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Today’s Summary
Monday, January 25th, 2021
Indices: US Stocks were mixed to start the week. The Dow Jones Industrial Average inched lower by just 37 points or 0.12%. The S&P 500 and Nasdaq both closed at record highs, rising 0.36% and 0.69%, respectively. Small-Caps underperformed, with the Russell 2000 slipping 0.25%.
Sectors: 7 of the 11 sectors closed higher. Utilities led, gaining 2.01%. Energy lagged, falling 1.02%.
Commodities: Crude Oil futures moved higher by 0.96% to $52.77 per barrel. Gold futures were flat and continue to trade around $1,855 per ounce.
Currencies: The US Dollar Index inched higher by 0.14%.
Interest Rates: The 10-year US Treasury yield dropped to 1.030%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
While everyone was busy freaking out about $GME last week, S&P 500 growth had its best week vs value since Nov. 2008 pic.twitter.com/kVY4IlgCNh
— Sarah Ponczek (@SarahPonczek) January 25, 2021
Today’s Chart of the Day was shared on Twitter by Sarah Ponczek of Bloomberg (@SarahPonczek). The chart shows the weekly percent change of S&P 500 Growth vs. S&P 500 Value. Sarah points out that Growth outperformed Value by more than 4% last week, marking the best week for Growth vs. Value since 2008. Growth trounced Value for the majority of last year but paused in the fourth quarter. Every time we’ve seen Growth pause over the past few years, we see the narrative emerge that Value is setting the stage for a meaningful comeback. Unfourtunatly for Value investors, that comeback remains a mirage. For now, the trend continues to reward those who swim with it in terms of Growth vs. Value. Last week’s impressive outperformance was a reminder that Growth is still very much alive and in the driver’s seat.
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Quote of the Day
“Treat it like a casino and the house is gonna win.”
– Anthony Maceroni
Top Links
We’re in the Enthusiasm Phase of a Typical Sentiment Cycle – SentimenTrader
Jason Goepfert offers his take on sentiment.
We May Be in a Bubble But it Really Doesn’t Matter – Andrew Thrasher
Andrew Thrasher weighs-in on the idea that stocks are in a bubble.
Constant Sector Rotation – Momentum Monday
In their weekly Momentum Monday video, Howard Lindzon, and Ivanhoff highlight the strongest stocks, trends, and themes across the markets.
3 Potential Stock Market Headwinds To Be Aware Of – All Star Charts
JC Parets outlines three potential risks to keep an eye on.
Large Cap Growth Back in Action – The Weekly Trend
In this week’s Weekly Trend podcast, David Zarling and Ian McMillan discuss the rotation back into Mega-Caps, international participation, February seasonality, and more.
Top Tweets
VIX… up
Equities… up
Dollar…. up
Bonds…. up
Commodities… up— Andrew Thrasher, CMT (@AndrewThrasher) January 25, 2021
The volatility this past session was remarkable. The $SPX ended with a very impressive lower wick: pic.twitter.com/R1aSBfC6Pr
— John Kicklighter (@JohnKicklighter) January 25, 2021
SPX filled last week's gap: pic.twitter.com/OKamLVc48Q
— Walter Deemer (@WalterDeemer) January 25, 2021
$ES, 1h
The $ES continues to trend within the 'higher highs – higher low' pattern on the hourly chart. When this pattern finally breaks, the top will be in. pic.twitter.com/QZL1xCs4it
— Yuriy Matso (@yuriymatso) January 25, 2021
Tell me why you're shorting stocks again?$ES_F $SPX $SPY pic.twitter.com/sW8pSCo5PO
— Shane C. Murphy (@murphycharts) January 25, 2021
When a new party is in power in the White House, that first year tends to be pretty choppy for the S&P 500.
In fact, starting soon, and going into March, is quite weak from a seasonality point of view. pic.twitter.com/Mh4C1KBYGR
— Ryan Detrick, CMT (@RyanDetrick) January 25, 2021
After consolidating for basically all of Q4 2020 (aside from $TSLA), the mega-caps ripped higher last week as shown in our Trend Analyzer. Four are now in extreme overbought territory $AAPL $GOOG $MSFT $NFLX. pic.twitter.com/UhggcYOlr8
— Bespoke (@bespokeinvest) January 25, 2021
VIX Daily Sentiment Index's 3 month average is at the lowest level since February 2020, just before VIX exploded and stocks fell
Historical cases saw VIX higher 3 months later by an average of 87%
The overextended rally may overextend further, but be mindful of mounting risks. pic.twitter.com/AWlkqtISMT
— Troy Bombardia (@bullmarketsco) January 25, 2021
Over the past 20 years, emerging markets have outperformed developed countries including the US. Imagine how they'll do now that they've just come out of a 14-year sideways base! $EEM pic.twitter.com/zHyVT4ZjjA
— Brian G (@alphacharts) January 25, 2021
Tin is up 10% so far this year, climbing to the highest price since 2014. pic.twitter.com/CS0ahWghjp
— Lisa Abramowicz (@lisaabramowicz1) January 25, 2021
Newton was wrong. An apple can defy gravity. pic.twitter.com/P0OcvTO78P
— Eddy Elfenbein (@EddyElfenbein) January 25, 2021
You’re all caught up now. Thanks for reading!