Sponsored By:
Today’s Summary
Wednesday, March 30th, 2022
Indices: Dow -0.19% | S&P 500 -0.63% | Nasdaq 100 -1.10% | Russell 2000 -1.97%
Sectors: 4 of the 11 sectors closed higher. Energy led, gaining +1.16%. Consumer Discretionary lagged, falling -1.52%.
Commodities: Crude Oil futures rose +3.43% to $107.82 per barrel. Gold futures rose +1.40% to $1,939 per ounce.
Currencies: The US Dollar Index dropped -0.58%.
Crypto: Bitcoin snapped an eight-day winning streak, falling -1.11% to $46,900. Ethereum slipped -0.78% $3,374.
Interest Rates: The US 10-year Treasury yield fell to 2.352%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
https://twitter.com/MikeZaccardi/status/1509259285804498957
Today’s Chart of the Day was shared by Mike Zaccardi (@MikeZaccardi). It’s a chart of the Russell 2000 ETF, $IWM, over the past two years. The Russell 2000 closed at a two-month high yesterday, but it was rejected at a familiar level around $211 today. This level acted as support for the majority of last year, and now it’s acting as resistance. To be fair, today’s 2% drop is coming after rallying nearly 10% in the past two weeks, so some short-term pause is normal. Small-Caps often lead the broader market higher or lower, so there is a lot of information to be gleaned from how this test plays out. Bulls want to see price reclaim $211 in the near term, but so far, no cigar.
Quote of the Day
“The biggest mistake a fundamental analyst makes is thinking a stock and a company are the same thing. The biggest mistake a technical analyst makes is thinking they are different.”
– Phil Roth
Top Links
Here Comes the Best Month of the Year – LPL Financial Research
The team at LPL Financial Research points out that April has been a strong month for the S&P 500.
Yield Curve Inversions and SPX Returns – Quantifiable Edges
Rob Hanna takes a look at how the S&P 500 has historically performed after yield curve inversions and concludes that it’s not a great timing tool.
Bearish Newsletter Sentiment as a Contrarian Indicator – Schaeffer’s Investment Research
Rocky White examines the recent sentiment survey from Investor’s Intelligence and what it could mean for stocks.
The Most Bullish Catalyst? – All Star Charts
JC Parets points out that potential weakness in the US Dollar could be the next bullish catalyst for risk assets.
Incredible Volatility in Commodities | Strength in Cotton – TD Ameritrade Network
Legendary Turtle Trader, Jerry Parker discusses the noteworthy trends in commodities and currencies.
Sponsored:
Magnifi is a new marketplace that allows you to do more than trade stocks. With Magnifi, you can search, discover, and invest in the ideas and values that are the most important to you!
Magnifi is a registered RIA with the SEC – and it takes just two seconds to open an account.
Top Tweets
Daily Market Mood: Risk-Off
Stocks down, bonds up and it’s unclear if this is a pause in the recent rally or the start of a whipsaw down.
Dollar down ~1% over last two days supports bulls.$SPX chart, RSI is less clear PCE, NFP cld prove key.
Never a dull day!
— Abigail Doolittle (@TheChartress) March 30, 2022
Markets finally halted their furious advance as the Nasdaq 100 stalled at the 200-day average. Recent trends continued and commodity-related stocks remained strong. Big intraday reversals in momentum stocks highlight how critical it is to not chase extended. $BROS $MOS $SU $BTU pic.twitter.com/b6MbfE1syZ
— Matt Caruso, CFA, CMT (@Trader_mcaruso) March 30, 2022
Two days in a row now with more new highs than new lows – haven't had more than that since mid-November.
Let's see if we can get a blue streak going. pic.twitter.com/HXEA79LzYk
— Willie Delwiche, CMT, CFA (@WillieDelwiche) March 30, 2022
S&P 500 has rallied by 11.1% in past 15 days; prior periods of similar strength include surges from 2020 pandemic bear market, 2018 near-bear market, 2011, GFC, and various periods after tech bust
[Past performance is no guarantee of future results] pic.twitter.com/MrBnvz9w3f— Liz Ann Sonders (@LizAnnSonders) March 30, 2022
20-day new highs on SPX at 49.9%. Needs to climb to 55.0%. @RenMacLLC @WillieDelwiche 2/2 pic.twitter.com/6vw9ycBp44
— Ed Clissold (@edclissold) March 30, 2022
$SPX $SPY rally is strong, with 93% or components above their respective 20-ma, as of this morning. Beware that near-term drawdowns historically outpace the forward returns for a bit when it gets like this. Just part of the healing process. pic.twitter.com/qF0Q4LuHa1
— Jonathan Harrier, CMT (@jonathanharrier) March 30, 2022
The dollar isn't looking too hot when we look at a broader basket of currencies denominated in USD.
Breadth is deteriorating as our US dollar A/D line is carving out a lower high.
Broad weakness isn't indicative of uptrends. $DXY pic.twitter.com/9vGrf2x2o9
— Ian Culley (@IanCulley) March 30, 2022
Looking at the previous 4 times the 2/10 yr yield curve inverted shows the S&P 500 rallied for another 17 months and gained 28.8% until the ultimate peak.
Beware some of the narratives taking place right now. pic.twitter.com/o00JQuaTVl
— Ryan Detrick, CMT (@RyanDetrick) March 30, 2022
Since 1977, there have been eight yield curve inversions. The S&P 500's average return in the following year was +11.5%, with dividends +15.2%.
Inversions are not a signal to fade stocks. pic.twitter.com/vVvgzDIv6d
— Liz Young (@LizYoungStrat) March 30, 2022
You’re all caught up now. Thanks for reading!