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Today’s Summary
Monday, January 4th, 2021
Indices: US Stocks kicked off the new year on a sour note with the Dow Jones Industrial Average dropping 383 points or 1.25%. The S&P 500 and Nasdaq fell 1.48% and 1.47%, respectively. The Russell 2000 also fell 1.47%.
Sectors: Energy was the only sector to close higher, inching up just 0.16%. Real Estate lagged, dropping 3.23%.
Commodities: Crude Oil futures moved lower by 2.45% to $47.34 per barrel. Gold futures gained 2.73% to $1,947 per ounce.
Currencies: The US Dollar Index inched lower by just 0.06%.
Interest Rates: The 10-year US Treasury yield slipped to 0.913%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The ratio of Gold vs. TLT, after breaking out of a 2.5 year base and digesting its gains, is breaking out of a new 6 month base. Gold is being used over treasury bonds as a risk off hedge. Rising inflation expectations seem to be kicking in into asset preferences. $GC $ZB $TLT pic.twitter.com/ARbHX1j6HV
— Rafael Marulanda (@rafatrade93) January 4, 2021
Today’s Chart of the Day was shared on Rafa Marulanda (@rafatrade93). It’s a ratio chart of Gold vs. US Treasury Bonds ($GC/$TLT). Ratio charts are great because they help to simplify opportunity cost for investors. When the line is rising, it means Gold is outperforming Treasuries and vice versa. Both of these assets are perceived as safe-havens. But as Rafa points out, Gold looks like the more attractive safe-haven at the moment. As you can see, this ratio is breaking out of a multi-year base in favor of Gold. You already know what they say about big bases – “the bigger the base, the higher in space.” Also, January has historically been the best month of the year for Gold. In a comment to The Chart Report Rafa said, “You have to listen to the market, and right now, the market is making a clear statement. Gold is the better bet here as far as safe-haven assets go.”
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Quote of the Day
“Difficult roads often lead to beautiful destinations. The best is yet to come.”
– Zig Ziglar
Top Links
21 Charts for 2021 – The Rotation Report
Aaron Jackson shares 21 charts worth keeping an eye on in the new year.
Back-to-Normal Stocks are Leading and Setting Up – Momentum Monday
In their weekly Momentum Monday, Howard Lindzon and Ivanhoff highlight the strongest stocks, trends, and themes across the markets.
Who is Buying and Selling Stocks – BullMarkets.co
Troy Bombardia outlines some risks worth monitoring.
Weekly Report 1.3.2021 – Cully Charts
Ian Cully offers his analysis of stocks, bonds, commodities, and currencies.
And the Beat Goes On – The Weekly Trends
In this podcast, David Zarling and Ian McMillan discuss the most noteworthy technical developments on their radar.
Top Tweets
OK, gonna put this "as goes the first day, so goes the year" stuff to bed.
Look. The S&P 500 has dropped 1% or more on the first day of 10 years since 1950.
In 5/10 of those years, $SPX gained 10% or more that year.
In 3/10 of those years, $SPX lost 10% or more that year.
— Callie Cox (@callieabost) January 4, 2021
This was one of the worst first days of the year ever for the S&P 500 Index. pic.twitter.com/R0ShZVUWaD
— Ryan Detrick, CMT (@RyanDetrick) January 4, 2021
First scary chart of the year: Just two years since 1983 that S&P 500 opened higher on first trading day of the year but was down 1%+ by noon. 2000 and 2008. pic.twitter.com/OnyTJ0hmDP
— Bespoke (@bespokeinvest) January 4, 2021
$IWM / $SPY overhead resistance? pic.twitter.com/Stw3l7xLQI
— Mark Ungewitter (@mark_ungewitter) January 4, 2021
We start the year with 96% of world markets above their 50-day averages. Stock market strength tends to persist when global rally participation is this widespread. pic.twitter.com/jx84JDtQCu
— Willie Delwiche (@WillieDelwiche) January 4, 2021
Russell 2000 and Dollar index. Extreme positioning, extreme leverage, extremely over bought/sold. Maximum pain trade to start the year. Dollar has some room to catch up. Retracements are healthy! pic.twitter.com/CTIJCxTUjF
— James Brodie CMT (@jamesrbrodie) January 4, 2021
An important month for the $DXY pic.twitter.com/ebOPMlRUB3
— Aksel Kibar, CMT (@TechCharts) January 4, 2021
Gold holding above the old highs for the first time in awhile. We need to close here. pic.twitter.com/waasgfhHM9
— Jason (@JasonPerz138) January 4, 2021
What the average January looks like for #Gold pic.twitter.com/AGL6fSVqku
— Grant Hawkridge (@granthawkridge) January 4, 2021
$GDX Trendline break this morning in the gold miners. I'll be watching to see how they close. $GDXJ $GLD pic.twitter.com/szgWnnF8X6
— Greg Rieben (@gregrieben) January 4, 2021
Fear grips Wall Street as stocks fall to levels not seen since last year
— Hipster (@Hipster_Trader) January 4, 2021