘too cute’.. Even if we don’t get back to new highs, the next meaningful move looks to be higher.. At a minimum the SPX should be able to bounce back towards ~4500.” @jkrinskypga pic.twitter.com/piqQUBHqRS
— Carl Quintanilla (@carlquintanilla) October 5, 2021
— Steven Strazza (@sstrazza) October 5, 2021
— jeroen blokland (@jsblokland) October 5, 2021
— David Keller, CMT (@DKellerCMT) October 5, 2021
Crude breaking out to 7 year highs, along with oil and gas exploration stocks moving higher.
Then remember energy is still only 3% of the S&P 500, suggesting this move could have a lot of legs left. pic.twitter.com/I5cHCks4ZA
— Ryan Detrick, CMT (@RyanDetrick) October 5, 2021
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) October 5, 2021
What is the US Dollar's next move? pic.twitter.com/ARV5YwWqjk
— Louis Spector (@LouisSpector13) October 5, 2021
— Alfonso Depablos (@AlfCharts) October 5, 2021
This one has been building a base since the first quarter. If it were a stock it would be classified as a "Large-cap", about the size of Williams-Sonoma, Campbell Soup or Whirlpool. If we're above those Q1 highs, how do we not own it? #algorand $ALGO pic.twitter.com/0e4KH5BkTg
— J.C. Parets (@allstarcharts) October 5, 2021
If you bought the Energy Sector ETF at the start of 2020 and didn't look at it until today, you'd see a total return of 1%.
What happened in between? A 60% drawdown followed by a 153% advance.$XLE
— Charlie Bilello (@charliebilello) October 5, 2021
You’re all caught up now. Thanks for reading!