Monday, December 30th, 2019
Indices: US stocks closed lower in today’s session with the Dow Jones Industrial Average dropping 183 points or 0.64%. The S&P 500 and Nasdaq fell 0.58% and 0.67%, respectively. The Russell 2000 outperformed the rest of the major averages but still slipped 0.29%.
Sectors: All 11 sectors closed lower. Utilities led but still closed slightly lower, changing just 0.02%. Communications lagged, falling 1.04%.
Commodities: Crude Oil futures were relatively flat, changing just 0.15% to settle at $61.64 per barrel. Gold futures were also flat, changing only 0.03% to settle at $1,519 per ounce.
Currencies: The US Dollar Index slipped 0.16%.
Interest Rates: The US 10-year Treasury yield moved higher to 1.886%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Earlier today, we asked our Twitter followers: What is the most important chart you’re watching heading into the new year? This chart from @rsandbachlaw was one that we thought was worth highlighting. It’s a ratio chart of the Consumer Discretionary ETF, $XLY, versus the Consumer Staples ETF, $XLP. This ratio serves as a useful risk-on/risk-off indicator for the broader stock market. Consumer Discretionary ($XLY) is the more aggressive of the two sectors and tends to outperform in risk-on environments. Conversely, the Consumer Staples sector, ($XLP) is less-risky and tends to outperform in risk-off situations. Even in a recession, consumers will continue to buy staples like toilet paper, soda, and cigarettes and avoid discretionary spending at places like Starbucks, Amazon, and Nike, all of which are components in $XLY. As you can see, the ratio has been somewhat trendless over the past year. However, it’s coiling up for a big move. If it breaks higher from this coil, it would indicate that Consumer Discretionary stocks are outperforming Staples, which would send a bullish message to the broader market. On the other hand, if it resolves lower, it would suggest a lack of risk appetitie in the market. Tell us what chart you’ll be watching in 2020.
Quote of the Day
“Never confuse a single defeat with a final defeat.”
– F. Scott Fitzgerald (Writer)
Dow Testing Top Of 70-Year Channel, As Great Decade Raps Up -Kimble Charting Solutions
Chris Kimble shares a chart of the Dow Jones Industrial Average going back 95-years and highlights the fact that the index is currently testing the top of a long-term channel.
Twenty-Twenty – The Lund Loop
Brian Lund stresses the importance of remaining unbiased and objective in the new-year and reviews some of the most noteworthy charts of 2019.
Two Investment Tricks You Can Use for 2020 – The Reformed Broker
If you’re a long term investor, this is a must-read blog post from Josh Brown. He offers two simple investing tricks and touches on the importance of ignoring headlines in order to stay the course in the long-run.
New Traders: Where your focus needs to be NOW – All Star Charts
If you’re a trader, this is a must-read blog post from Sean McLaughlin of All Star Charts. He shares some valuable advice that will help new traders get in the right mental framework for success.
Interpreting the Put/Call Ratio & What Many Misunderstand – Andrew Thrasher
Andrew Thrasher addresses concerns over the low put/call ratio that many have been worried about recently.
Top 10 Tweets
Since 1950, the S&P 500 has gained 1.3% during the final five trading days of the year, and the first two sessions of the new year.
— Eddy Elfenbein (@EddyElfenbein) December 30, 2019
The S&P 500’s decade in review:
💰 11.6% annualized returns
👶🏼 First record high in March 2013
🤑 241 record highs since then
😵 176 days in correction territory
😅 No recessions
⬆️ 9 Fed hikes
⬇️ 3 Fed cuts
🐻 Most hated bull market in history
— Callie Cox (@callieabost) December 30, 2019
Equal-Weight S&P 500 vs. S&P 500
The equally-weighted version of the S&P 500 still looks weak and is close to breaking through a major support zone. pic.twitter.com/CjfPzbwu0X
— Adaptiv (@adaptiv) December 30, 2019
The Tech sector is up 50% in 2019, best year since 2009 (+51%).
— Charlie Bilello (@charliebilello) December 30, 2019
— JMVala (@JMVala_Trades) December 29, 2019
— Tarek I. Saab (@FibLines) December 30, 2019
The U.S. 2-10s yield curve has steepened to the widest since October 2018. pic.twitter.com/lQwFyfyqDw
— Lisa Abramowicz (@lisaabramowicz1) December 30, 2019
— David Keller, CMT (@DKellerCMT) December 30, 2019
The biggest move in the otherwise quiet FX market today is month-end selling in the dollar – my personal dollar index has broken definitively below its 18-month bullish trend line: pic.twitter.com/aOCAXkTXD5
— Matt Weller CFA, CMT (@MWellerFX) December 30, 2019
— UPBOptionMil (@UPBOptionMil) December 30, 2019
You’re all caught up now. Thanks for reading!