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Today’s Summary
Thursday, June 4th, 2020
Indices: US Stocks were mostly lower in today’s session. The Dow Jones Industrial Average was flat, changing just 12 points or 0.05%. The S&P 500 and Nasdaq fell 0.34% and 0.69%, respectively. The Russell 2000 was completely unchanged.
Sectors: Financials led, gaining 2.18%. Real Estate lagged, falling 1.87%.
Commodities: The July Crude Oil futures inched higher by 0.32% to $37.41 per barrel. Gold futures rose 1.33% to $1,727 per ounce.
Currencies: The US Dollar Index fell for the eighth day in a row, dropping 0.56%.
Interest Rates: The US 10-year Treasury yield rose to 0.831% – its highest level since the end of March.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Invert the 5-day Put/Call ratio and layer in the S&P 500 behind. Interesting to see how important pivots in this ratio have tracked just ahead of turning points for $SPX.
Mom always said nothing good happens after midnight. I think nothing good happens below 0.55 on the $CPCE… pic.twitter.com/XoteTEmw55
— Grayson Roze (@GraysonRoze) June 4, 2020
Today’s Chart of the Day was shared on Twitter by Grayson Roze (@GraysonRoze). It’s a chart of the S&P 500 over the past three years, along with an inverted 5-day Put/Call Ratio in red. Many technicians are concerned that the market is getting frothy, as reflected by the extremely low Put/Call ratio. It’s 5-day moving average is currently at 0.49 – the lowest reading since the market peaked in mid-February. An extremely low reading from this short-term sentiment indicator tells us that market participants are abandoning their protective puts and buying more speculative calls, betting the market will continue higher. As Grayson points out, extreme turning points in the Put/Call ratio often occur just before turning points in the S&P 500. After a record-breaking 40% rally over the past 50-days, it wouldn’t be surprising to see stocks pullback and shake out some complacent bulls. As always, this is just one data point to consider within the context of other evidence. However, it’s certainly a potential risk to be aware of in the near-term.
Quote of the Day
– George Soros (Hedge Fund Manager)
Top Links
Nasdaq’s Historic Run – Bespoke
Bespoke points out that the slope of the Nasdaq’s 50-day moving average has never been so steep as a result of the sharpest 50-day rally on record.
The Market Saying Better Times Could be Ahead – Yahoo Finance
In this clip, Ryan Detrick of LPL Financial Research shares his outlook on Stocks.
Crude Oil Rallies 222% in 30-days, Peak Oil Time Again? – Kimble Charting Solutions
Chris Kimble shows that Crude Oil is running into an area of resistance after a triple-digit rally off the April lows.
BRIC by BRIC… The Building Blocks – Jotting on Charts
Grant Hawkridge shares his notes on several different global equity markets, specifically, Emerging Markets and the BRICs – Brazil, Russia, India, China.
Volatility Index – Did it Bottom? – StockCharts.com
Michele Schneider examines a potential reversal brewing in the Volatility Index ($VIX).
Top 10 Tweets
Not making a market call, but as a fan of great charts, if we do get a double top in $QQQ, it'd be a pretty epic chart setup. Still way to early to make that conclusion. pic.twitter.com/lDVYyLW6pb
— Andrew Thrasher, CMT (@AndrewThrasher) June 4, 2020
first time we’ve seen the 50-day moving average of the $QQQ vs. $SPX relative turn down since September, 2019… the last time didn’t last long but, this time is different? pic.twitter.com/X5MtwTxRJB
— David Cox, CMT, CFA (@DavidCoxWG) June 4, 2020
Since the low, equal weight is slightly beating the regular index. pic.twitter.com/VcSvq5DdIE
— Eddy Elfenbein (@EddyElfenbein) June 4, 2020
U.S. Momentum Long/Short with its 5th worst 15-day stretch (-30%) on record pic.twitter.com/2NAcE5Wxyj
— Jonathan Krinsky,CMT (@jkrinskypga) June 4, 2020
Another breadth thrust yesterday with percentage of $SPX stocks at new 20-day highs surging to 69%. Track record 6-12 months out pretty impressive. Chart from @NDR_Research based on work done by @RenMacLLC pic.twitter.com/Cw816eMZ7x
— Willie Delwiche, CMT, CFA (@WillieDelwiche) June 4, 2020
$QQQ Money flow as seen in Accumulation/Distribution, On Balance Volume & Chaikin Oscillator support the rally and in fact are showing new highs in money going where the mouth is. pic.twitter.com/e8PfsqawNI
— Alan Cohen (@al_xdpg) June 4, 2020
The Volatility Index has declined over 62% in the past 10 weeks, the largest 10-week decline ever. $VIX pic.twitter.com/dVPlXGR6pB
— Charlie Bilello (@charliebilello) June 4, 2020
So many polarized opinions about markets right now. But even for those who think the rally makes no sense, very few are willing to bet that it will end. Or even hedge it.
Equity put/ call ratio lowest since 2014. pic.twitter.com/jAK1hr5ezI
— Dani Burger (@daniburgz) June 4, 2020
Put/Call Ratio at 29th most overbought day in 20 years, a 0.60% frequency event.
P/C 10d at most extreme 1.4% of days in 20 years – *half a cent* from Feb peak.
P/C 21d at most extreme 3.5% of days in 20 years – just *three cents* from Jan peak.
Monitor very closely from here. pic.twitter.com/yQztRPOnyf
— Macro Charts (@MacroCharts) June 4, 2020
10 year treasuries see quite the selloff. Yield breaks out of 2 month trading range?
Some of the action in treasuries coming from delta hedging in the options market @EddBolingbroke explains on @TheTerminal pic.twitter.com/PLAOPLjtqs
— Kriti Gupta (@KritiGuptaNews) June 4, 2020