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Today’s Summary
Tuesday, August 25th, 2020
Indices: US Stocks were mixed in today’s session with the Dow Jones Industrial Average slipping 60 points or 0.21%. The S&P 500 and Nasdaq moved higher by 0.36% and 0.76%, respectively. Small-Caps also moved higher, with the Russell 2000 inching up 0.17%.
Sectors: Communications led, rising 0.94%. Energy lagged, falling 1.40%.
Commodities: Crude Oil futures gained 1.71% to $43.35 per barrel. Gold futures inched lower by 0.22% to $1,935 per ounce.
Currencies: The US Dollar Index fell 0.30%.
Interest Rates: The US 10-year Treasury yield moved higher to 0.688%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
$DXY | Citi's Pain Index recently hit -40. The index has only hit that level a handful of other times over the last 8+ years.
This implies there is *very* crowded short positioning in the dollar amongst FX funds.
There's a lot of fuel to drive a sharp mean-reversion trade. pic.twitter.com/WzqzlCINLX
— Alexander Barrow ? (@MacroOps) August 25, 2020
Today’s Chart of the Day was shared on Twitter by Alex Barrow (@MacroOps). It’s a chart of the US Dollar Index ($DXY) over the past 9-years along with the Citi Pain Index below. This short-term indicator measures crowded market conditions in the US Dollar Index. Alex points out that the current reading of -40 suggests that the US Dollar short has become a crowded trade. An unwind of this large short positioning could fuel a sharp mean-reversion rally in the near-term, which would likely provide a headwind for a number of asset classes including, Stocks, Precious Metals, and Emerging Markets. For more on how extreme US Dollar sentiment and positioning have become, check out Alex’s full blog post – iS tHE dOLlaR abOUt to cRaSH?
Quote of the Day
“Common sense is genius dressed in its working clothes.”
– Ralph Waldo Emerson
Top Links
iS tHE dOLlaR abOUt to cRaSH – Macro Ops
Going along with today’s Chart of the Day, Alex Barrow explains why he thinks the pain trade is higher for the US Dollar in the near-term.
Welcome, New Dow Components! Amgen, Honeywell & Salesforce – All Star Charts
JC Parets weighs-in on the recent changes being made to the Dow Jones Industrial Average.
Weak Breadth in Strong Months – Bespoke
Bespoke points out that August is on pace to be the second month in a row where the S&P 500 was up at least 4% while breadth was negative on half of all trading days.
Chart Corner 8/24/2020 – Pivot Analytics
Pivot Analytics highlights several noteworthy chart setups.
Midweek Stock Market Recap and Technical Analysis – The Trade Risk
In this video, Evan Medieros analyzes the recent price action of the major sectors and indices.
Top Tweets
S&P 500 has a chance to record back to back 5% monthly advances too.
That's N=9 since 1950 – and none saw the index close lower 12 months later.
(Ducks for cover)
— Steve Deppe, CMT (@SJD10304) August 25, 2020
$SPX $NDX new highs and both close near the HOD after the early morning pullback, showing buyers ready to come in early + $CRM big beat after hours +10% – all bullish action. pic.twitter.com/kaB7DtpF2S
— Larry Tentarelli, Blue Chip Daily (@LMT978) August 25, 2020
The #SPX eclipsed its 2/19 all-time price high of 3394 in closing the week at 3400 on Friday—a feat! But every sector in the US #stockmarket had more decliners than advancers. It’s extremely rare for the market to be up while all 11 sectors have more decliners than advancers. pic.twitter.com/KVstZRyWph
— Jurrien Timmer (@TimmerFidelity) August 25, 2020
A look at $SPY over the last decade with respect to its 200 SMA. Can correct through time and/or price. Rarefied air up here. pic.twitter.com/BWhQVuFO3L
— Darren Miller (@djmphd) August 24, 2020
The Financials/S&P 500 is still under its 2009 relative low — that's not a sign of strength.
So, I'm still not buying this whole cyclical rotation to financials theme some strategists have proposed. $XLF $SPY pic.twitter.com/rc0VMtGbLJ
— Matthew Timpane, CMT (@mtimpane) August 25, 2020
Gasoline's decisive breakout makes me think that Heating Oil and Crude Oil will likely resolve to the upside too.
Keeping an eye on this. pic.twitter.com/EJLJlnNssB
— Tom Bruni, CMT (@BruniCharting) August 25, 2020
Unleaded Gas leading the complex to the upside. Breakout potential in the Crude. pic.twitter.com/5q97O87zjs
— Linda Raschke (@LindaRaschke) August 25, 2020
$GOOGL $GOOG Breaking out. Might be time for a new leg higher here. pic.twitter.com/oA9NPLrNXh
— Greg Rieben (@gregrieben) August 25, 2020
I have a feeling $MSFT is about to do an $AAPL ?
This is not a bearish-looking chart. pic.twitter.com/sphPemzIAi
— ? I. Vodenitcharov CFA CMT (@iv_technicals) August 25, 2020
Lots of good players on the team. $AAPL should pass the ball pic.twitter.com/4qif5hmLbP
— Gregory Krupinski (@G_krupins) August 25, 2020