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Today’s Summary
Tuesday, April 20th, 2021
Indices: US stocks continued lower in today’s session with the Dow Jones Industrial Average falling 256 points or 0.75%. The S&P 500 and Nasdaq slipped 0.68% and 0.92%, respectively. The Russell 2000 underperformed, dropping 1.96%.
Sectors: 4 of the 11 sectors closed higher. Utilities led, gaining 1.27%. Energy lagged, falling 2.65%.
Commodities: Crude Oil futures fell 1.20% to $62.67 per barrel. Gold futures rose 0.44% to $1,778 per ounce.
Currencies: The US Dollar Index inched higher by 0.13%.
Interest Rates: The 10-year US Treasury fell to 1.557%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Is a failed breakout coming in the Nasdaq 100 $QQQ?
The Feb highs ($336) are the level to watch? pic.twitter.com/77NmnDD3Ho
— R. Alfonso Depablos (@AlfCharts) April 20, 2021
Today’s Chart of the Day was shared by Alfonso Depablos (@AlfCharts). It’s a daily candlestick chart of the Nasdaq 100 ETF, $QQQ, over the past five months. Alfonso points out that the Nasdaq could be forming a failed breakout. This bearish pattern occurs when price fails to hold above a prior breakout level. In this case, that breakout level is the February highs, around $336. There’s an old adage about failed breakouts – “out of failed moves come fast moves in the opposite direction.” Failed breakouts are often referred to as bull traps because the bulls who bought the breakout become trapped when price moves against them. To be fair, we closed slightly above $336 today, so it’s still a bit early. But $QQQ is skating on thin ice here and buyers will need to show up soon. Stay tuned! If we’re below $336, things could get messy!
Quote of the Day
“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time, and still retain the ability to function.”
– F. Scott Fitzgerald
Top Links
Peak Optimism? – LPL Financial Research
The team at LPL Financial Research explains that excessive optimism is a near-term risk to stocks.
Chop Chop Chop… – All Star Charts
JC Parets shares some thoughts on the current market environment.
What is a 200-day Moving Average Again? – Bespoke
Bespoke points out that it’s been nearly a year since the S&P 500 tested its 200-day moving average.
What’s Important in The Process of Trading Dogecoin and Other Crypto Assets – Yahoo Finance
Dan Russo offers his perspective on Cryptocurrencies.
Beware of These Long-Term Technical Patterns Repeating – Schaeffer’s Investment Research
Todd Salamone weighs the bullish and bearish aspects of the current market.
Top Tweets
You: “Wow, look! Worst day for the stock market in a month!”
Me: *rushes to comp, sees a 0.7% drop*
?
— Callie Cox (@callieabost) April 20, 2021
$NQ, 4h
After multiple rejections at 14000, NQ is now below prior ATHs forming a potential failed break out. In order to invalidate this bearish pattern, NQ needs to recapture 13900 and clear the 14000 resistance. If this doesn't happen, deeper correction can be expected. pic.twitter.com/LTp0wiWm8O
— Yuriy Matso (@yuriymatso) April 20, 2021
What would be the implications of the nasdaq failing to hold those former highs? From failed moves come….? pic.twitter.com/5XKLbNmCSS
— J.C. Parets (@allstarcharts) April 20, 2021
“Market internals continue to weaken, .. we think this is consistent with a back-half of the month shakeout similar to what we have seen each of the first three months this year, and see the SPX towards 3,950 as a reasonable downside target.” @jkrinskypga pic.twitter.com/MazI9HUWua
— Carl Quintanilla (@carlquintanilla) April 20, 2021
$SMH testing the 50 day SMA after breaking down from what looked like a handle being built on the right side of a base below $260. Watching this key level in semi's as they have a tendency to bring the market with them. pic.twitter.com/Y599qAhdvl
— @theEquilibrium (@theEquilibrium) April 20, 2021
No bounce for IPO index. pic.twitter.com/0YmjP5larn
— Strategas (@StrategasRP) April 20, 2021
Industry group dynamics show downward sloping relationship between 4-week change and 13-week change.
4-week leaders are the 13-week laggards (mostly large cap groups) & vice versa (mostly small cap groups). pic.twitter.com/n109rhjUn6
— Willie Delwiche (@WillieDelwiche) April 20, 2021
Traditional defensive assets starting to move has got me thinking a little today. $GDX $GDXJ pic.twitter.com/x1wRfpmiSA
— Sam McCallum (@honeystocks1) April 20, 2021
$DBA – Agricultural commodities at 52w Highs after successful test of this area of polarity. Strong momentum regime and uptrend as well. pic.twitter.com/OVwyyQpShj
— Bob Sheehan, CMT, CFA (@LighthouseCap23) April 20, 2021
BREAKING NEWS:
Twitter trader who's been calling for a top in lumber for the last 15 sessions claims victory as futures reverse pic.twitter.com/QANtYqpj0R— Oliver – Blue Line Futures (@OliverSloup) April 20, 2021
Soybean historical chart, courtesy MRCI. Not quite the lumber chart…but….(!) pic.twitter.com/Ey4ntQtRe3
— Linda Raschke (@LindaRaschke) April 20, 2021
Since lumber is in the news, seems like a good time to revisit one of my favorite trading anomalies — front month lumber futures returns by day of week. pic.twitter.com/SMrBU50voy
— vampyroteuthis (@macrocephalopod) April 20, 2021
Just because relative charts are fun ?♂️ Lumber futures vs. Nasdaq futures. #inflectionzone #weekly
**Yes, I understand it is only Tuesday** pic.twitter.com/h3IWTkCxeM
— Dan J. Gorghuber, CMT (@Futures_Runner) April 20, 2021
One year ago today – you probably remember where you were. Crude 4/20/20 $CL pic.twitter.com/9MndWySSDy
— Drew Wells, CMT, CIMA® (@DrewTheCharts) April 20, 2021