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Today’s Summary
Friday, June 18th, 2021
Indices: US Stocks ended the week on a sour note, with the Dow dropping 533 points or 1.58%. The S&P 500 and Nasdaq fell 1.31% and 0.92%, respectively. The Russell 2000 underperformed dropping 2.17%.
Sectors: All 11 sectors closed lower. Consumer Discretionary led, but still slipped 0.53%. Energy lagged dropping 2.96%.
Commodities: Crude Oil futures inched higher by just 0.14% to $71.14 per barrel. Gold futures fell 0.61% to a one-month low of $1,764 per ounce.
Currencies: The US Dollar Index continued higher by 0.46%.
Interest Rates: The 10-year US Treasury yield dropped to 1.441%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The bottom line is market breadth has been deteriorating behind the scenes.
This isn't end of the world stuff, but after a 90% rally for the S&P 500, it has been suggesting a break could be needed. pic.twitter.com/OKd68QpomU
— Ryan Detrick, CMT (@RyanDetrick) June 18, 2021
Today’s Chart of the Day was shared by Ryan Detrick (@RyanDetrick). It’s a daily candlestick chart of the S&P 500 over the past year, with several breadth metrics below. Things continue to look ugly beneath the surface of the market right now. Over the past month, the S&P 500 made a new high, and yet, fewer and fewer stocks participated in that strength. Price has begun to soften this week, but we’re still only 2% off of Monday’s record highs. As Ryan notes, after a 90% rally since March 2020, it wouldn’t be surprising to see some sort of pullback or correction. Especially when you consider the S&P 500’s weak seasonal tendency around this time of year. On an optimistic note, the primary trend is still higher, and there is plenty of evidence that suggests that any short-term market weakness could prove to be a long-term buying opportunity.
Quote of the Day
“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”
– James Carville
Top Links
Big Drops in the Percent of Stocks Above Their 50-DMAs – Bespoke
Bespoke takes a look at the deterioration in market breadth.
Where Do We (Investors) Stand – David Cox
In this quick video, David Cox highlights some noteworthy technical developments to be aware of.
US Dollar Breakout Could Cool Off Commodities Prices – Kimble Charting Solutions
Chris Kimble shares his thoughts on the recent reversal in the US Dollar.
Lumber Falls and Copper Follows – All Star Charts
Ian Cully examines this week’s sharp decline in Lumber and Copper prices.
The Surprisingly Cyclical Nature of Gas Prices – SentimenTrader
While everyone is expecting prices at the pump to rise, Jay Kaepel points out that Unleaded Gasoline futures often peak around this time of year.
Top Tweets
$SPX $COMPQ $INDU – here the weekly charts – what are they telling you about next week? pic.twitter.com/WtD6Zg3eZw
— Rob Moreno (@rightviewrob) June 18, 2021
The S&P 500 is down less than 1% from an all-time high.
Meanwhile, the average stock within the index is down 8.4% with over 30% in a 10+% drawdown.
The internals of the market have weakened. pic.twitter.com/ZytubxjRjC
— Andrew Thrasher, CMT (@AndrewThrasher) June 18, 2021
None of those chart patterns look like top reversals. $FB $AMZN $NFLX $GOOG.
You can see what might be up for $AMZN and $NFLX.
More with the upcoming report >> https://t.co/3PXD6BGq77 pic.twitter.com/Y6JVWrBlJs
— Aksel Kibar, CMT (@TechCharts) June 18, 2021
If Growth is truly back, I think index is one to watch…$ARKK $ARKQ $ARKW $ARKG $ARKF pic.twitter.com/MHGO911ZHq
— Ian McMillan, CMT (@the_chart_life) June 18, 2021
meanwhile, while the growth vs. value debate rages on…
what if the real story is bonds turning upwards against stocks? pic.twitter.com/BFlS2122gP
— David Cox, CMT, CFA (@DavidCoxWG) June 18, 2021
Regional Banks breaking down relative to the S&P 500 to the lowest level since mid-January is probably not a good sign for the financial sector.$KRE / $SPY pic.twitter.com/lS9tTWG64U
— R. Alfonso Depablos (@AlfCharts) June 18, 2021
US Yield Curve ….. pic.twitter.com/0R1sfr67f9
— Nautilus Research (@NautilusCap) June 18, 2021
biggest weekly 5s30s flattening since 2011 pic.twitter.com/LRH41EbA2t
— Katie Greifeld (@kgreifeld) June 18, 2021
Periods of flattening like we've seen this week (past 3 days -25 bps!) typically result in more flattening for the 5y30y curve. pic.twitter.com/Lg43qEJIIY
— Arbor Data Science (@DataArbor) June 18, 2021
With inflation rising and the central bank now tilting more hawkish, the curve is flattening and, in the process, hitting all iterations of the reflation trade. pic.twitter.com/t4vYV0DwmY
— Jurrien Timmer (@TimmerFidelity) June 18, 2021
29% Bulls in DXY suggested vulnerability to one-way thinking (like bonds 3m ago). Now overbought, but decent momentum for more follow-thru.
Need to get thru 93.50 to complete double bottom. pic.twitter.com/DJByh7lg2y— RenMac: Renaissance Macro Research (@RenMacLLC) June 18, 2021
$BTCUSD month-old sideways, via 5% box size. pic.twitter.com/mJJiC1XLhv
— Mark Ungewitter (@mark_ungewitter) June 18, 2021
Learn to fade conventional wisdom
When most of the trading world get comfortable thinking one way, then it is time to make bets the other wayDuring May most people thought…
U.S. Dollar down forever
Gold up forever$BTC up forever
Grains/commodities up foreverNow look pic.twitter.com/1mFSigLMvw
— Peter Brandt (@PeterLBrandt) June 18, 2021
You’re all caught up now. Thanks for reading!