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Today’s Summary
Tuesday, February 1st, 2022
Indices: Dow +0.78% | S&P 500 +0.69% | Nasdaq +0.75% | Russell 2000 +1.10%
Sectors: 8 of the 11 sectors closed higher. Energy led by a wide margin, gaining 3.56%. Utilities lagged, falling 1.33%.
Commodities: Crude Oil futures inched up 0.24% to a seven-year high of $88.36 per barrel. Gold futures rose 0.27% to $1,801 per ounce.
Currencies: The US Dollar Index dropped 0.39%.
Interest Rates: The US 10-year Treasury yield ticked higher to 1.791%
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day was shared by Frank Cappelleri (@FrankCappelleri). The S&P 500 fell 5.3% last month, marking the worst January since 2009. Frank points out that we tend to see further weakness in February after big down Januarys. The table shows all the years in which the S&P 500 dropped 4% or more in January. Of the 16 prior occurrences, the S&P 500 was down 69% of the time in February for an average loss of 1.68%. The full year was down 62% of the time for an average loss of 2.14%. Of course, anything can happen. But hopefully, this gives you an idea of what’s possible and probable as we kick off the new month.
Quote of the Day
“We want to perceive ourselves as winners, but successful traders are always focusing on their losses.”
– Peter Borish
Top Links
What a Big Down Month for Stocks in January Could Mean – LPL Financial Research
The team at LPL Financial Research shares some interesting stats from last month’s weakness.
Nasdaq Hits the Thrusters! – StockCharts.com
Greg Schnell breaks down his short-term and long-term outlook for the Nasdaq.
Focus on the Best Relative Trends – Potomac Fund Management
Dan Russo highlights the strongest/weakest sectors of the S&P 500.
Bitcoin Oversold for a Month Straight – Bespoke
Bespoke takes a look at Bitcoin.
Bitcoin’s Loss of Long-Term Momentum is Flashing a ‘Sell’ Signal and Suggests the Coin Could Test $27,000 as Support, Fairlead’s Katie Stockton Says – Business Insider
Katie Stockton shares her outlook for Bitcoin.
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Top Tweets
After 8 straight $SPX sessions with at least one >100 point intraday day move our range today is just 41 points. pic.twitter.com/R18UqjHlUm
— Tom Hearden (@followtheh) February 1, 2022
$SPX… imagine if we squeezed to 4700 just to retest the lows again. pic.twitter.com/fXuzN6lzor
— The Kobeissi Letter (@KobeissiLetter) February 1, 2022
#NQ_F, 1h
Key levels on Nasdaq. pic.twitter.com/GVqhg26DSd
— Yuriy Matso (@yuriymatso) February 1, 2022
The Nasdaq 100 fell 83% from March 2000 to October 2002. That was a real bear market – what we saw in January was just a flesh wound.
Did it go straight down?
No. There were many vicious bounces in between, including two 50% rallies where it seemed as if the low was in.$QQQ pic.twitter.com/uwAJaf66Mu
— Charlie Bilello (@charliebilello) January 31, 2022
S&P 500 up 4.4% the last two days of January.
This was one of the largest ends to any month ever.
What happens the following month? I'm surprised here, but the next month tends to be quite weak. pic.twitter.com/EFO4pOb5Q4
— Ryan Detrick, CMT (@RyanDetrick) February 1, 2022
The Nasdaq Composite rallied > 3% on back-to-back days following at least a 6-month low.
It's only happened 5 other times, 4 of which happened to ~mark a bottom.
It averaged a return of 47% a year later.*
* No guarantee of future return LOL pic.twitter.com/9IFWp1HFM7
— SentimenTrader (@sentimentrader) February 1, 2022
The only two sectors that were positive last month were Energy and Financials, the types of stocks that historically do best when rates are rising. https://t.co/ekvrbbEB6F $XLE $XLF pic.twitter.com/ao6kWuKfQn
— J.C. Parets (@allstarcharts) February 1, 2022
The yield on the benchmark 10-year treasury bond is coiling around the 1.80% level – will we get another leg higher from here? $TNX pic.twitter.com/niFFBY1x2f
— Matt Weller CFA, CMT (@MWellerFX) February 1, 2022
USD "breadth" divergence pic.twitter.com/VGSMXD0b33
— Strategas (@StrategasRP) February 1, 2022
There's a major trend reversal underway in commodities and the CRB Index monthly candle really tells the story… #commodities pic.twitter.com/8vBXnkOXt7
— Ian Culley (@IanCulley) February 1, 2022
Similar to equities, watching those Sept./Oct. lows in #crypto as well. Bulls want to see price break above. $ETH #Etherum pic.twitter.com/XlSwgB1bAC
— Andrew Thrasher, CMT (@AndrewThrasher) February 1, 2022
Wondering when the last time $XOM was 32% above its 200 day moving average and had an RSI above 83?
So was I.
January/February 2011. It paused and retraced, but it was far from over. pic.twitter.com/zUbTLv8gT4
— Jay Woods (@JayWoods3) February 1, 2022
And with that, the longest drawdown in $XOM modern history is finally over pic.twitter.com/VeSVXzKI8w
— Lawrence Hamtil (@lhamtil) February 1, 2022
You’re all caught up now. Thanks for reading!