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Today’s Summary
Monday, May 3rd, 2021
Indices: US indices closed higher to start the week with the exception of the Nasdaq, which fell 0.48%. The Dow gained 238 points or 0.70%, while the S&P 500 rose 0.27%. The Russell 2000 moved higher by 0.49%.
Sectors: 6 of the 11 sectors closed higher. Energy led, gaining 2.75%. Real Estate lagged, falling 0.54%.
Commodities: Crude Oil futures rose 1.43% to $64.49 per barrel. Gold futures moved higher by 1.36% to $1,792 per ounce.
Currencies: The US Dollar Index fell 0.36%.
Interest Rates: The 10-year US Treasury slipped to 1.603%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
A notable disparity between Growth and Value to kick off the day. Seems like a successful retest in the favor of Value and Cyclicals
Hope you didn't squander that opportunity by doubling down on Growth instead of adding more Value exposure $IWF $IWD pic.twitter.com/wTiAThm8QG
— Louis Sykes (@haumicharts) May 3, 2021
Today’s Chart of the Day was shared by Louis Sykes (@haumicharts). The chatter on the street today was all about Sell in May & Go Away, but perhaps the better move is to Rotate in May & Go Away. The chart shows Growth vs. Value over the past 14-months ($IWF/$IWD). You may remember, this ratio broke down in favor of Value in late February. Growth staged a nice rebound in March-April. However, that rebound fizzled out recently as the ratio retested the level it broke down from in February. As Louis points out, Value outperformed Growth in a meaningful way today, which begs the question – was that it for Growth? Interest rates are an important catalyst to watch for this relationship. Keep in mind, Value caught a bid as interest rates were spiking in late February. If rates pick back up, it will likely put pressure on this ratio in favor of Value.
Quote of the Day
“The trend has vanished, killed by its own discovery.”
– Benoit Mandelbrot
Top Links
Time to Sell in May? – LPL Financial Research
The team at LPL Financial Research notes a few reasons that stocks could pause in the intermediate-term.
Inflection Point – The Weekly Trend
In this podcast, Ian McMillan highlights some noteworthy technical developments to watch in the week ahead.
Monthly Candlesticks – April 2021 – Alf Charts
With April in the books, Alfonso Depablos reviews some monthly candlestick charts.
Why is JC a Crypto Guy Now? – All Star Charts
JC Parets explains why Cryptocurrencies should not be ignored here.
An Interesting Trading Pair – AlphaCharts
Brian at AlphaCharts examines the relationship between Bitcoin and Gold.
Top Tweets
First half of the month vs. second half of the month certainly has that Jekyll & Hyde feel to it so far in 2021…
1/1 – 1/16 +2.04%
1/17 – 1/31 -0.06%2/1 – 2/14 +4.21%
2/15 – 2/28 -0.78%3/1 – 3/16 +1.56%
3/17 – 3/31 -0.04%4/1 – 4/15 +3.75%
4/16 – 4/30 +0.26%— Ian McMillan, CMT (@the_chart_life) May 3, 2021
Bifurcated market today.
Value > Growth pic.twitter.com/OiyVozczWZ
— ??????? ??? ??? (@BrandonVanZee) May 3, 2021
The next six months are indeed the worst possible 6 month combo for the S&P 500, up 1.7% on average.
But did you know when the S&P 500 is >5% in May (like '21) then the next six months are up 6.2% on average? pic.twitter.com/BKMDBlUaMK
— Ryan Detrick, CMT (@RyanDetrick) May 2, 2021
S&P 500 Index has averaged a gain of 0.4% in the month of May with 70% of periods closing higher over the past 20 years. https://t.co/ZAa7hC9MuD $SPX $SPY $ES_F $STUDY pic.twitter.com/79MFbopjrF
— Equity Clock (@EquityClock) May 3, 2021
Still not much love for #SPACs over past couple months … in general, those with no deals have moved sideways & those with deals announced are in bear market territory
[Past performance is no guarantee of future results] pic.twitter.com/aukCxm2Oxn— Liz Ann Sonders (@LizAnnSonders) May 3, 2021
"Aspirational Tech" – i.e., recent IPO's – remain on the relative low list. The Software rally also tepid, and Semis haven't made a new high in 10 weeks… but the Fed! and Earnings! and chip shortage! When things don't work out as they should, pay attention. pic.twitter.com/b1ChwKscHr
— Chris Verrone (@verrone_chris) May 3, 2021
Notice how the semis ran out of steam just when the 'shortage' went mainstream? $SMH $SOX pic.twitter.com/hvncjjfJX8
— Bespoke (@bespokeinvest) May 3, 2021
"If you want to outperform the $SPX, you have own things that are outperforming the $SPX."
Today's example: real estate $XLRE pic.twitter.com/yqGSvynMX4— David Keller, CMT (@DKellerCMT) May 3, 2021
A chart to keep an ? on is the 10 yr. treasury yield as it sits on the 50 day moving average.
The 10 yr. yield broke above the 50 day in August '20 and has been in a persistent uptrend since.
Today the 10 yr. is 1.60%, 50 day moving average 1.59%. Cutting it close. @FactSet. pic.twitter.com/GwJutAQge6
— Matthew Miskin, CFA (@matthew_miskin) May 3, 2021
The Bloomberg Commodities Index returned 15.78% year-to-date.
With data going back to 1973, this marks commodities’ best total return through the first four months of any year on record. pic.twitter.com/BKTsjqeWLm
— Jim Bianco (@biancoresearch) May 3, 2021
Chart from last night's Thrasher Analytics letter.
Commodities. pic.twitter.com/RbZZv891yn
— Andrew Thrasher, CMT (@AndrewThrasher) May 3, 2021
what the bond market thinks about inflation pic.twitter.com/fDcMDiY7c3
— J.C. Parets (@allstarcharts) May 3, 2021
So everyone's like… crazy long.
? 5-day Equity Put/Call at 0.484
? NAAIM Exposure over 100 (103.72)
? Rydex Asset Ratio at 0.08I'm an optimistic guy, but… ? pic.twitter.com/VjoHbmIyT4
— Grayson Roze (@GraysonRoze) May 3, 2021
You’re all caught up now. Thanks for reading!