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Today’s Summary
Wednesday, February 7, 2024
Indices: Nasdaq +1.04% | S&P 500 +0.82% | Dow +0.40% | Russell 2000 -0.17%
Sectors: 9 of the 11 sectors closed higher. Technology led gaining +1.32%. Consumer Staples lagged, but only fell -0.09%.
Commodities: Crude Oil futures rose +0.75% to $73.86 per barrel. Gold futures were flat at $2,052 per oz.
Currencies: The US Dollar Index inched lower by -0.08% to $104.05.
Crypto: Bitcoin rose +2.91% to $44,346. Ethereum gained +2.18% to $2,424.
Volatility: The Volatility Index fell -1.76% to 12.82.
Interest Rates: The US 10-year Treasury yield rose to 4.123%.
Here are the best charts, articles, and ideas shared on the web today!
Chart of the Day
Divergences and seasonality are reasons to be cautious, but not to sell and certainly not to short$SPY $QQQ $SMH remain innocent until proven guilty in interemdiate term as they remain above the (0range) 5⃣DMA$IWM guilty until proven innocent below declining 5⃣
Only Price… pic.twitter.com/rQ2vK408ps— Brian Shannon, CMT (@alphatrends) February 7, 2024
🏆 Today’s Chart of the Day was shared by Brian Shannon (@alphatrends).
- Momentum and breadth indicators have recently begun to diverge from price, suggesting the rally is getting long in the tooth. In addition, the bulls no longer have a seasonal tailwind at their backs.
- While breadth, momentum, and seasonality warrant near-term caution, Brian reminds us that the trend is the final arbiter.
- The S&P 500 ($SPY), Nasdaq 100 ($QQQ), and Semiconductor Index ($SMH) are “innocent until proven guilty” as they’re above their 5-day moving averages. On the other hand, the Russell 2000 ($IWM) remains below its 5-day moving average, making it “guilty until proven innocent.”
The takeaway: Divergences are beginning to stack up as the rally matures. It’s important to be aware of these bearish developments, but acting on them is pointless until the short-term trend turns lower, which hasn’t happened yet.
Quote of the Day
“Divergences are like laxatives. You never know if one is enough or two is too many.”
– Justin Mamis
Top Links
Almost Time for a Tech Breather – Grindstone Intelligence
Austin Harrison looks at the relentless outperformance from the Technology sector ($XLK).
Trend in Large Cap Equities Becomes Stretched – Thrasher Analytics
Andrew Thrasher points out that the S&P 500 is getting stretched from its 200-day moving average.
How to Trade Psychological Milestones – Schaeffer’s Investment Research
With the S&P 500 approaching 5,000 and the Dow approaching 40,000, Rocky White examines how the major averages have performed after reaching round-number milestones.
Stock Market & Bitcoin Analysis February 7, 2024 Alphatrends
Brian Shannon breaks down recent price action and identifies some key levels to watch in the near term.
Will the (year of the) Dragon Slay the Bear in China – Almanac Trader
Jeff Hirsch looks at how Chinese stocks have performed before and after Chinese New Year.
Top Tweets
The S&P 500 inched towards 5,000 and closed at a record high for the 8th time this year (+0.82% today). Growth #stocks continue to lead the way, while small caps lagged. Real Estate and Consumer Staples were the only sectors in the red. pic.twitter.com/gEovaPfCaL
— Cetera Investment Management (@ceteraIM) February 7, 2024
$QQQ $NQ_F $NDX Ascending triangle breakout today after two weeks of consolidation. pic.twitter.com/ZiPtu9pZMT
— Jake Wujastyk (@Jake__Wujastyk) February 7, 2024
Truckers red hot +13% last 5 days, driving the strength in transports $DJT$ARCB $TFII $SAIA $XPO $ODFL $KNX $JBHT all making new highs today pic.twitter.com/OJsutWWStf
— Steven Strazza (@sstrazza) February 7, 2024
G/V break below 200 DMA was short-lived. The ratio is now at fresh 52-week highs. $SPYG $SPYV pic.twitter.com/R4eiaHktUp
— Shane C. Murphy (@murphycharts) February 7, 2024
Wow, this stat jumped off the page for me. Great work @meanstoatrend:
Tech is unstoppable.
Just how unstoppable? Over the last 5 years, the Information Technology has risen more than 200%, 2x the return of the S&P 500 index. It goes even further than that, though. Tech’s… pic.twitter.com/tyk6LN6tpO
— Blake B. Millard, CFA (@BlakeMillardCFA) February 7, 2024
Returns over last 2 years…
Uber $UBER: +93%
Lyft $LYFT: -67% pic.twitter.com/hrmPjovC5X— Charlie Bilello (@charliebilello) February 7, 2024
FinTwit is losing its mind over the breadth divergence. A threadhttps://t.co/vmIEAL9Ato
— Urban Carmel (@ukarlewitz) February 7, 2024
Commodities have not participated in rally with S&P 500 (orange) … @Bloomberg Commodity Spot Index (blue) peaked in June 2022 and is down by 31% since then
[Past performance is no guarantee of future results] pic.twitter.com/tG7q8DG1sv— Liz Ann Sonders (@LizAnnSonders) February 7, 2024
Nat gas with a $1 handle in the heart of winter.
You gotta love it. $UNG pic.twitter.com/mMZRKL9wPt
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) February 7, 2024
Forget valuations. Forget earnings. Forget geopolitics.
Just buy Chinese stocks when they replace their main regulator.
The "strategy" gained an average of 10% over two months with a single loss. pic.twitter.com/ecInCTtvwa
— Jason Goepfert (@jasongoepfert) February 7, 2024
I got this from @HalfersPower but here is Abercrombie & Fitch, yes that same subpar clothing brand Abercrombie & Fitch, essentially trading like a treasury bill while more than doubling the last 6 months. pic.twitter.com/TxaZsL1mXq
— Steve Deppe, CMT (@SJD10304) February 7, 2024