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Today’s Summary
Friday, August 7th, 2020
Indices: US Stocks were mixed today’s session. The Dow Jones Industrial Average rose 47 points or 0.17%. The S&P 500 closed higher for the sixth day in a row, inching up 0.06%. The Nasdaq underperformed, dropping 0.87%. The Russell 2000 outperformed, gaining 1.59%.
Sectors: Financials led, gaining 2.14%. Tech lagged, falling 1.49%.
Commodities: Crude Oil futures moved lower by 0.83% to $41.60 per barrel. Gold futures snapped a 15-day winning streak, falling 1.13% to $2,046 per ounce.
Currencies: The US Dollar Index rose 0.67%.
Interest Rates: The US 10-year Treasury yield moved higher to 0.570%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Another look at breadth, using % stocks >50-d or 200-d. Poor participation + divergences hasn’t stopped a 4-mo rally back to ATHs. This is nothing new. Divergences can last days or a year. Markets can peak with or without them, on ‘good breadth’ or bad. In real time, worthless pic.twitter.com/QI1EKqqzPY
— ukarlewitz (@ukarlewitz) August 7, 2020
Today’s Chart of the Day was shared on Twitter by Urban Carmel (@ukarlewitz). It’s a chart of the S&P 500 over the past 12 years. The S&P 500 has been drifting higher while the percentage of stocks above their 50 and 200-day moving averages has fallen. These breadth divergences have caused some debate among analysts that the market is due for a decline. As you can see, most significant declines have been preceded by breadth divergences. But, not all breadth divergences have led to significant declines. As Urban reminds us, divergences can persist for months or even years while the market grinds higher. These are simply potential divergences until price confirms.
Quote of the Day
“If we couldn’t laugh we would all go insane.”
– Robert Frost
Top Links
High Low Friday – 8/7/20 – Dana Lyons
Dana Lyons highlights some noteworthy new highs and lows across the markets.
Stock Market Video Analysis 8/7/20 – AlphaTrends.net
Here’s Brian Shanon’s weekly video recap, in which he lays out some levels of interest to watch on the major indices.
Macro Themes and Trends (Steve Strazza) – Koyfin
Rob Koyfman and Steve Strazza discuss some of the most important macro trends to going on right now.
Four Stock Poised to Drive Heath Care Higher – TrendInvestorPro
Arthur Hill takes a look at the largest stocks in the Health Care sector.
What The FICC? – Breakout in US Treasury Bonds – All Star Charts
Tom Bruni gives an update on the fixed income space. In this week’s episode, he focuses on the breakout in US Treasury Bonds.
Top Tweets
The S&P 500 just clocked its 6th straight gain, its longest winning streak since April 2019.
This market, man.
— Callie Cox (@callieabost) August 7, 2020
Here are all 32 corrections in the S&P 500 since 1980.
The one constant is returns 1- and 2-yrs out are very strong.
They say that the stock market is the only place where prices go on sale and people run out of the store screaming.
This chart will hopefully help next time. pic.twitter.com/ZuM8PLhxQL
— Ryan Detrick, CMT (@RyanDetrick) August 7, 2020
Small caps again turning higher relative to large. While this is a "narrow leadership market" small cap stocks appear to be finding a bid out there. Good environment for stock picking. $SPX $SPY $IWM $SML pic.twitter.com/K7vLrHJIAP
— David Keller, CMT (@DKellerCMT) August 7, 2020
All-time weekly closing highs:
Home construction, Semis, and Trucking – continued bullish signals in leading cyclical groups – charts continuing to forecast an economic recovery. $ITB $SMH $DJUSTK pic.twitter.com/pPjRiSLwa1— Larry Tentarelli, Blue Chip Daily (@LMT978) August 7, 2020
Transports > Utilities… 2+ year cyclical bear market ending? pic.twitter.com/PWbvrWFbqU
— Strategas (@StrategasRP) August 7, 2020
After making new marginal lows on Thursday as momentum diverged positively, it looks like it's setting up for a bounce here.
The weak Dollar has been a big tailwind for a lot of assets around the world, so as it mean reverts higher I'm watching closely how other assets hold up. pic.twitter.com/Dip2jK1Fts
— Tom Bruni, CMT (@BruniCharting) August 7, 2020
Closing the week with a special update on $DXY Daily Sentiment:
The day after FOMC (see last week's chart) reached Bottom 0.6% most oversold in 9 years. Very rare.
Since 2011 this was a near-perfect bottoming signal.
Monitoring for a turn – will revisit. Have a good weekend. pic.twitter.com/7r5epguGN4
— Macro Charts (@MacroCharts) August 7, 2020
Since the EURO started trading in 1999, the Net Speculative Long position has never been greater… pic.twitter.com/R6kPNvIX8i
— Santiago Capital (@SantiagoAuFund) August 7, 2020
MRCI short seasonal trade on Copper pushes down into Aug 17. MRCI – a great resource for those following multiple commodity markets. pic.twitter.com/XvDeW9R5hs
— Linda Raschke (@LindaRaschke) August 7, 2020
$GC_F, $GLD | Gold is now FOUR Std Dev's above its 200-week moving average.
This has only happened two other times in the last 30-years, in Jan 03' and May 06'. Both prior instances led to sharp pullbacks of 18% and 25%, respectively.
+ record call volumes in $GLD & $SLV pic.twitter.com/7gHhPBKs0D
— Alex Barrow (@MacroOps) August 7, 2020
Gold was up for 15 days in a row. pic.twitter.com/hzbeJhlV8L
— Eddy Elfenbein (@EddyElfenbein) August 7, 2020