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Today’s Summary
Tuesday, January 11th, 2022
Indices: Dow +0.51% | S&P 500 +0.92% | Nasdaq +1.41% | Russell 2000 +1.05%
Sectors: 8 of the 11 sectors closed higher. Energy led by a wide margin, gaining 3.40%. Utilities lagged, falling 0.90%.
Commodities: Crude Oil futures gained 3.82% to a two-month high of $81.22 per barrel. Gold futures rose 1.10% to $1,819 per ounce.
Currencies: The US Dollar Index fell 0.36%.
Interest Rates: The US 10-year Treasury yield fell to 1.739%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The latest worry is higher rates will end the bull market.
This is always possible, but historically a higher trending 10-year yield has been really good for stocks.
The past 7 periods of higher yields all saw higher stocks, with some huge gains in there. pic.twitter.com/syquC7MvuV
— Ryan Detrick, CMT (@RyanDetrick) January 11, 2022
Today’s Chart of the Day was shared by Ryan Detrick (@RyanDetrick). The 10-year US Treasury yield has risen 5 out of the 7 trading days so far this year. There seems to be a belief that rising yields are generally bad for Stocks, but the data suggests otherwise. The table shows the S&P 500’s returns during periods in which the 10-year yield gained more than 100 basis points. As you can see, the S&P 500 tends to rise along with yields more often than not. To be fair, rising yields will likely impact which areas of the market outperform. For example, Value may begin to look more attractive than Growth. But overall, the S&P 500 tends to do just fine in an environment where the 10-year yield is rising.
Quote of the Day
“Be quick to turn bullish, but take your time turning bearish.
The market is up more than 70% of the time.”
– Larry Williams
Top Links
Why Isn’t The Stock Market Down More Right Now? – A Wealth of Common Sense
Ben Carlson examines why the major indices aren’t down more with so many stocks down double digits.
Who Charted? The Growth to Value Shift? – Potomac Fund Management
In this quick video, Dan Russo and Drew Wells break down six important charts in six minutes.
Internal Momentum Has Surged in Defensive Sectors – SentimenTrader
Jason Goepfert takes a look at the recent strength in Staples, Utilities, and Health Care.
DJIA Bullishly Erases Down Friday/Down Monday Losses – Almanac Trader
Jeff Hirsch explains why the Dow could extend its recent gains in the remainder of the week.
How Rising Rates Are Impacting Equities – TD Ameritrade Network
In this clip, Andrew Thrasher shares his thoughts on the recent volatility.
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Top Tweets
Another comeback story for the day with SPX closing up 0.9%. Under the hood, the volatility factor was up 2.7% today after being down 8.2% on the year thus far. Defensives closed in the red. pic.twitter.com/lQhLDtG1IQ
— Liz Young (@LizYoungStrat) January 11, 2022
Kick save for the QQQ's yesterday, but internals still sloppy. pic.twitter.com/UGdnTTvuv3
— Strategas (@StrategasRP) January 11, 2022
It has been 388 days since the S&P 500 was below hits 200-day SMA (June 2020). This is the fifth longest run since 1990. It would take a decline of 5.7% from current levels to breach the rising 200-day SMA. $SPX $SPY #observationalanalysis pic.twitter.com/Ky25CuFDTs
— Arthur Hill, CMT (@ArthurHill) January 11, 2022
Be aware that midterm years see the largest intra-year pullback, more than 17% on average. After last year, be open to some type of uncomfortable correction this year.
That's the bad news. The good news? Up more than 32% a year off of those lows on average. pic.twitter.com/66kh3LSqhp
— Ryan Detrick, CMT (@RyanDetrick) January 11, 2022
Here's @AlmanacTrader's midterm election year $SPX performance.
Volatility is prevalent for most of the year, then stocks have a tendency to climb once the midterm elections are over, along with Election Day uncertainty.
2022 is surely a year that will require patience! pic.twitter.com/eS4yBUbtRq
— Adam D. Koós, CFP®, CMT, CEPA (@AdamKoos) January 11, 2022
100% of the S&P 500 Energy sector is above their respective 50 and 200 DMAs. pic.twitter.com/WPgWVwsEwc
— Dan Russo, CMT (@DanRusso_CMT) January 11, 2022
3x Oil Proshares $OILU (long) and $OILD (short) are the news levered funds from @msectors
good timing pic.twitter.com/1GwnNX06Ls
— Brian Shannon, CMT (@alphatrends) January 11, 2022
$ARKK Bulls showed up at the 61.8% fib level. Is the bottom in? Or just another bear market rally? pic.twitter.com/LzsLzMizm8
— Greg Rieben (@gregrieben) January 11, 2022
Best day for $EEM since July pic.twitter.com/N1iqzuVV0c
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) January 11, 2022
$EEM / $SPY trying to break pic.twitter.com/S0MAdaq03q
— Teddy Vallee (@TeddyVallee) January 11, 2022
Something to watch…$EEM $QQQ $SPY $KWEB pic.twitter.com/CGCRgwNjGX
— J4 (@J4_doji) January 10, 2022
The much-hated Chinese Internet sector is getting some traction. Of the 33 ADRs in $KWEB, only one is down today. It's also jumped above the 10-ema after being below it since mid-Nov. @TrendSpider https://t.co/Wmlmkt8vXO
— Jonathan Harrier, CMT (@jonathanharrier) January 11, 2022
$SPX – Tomorrow is a big day, the fat lady has not quite sung yet imo. pic.twitter.com/uG6vbPn5PO
— HostileCharts (@HostileCapital) January 11, 2022
You’re all caught up now. Thanks for reading!