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Today’s Summary
Tuesday, January 26th, 2021
Indices: US Stocks closed slightly lower in today’s session. The Dow and Nasdaq were virtually unchanged, with both slipping just 0.07%. The S&P 500 inched lower by 0.15%. The Russell 2000 underperformed, falling 0.62%.
Sectors: 4 of the 11 sectors closed higher. Communications led, gaining 1.36%. Energy lagged, dropping 2.14%.
Commodities: Crude Oil futures slipped 0.30% to $52.61 per barrel. Gold futures inched lower by 0.23% to $1,851 per ounce.
Currencies: The US Dollar Index slipped 0.24%.
Interest Rates: The 10-year US Treasury yield rose to 1.038%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Honeymoon period nearing it's end historically? The first year of Presidential cycle usually sees a $SPX pause in February as the realities of politics set in after inauguration (Red line)…Sorry dreamers.
For more, see our Weekly Survival Guide out soon. pic.twitter.com/lCKyC7T9MY
— RenMac: Renaissance Macro Research (@RenMacLLC) January 26, 2021
Today’s Chart of the Day was shared on Twitter by Renaissance Macro Research (@RenMacLLC). The red line shows the S&P 500’s average performance during election and post-election years. Renaissance points out that stocks have historically stumbled between February and April of post-election years. Seasonality has been a nice tailwind for stocks since November, but that’s no longer the case. The good news? The S&P 500 continues to be in a strong uptrend and the trend is far more important than seasonality. So, the bulls have that going for them. But, it’s important to be aware that seasonality and the Presidential Election Cycle do not favor the bulls over the next couple of months.
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Quote of the Day
“Las Vegas is busy every day, so we know that not everyone is rational.”
– Charles Ellis
Top Links
A Very Big Picture Tour of the World – AlphaCharts
Brian at AlphaCharts highlights the big-picture trends by looking at some yearly candlestick charts.
Sector Rotation w/ Jonathan Krinsky, Chief Market Technician at Bay Crest Partners – Technical Analysis Radio
In this podcast, two respected technicians discuss the sector rotation going on in the market right now.
(Big) Tech is Back on Track – StockCharts.com
Julius de Kempenaer takes a look at the rotation back into Mega-Cap Tech.
Most Shorted Stocks Towering Over the Rest – Bespoke
Bespoke weighs-in on the historic short squeezes going on right now.
For Better or For Worse, This is a Young Person’s Market Right Now – A Wealth of Common Sense
Here’s a good read from Ben Carlson about the epic short squeeze going on in GameStop, $GME, this week.
Top Tweets
Here's the updated chart that compares this new bull market versus the '82 and '09 bulls.
We noted many times last year that potentially higher prices were possible based on this. Now, if history repeats, the next several months could be due for a break or consolidation. pic.twitter.com/M1HDHKDxNz
— Ryan Detrick, CMT (@RyanDetrick) January 26, 2021
Underperformance by equal-weight $SPX benchmarks like $RSP shows a latent pullback is underway, masked by the mega-caps; $TSLA's earnings reaction could make-or-break mega-cap leadership #fairleadstrategies pic.twitter.com/2vkdt6lNeb
— Katie Stockton, CMT (@StocktonKatie) January 26, 2021
A few measures of risk appetite are falling in relative performance. Small Cap, High Beta, and Equal Weight all were leaders but have recently turned lower against the S&P 500. pic.twitter.com/jF02ROH4xS
— Andrew Thrasher, CMT (@AndrewThrasher) January 26, 2021
BAYCREST looks at potential for a “long-squeeze” — where “stocks that are widely owned, but not heavily shorted, see forced selling to limit losses or offset loses on the short-side. .. some that stand out as potentially vulnerable” include: $IAC, $MU, $PTON, $PYPL — @jkrinskypga pic.twitter.com/x5tPEghlL5
— Carl Quintanilla (@carlquintanilla) January 26, 2021
Under-asked question. Will $USD support restrain $EEM relative strength? pic.twitter.com/yx3YaYVJMf
— Mark Ungewitter (@mark_ungewitter) January 26, 2021
About as simple as indicators get for U.S. vs. international call. I've posted a few times but now bonds have deteriorated enough to confirm $ weakness. Results aren't incredibly robust (optimized!) but a useful confirmation of international trade relative to U.S. nonetheless. pic.twitter.com/0FzXjtMLg4
— Tony Welch, CFA, CFP®, CMT (@tonywelch17) January 26, 2021
So it is theoretically possible for an RSI to reach 100 although I've never seen it in a liquid name. $GME pic.twitter.com/CGxMRCB9Jt
— David Keller, CMT (@DKellerCMT) January 26, 2021
GameStop's market cap just blew past Domino's in after hours and is now up more than 10x in the past month.
Are you not entertained?$GME $DPZ pic.twitter.com/T8QqREFB2O
— Charlie Bilello (@charliebilello) January 26, 2021
Heads up! While we're all focused on GameStop, Apple reports Wednesday. $AAPL just had its best weekly gain since July and closed at a weekly ATH. Analysts expect quarterly sales to break $100B for the first time ever.
Source: Bloomberg L.P. pic.twitter.com/erwvcek8TX
— MicroSectors (@msectors) January 25, 2021
This seems to sum up the current environment pic.twitter.com/oWGi28Z3zJ
— Abigail Doolittle (@TheChartress) January 26, 2021