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Today’s Summary
Monday, August 10th, 2020
Indices: US Stocks were mixed in today’s session. The Dow Jones Industrial Average advanced 358 points or 1.30%. The S&P 500 closed higher for the seventh day in a row, rising 0.27%. The Nasdaq underperformed, slipping 0.39%. The Russell 2000 gained 0.99%.
Sectors: Energy led, rising 3.09%. Health Care lagged, falling 0.34%.
Commodities: Crude Oil futures moved higher by 1.75% to $41.94 per barrel. Gold futures rose 0.46% to $2,037 per ounce.
Currencies: The US Dollar Index gained 0.23%.
Interest Rates: The US 10-year Treasury yield moved higher to 0.581%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Check this out: The recovery since March 23 continues to look like the recovery from the March 2009 low in terms of both price (at top) and breadth (below). #SPX #SP500 pic.twitter.com/gQZGvRFO5V
— Jurrien Timmer (@TimmerFidelity) August 10, 2020
Today’s Chart of the Day was shared on Twitter by Jurrien Timmer of Fidelity (@TimmerFidelity). As of today’s close, the S&P 500 is up 50% from the March 23rd low and within 1% of an all-time high. Jurrien points out that this recovery rally looks very similar to the recovery from the March 2009 low, in terms of both price and breadth. As we discussed on Friday, the fact that price and breadth have begun to diverge has caused some concern that we’re due for a decline. As you can see, breadth was also diverging in 2009, and yet price ultimately resolved higher. Analog charts like this can be tricky because we know history doesn’t repeat exactly. But it’s worth noting that a breadth divergence following a major cyclical low is not always the bearish signal that some think.
Quote of the Day
“History does not repeat itself exactly, but behavior does.”
– Bob Farrell
Top Links
Rocket Reversals – Bespoke
Bespoke examines the recent rotation out of high flying growth stocks.
Which Investments Benefit From a Weaker Dollar – A Wealth of Common Sense
Ben Carlson takes a look at which asset classes tend to do well when the US Dollar is weak.
And the Beat Goes On – The Weekly Trend
In this podcast, David Zarling and Ian McMillan highlight the major technical developments on their radar right now.
Rotation Rotation Rotation: Transports Edition – All Star Charts
JC Parets explains why he’s closely watching Transportation stocks this week.
Rotation into Small Caps? – Momentum Monday
In their weekly video, Howard Lindzon and Ivanhoff discuss some of the strongest stocks, themes, and trends across the market.
Top Tweets
Seven straight up days. pic.twitter.com/zNTJspDusL
— Eddy Elfenbein (@EddyElfenbein) August 10, 2020
Half of the Nasdaq's gain off the March lows has come on Mondays. https://t.co/NaIo7Hwe17 pic.twitter.com/wGEF3d4R41
— Bespoke (@bespokeinvest) August 10, 2020
Imagining a world where Small Cap Value takes the lead.
We're getting a glimpse of it the last 6 days. pic.twitter.com/mKMOYnlhMg
— Steve Deppe, CMT (@SJD10304) August 10, 2020
US outperforming world over the last two weeks. Still a fan of the weaker dollar/stronger EM thesis but a bit of a breather last week with $SPX up big relative to $ACWI. Worth watching this week. pic.twitter.com/hWxbTZE8eS
— David Keller, CMT (@DKellerCMT) August 10, 2020
Taiwan based for about 30 years and is now breaking out to new highs.
Remember, they make a lot of semis and this could be telling us something about this influential group (ie – it has room to go). pic.twitter.com/0yBPnOxeK1
— Ryan Detrick, CMT (@RyanDetrick) August 9, 2020
Growth versus Value relationship looking a bit more interesting now with better double top in place. "It's a process…" pic.twitter.com/fzZeKqrWuf
— Linda Raschke (@LindaRaschke) August 10, 2020
The Stock/Bond Ratio is at levels that have marked long-term bottoms in relative performance every time over the last 30-years.
We are about to enter a new regime. One that'll have consequences for every market. I talk about a few of these, here. ?https://t.co/N5VTPWDxs8 pic.twitter.com/fC3So2fHjg
— Alex Barrow (@MacroOps) August 10, 2020
Lumber not taking prisoners pic.twitter.com/K8ZBectHZa
— ???????? ????? (@pineconemacro) August 10, 2020
Volume precedes price… pic.twitter.com/mhncMRsRXL
— Shane C. Murphy (@murphycharts) August 10, 2020
$PLUG Plug Power …BRB setup, coming out of a 6.5-year base. pic.twitter.com/v2y2DeV39v
— Ian McMillan, CMT (@the_chart_life) August 10, 2020