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Today’s Summary
Tuesday, September 28th, 2021
Indices: US Stocks closed lower in today’s session with the Dow falling 569 points or 1.63%. The S&P 500 and Nasdaq dropped 2.04% and 2.83%, respectively. The Russell 2000 fell 2.25%.
Sectors: 10 of the 11 sectors closed lower. Energy was the only sector to close higher, rising 0.34%. Tech lagged, dropping 2.96%.
Commodities: Crude Oil futures inched lower by 0.21% to $75.29 per barrel. Gold futures fell 0.83% $1,738 per ounce.
Currencies: The US Dollar Index rose 0.34% to an 11-month high.
Interest Rates: The 10-year US Treasury yield continued higher for the fourth straight day to 1.541%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The most important chart for today – comparison of $TNX (10-yr Treasury Yield) to the rotational chart of $IWM : $QQQ. This explains the weakness in the Tech sector & suggests small-cap outperformance, regardless of directionality. We will discuss it in Wednesday's WMD class. pic.twitter.com/CczqGG1wS1
— Wyckoff Analytics (@WyckoffAnalysis) September 28, 2021
Today’s Chart of the Day was shared by Wyckoff Analytics (@WyckoffAnalysis). On top, is Russell 2000 vs. the Nasdaq ($IWM/$QQQ) over the past two years, with the 10 year US Treasury yield below. Interest rates continue to move higher, with the 10-year yield rising for the fourth consecutive day today. This spike in yields has been driving a lot of the action we’re seeing in the major equity indices this week. Over the past 5-days, the Russell 2000 is up 1.73%, while the Nasdaq 100 is down 1.71%. As you can see, $IWM/$QQQ moves nearly in lockstep with the 10-year yield. It wouldn’t be surprising to see yields pause in the very near term given the four-day winning streak, but if yields do continue higher, expect the Russell 2000 to outperform the Nasdaq.
Quote of the Day
“A person watching the tide coming in and who wishes to know the exact spot which marks the high tide sets a stick in the sand at the points reached by the incoming waves until the stick reaches a position where the waves do not come up to it, and finally recede enough to show that the tide has turned. This method holds good in watching and determining the flood tide of the stock market.”
– Charles H. Dow
Top Links
Rising Rates Ripples Through the Equity Market – Potomac Fund Management
Dan Russo shares his weekly sector analysis.
September 2020 vs. 2021 – Bespoke
Bespoke compares the performance of this September to last September.
This Indicator SCREAMS Risk-On! – All Star Charts
JC Parets points out that the Consumer Discretionary sector is breaking out relative to the Consumer Staples sector.
Rising Yields Have A History Of Favoring These Stocks; One Such Stock Is Being Heavily Accumulated – StockCharts.com
Tom Bowley discusses which areas of the market are likely to benefit in a rising rate environment.
October’s First Trading Day Mixed Over Past 22 Years – Almanac Trader
Seasonality expert, Jeff Hirsch takes a look at how stocks have historically fared on the first day of October.
Top Tweets
Today was the S&P 500's 4th daily drop of 2% or more this year.
On average, the S&P 500 has gone through 9 drops of 2% or more each year since 1928.
— Callie Cox (@callieabost) September 28, 2021
The S&P 500 is in the midst of a 4% correction
On the one hand, that's relatively mild and normal
On the other hand, you can't crash 80% w/o falling 4% first pic.twitter.com/bWX5JGuHlk
— Ben Carlson (@awealthofcs) September 28, 2021
even if we get a 20% drawdown in the S&P 500, the monthly is still in a super strong bull trend $SPX $SPY pic.twitter.com/oxFXiUNBrQ
— BostonCharts (@bostonchaahhts) September 28, 2021
Important spot. $SPX pic.twitter.com/9MkJZDiw8Q
— Frank Cappelleri (@FrankCappelleri) September 28, 2021
Fairly confident that today’s downside will now ensure that September stays as a “bearish outside reversal month” (BORM).
15 prior BORM’s from new all-time highs since 1970.
Historically, mostly a shakeout. Weak hands don’t get paid. pic.twitter.com/JDskkAnZqg
— Steve Deppe, CMT (@SJD10304) September 28, 2021
@SJD10304 pointed out yesterday that $XLU is having its longest losing streak ever (13 days, about to hit 14 today). Here is a list of the 10 $SPX sector ETFs and their worst losing streaks. pic.twitter.com/ey1vXWrehm
— Quantifiable Edges (@QuantifiablEdgs) September 28, 2021
$XLU is down again today, 14 in a row. This move finds it right at support going back to the COVID crash while it also sits on the 200 dma and a 14-day RSI just below 30. Eventually the selling pressure will run out, but when? pic.twitter.com/Bz3KG8GoVl
— Jonathan Harrier, CMT (@jonathanharrier) September 28, 2021
$TLT broke through its 50-, 100- and 200-dma pic.twitter.com/itysA2BRku
— Katie Greifeld (@kgreifeld) September 28, 2021
This is what the PnF crowd calls a quintuple top breakout in the 10-year Treasury yield. Bonds ⬇️ Stonks ⬇️ It's a thing. pic.twitter.com/b1bHTgkVSE
— Jim Carroll (@vixologist) September 28, 2021
Nat Gas is a tad parabolic no? $NG_F pic.twitter.com/TgDjKE7LlE
— Drew Wells, CMT, CIMA® (@DrewTheCharts) September 28, 2021
BTU – among the best all year, therefore watching closely if it continues.
Cyclicals could extend higher for months still, we'll see.
Hope my recent charts helped in that direction..
Will share a matrix soon, with other names that stand out. There are many. pic.twitter.com/ue4d8BO6ne
— Macro Charts (@MacroCharts) September 28, 2021
$IWM #IWM The chart for this year is literally a bar code. pic.twitter.com/sFMecw1MAx
— Jake Wujastyk (@Trendspider_J) September 28, 2021
You’re all caught up now. Thanks for reading!