Sponsored By:
Today’s Summary
Thursday, February 18th, 2021
Indices: US Stocks closed lower in today’s session with the Dow Jones Industrial Average slipping 120 points or 0.38%. The S&P 500 and Nasdaq fell 0.44% and 0.72%, respectively. The Russell 2000 underperformed, dropping 1.67%.
Sectors: 2 of the 11 sectors closed higher. Utilities led, rising 0.60%. Energy lagged, dropping 2.26%.
Commodities: Crude Oil futures fell 1.00% to $60.53 per barrel. Gold futures inched higher by 0.12% to $1,775 per ounce.
Currencies: The US Dollar Index dropped 0.43%.
Interest Rates: The 10-year US Treasury yield rose to 1.296%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Copper is at it's highest level since 2012.
Remember, the copper to gold ratio has been saying higher rates were coming all year.
Historically, stronger copper relative to gold is a sign of an improving economy and higher rates. pic.twitter.com/ibsl4VFBzw
— Ryan Detrick, CMT (@RyanDetrick) February 18, 2021
Today’s Chart of the Day was shared on Twitter by Ryan Detrick (@RyanDetrick). The chart shows the Copper/Gold ratio in black, and the 10-year Treasury yield ($TNX) over the past 15-years. As Ryan points out, a rising Copper/Gold ratio is a sign of an improving economy and higher interest rates. Just take a look at how strongly correlated the Copper/Gold ratio has been to the 10-year Treasury yield over the years. If Copper continues to outperform Gold, expect interest rates to head north as well. For more on this relationship, check out this white paper.
Quote of the Day
“Wall Street never changes, the pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes.”
– Jesse Livermore
Top Links
What The VIX’s Historical Move Means for Stocks – Schaeffer’s Investment Research
Rocky White takes a look at what tends to happen after the VIX falls below 20.
We Have All Been There – Exchanging Thoughts
Ian McMillan shares some wise words regarding the GameStop debacle.
Small Changes in Sentiment – Bespoke
Bespoke breaks down the results of the latest AAII Sentiment Survey.
The Worst Year for Bonds in History? – Compound
Charlie Bilello explains why this could be the worst year for Bonds.
February Conference Call: 5 Key Takeaways – All Star Charts
Steve Strazza highlights five important topics discussed in their monthly conference call.
Top Tweets
Today was the worst day for the S&P 500 this month, but the real takeaway is that there haven't been many bad days this month.
— Eddy Elfenbein (@EddyElfenbein) February 18, 2021
$NDX breadth shows less participation on the recent move higher as the percent of stocks above the 50-day SMA failed to get back above 75% in February. Signs of waning participation preceded the Feb-2020 top and the Sep-Oct correction. Watch for a move below 50% to confirm. $QQQ pic.twitter.com/ru3dz2pbN7
— Arthur Hill, CMT (@ArthurHill) February 18, 2021
From 0 to 100.. real quick! $XLE stocks above their 200-day moving average pic.twitter.com/v98wlJdeXy
— Grant Hawkridge (@granthawkridge) February 18, 2021
$JPM $XLF
Financials breaking out… do we think JP Morgan makes sense here? pic.twitter.com/JFkWiMC9Ff— Sam McCallum (@honeystocks1) February 17, 2021
Yield curve continuing to steepen -> $XLF continues to make higher highs. pic.twitter.com/1wHjIy6iVd
— David Keller, CMT (@DKellerCMT) February 18, 2021
Copper is now at its highest level in 9 years, doubling from its low last March. $COPPER pic.twitter.com/1RGtdmtoYI
— Charlie Bilello (@charliebilello) February 18, 2021
Copper/Gold ratio looking pretty good pic.twitter.com/9c53zFlRAg
— Michael Kahn, CMT (@mnkahn) February 18, 2021
copper/gold vs US 10s pic.twitter.com/AkBPU6ldoe
— ? I. Vodenitcharov CFA CMT (@iv_technicals) February 18, 2021
Copper/Gold ratio vs US10Y Yields.
They normally track each other closely. A huge gap has opened up.
3 options here:
A. 10s have a long way to go. Possible move up to 2.2%.
B. Copper, which is at a 9yr high, comes down.
C. Gold, which is seen as an inflation hedge, rises. pic.twitter.com/MSETpYdzP2— Michael Goodwell (@MichaelGoodwell) February 18, 2021
At some point rising interest rates WILL have a negative impact on stocks. The big question, of course, is when… pic.twitter.com/zMf1c3kezM
— Walter Deemer (@WalterDeemer) February 18, 2021
Y'all, rising yields are normal in the first year of a stock market recovery.
Here's the 10-year yield's change in the first year of every major S&P 500 rally (bull market) since 1962. pic.twitter.com/FcHo9nwKa3
— Callie Cox (@callieabost) February 18, 2021
$GME remove the noise. Breakout, retest, bounce? To be determined. pic.twitter.com/konO8KbRqU
— Ryan Deitrich (@ryandeitrich) February 18, 2021