Tuesday, February 25th, 2020
Indices: US stocks extended yesterday’s losses with the Dow Jones Industrial Average falling 879 points or 3.15%. The S&P 500 and Nasdaq closed lower by 3.03% and 2.77%, respectively. The Russell 2000 was the weakest of the major indices, dropping 3.45%.
Sectors: All 11 sectors closed lower by more than 1% for the second day in a row. Consumer Staples led, but still fell 1.80%. Energy lagged for the second day in a row, falling 4.42%.
Commodities: Crude Oil futures moved lower by 2.42% to $50.10 per barrel. Gold futures fell 1.49% to $1,637 per ounce.
Currencies: The US Dollar Index moved lower by 0.38%.
Interest Rates: The US 10-year Treasury yield moved lower to 1.355%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
TRIN Index still low at 0.92 & lower than yesterday implying investors still complacent. By comparison, in Dec ‘18 it got to 3.59 & in Aug ‘19 to 3.63. High TRIN readings are often signs of capitulation. The VIX, another one we're watching closely, is rallying sharply. pic.twitter.com/lTENyNuXH3
— Wolfe Daily Howl (@WolfeDailyHowl) February 25, 2020
Today’s Chart of the Day was shared on Twitter by Wolfe Research (@WolfeDailyHowl). It’s a chart of the TRIN index over the past year. The Trading Index (TRIN) or Arms Index is an indicator used to gauge market internals in the short-term. Put simply, “When the TRIN is high, it’s time to buy. When the TRIN is low, it’s time to go.” When the index spikes higher, it tells us that market participants have thrown in the towel or capitulated and that a short-term bottom may be in. Wolfe Research points out that the current reading on the TRIN is still relatively low, despite the sharp sell-off we’ve seen over the past few sessions. This suggests that we still haven’t gotten a total washout in complacency and that stocks could fall further in the short-term before finding a bottom.
Quote of the Day
“Excesses in one direction will lead to an opposite excess in the other direction”
– Bob Farrell (Technical Analyst)
Here’s a Technical Look at Monday’s Market Sell-Off – CNBC
John Roque made an appearance on CNBC this morning to share his thoughts on the S&P 500, the Hang Seng index, and Gold.
The Risk of Owning Stocks is Elevated – All Star Charts
In this note, JC Parets argues that now is not the time to be aggressively buying stocks.
Bad Case of Deja Vu – Another 3% S&P 500 Decline – Almanac Trader
Jeff Hirsch takes a look at how the S&P 500 tends to fare in the days/weeks following back-to-back daily losses of 3% or more.
Corona Virus Fears Rip Through Stock Market – Libertas Wealth Management
Adam Koos puts the recent pullback into perspective and emphasizes the importance of focusing on the trend in times like these.
Stock Market Analysis February 25, 2020 – Brian Shannon
In this video, Brian Shannon of AlphaTrends.net examines recent price action and lays out some levels of interest on the S&P 500 ETF, $SPY.
Top 10 Tweets
The bears 🐻 take the day again as the S&P 500 shed another -3%. All sectors sold as #coronavirususa fears surged. Energy, Materials, & Industrials led the way down. Banks also dumped.
— Keith✨ (@JackDamn) February 25, 2020
— Brian Lund (@bclund) February 25, 2020
Evidence of just how vicious this sell off is. More NYSE stocks have traded down over the past two days than any other period during this bull market. pic.twitter.com/wvVJJb3jge
— Dani Burger (@daniburgz) February 25, 2020
Today was the 11th time markets experienced back-to-back Major Distribution Days or days w/ 90%+ down volume on the NYSE. Historically, lower lows typically scored, but markets generally recovered or stabilized after 2nd MDD day. Have a look for yourself at the stats. pic.twitter.com/in8z5UGEBx
— Michael McKerr (@MikeMcKerr_TDA) February 25, 2020
The 3-day rate of change on the $SPX is matching the extremes of Dec 2018 and Feb 2018. If the selloff continues into the close, it will qualify as the worst stretch over that period since Aug 2015 pic.twitter.com/5FsNK8CcHQ
— John Kicklighter (@JohnKicklighter) February 25, 2020
— Andrew Thrasher, CMT (@AndrewThrasher) February 25, 2020
— jeroen blokland (@jsblokland) February 25, 2020
Copper isn't going to wow anyone with its strength, but interesting that it remains above its Jan lows at a time when bond yields have moved sharply lower. pic.twitter.com/GYPW11i6UJ
— Willie Delwiche (@WillieDelwiche) February 25, 2020
— Jared Blikre (@SPYJared) February 25, 2020
Volatility be like pic.twitter.com/Ye09Pisrrq
— Mark Ungewitter (@mark_ungewitter) February 25, 2020