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Today’s Summary
Thursday, October 5, 2023
Indices: Russell 2000 +0.14% | Dow -0.03% | S&P 500 -0.13% | Nasdaq 100 -0.36%
Sectors: 4 of the 11 sectors closed higher. Real Estate led, gaining +0.72%. Consumer Staples lagged, dropping -1.97%.
Commodities: Crude Oil futures dropped -2.27% to a 1-month low of $82.31 per barrel. Gold futures fell for the 10th consecutive day, by -0.16%, to a six-month low of $1,832 per oz.
Currencies: The US Dollar Index fell -0.28% to $106.77.
Crypto: Bitcoin fell -1.34% to $27,417. Ethereum dropped -2.16% to $1,611.
Volatility: The Volatility Index fell -0.48% to 18.48.
Interest Rates: The US 10-year Treasury yield inched lower to 4.719%.
Here are the best charts, articles, and ideas shared on the web today!
Chart of the Day
I dont know you BUT the ratio of consumer discretionary to consumer staples (XLY to XLP in red) is calling the bluff of the S&P500 pullback (SPY in blue). pic.twitter.com/nOL8d98Vci
— conradseric, CMT, CAIA, CEFA (@conradseric) October 5, 2023
Today’s Chart of the Day was shared by Eric Conrads (@conradseric). Today was the worst day for the Consumer Staples sector since January, with $XLP dropping -1.97%. Meanwhile, the Consumer Discretionary sector ($XLY) has held up relatively well since the market’s peak in late July. As a result, the Discretionary/Staples ratio ($XLY/$XLP in red) is flirting with new 52-week highs. Eric points out that this risk gauge is calling B.S. on the pullback in the S&P 500 (blue). It’s easy to doubt this ratio’s bullish message because Staples are seemingly reacting to higher yields right now, but… is this time really different?
Quote of the Day
“The four most expensive words in the English language are, ‘This time it’s different. ‘”
– Sir John Templeton
Top Links
“Could Stocks Actually Bounce?” – Trading Adventures
Andy Moss examines how the major averages are holding up this week.
S&P 500 Slide Further Hits Sentiment – Bespoke
Bespoke breaks down the results of the latest AAII Sentiment Survey.
Advance/Decline Line Warns Investors with Triple Top Breakdown! – Kimble Charting Solutions
Chris Kimble looks at a potentially bearish message from the NYSE A/D line.
World’s Biggest Trend – All Star Charts
JC Parets points out that Mega-Cap growth continues to dominate the broader market.
Top Tweets
I'm still seeing it like this.
🔹Upward sloping 200 DMA.
🔹Trading atop of well tested S/R zone.What's not to like? $SPX $NDX pic.twitter.com/5Y7SxD3Bav
— Shane C. Murphy (@murphycharts) October 5, 2023
Fact:$SPX Breaking a steep downtrend line has led to strong bounces since the start of '22. pic.twitter.com/w9bN2CK3SE
— Frank Cappelleri (@FrankCappelleri) October 5, 2023
Early October and Dow Industrials, S&P 500 EW, Small-Caps, and Value Line Geometric Index are all down YTD.
S&P 500 is the outlier.
Heckuva "bull market" we are having. pic.twitter.com/rHyWkHkVDK
— Willie Delwiche, CMT, CFA (@WillieDelwiche) October 5, 2023
The median stock is closing in on fresh 52-wk lows… here's the Value Line $VLG trading at its lowest level since last October pic.twitter.com/DdlrbTwXWS
— Steven Strazza (@sstrazza) October 5, 2023
On avg $SPX gains almost 1% in October but historically it has been the most volatile. The Box & Whisker seasonality chart shows the max 16.3% (1974) and min -21.8%(1997) with a standard deviation of 5.5: pic.twitter.com/eoK5JZLzYL
— Optuma (@Optuma) October 5, 2023
Consumer Staples had its worst day since January today. Relative to the S&P 500, Staples are at 52-week lows and have lagged the broad index by 12% over the past year.
Read more in tonight's Closer: https://t.co/qsMBmciANn pic.twitter.com/pCf4aOQhXP
— Bespoke (@bespokeinvest) October 5, 2023
$KO Talk about Consumer Staples taking a hit….
Coca-Cola at support – look at that rounded top! pic.twitter.com/7kboevMPRe
— Dash, CMT, CFP (@Dash_charts) October 5, 2023
Is that a dollar reversal? $UUP pic.twitter.com/bRXSqZaKQV
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) October 5, 2023
Crude Oil is approaching an important level… #oil #commodities $CL_F pic.twitter.com/KfWHK78n8S
— Conor White, CMT, CIM (@ConorWhiteRJ) October 5, 2023
Natural Gas is trading above $3, a key level of resistance during the bulk of 2023.
A close above this level could show pot'l for a durable breakout.$NG_F pic.twitter.com/T1KoTXEYhK— Andrew Thrasher, CMT (@AndrewThrasher) October 5, 2023
#Natgas seeing follow-through after breaking out above key resistance at $3. Inventories below expectations per EIA, while heating demand, global exports, and power generation use climb (not to mention declining rig counts). Next resistance sets up at the '21 lows near $3.53 pic.twitter.com/SwOwmriNsj
— Adam Turnquist, CMT (@adam_turnquist) October 5, 2023
Getting close again.
Let's say the curve (or at least your 'curve' of choice) does snap. What does that mean?
Could be a fake out, a la 1996 and 1998.
OR
It could be a slow disaster, like 2001 and 2007.
OR
It could be a fast crash, such as 2020
OR
Nothing happens… pic.twitter.com/rVO1kOpaZF
— Ian McMillan, CMT (@the_chart_life) October 5, 2023
While it’s true that the yield curve has de-inverted since late June, an equity-unfriendly bull steepener requires that declining short-term yields outpace declining long-term yields. Such a regime is definitionally challenged at present. pic.twitter.com/J7IjEhD3RZ
— Mark Ungewitter (@mark_ungewitter) October 5, 2023
Bad news if you're sick of watching yields:
The 10-year yield has moved an average of 11 basis points (0.11%) on jobs days this year, making it the most volatile data release since Fed days in 2009
(and the next jobs day is tomorrow 🎢) pic.twitter.com/l3nmLePZzf
— Callie Cox (@callieabost) October 5, 2023