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Today’s Summary
Monday, August 2nd, 2021
Indices: US Stocks closed lower to start the week/month. The Dow slipped 97 points or 0.28%. The S&P 500 inched lower by just 0.18%, while the Nasdaq managed to close slightly positively (0.06%). The Russell 2000 underperformed, falling 0.48%.
Sectors: 4 of the 11 sectors closed higher. Utilities led, gaining 0.77%. Materials lagged, falling 1.21%.
Commodities: Crude Oil futures dropped 3.33% to $71.49 per barrel. Gold futures were unchanged and continue to trade around $1,817 per ounce.
Currencies: The US Dollar Index was unchanged.
Interest Rates: The 10-year US Treasury yield dropped to 1.177%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The volatility index has a 100% win rate in August since the 2016 market reversal. pic.twitter.com/IiccGYB6Va
— TrendSpider (@TrendSpider) August 3, 2021
Today’s Chart of the Day was shared by TrendSpider (@TrendSpider). The chart shows the monthly win rate for the Volatility Index ($VIX) over the past five years. The stock market has been pretty calm so far in 2021. The S&P 500 hasn’t had a single pullback of 5% or more all year, which is unusual considering the average year sees about three. Furthermore, we haven’t had a correction of 10% or more on a closing basis since the bull market began over a year ago. However, things could get turbulent over the coming weeks if recent history is any guide. While five years is a very small sample size, the VIX has closed higher every August since 2016. On a brighter note, the VIX has closed lower every September since 2016. For seasonality tools like the one seen here, be sure to check out TrendSpider. Use the code TCR40 to save 40% at signup!
Quote of the Day
“In the long history of humankind (and animal kind too), those who learned to collaborate and improvise most effectively have prevailed.”
– Charles Darwin
Top Links
Seasonality Heading into Weak Zone, deGraaf Says – CNBC
In this clip, Jeff deGraaf of Renaissance Macro Research discusses stock market seasonality.
While Tough for Equities, August Has Been Good for Fixed Income – LPL Financial Research
The team at LPL Financial Research takes a look at August seasonality in the fixed income markets.
Cyclical Sectors are Being Put to the Test – Potomac Fund Management
Dan Russo analyzes each of the 11 sectors on both an absolute and relative basis.
Commodities Attempting to Break Above 6-Year Price Resistance! – Kimble Charting Solutions
Chris Kimble breaks down a long-term chart of the Commodities ETF, $DBC.
Bitcoin Is On The Verge Of A 34% Rally As Technicals Signal Risk-On Mode For Cryptocurrencies, Fairlead’s Katie Stockton Says – Markets Insider
Katie Stockton shares her technical outlook on Bitcoin.
Top Tweets
A seasonally-challenged period ahead…
The 3-month period Aug-Sep-Oct is lackluster. Typically, it is the worst 3-month period of the calendar year for the $SPX. pic.twitter.com/xkjnqAY31f
— Carter Braxton Worth (@CarterBWorth) August 3, 2021
$QQQ In spite of all the fear, Seasonality & otherwise, this market could be on the verge of breaking out. Time will tell. Hourly chart. pic.twitter.com/rCUjEOiF64
— Alan Cohen (@al_xdpg) August 3, 2021
Equal Weight $SPX is at a new high today. Are we happy with that or no? pic.twitter.com/smO4zBEPdj
— Michael Antonelli (@BullandBaird) August 3, 2021
it's probably nothing pic.twitter.com/FYCgBperBE
— J.C. Parets (@allstarcharts) August 2, 2021
$SPY, $VIX and $TLT continue to make higher lows pic.twitter.com/ap2htg4L1f
— Bailey.Baxter2020 (@BBaxter2020) August 2, 2021
The performance of the S&P 500 after tagging its 50-day MA has been declining.
While dip buyers have been in control, the gains have been shrinking between dips.$SPX $SPY pic.twitter.com/koIXMg2XZl— Andrew Thrasher, CMT (@AndrewThrasher) August 3, 2021
New relative lows for Mobile Payments. pic.twitter.com/6KJjXxkSFT
— Strategas (@StrategasRP) August 3, 2021
Some serious breakdowns in the payments names… pic.twitter.com/P9RD7dV3ol
— Gil Morales – The Gilmo Report & VoSI (@gilmoreport) August 3, 2021
US 10Yr yield still under pressure $TNX 1.40 is the key level here pic.twitter.com/W2jG8C7AeP
— Grant Hawkridge (@granthawkridge) August 3, 2021
Bond sentiment finally inched up into extreme optimism zone. Still a seasonality tailwind and a bit more long-term mean reversion available but my best guess is that we're approaching the vicinity of the tactical low in bond yields. pic.twitter.com/eY1tRarlkm
— Tony Welch, CFA, CFP®, CMT (@tonywelch17) August 3, 2021
Much of the differentiation between groups over the last 2-months can be attributed to the contracting yields. Some groups tend to struggle, while others thrive in a falling yield regime. Here's a proprietary chart showing the sensitivities since 2009. pic.twitter.com/CnVOJh0OfQ
— RenMac: Renaissance Macro Research (@RenMacLLC) August 3, 2021
I think this is one of the most interesting weekly and daily set-ups no one is talking about.
I'm likely not going to get married before earnings (Thurs) but its my top name to watch. $HIMX pic.twitter.com/JxAGIvWI5C
— Ken Goodreau, CMT (@KenGoodreau) August 3, 2021
Zillow is down 48% from ATHs in the midst of the biggest housing boom of my lifetime
Can someone who is smarter at stocks than me explain this one? pic.twitter.com/xjVYVQyA9Z
— Ben Carlson (@awealthofcs) August 3, 2021
You’re all caught up now. Thanks for reading!