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Today’s Summary
Tuesday, October 18th, 2022
Indices: Russell 2000 +1.16% | S&P 500 +1.14% | Dow +1.12%| Nasdaq 100 +0.77%
Sectors: All 11 sectors closed higher for the second straight day. Industrials led, rising +2.41%. Health Care lagged but still gained +0.56%.
Commodities: Crude Oil futures dropped -3.97% to $82.07 per barrel. Gold futures fell -0.49% to $1,656 per ounce.
Currencies: The US Dollar Index inched lower by -0.06%.
Crypto: Bitcoin fell -1.23% to $19,308. Ethereum fell -1.42% to $1,313.
Interest Rates: The US 10-year Treasury yield was unchanged at 4.011%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Honestly, probably the most important chart on the watchlist – and for a number of reasons.
It's nice when the fundamentals and technicals point in the same direction. Not saying the technicals are there yet, but pretty darn close. $RUT $SPX pic.twitter.com/2HTY1V0ZQc
— Shane C. Murphy (@murphycharts) October 18, 2022
Today’s Chart of the Day was shared by Shane Murphy (@murphycharts). It’s a ratio chart of Small-Caps vs. Large-Caps over the past three years ($RUT/$SPX). Small-Caps have held up relatively well recently. In fact, the Russell 2000 was the only major index that respected its June lows throughout the recent sell-off. Shane points out that this ratio is currently at seven-month highs, in favor of Small-Caps. As we know, Small-Caps often lead the broader market higher or lower, so this is an encouraging development for the bulls. To be fair, the index is still down more than 28% from its peak nearly a year ago, so there’s plenty of damage to repair but this is a start.
Quote of the Day
“The test of success is not what you do when you are on top.
Success is how high you bounce when you hit bottom.”
– George S. Patton
Top Links
It’s a Market of Stocks – PFT Trading
Greg Rieben highlights some pockets of strength within the market.
The US Dollar Dilemma – The Weekly Grind
Sam McCallum shares his thoughts the US Dollar Index and the Euro.
Who’s Leading and Who’s Lagging? – Research by Potomac
Dan Russo analyzes all 11 sectors of the S&P 500.
About that Yield Curve Inversion – StockCharts
Julius de Kempenaer examines at the yield curve.
“Are You Bullish or Bearish?” – All Star Charts
Louis Sykes takes a look at one of the only Cryptocurrencies showing strength right now.
Top Tweets
Daily Market Mood: Risk-On
Bear mkt Rally continues w/ $SPX still poised to go above 4000 before yr end.
Bigger trend though is down.
Stay nimble!
— Abigail Doolittle (@TheChartress) October 18, 2022
Today's open in $SPX was 1.53% higher than yesterday's high – biggest gap since Nov 2020: pic.twitter.com/A19pjAutx0
— Optuma (@Optuma) October 18, 2022
Understatement to say past 30 days have been quite wild for S&P 500 … timespan has seen a max drawdown of 15% and two 6.1% rallies
[Past performance is no guarantee of future results] pic.twitter.com/RCOTJJYbtK— Liz Ann Sonders (@LizAnnSonders) October 18, 2022
$SPY So far in 2022 we have had 7 bear market rallies. And the average return of those are ~9.85%. Currently we are sitting in one at 6%. Is this yet another rally to fade…?
FWIW! pic.twitter.com/OvfFjUY1nt
— Heisenberg (@Mr_Derivatives) October 18, 2022
#ES_F, 1d
Traps usually lead to big moves. pic.twitter.com/GaptBS5EY0
— Yuriy Matso (@yuriymatso) October 18, 2022
This year was the third worst start to a year ever.
The only two worst starts for the S&P 500 were 1974 and 2002.
Those years saw stocks bottom on October 3 and October 9.
Did history repeat once again? pic.twitter.com/wuFkGKE5eu
— Ryan Detrick, CMT (@RyanDetrick) October 18, 2022
#spx #seasonality – SPX still "tracking" mid-term seasonal composite reasonably well. pic.twitter.com/Cly67DBkEI
— Nautilus Research (@NautilusCap) October 18, 2022
If elections are going to be a catalyst for better times ahead this is the time for action.
Going back to 1950, the S&P 500 has never been lower a year after midterm elections than it was 3 weeks prior to the election.
Election day is now just three weeks away. pic.twitter.com/fKR7tOGbXL
— Willie Delwiche, CMT, CFA (@WillieDelwiche) October 18, 2022
The Consumer Discretionary vs Consumer Staples ratio shows a slight positive divergence as it hasn't made a lower low even though the S&P 500 did.
Notice how XLY/XLP ratio has historically put in major divergences in the past, acting as a leading indicator for the overall market pic.twitter.com/P6N5iKnzYQ
— Alfonso Depablos (@AlfCharts) October 18, 2022
S&P 500 declined >-15% and bottomed three days prior.TRIN on Day 3 below 0.40. A Day 3 TRIN thrust after a >-15% decline occurred three times in the past. 10-12-1966, 8-17-1982, 10-06-2011. These Signals were followed by bull markets. Minor pullbacks of -0.57%, -0.46% -0.81%. pic.twitter.com/ZdhiuleeJN
— Milton W Berg CFA (@BergMilton) October 18, 2022
congratulations to the US stock market for being up again today with 30-year yields at a decade-plus high of 4.07% pic.twitter.com/dvLZvnxg6k
— Brian Chappatta (@BChappatta) October 18, 2022
Here's $NFLX since its 2002 IPO pic.twitter.com/sZ7Znh9isf
— Matt ?, CMT (@topstockcharts) October 18, 2022
Netflix $NFLX blasting in after hours trading pic.twitter.com/hTDmCbHkfY
— Barchart (@Barchart) October 18, 2022
Communication Services needed some good news… pic.twitter.com/Jzh98IWSwG
— Bespoke (@bespokeinvest) October 18, 2022
You’re all caught up now. Thanks for reading!