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Today’s Summary
Thursday, May 26th, 2022
Indices: Nasdaq 100 +2.79% | Russell 2000 +2.17% | S&P 500 +1.99% | Dow +1.61%
Sectors: 10 of the 11 sectors closed higher. Consumer Discretionary led, gaining +4.90%. Real Estate was the only sector that closed lower, slipping -0.11%.
Commodities: Crude Oil futures rose +3.41% to $114.09 per barrel. Gold futures ticked higher by +0.07% to $1,848 per ounce.
Currencies: The US Dollar Index fell -0.31%.
Crypto: Bitcoin inched higher by +0.20% to $29,570. Ethereum dropped -5.40% to $1,836.
Interest Rates: The US 10-year Treasury yield inched higher to 2.751%
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
https://twitter.com/murphycharts/status/1529622215829905408
Today’s Chart of the Day was shared by Shane Murphy (@murphycharts). It’s a daily candlestick chart of the Russell 2000 over the past five years. A couple of weeks ago, Shane pointed out that the Russell 2000 was testing a major level around 1750-1700. This level acted as resistance in 2018 and 2020, and now it’s acting as support, with the Russell up 7% from its recent lows. As we know, Small-Caps often lead the broader market higher or lower, so this is encouraging for the bulls. However, the index is still 25% off its highs, and there is a lot of overhead supply to clear. The next resistance level to watch is around 1950. This level was support in January, February, and March until it eventually broke in April. 1950 also coincides with the VWAP from the Covid lows, so we’ll see how the index behaves if it gets to that key level in the near term.
Quote of the Day
“You should be far more concerned with your current trajectory than with your current results.”
– James Clear
Top Links
One of the Worst Starts Ever After 100 Days, But There Is Hope – LPL Financial Research
Ryan Detrick looks at how the S&P 500 has historically performed in the remainder of the year after a horrible first 100 days.
Bulls Back Below 20% – Bespoke
Bespoke analyzes the results of the latest AAII Sentiment Survey.
Finally Something Postive to Say About Breadth – Potomac Fund Management
Dan Russo points out some signs of breadth improvement.
This Week in Charts (5/26/22) – Charlie Bilello
In this video, Charlie Bilello walks through several noteworthy charts.
Top Tweets
Final heat map of the S&P 500's performance from today pic.twitter.com/vMHzwqbSY9
— Stock Market News (@StockMKTNewz) May 26, 2022
A lot of the recently unloved areas of the market got some love today. Can't rule out the possibility that this rally was spurred by short covering, but an up day is an up day. We just might close out this week in the green. pic.twitter.com/Y1cucUloQv
— Liz Young (@LizYoungStrat) May 26, 2022
Big rally across the board. $COMPQ Nasdaq Composite rallied to the 20 DMA where it met some resistance. Despite the big move, new lows outpaced new highs. pic.twitter.com/1g8BTeqFvB
— Victor Riesco (@Global_Trader) May 26, 2022
New chop zone on $SPX. Nothing good happens under 4100. Market is rallying where it needed to, let's see if it continues. pic.twitter.com/CqEz1yVnI1
— Jim Denholm, CMT (@denholm_jim) May 26, 2022
$SPX – some follow through on the bullish breadth and momentum divergence. pic.twitter.com/tyNKTUByPe
— Larry Thompson, CPA (@HostileCharts) May 26, 2022
$IWM 3-week closing high pic.twitter.com/iOmjT20Kli
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) May 26, 2022
Small caps are finally showing signs of long-term downside exhaustion vs large caps; check out the DeMARK signal in $IWM vs. $SPX as indicative of 4 mos of stabilization (i.e., underperformance from small caps shouldn't be as pronounced) #fairleadstrategies pic.twitter.com/TyCpnMp7o6
— Katie Stockton, CMT (@StocktonKatie) May 26, 2022
2022 is the 4th worst start to a year ever for the S&P 500 after 100 days.
That's the bad news.
The good news is looking at the previous worst 5 starts ever shows the rest of the year was higher every time and up 19.1% on average. pic.twitter.com/79NC9OZbKj
— Ryan Detrick, CMT (@RyanDetrick) May 26, 2022
In first 100 days of 2022, we had new highs > new lows only 6 times.
Last time it was that few in a 100-day time period was Oct 2008. pic.twitter.com/YCJdDNfVLP
— Willie Delwiche, CMT, CFA (@WillieDelwiche) May 26, 2022
If high beta stocks want to start outperforming low volatility stocks, this would be a logical level to do so.$SPHB / $SPLV pic.twitter.com/2fxRUq5goz
— Alfonso Depablos (@AlfCharts) May 26, 2022
The 10-Year Note has rallied from the 2018 lows to meet the 50-day MA which is below the declining 100-day MA. The RSI is still in bearish ranges. What's it gonna be from here? pic.twitter.com/amERXLL6fl
— Dan Russo, CMT (@DanRusso_CMT) May 26, 2022
huge move this week, tightening pic.twitter.com/GD6vThlkQc
— Christian Fromhertz ???? (@cfromhertz) May 26, 2022
Keep a close, close eye on crude oil.
If it breaks out (and stays there), we are likely entering a (painful and even more expensive) new chapter.
If it fails and breaks down, the worst of inflation may be behind us.
An important clue will soon reveal itself…#sentimentrader pic.twitter.com/EvDWa8WwYG— Jay Kaeppel (@jaykaeppel) May 26, 2022
$CRAK pic.twitter.com/IKLtghS91D
— Ian McMillan, CMT (@the_chart_life) May 26, 2022
If you're wondering what a trending 200% move in an index does to an underlying 3x bull ETF , this is it $XLE and $NRGU
When it comes to leveraged ETF…path matters the most pic.twitter.com/W0bZL4FcQc
— Canadian Soccer Mom (@SoccerMomTrades) May 25, 2022
You’re all caught up now. Thanks for reading!