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Today’s Summary
Wednesday, October 4, 2023
Indices: Nasdaq 100 +1.45% | S&P 500 +0.81% | Dow +0.39% | Russell 2000 +0.11%
Sectors: 9 of the 11 sectors closed higher. Consumer Discretionary led, gaining +1.97%. Energy lagged by a wide margin, dropping -3.14%.
Commodities: Crude Oil futures had their worst day in over a year, tumbling -5.61% to $84.22 per barrel. Gold futures closed lower for 8th consecutive day, falling -0.36% to a six-month low of $1,835 per oz.
Currencies: The US Dollar Index fell -0.28% to $106.77.
Crypto: Bitcoin rose +1.29% to $27,790. Ethereum fell -0.61% to $1,647.
Volatility: The Volatility Index dropped -6.12% to 18.57.
Interest Rates: The US 10-year Treasury yield fell to 4.735%.
Here are the best charts, articles, and ideas shared on the web today!
Chart of the Day
When reversal patterns fail, it's because they were actually continuation patterns #funfact $QQQ $XLK pic.twitter.com/ncLgYlkjDh
— Steven Strazza (@sstrazza) October 4, 2023
Today’s Chart of the Day was shared by Steve Strazza (@sstrazza). The Nasdaq 100 ($QQQ) is attempting to invalidate the Head & Shoulders top that formed over the Summer. Bears will be trapped below support if $QQQ reclaims the neckline, around $360. The best Head & Shoulders patterns are the ones that fail, as they’re often followed by sharp moves higher. Steve points out that the Technology sector ($XLK) is also attempting to invalidate its respective H&S top. Tech is easily the most important sector of the S&P 500, representing over 25% of the index. Remember, we’re approaching what has historically been a seasonal inflection point where the calendar will flip from bearish to bullish in less than two weeks.
Quote of the Day
“A group of people who think differently is a market. A group of people who think alike is a mob.”
– Naval Ravikant
Top Links
Lower Daily Lows Becoming the Norm – Bespoke
Bespoke points out $SPY has made new undercut the prior day’s low in 33 of the past 50 trading days.
Renaissance’s Jeff Degraaf Explains Why He’s Bullish on the Market – CNBC
Jeff Degraaf shares his thoughts on seasonality, breadth, yields, and more.
A Potential Target for Yields – All Star Charts
Alphonso Depablos explains why 5.45% is a realistic target for the US 10-year yield.
Technical Analysis with Frank Cappelleri – Schwab Network
Frank Cappelleri examines some of the chart patterns in the S&P 500.
Strategas’ Chris Verrone on Nvidia: We are Sellers of Strength – CNBC
Chris Verrone examines what the impact of rising yields could be.
Top Tweets
Call your gas station. pic.twitter.com/6nhzLY6oD1
— unusual_whales (@unusual_whales) October 4, 2023
#ES_F, 1d
ES and 200d MA pic.twitter.com/cac94Uzf3I
— Yuriy Matso (@yuriymatso) October 4, 2023
SPY has made lower lows on 33 of the last 50 trading days. That's tied for the most in the ETF's history. pic.twitter.com/wFfx5oVypm
— Bespoke (@bespokeinvest) October 4, 2023
$IWM going for a hammer – but will it follow through? pic.twitter.com/Octg8uAfeR
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) October 4, 2023
This is a big one. If Financials and Small-caps (which have been trading together very closely) can't hold their pre-Covid highs, there's likely a much larger problem underneath the surface for the overall market. This one should be front and center imo https://t.co/rAmEjfDYvL pic.twitter.com/Jfb7yoQJdt
— J.C. Parets (@allstarcharts) October 4, 2023
Only 7% of stocks in the S&P 500 are trading above their 50-day moving average (grey line)
Sounds bearish, but historically when this reading gets <10%, it results in at least a short-term bounce in $SPX (blue line)
But this is Twitter, so I'm sure it's different this time pic.twitter.com/D3zPIbj5Mq
— Simon Ree (@simon_ree) October 4, 2023
The level of Excessive Pessimism is now below what was registered at the December 2022 and March 2023 lows, based on the @NDR_Research Daily Trading Sentiment Composite. With sentiment indicators, we "Go with the flow until it reaches an extreme and reverses." pic.twitter.com/2sTydRiKa0
— Day Hagan Asset Management (@DayHagan_Invest) October 4, 2023
Despite the deteriorating momentum & Mkt breadth hitting new 2023 lows, US Equity indices $SPX have held up above intermediate-term uptrends, thanks to Technology.
Now bearish sentiment combines w/ bullish seasonality as we near the annvy of last year's bottom- I'll discuss… pic.twitter.com/B8icHqVzAR
— Mark Newton CMT (@MarkNewtonCMT) October 4, 2023
"pretty is as pretty does…" pic.twitter.com/oBhxLH1oZG
— Linda Raschke (@LindaRaschke) October 4, 2023
Oil $CL_F looks like important level just below
Prior resistance
– ⚓️VWAP from 2022 high
– ⚓️VWAP from begin of recent rally pic.twitter.com/kklngtAQl5— Brian Shannon, CMT (@alphatrends) October 4, 2023
That was fast: from resistance to support… pic.twitter.com/0Gju2esYi8
— conradseric, CMT, CAIA, CEFA (@conradseric) October 4, 2023
Crude oil fell more than 5% to cross below its 50-day SMA slightly. This is the first time its dropped this much with $CL_F above its 50-day and 200-day since May 9, 2022. That was a much more mature bull market in crude and it DIDN'T mark the end of the trend either pic.twitter.com/PWcyKF353a
— David Settle, CMT (@davidsettle42) October 4, 2023
We've reached the "relentless" phase of the rise in yields.
News articles mentioning that word and the bond market have spiked to the 2nd-highest in 8+ years.
It was only higher once, which was almost exactly a year ago. pic.twitter.com/hlVbM0t9RJ
— Jason Goepfert (@jasongoepfert) October 4, 2023