Friday, December 27th, 2019
Indices: US stocks were a mixed bag in today’s session with the Dow Jones Industrial Average inching higher by just 24 points or 0.08%. The S&P 500 closed completely flat but notched its fifth weekly gain. The Nasdaq slipped 0.17% and the Russell 2000 fell 0.51%.
Sectors: Consumer Staples led, gaining 0.44%. Energy lagged, falling 0.42%.
Commodities: Crude Oil futures were flat today and closed the week at $61.72 per barrel. Gold futures were also flat and continue to trade at $1,516 per ounce.
Currencies: The US Dollar Index slipped 0.17%.
Interest Rates: The US 10-year Treasury yield moved lower to 1.875%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
— Dana Lyons (@JLyonsFundMgmt) December 27, 2019
Today’s Chart of the Day was shared on Twitter by Dana Lyons (@JLyonsFundMgmt). It’s a chart of the Value Line Geometric Composite ($VALUG) over the past two years. The Value Line Geometric Composite is an equally weighted index of about 1700 stocks. It uses a geometric average, so the daily change reflects the median stock price change. Some argue that it provides a broader and more accurate representation of the stock market than popular cap-weighted benchmarks like the S&P 500. Dana points out that the index just printed a fresh 52-week high for the first time in 16-months. It still has yet to join the other major averages at the all-time high club. However, this is certainly not a bearish development.
Quote of the Day
“The markets are governed by behavioral science, not physical science.”
– Seth Klarman (Hedge Fund Manager)
2019: A Year Filled with Distractions – StockCharts.com
If you had only read the headlines in 2019, you would’ve never guessed that stocks had above-average returns with fairly low volatility. In this piece, Arthur Hill discusses the wall of worry that the market climbed in 2019.
Traders Buy Calls As Smart/Dumb Money Plunges – SentimenTrader
Jason Goepfert of SentimenTrader weighs in on the put/call ratio as well as the growing spread between the “smart money” and the “dumb money.”
January Almanac: Average Performance Slips in Presidential Election Years – Almanac Trader
January is typically a strong month for stocks however, Jeff Hirsch points out that Januarys in presidential election years (like 2020) tend to be slightly weaker.
Has the US Dollar Topped Out? – Market Gauge
Michele Schneider shares her thoughts on the US dollar and what a weaker dollar would mean for other asset classes.
Stock Market Video Analysis for Week Ending 12/27/19 – AlphaTrends.net
Here’s Brian Shannon’s weekly stock market analysis video, where he recaps price action from the past week and lays out some charts to keep an eye on next week.
Top 10 Tweets
The S&P 500 is currently up roughly 32% on the year
Should it hold for the remainder of the year this would be the 18th time since 1928 stocks have gained at least 30% in a calendar year
It *feels* out of the ordinary but that means 1 out of every 5 years has seen 30%+ returns
— Ben Carlson (@awealthofcs) December 27, 2019
Great chart from JPM showing that the average market decline over the last 40 years has been -14%, but the S&P 500 still closed higher 75% of the time! pic.twitter.com/Zb4XPlZncA
— Matt Weller CFA, CMT (@MWellerFX) December 27, 2019
— YCharts (@ycharts) December 27, 2019
— Arun S. Chopra CFA CMT🧐 (@FusionptCapital) December 27, 2019
Equity Put/Call ratio looks to be the most skewed toward Calls in over five years. The only lower reading I see was in June 2014, yet that didn't exactly lead to a big $SPX drop. $SPY $QQQ $VIX pic.twitter.com/cilpigQA5q
— Andrew Adams CFA, CMT (@DayTraderGator) December 27, 2019
AAII Bull – Bear in the top 90th percentile. Don't get too worked up about it, it's not very good. ALL the significance comes from low readings which are bullish, but the high readings give too many false signals. 8 of 49 sell signals worked on 13-wk forward returns (14%). pic.twitter.com/oVfxCTWqVp
— RenMac: Renaissance Macro Research (@RenMacLLC) December 27, 2019
I'm watching $FCX Freeport-McMoran closely here. The $14 level has been a key area of support/resistance for 5 years, and the next break would also be a break of a 5+ year symmetrical triangle. 🕒 pic.twitter.com/4y67MGlgmk
— Tarek I. Saab (@FibLines) December 27, 2019
$BABA weekly. On watch. ATHs here.
Check the monthly MACD on this thing, too. Histogram printing a green month for first time this year. As I have written here previously, I refer to monthly charts to gauge the power under the hood, so to speak. pic.twitter.com/YysVuuRIQg
— Merry Tex-mas 🎄 (@theycallmetex) December 27, 2019
— Scott Redler (@RedDogT3) December 27, 2019
You’re all caught up now. Thanks for reading!