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Today’s Summary
Tuesday, March 29th, 2022
Indices: Russell 2000 +2.65% | Nasdaq 100 +1.68% | S&P 500 +1.23% | Dow +0.97%
Sectors: 10 of the 11 sectors closed higher. Real Estate led, gaining +2.93%. Energy was the only sector that closed lower, slipping -0.26%.
Commodities: Crude Oil futures fell -1.62% to $104.24 per barrel. Gold futures dropped -1.42% to $1,912 per ounce.
Currencies: The US Dollar Index dropped -0.72%.
Crypto: Bitcoin rose +0.40% to $47,307. Ethereum rose +1.16% to $3,375.
Interest Rates: The US 10-year Treasury yield fell to 2.400%.
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 Callie Cox (@callieabost). The 2yr/10yr yield curve briefly inverted today for the first time since 2019. The yield curve has been known to be one of the best leading economic indicators out there. It has inverted before all of the past 10 recessions since 1950, but there are some important caveats to consider. For starters, another closely watched part of the yield curve, the 3mo/10yr, is nowhere near inversion. Callie also points out that it has historically taken anywhere from 5-33 months to see a recession after the 2yr/10yr curve has inverted in the past. The last time it inverted in 2019, the S&P 500 rallied another 17% in less than six months before peaking along with the economy. This is definitely worth keeping in mind, but it can be psychologically and financially painful to try and time this signal. For more on this, check out the full thread.
Quote of the Day
“The brains of humans contain a mechanism that is designed to give priority to bad news.”
– Daniel Kahneman
Top Links
The Big Bounce – The Irrelevant Investor
Michael Batnick shares his thoughts on the recent rebound in stocks.
Time to Pay Attention to Growth Themes Again? – Potomac Fund Management
Dan Russo analyzes the strongest and weakest sectors of the S&P 500.
Speculators Step Away From S&P – Bespoke
Bespoke examines positioning within S&P 500 futures.
Currencies Get Real – All Star Charts
The team at All Star Charts takes a look at which currencies could benefit from higher interest rates.
Three Quick Facts About the Yield Curve Inversion – Callie Cox
Here’s a good Twitter thread from Callie Cox that sums up everything you need to know about yield curve inversions.
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Top Tweets
$SPY +11% last 11 days.
Here's an 11-year chart with the 11-day ROC above. pic.twitter.com/pQRRsH94eK— Mike Zaccardi, CFA, CMT (@MikeZaccardi) March 29, 2022
The QQQs joined $DIA and $SPY above their 200-DMAs after today's rally. $QQQ Here's a quick look at the price charts. https://t.co/H4p1RcpNxV pic.twitter.com/Yg0p4cd6Nj
— Bespoke (@bespokeinvest) March 29, 2022
NASDAQ closed with highest daily RSI since November 2021. pic.twitter.com/z7IJwy0Mtr
— Chris Ciovacco (@CiovaccoCapital) March 29, 2022
And the afternoon push gets us back into the range…$IWM $RUT $RTY_F pic.twitter.com/0S8SvkzIEU
— Ian McMillan, CMT (@the_chart_life) March 29, 2022
For only 3rd time this year and 8th time since mid-November, we had more new highs than new lows today on NYSE+NASDAQ. pic.twitter.com/pua8NYolDO
— Willie Delwiche, CMT, CFA (@WillieDelwiche) March 29, 2022
This is amazing, but the S&P 500 has been green in 15 of the past 16 years. pic.twitter.com/UzXM66kRTB
— Ryan Detrick, CMT (@RyanDetrick) March 29, 2022
$XLK is doing some heavy lifting here, note the %of XLK stocks above their 50MA is at the same level it was when $XLK hit a high in December pic.twitter.com/THtMIGoDh4
— Bailey.Baxter2020 (@BBaxter2020) March 29, 2022
$AAPL is up 11 days in a row.
Trading above some key levels here too, taking out the mid Jan / early Feb highs.
Haven't heard nearly enough people talking about this. pic.twitter.com/0XtVVqeVna
— Grayson Roze (@GraysonRoze) March 29, 2022
Growth set to retest the top end of the range again? $IWF $IWD pic.twitter.com/1KVtK2lKP6
— Drew Wells, CMT, CIMA® (@DrewTheCharts) March 29, 2022
Technical inversion of 10s2s this afternoon pic.twitter.com/RFtU7PeHAL
— Liz Ann Sonders (@LizAnnSonders) March 29, 2022
The 10-year 2-year #yieldcurve briefly inverted today. This is in line with what happened in the run-up to earlier #recessions. It inverts before the 10-year – 3-month yield curve does. The exception was the Covid-recession. pic.twitter.com/AIURiZ9ee4
— jeroen blokland (@jsblokland) March 29, 2022
So, the yield curve inverted… However, some of the best blow-off bull markets have happened after the initial inversion. It's the reversion you should be really worried about and typically any decent sell-off on the headline scaries is a good buying opportunity.
$TNX $SPY pic.twitter.com/9gfYY7I0QP— Matthew Timpane, CMT (@mtimpane) March 29, 2022
On this day in 1999 the Dow Jones closed above 10,000 for the first time ever pic.twitter.com/nPnKVPhsHy
— Ticker History (@TickerHistory) March 29, 2022
You’re all caught up now. Thanks for reading!