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Today’s Summary
Monday, October 23, 2023
Indices: Nasdaq 100 +0.30% | S&P 500 -0.17% | Dow -0.58% | Russell 2000 -0.89%
Sectors: 3 of the 11 sectors closed higher. Communications led, gaining +0.53%. Energy lagged, falling -1.62%.
Commodities: Crude Oil futures dropped -2.94% to $85.49 per barrel. Gold futures fell –0.33% to $1,988 per oz.
Currencies: The US Dollar Index dropped -0.53% $105.61.
Crypto: Bitcoin jumped +10.24% to an 18-month high of $33,074 Ethereum rose +6.17% to $1,767.
Volatility: The Volatility Index fell -6.18% to 20.36.
Interest Rates: The US 10-year Treasury yield fell to 4.852%.
Here are the best charts, articles, and ideas shared on the web today!
Chart of the Day
Why are we so focused on $SPX remaining above its 200-day moving average? Because every major drawdown since the 2009 low has involved a breakdown through this important long-term trend barometer. "Nothing good happens below the 200-day moving average." pic.twitter.com/PjZeTYe82N
— David Keller, CMT (@DKellerCMT) October 23, 2023
Today’s Chart of the Day was shared by David Keller (@DKellerCMT). The S&P 500 remains below its 200-day moving average after closing below it on Friday for the first time in seven months. David explains why traders fixate on this seemingly arbitrary moving average. Breaking the 200-DMA doesn’t guarantee a major decline, but every major decline starts with a break of the 200-DMA before intensifying. One of the wealthiest traders, Paul Tudor Jones, once explained how the 200-DMA rule kept him out of the market during the crash of 1987; “My metric for everything I look at is the 200-day moving average of closing prices. I’ve seen too many things go to zero, stocks and commodities. The whole trick in investing is: ‘How do I keep from losing everything?’ If you use the 200-day moving average rule, then you get out. You play defense, and you get out.”
Quote of the Day
“Markets will do the most obvious thing in the least obvious way.”
– Linda Raschke
Top Links
Impossible Week – The Rotation Report
Aaron Jackson highlights several key areas to watch this week.
Nasdaq Corrections – Bespoke
Bespoke examines the corrections that have taken place in the Nasdaq over the past two years.
The S&P 500 is Poised For a 14% Rally as Stocks are Flashing Signs of Being Oversold, Strategist Says – Business Insider
Craig Johnson of Piper Sandler makes the case for record highs in the S&P 500 by year-end.
When Year End Rally? – All Star Charts
JC Parets looks at what’s needed for a year-end rally.
Chili Season – The Weekly Trend
In this podcast, David Zarling and Ian McMillan discuss the noteworthy technical developments across the markets.
Top Tweets
The S&P 500's 200-day moving average is an important line to watch, especially if you're not convinced we're in a bull market🐻
Since 1950, the S&P 500 has stayed above its 200-day MA in 80% of days during bull markets (vs. just 28% for bear markets)
— Callie Cox (@callieabost) October 23, 2023
Volatile indecision: spinning top right a the 200d MAV…
exhausted sellers? 👀 pic.twitter.com/VtixudF3W3— conradseric, CMT, CAIA, CEFA (@conradseric) October 23, 2023
The $SPX has produced a weird daily candle to start the week. Large wicks on both the bullish and bearish side of the market.
That suggests there is volatility in the market but also considerable indecision. Perhaps waiting for the data deluge ahead of us…. pic.twitter.com/gpTeh36w44
— John Kicklighter (@JohnKicklighter) October 23, 2023
Bullish RSI Divergence setup into the new low went 2/2 today. ✅ $SPY $QQQ
Question is, will we see some follow through? pic.twitter.com/F1wYLwUsHP
— TrendSpider (@TrendSpider) October 23, 2023
$SPX #stockmarket SPX cross below 200 dma after above at least 6-months. Including where were % above their 50 DMAs and where was VIX (on historical signals.) pic.twitter.com/IdiFmsurIK
— Nautilus Research (@NautilusCap) October 23, 2023
The S&P 500 is up 20% from last year's closing low while Small Caps are up only 1%.
Is this what a new bull market looks like?
Video: https://t.co/KETTpuyVwR pic.twitter.com/gxZ3ge1IoC
— Charlie Bilello (@charliebilello) October 23, 2023
$IWM now -17% from its July 31 rebound high.
-32% total drawdown.-39% real total return drawdown pic.twitter.com/8dwsstul0u
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) October 23, 2023
$VIX Volatility Index
Slope of 200 DMA as close to positive as it’s been all year. Are we going to witness a true change in vol regime? pic.twitter.com/eXJhzStvUM
— Shane C. Murphy (@murphycharts) October 22, 2023
the charts are saying we want to be favouring commodities over stocks… are you leaning that way? or no? pic.twitter.com/QgfwYhrqeH
— David Cox, CMT, CFA (@DavidCoxRJ) October 23, 2023
#Bitcoin with a new 52-week high above $32,000.
It's up over 90% YTD.
I do hold coins offline in cold storage. It's a highly speculative investment (not for everyone). pic.twitter.com/WgOv2tWnoI
— Chris Perruna (@cperruna) October 23, 2023
How many liquid assets do you know pushing up against new 52-week highs? Bitcoin is up 88% this year. Are you not entertained? pic.twitter.com/kVyQaAm10F
— J.C. Parets (@allstarcharts) October 23, 2023
$BTC Weekly. Interesting. pic.twitter.com/6nuJGB6UOY
— Brian G (@alphacharts) October 23, 2023
Not our favorite type of chart, BUT it's notable that #Bitcoin is breakingout while $QQQ struggles to find a toe-hold. The BTC price action has been a bullish precondition for stocks since the bottom of 2022. pic.twitter.com/7lY6heP4eK
— RenMac: Renaissance Macro Research (@RenMacLLC) October 23, 2023
It might not feel like it given the rough patch for stocks, but be aware that we are entering one of the most seasonally bullish periods of the year right now. pic.twitter.com/LnSG6QeCZU
— Ryan Detrick, CMT (@RyanDetrick) October 23, 2023