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Today’s Summary
Wednesday, August 17th, 2022
Indices: Dow -0.50% | S&P 500 -0.72% | Nasdaq 100 -1.21% | Russell 2000 -1.64%
Sectors: Energy was the only sector that closed higher, rising +0.83%. Communications lagged, dropping -1.94%.
Commodities: Crude Oil futures rose +1.83% to $88.11 per barrel. Gold futures fell -0.73% to $1,777 per ounce.
Currencies: The US Dollar Index rose +0.18%.
Crypto: Bitcoin fell -2.32% to $23,314. Ethereum dropped -2.68% to $1,829.
Interest Rates: The US 10-year Treasury yield rose to 2.900%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Point to ponder: If this is a "bear market rally", a lower low, by definition, is somewhere ahead. But what is a rally followed by a significant decline that does *not* lead to a lower low (e. g., the 12.9% decline in Aug-Oct 1962)?
Not a forecast; just some semantics to ponder. pic.twitter.com/NXZwE8iIgt
— Walter Deemer (@WalterDeemer) August 17, 2022
Today’s Chart of the Day was shared by Walter Deemer (@WalterDeemer). The S&P 500 is up 17% since the June low, and everyone wants to know; is this a bear market rally, or the start of a new bull market? But what if it’s neither? Walter brings up the 1962 analog as a possible scenario to consider. This year has played out very similarly to 1962 so far. The S&P 500 peaked around the beginning of that year (two weeks before it started), then slid 28%, and ultimately bottomed in June… Sound familiar? It then rallied 14% off those June lows, but it rolled over at the end of August and gave back nearly all of its Summer rally. It would’ve been silly to call that 14% Summer rally ‘the start of a new bull market’ considering it went back to retest the June lows in October. At the same time, it would’ve been silly to call it a ‘bear market rally’ considering it didn’t quite make a new low. As Walter points out, it’s really all just semantics.
Quote of the Day
“Charting is a little like surfing. You don’t have to know a lot about the physics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.”
– Ed Seykota
Top Links
Battle at the 200-day Moving Average – Howard Lindzon
Howard Lindzon shares his thoughts on the S&P 500 as it tests the 200-day moving average.
The Bulls are In Control and Risk Management Levels are Clear – Research by Potomac
Dan Russo highlights some key technical developments.
10-Day A/D Line Overbought for 15 Days – Bespoke
Bespoke points out that the 10-day A/D line has been overbought for 15 consecutive days now.
August Mid-Month Conference Call: 5 Key Takeaways – All Star Charts
The team at All Star Charts shares five noteworthy charts to consider.
What the Mets Can Teach Us About Chart Analog’s – CMT Association
Steve Deppe reminds us not to read too far into analog charts.
Top Tweets
Daily Market Mood: Mixed
Stocks close lower after hitting resistance of 200 DMA.
We’re close/at point where we get to see what this rally’s made of & … it could be interesting.
S&P might trickle higher yet, but this year’s bear mkt range is rather compelling.
Stay nimble!
— Abigail Doolittle (@TheChartress) August 17, 2022
Put simply, this is how I see the market (as an inverse traffic light):
– Above the 200MA = green
– Below the 200MA and down to the May lows = yellow
– Below the May lows (and lower) = redWe also have momentum shifting to a bullish regime after never falling bearish in spring. pic.twitter.com/WZtAQKtHbk
— Adam D. Koós, CFP®, CMT, CEPA (@AdamKoos) August 17, 2022
Just above 50% of $SPX members above their 200-day moving average as of yesterday's close. And 90% are above their 500-day moving average. Bullish? Yes. But sustainable?….. pic.twitter.com/nW0l7H9u3N
— David Keller, CMT (@DKellerCMT) August 17, 2022
Utes first sector to make a new price high pic.twitter.com/Mn7brpl0xN
— Strategas (@StrategasRP) August 17, 2022
S&P 500 being up 15% or more in 40 days tends to lead to more gains.
Strength begets strength. https://t.co/8bNZHOzmyM pic.twitter.com/4dsvepTmzv
— Willie Delwiche, CMT, CFA (@WillieDelwiche) August 17, 2022
The S&P 500 is up 13% in July and August currently.
This would go down as one of the best summer rallies ever, but safe to say the 89% rally in 1932 is ok.
Last 3 times it gained >10% in July and August? 1989, 2009, and 2020.
The final 4 months added 13.5%, 16.9%, and 20.2%. pic.twitter.com/cWtKMqWHcx
— Ryan Detrick, CMT (@RyanDetrick) August 17, 2022
Is it time to buy foreign equities?
No. No it is not.$EEM $EFA pic.twitter.com/49BKWASsW9
— Ian McMillan, CMT (@the_chart_life) August 17, 2022
Natural gas is challenging its year-to-date highs. Meanwhile, crude oil is printing fresh 6-month lows. $NG_F $CL_F pic.twitter.com/D0qjGwst4n
— Ian Culley (@IanCulley) August 17, 2022
is this the most jaw-dropping rally in $AAPL history? pic.twitter.com/vZf0ZNxXs7
— Oliver Renick (@OJRenick) August 17, 2022
Imagine spending 4 years and $150,000 to learn about the efficient market hypothesis just to watch $BBBY squeeze to infinity pic.twitter.com/QC5V42P8Zc
— Fintwit (@fintwit_news) August 17, 2022
You’re all caught up now. Thanks for reading!