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Today’s Summary
Wednesday, October 28th, 2020
Indices: US Stocks suffered their worst decline in over four months today, with the Dow Jones Industrial Average tumbling 943 points or 3.43%. The S&P 500 and Nasdaq dropped 3.53% and 3.73%. Small-Caps outperformed but still fell 2.97%.
Sectors: All 11 sectors closed lower by more than 2%. Real Estate led, but still fell 2.22%. Tech lagged, dropping 4.24%.
Commodities: Crude Oil futures slid 5.51% to $37.39 per barrel. Gold futures moved lower by 1.71% to $1,879 per ounce.
Currencies: The US Dollar Index rose 0.53%.
Interest Rates: The 10-year US Treasury yield was little changed at 0.773%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day was shared by Brian Lund (@bclund). The S&P 500 suffered its worst day in more than four months today. Ironically, October 28th has historically been the strongest day of the year for the index on average over the past 70-years. Brian takes a look at some of the technical damage we saw in today’s session. He points out that we lost both the 50 and 100-day moving averages. This was the first close below the 100-day moving average since May 22nd. Price is already below downward sloping 8-day and 21-day moving averages, indicating we’re in an intermediate-term downtrend. Traders will be watching how price behaves around the September lows (around 3225) and the 200-day moving average (currently around 3130). In a separate comment, Brian added “Generally institutions only buy stocks above the 200-day moving average, so if that breaks it could get uglier.”
Quote of the Day
“There is a time to go long, a time to go short, and a time to go fishing.”
– Jesse Livermore
Top Links
Whatever the Outcome, Day Before Election Day Historically Bullish – Almanac Trader
Seasonality expert, Jeff Hirsch takes a look at how Stocks have historically performed around Election Day.
More Pain for European Stocks – Bespoke
Bespoke highlights the recent weakness in European Stocks.
Mid Week Thoughts – Chaikin Analytics
In this quick video, Dan Russo offers his technical perspective on this week’s bearish price action.
Can the Market Be Saved – StockCharts.com
Mish Schneider outlines some key levels she’s watching on the major indexes.
What Happens When Stocks Drop 3% on the Third Down Day – Pivot Analytics
Pivot Analytics examines what tends to happen to the S&P 500 in the days/weeks following a 3% decline on the third consecutive down day.
Top Tweets
Big drops right ahead of an election are quite rare.
In fact, only twice did the S&P 500 fall 3% or more within 6 trading sessions of the presidential election.
1932 and 2008. The incumbent party lost both times.
Could happen today.
— Ryan Detrick, CMT (@RyanDetrick) October 28, 2020
The S&P 500 is on pace for its worst week before the presidential election on record. pic.twitter.com/35IFw4CsvA
— Steven Russolillo (@srussolillo) October 28, 2020
The S&P 500 fell 3.52% today & while you might have felt the turbulence, this was only the 10th biggest drop & 18th biggest move this year. pic.twitter.com/8r21zQyCGw
— MicroSectors (@msectors) October 28, 2020
$SPX below its 100 DMA suggests this potential Double Top could take the index sub-3000 pic.twitter.com/V3nviDJakt
— Abigail Doolittle (@TheChartress) October 28, 2020
What I'm looking at: Support in the 3250 to 3200 area. #Stockmarket #Stocks $SPY #TechnicalAnalysis #BigPicture pic.twitter.com/1vU4gH3IYn
— Mike Moses, CMT (@DominickMike) October 28, 2020
$QQQ Not very fun lately but still well above a rising 40 week / 200 day. Price likes to come back towards this "mean" or vice versa. pic.twitter.com/Jr5dyp7O9q
— Gregory Krupinski (@G_krupins) October 28, 2020
Tech over the last three months. pic.twitter.com/07ybWklhhW
— Eddy Elfenbein (@EddyElfenbein) October 28, 2020
With most of FAAMG reporting tomorrow, all are underperforming today. Either setups for post-earnings bounce or the spark that lit the match for further decline. Either way, should be interesting price action to close out the week. pic.twitter.com/Q6JQn6TCMW
— Andrew Thrasher, CMT (@AndrewThrasher) October 28, 2020
Will FAANG+M earnings tomorrow help lift the market out of its pullback? Recent outperformance vs. $SPX is promising #fairleadstrategies pic.twitter.com/MrMOoopGUI
— Katie Stockton, CMT (@StocktonKatie) October 28, 2020
And interestingly, the dollar continues to be a more reliable hedge against a risk-off market: pic.twitter.com/hFPzKUNFEx
— Lisa Abramowicz (@lisaabramowicz1) October 28, 2020
With AUDJPY breaking 74.19 it's a clear risk off day. Equities lower and DXY higher.
But i'm more interested to see how gold and Bitcoin react. They're struggling. More likely just another crowded trade than 'the greatest trade ever!'. #Priceaction pic.twitter.com/epSgiJYpW9— James Brodie CMT (@jamesrbrodie) October 28, 2020
#Bitcoin poised pic.twitter.com/AdxvpEYQuQ
— Mark Ungewitter (@mark_ungewitter) October 28, 2020
Solar Energy $TAN bucking the trend today, led by $FSLR up ~13% on the heels of a nice earnings beat…$ENPH $SPWR $RUN $CSIQ $SEDG all w/ the sympathy bid higher pic.twitter.com/oSSGlIUt45
— Steven Strazza (@sstrazza) October 28, 2020
Halloween arrives early on Wall Street pic.twitter.com/y2PefFkWXd
— StockCats (@StockCats) October 28, 2020