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Today’s Summary
Thursday, March 4th, 2021
Indices: US Stocks continued lower in today’s session with the Dow Jones Industrial Average falling 346 points or 1.11%. The S&P 500 and Nasdaq closed lower by 1.34% and 2.11%, respectively. The Russell 2000 underperformed, dropping 2.76%.
Sectors: Energy was the only sector to close higher, gaining 2.39%. Tech lagged for the third straight day, falling 2.21%.
Commodities: Crude Oil futures jumped 4.16% to $63.83 per barrel. Gold futures fell 0.88% to $1,701 per ounce.
Currencies: The US Dollar Index moved higher by 0.74%.
Interest Rates: The 10-year US Treasury yield rose to a 52-week high of 1.566%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today, $SPY closed below it's 50 day moving average. Since 2009, this has happened 92 times when the MA is upward sloping. Typically, it is higher two weeks later nearly 70% of the time. pic.twitter.com/rarSUELFVI
— Pivot Analytics ?? (@pivotanalytics) March 4, 2021
Today’s Chart of the Day was shared on Twitter by Pivot Analytics (@pivotanalytics). The S&P 500 closed below its 50-day moving average for the first time since late January today. While conventional wisdom would say this is bearish, the data suggests otherwise. Pivot Analytics examined all the prior instances over the past decade where the S&P 500 closed below a rising 50-day moving average. Two weeks later, the S&P 500 has historically been higher nearly 70% of the time for a modest average gain of 0.72%.
Quote of the Day
“The market is better at predicting the news than the news is at predicting the market.”
– Gerald Loeb
Top Links
The New Bull Market – The Untitled Chart Show
Josh Brown and JC Parets highlight some of the big-picture trends across the markets.
The Gold Report – The Rotation Report
Aaron Jackson takes a look at Gold Mining stocks.
The Market Discounts The Future – Marea Market Musings
Dan Russo reminds us that the market is a forward-looking mechanism.
Will FAANGs Pop the Bubble in Passive? – All Star Charts
Steve Strazza shares his thoughts on the rotation from Growth to Value.
Declines Keep Sentiment in Check – Bespoke
Bespoke breaks down the results of the latest AAII Sentiment Survey.
Top Tweets
All right… another fantastic day of trading in the books. 9 out of 11 S&P 500 sectors ended the day negative, so a fairly broad based selloff.
– Leaders
⬆️Energy– Meh
↔️Communications
↔️Utilities– Laggards
⬇️Discretionary
⬇️Materials
⬇️Technology$SPY #StockMarket ☕️ pic.twitter.com/SMNI4InTlD— Jack Damn (@JackDamn) March 4, 2021
Drawdown % from peak:
Dow: -3.21%
Russell: -7.01%
S&P: -4.11%
Nasdaq: -9.41% pic.twitter.com/jYLpc55Kal— Michael Goodwell (@MichaelGoodwell) March 4, 2021
Drops like these are healthy (even normal), and they can even happen in strong markets.
I'm just gonna leave this right here. pic.twitter.com/5Ru3YKWjIW
— Callie Cox (@callieabost) March 4, 2021
$QQQ Back to the Sept highs. pic.twitter.com/djfiPlbXzi
— Pratyush Tulsian (@PrattyCharts) March 4, 2021
This is a bit of a help on the sentiment/positioning front, NAAIM equity exposure down to 65 from 110 three weeks ago and not too far above where it bottomed during the September correction. pic.twitter.com/GNuiKJGNAM
— Michael Santoli (@michaelsantoli) March 4, 2021
Higher rates are bad for stocks.
That might be true, then you look at the data.
The truth is a higher 10-year yield has been extremely bullish for stocks, especially since the mid-'90s. pic.twitter.com/CvS6fbvKFt
— Ryan Detrick, CMT (@RyanDetrick) March 4, 2021
quite the contrast in the last 3-months from high beta down to low volatility… pic.twitter.com/leTRoiaWIu
— David Cox, CMT, CFA (@DavidCoxWG) March 4, 2021
Oddly while equities have weakened, High Beta stocks have been outperforming. The below chart shows when the ratio of high beta to the index hits a 6m high while the index is below the 20-day MA.
Historically it's been bullish for the index.$SPHB $SPY $SPX pic.twitter.com/CtoWS0Lmkx
— Andrew Thrasher, CMT (@AndrewThrasher) March 4, 2021
$XLE is trading 37% above its 200d MA, a new record. pic.twitter.com/i9UJccOBEl
— MicroSectors (@msectors) March 4, 2021
ICYMI! The price of crude #oil (#WTI) spikes to its highest level since October 2018 as #OPEC again surprises market by refraining from an increase in output. pic.twitter.com/YU9jZQpMJa
— jeroen blokland (@jsblokland) March 4, 2021
Dollar Index $ DXY
Level to watch: 91.75 pic.twitter.com/RMwkg9S018
— R. Alfonso Depablos (@AlfCharts) March 4, 2021
S&P 500 drops 3% from record over a couple days…
… #stockmarketcrash trends on twitter pic.twitter.com/2BolhyAIuG
— Sarah Ponczek (@SarahPonczek) March 4, 2021
— Arun S. Chopra CFA CMT? (@FusionptCapital) March 4, 2021