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Today’s Summary
Thursday, March 11th, 2021
Indices: US Stocks closed higher in today’s session with the Dow Jones Industrial Average gaining 189 points or 0.58%. The S&P 500 rose 1.04% and closed at a fresh all-time high. The Nasdaq outperformed, closing up 2.52%. The Russell 2000 moved higher by 2.31%.
Sectors: 8 of the 11 sectors closed higher. Technology led, rising 2.14%. Financials lagged, slipping 0.29%.
Commodities: Crude Oil futures moved higher by 2.45% to $66.02 per barrel. Gold futures were unchanged and continue to trade at $1,722 per ounce.
Currencies: The US Dollar Index dropped 0.44%.
Interest Rates: The 10-year US Treasury yield rose to 1.542%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The tactical investment advisors in NAAIM survey have really retrenched, 10-month low in equity exposure.
S&P pulled back ~5% and has now fully recovered over the past month, but it allowed the overheated parts of the market to come off the boil and for sentiment to moderate. pic.twitter.com/0czbVJ0GAD
— Michael Santoli (@michaelsantoli) March 11, 2021
Today’s Chart of the Day was shared on Twitter by Michael Santoli (@michaelsantoli). It’s a chart of the NAAIM Exposure Index over the past two years. This index is based on a survey in which active fund managers are asked their exposure to the stock market. Like most sentiment indicators, it is used as a contrarian indicator. Generally speaking, levels over 80% indicate excessive optimism, while levels under 20% indicate excessive pessimism. The S&P 500 pulled back a mild 5% in recent weeks, and yet this sentiment indicator plunged to a 10-month low. Leading up to the pullback, there was a lot of concern over excessive optimism. But as Michael points out, it looks like the pullback did a lot to dampen optimism and reset sentiment. Now that the S&P 500 has returned to all-time highs, the bulls can sleep a little easier knowing that the market is not as frothy as it was prior to the pullback. We shared this quote from Robert Shiller a few days ago but it seems particularly applicable here – “After a stock market decline, people may perceive more risk than before when, in fact, the decline may have taken some of the risk out of the market. ”
Quote of the Day
“Sustained trends have a way of covering all kinds of mistakes and bad habits. In fact, strong and persistent trends can become the breeding grounds for habits that will eventually prove quite costly to traders.”
– Peter Brandt
Top Links
The Three Most Important Charts in the Market Right Now – Marea Market Musings
Dan Russo takes a look at the Nasdaq, US Treasury yields, and the US Dollar.
The Simplest Asset to Hedge Against Inflation – A Wealth of Common Sense
Ben Carlson explains why stocks are a good hedge against inflation.
Bitcoin and the Correlation Illusion – Osprey Funds
Phil Pearlman shares some wise words on Bitcoin.
New All Time Highs Are Bullish – StockCharts
In this episode of The Final Bar, David Keller and Willie Delwiche discuss the technical outlook for the S&P 500.
Is it Too Late to Rotate? – Rieben Financial
Greg Rieben offers his thoughts on the rotation from Growth to Value.
Top Tweets
Regardless of what you think you know, never argue with a market hitting an all-time high.#stocks $SPY $QQQ pic.twitter.com/iXPeiN7DQV
— Bob Loukas (@BobLoukas) March 11, 2021
That SPX drawdown lasted exactly one month ? pic.twitter.com/e6Dtk8fEkx
— Michael Goodwell (@MichaelGoodwell) March 12, 2021
S&P 500 4k could become a thing soon pic.twitter.com/QBU2OeppYP
— Katie Greifeld (@kgreifeld) March 11, 2021
Since 1970, there have been 24 times when stocks closed at 20 day lows and then five days later, closed at 20 day highs. Not much statistical significance for the pattern but the following day is very bullish and higher 80% of the time with a T-stat >3. $SPY $SPX $QQQ pic.twitter.com/MgIjN4ttC5
— Pivot Analytics ?? (@pivotanalytics) March 11, 2021
Breadth remains strong … % of NYSE stocks at 52w highs has continued to climb over past year, recently reaching highest since 2016
[Past performance is no guarantee of future results] pic.twitter.com/A8F4VBFnsQ— Liz Ann Sonders (@LizAnnSonders) March 11, 2021
Solid rebound in $SPX breadth over the past week. pic.twitter.com/oIKUYvZ7gi
— Dan Russo, CMT (@DanRusso_CMT) March 11, 2021
NAAIM fell from 110 four weeks ago to 49 this week, pushing it below its lower Bollinger. Higher high for $SPX odds on. Notes on chart. h/t @HumbleStudent pic.twitter.com/v6xtCHM012
— Urban Carmel (@ukarlewitz) March 11, 2021
#Growth #Value #Rotation — Picture "may" paint a thousand words…… pic.twitter.com/QYa1Fp3K6w
— Nautilus Research (@NautilusCap) March 11, 2021
Value is having quite the year thus far – but are we entering a cooling off period for Value relative to Growth stocks? Only time will tell. Correlation between the US 10yr Treasury Yield and the Value/Growth ratio is becoming increasingly more positive.$IWD $IWF $SPYV $SPYG pic.twitter.com/ln3z0BXlm1
— Michael Roberts Associates Inc. (@MRA_Planners) March 11, 2021
Bitcoin ($BTCUSD) is on pace for a seventh consecutive daily advance and a close at record highs. Looks like we have backed up to two fads ago for top performer pic.twitter.com/XbqDtiOi6S
— John Kicklighter (@JohnKicklighter) March 11, 2021
$BA Weekly. Liftoff. pic.twitter.com/r3I3F1LhlQ
— Brian G (@alphacharts) March 11, 2021