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Today’s Summary
Tuesday, January 5th, 2021
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average gaining 168 points or 0.55%. The S&P 500 and Nasdaq rose 0.71% and 0.95%, respectively. Small-Caps outperformed, with the Russell 2000 gaining 1.71%.
Sectors: 8 of the 11 sectors closed higher. Energy led significantly, jumping 4.48%. Real Estate lagged, slipping just 0.11%.
Commodities: Crude Oil futures moved higher by 4.85% to a 10-month high of $49.93 per barrel. Gold futures rose 0.40% to $1,954 per ounce.
Currencies: The US Dollar Index fell 0.42% to a fresh multi-year low.
Interest Rates: The 10-year US Treasury yield moved higher to 0.960%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
$IWM going back over 20 years, small caps were recently the most extended from the 200 day / 40 week than ever (30%+). The last couple times they've been gotten this extended after a big drop was toward the beginning of some nice long term moves. pic.twitter.com/BaYb5MiVZo
— Gregory Krupinski (@G_krupins) January 5, 2021
Today’s Chart of the Day was shared on Twitter by Greg Krupinski (@G_krupins). It’s a chart of the Russell 2000 ETF, $IWM, over the past two decades. $IWM is nearly 30% above its 200-day moving average, which is the most extended it’s ever been. While this over-extended reading might seem bearish, Greg points out that price thrusts of this magnitude have historically been a long-term bullish signal. There have only been two prior instances where $IWM was more than 25% above its 200-day moving average – 2003 & 2009. Both of these thrusts occurred after a major low and marked the start of a new bull market. In a comment to The Chart Report, Greg said, “There are plenty of bearish data points out there, especially around current valuations compared to history. Focusing on these could make you quite bearish. But nothing is as important as price action. Not even close. This huge surge off the lows and extension from the “mean” suggest there continues to be a great demand to own Stocks or Small-Caps in this case.”
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Quote of the Day
“Never mistake knowledge for wisdom. One helps you make a living; the other helps you make a life.”
– Eleanor Roosevelt
Top Links
One of the Great Bubbles of Financial History – The Irrelevant Investor
Michael Batnick refutes the idea that stocks are in a bubble.
Give Me The Inflation Baby – All Star Charts
JC Parets shares his thoughts on commodities and inflation.
Inflation is Still the Biggest Theme in the New Year – Marea Market Musings
Dan Russo highlights some signs of inflation.
Interview with Andrew Thrasher – TD Ameritrade Network
In this clip, Andrew Thrasher offers his technical perspective on recent price action.
Is the US Dollar About to Collapse or Rally? – Kimble Charting Solutions
Chris Kimble explains that the US Dollar is nearing an important long-term price level.
Top Tweets
$QQQ The 20 day ema continues to keep the trend intact. pic.twitter.com/bS9aGmgZBD
— Greg Rieben (@gregrieben) January 5, 2021
I saw studies posted over the weekend pointing to bullishness going forward when Monthly $SPX closes over the upper bollinger band… may be true longer term, but it has usually always resulted in a pull back the following month $SPY pic.twitter.com/uafeaK6Tma
— ? Rolando Santos ? (@TKPTrader) January 5, 2021
Critical level for Dow theory. Transport index on key trend line support having broken below s-t range. RSI<50, s-t moving averages sell signals. Needs to regain 12,380 for the longs. But with a crowded, leveraged long position a close below 12,100 could set off an avalanche pic.twitter.com/6Ks2qBb3qp
— James Brodie CMT (@jamesrbrodie) January 5, 2021
2020 was the best year for growth versus value since at least 1979 (using Russell 1000 indexes) pic.twitter.com/JBpASCtUjL
— Sarah Ponczek (@SarahPonczek) January 5, 2021
Crude hit $50 for the first time since late February today. Here’s how big oil names finished today’s session. pic.twitter.com/yF3cDQuHsQ
— MicroSectors (@msectors) January 5, 2021
Every energy stock in the S&P 500 is rallying right now pic.twitter.com/pIMLXr1GAq
— Katie Greifeld (@kgreifeld) January 5, 2021
International equity ETFs have gotten a big jump on US index ETFs over the first two trading days of 2021. The Energy sector is up big as well. $ASHR $SPY $XLE $$ https://t.co/H4p1RcGQzV pic.twitter.com/HcEvLoRMIU
— Bespoke (@bespokeinvest) January 5, 2021
China A-Shares vs the S&P 500 breaking out $ASHR $SPY pic.twitter.com/eAsraL7UAs
— ATMcharts (@ATMcharts) January 5, 2021
Nice rotation higher in silver and gold this week, with $GLD breaking trendline resistance and $SLV back above $24. Could certainly see the argument for precious metals reclaiming safe haven status if stocks struggle in 1st quarter. pic.twitter.com/wvqXsed4Wn
— David Keller, CMT (@DKellerCMT) January 5, 2021
#bitcoin back above USD 34,000! pic.twitter.com/CTKyM57oGF
— jeroen blokland (@jsblokland) January 5, 2021
The first Psychedelic's company to debut on an exchange is trying to find some support at its prior breakout.
Will it be all groovy or a bad trip? $CMPS pic.twitter.com/AETHjN0E7m
— Matthew Timpane, CMT (@mtimpane) January 5, 2021