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Today’s Summary
Wednesday, May 13th, 2020
Indices: US Stocks closed lower in today’s session with the Dow Jones Industrial Average dropping 517 points or 2.17%. The S&P 500 and Nasdaq fell 1.75% and 1.55%, respectively. The Russell 2000 was the weakest of the major indices, sliding 3.32%.
Sectors: All 11 sectors closed lower for the second day in a row. Utilities led but still fell by 0.85%. Energy lagged, dropping 4.54%.
Commodities: The June Crude Oil futures contract moved lower by 1.90% to $25.29 per barrel. Gold futures rose 0.56% to $1,716 per ounce.
Currencies: The US Dollar Index rose 0.20%.
Interest Rates: The US 10-year Treasury slipped to 0.657%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Asking for a friend. $BKX $SPX pic.twitter.com/lXk56nE0uQ
— Mark Ungewitter (@mark_ungewitter) May 13, 2020
Today’s Chart of the Day was shared on Twitter by Mark Ungewitter (@mark_ungewitter). It’s a ratio chart of the Bank Index ($BKX) versus the S&P 500 index over the past 15 years. This ratio made an all-time low today. In other words, Bank stocks are underperforming the broader market by the widest margin since the inception of $BKX. The Financial sector, more broadly, has been the worst-performing sector off the March 23rd low. Banks are critical to the overall health of the market. The fact that this industry group is performing even worse than it did during the Financial Crisis (on a relative basis) doesn’t exactly exude confidence in the overall health of the market right now.
Quote of the Day
– Bruce Kovner (Trader)
Top Links
How Breadth And Trend Can Signal A Move Back to A Bull Market – Andrew Thrasher
Andrew Thrasher shares some of the breadth and trend indicators that he’s watching to confirm whether we’re in a bull or bear market.
Bull Flag for Gold (GLD) – Bespoke
Bespoke takes a look at the bullish consolidation pattern forming in the popular Gold ETF, $GLD.
Why Gold Will Continue to Shine – LPL Financial Research
The team at LPL Financial Research lays out the long-term bull case for Gold.
Checking in with the Economic Modern Family – StockCharts.com
Michele Schneider checks-up on a group of popular ETFs she calls the ‘Economic Modern Family’ – $XRT, $IWM, $IBB, $KRE, $IYT, and $SMH.
Buying Exhaustion?…and The Banks – Howard Lindzon
Howard Lindzon discusses the recent market action and the weakness in Bank stocks.
Top 10 Tweets
Market Mood Today: RISK-OFF
– But not as much as you might think
– Yes, $SPX -1.8% & $BKX -4.7%
– But $SPX 2800 range held
– And the yen barely movedThoughts For Tomorrow
– Will 2800 $SPX hold…
– Or will $XLF break weigh?
– Heartbreaking jobless claims
– Practice gratitude— Abigail Doolittle (@TheChartress) May 13, 2020
So we've got a lower high in most major averages and the Nasdaq 100 closing at a 3 day low.
The weakest areas continue to get sold and finally some profit-taking in leaders.
But can we have a severe selloff without Gold, Bonds, and Yen making new highs?
Watching those closely
— Tom Bruni, CMT (@BruniCharting) May 12, 2020
We suspect this is a market in the throes of a
consolidation following a +35% rally, and while
we don’t perceive sentiment to pose a serious
threat as it did in January, low put/call ratios
are a tactical concern as weaker seasonality sets
in. pic.twitter.com/1NwQliPGDC— Strategas (@StrategasRP) May 13, 2020
MRCI down seasonal on the DOW lasts until June 26. You can read the details of this trade stat at https://t.co/1LfygLZaRA (no, I am not paid, lol, but am a fan of free resources!!!) pic.twitter.com/bChZXkZVQd
— Linda Raschke (@LindaRaschke) May 12, 2020
Transports Out of Gas? – Looking like a head and shoulders top in $TRAN $DJT just as S&P 500 gets turned away at 2950 again. A break of neckline around 7800 would point to a drop to around 6900 on this chart, about a 14% slide from here. $SPY $SPX Watching for confirmation pic.twitter.com/ahGsDsG8D5
— Michael Sroga, CMT (@M_Sroga) May 12, 2020
DJ Euro Stoxx50 beginning to roll over
When short, be short the weakest in category. When long, be long the strongest (NASDAQ)
Corrected only 48% of decline
Close below 1745 could bring bears out of hibernation$EX_F pic.twitter.com/6xGJlGevhW— Peter Brandt (@PeterLBrandt) May 13, 2020
The Volatility of Volatility ($VVIX) index has seen an impressive charge these past two days. Here it is with the 2-day rate of change below and the $SPX overlaid in blue pic.twitter.com/1P6npwMYIY
— John Kicklighter (@JohnKicklighter) May 13, 2020
$BKX/$NDX ratio vs 200 DMA
Not many times in last 30yrs with a wider divergence pic.twitter.com/hZ9B3vKKRp
— Jonathan Krinsky,CMT (@jkrinskypga) May 13, 2020
you can try to pitch my on your thesis about why real estate is a-ok but this chart tells me what I need to know. any other opinion is meaningless (to me). if “big” REITs have stock prices like this, the market is speaking. all we have to do is listen. pic.twitter.com/j1GUn5WAdM
— David Cox, CMT, CFA (@DavidCoxWG) May 13, 2020
Made a new chart pic.twitter.com/82clj7ITFO
— Arun S. Chopra CFA CMT? (@FusionptCapital) May 13, 2020