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Today’s Summary
Wednesday, October 26th, 2022
Indices: Russell 2000 +0.46% | Dow +0.01% | S&P 500 -0.74% | Nasdaq 100 -2.26%
Sectors: 6 of the 11 sectors closed higher. Energy led, gaining +1.36%. Communications lagged, dropping -3.16%.
Commodities: Crude Oil futures rose +3.04% to $87.91 per barrel. Gold futures gained +0.68% to $1,669 per ounce.
Currencies: The US Dollar Index dropped -1.08%.
Crypto: Bitcoin rose +3.38% to $20,765. Ethereum gained +6.54% to $1,556.
Interest Rates: The US 10-year Treasury yield fell to 4.007%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Same song… pic.twitter.com/zpjXDr0TKJ
— da Chart Life (@daChartLife) October 26, 2022
Today’s Chart of the Day was shared by John Roque (@daChartLife). It’s a ratio chart of the Nasdaq vs. the S&P 500 over the past four decades. We highlighted this chart at the beginning of the year, pointing out that the Nasdaq was forming a major top relative to the S&P 500. While the broader market has rebounded recently, this ratio continues to flirt with new lows. In a comment to The Chart Report, John said, “This ratio is down 18.5% over the past 21 months, in favor of the S&P 500. Prior tops fell further and lasted much longer than the current decline. Still looking for it to work lower from here.”
Quote of the Day
“The history of the stock market shows many periods of twenty years or more when stock prices ended up precisely where they began.”
– Peter Bernstein
Top Links
Stocks Bottom First – The Irrelevant Investor
Michael Batnick reminds readers that Stocks tend to bottom before the economic data does.
Here Come the Historically Best Six Months for Stocks – Carson Group
Ryan Detrick points out that seasonality favors the bulls over the next few months.
What Election Day Means for Stocks – Schaeffer’s Investment Research
With midterm elections just two weeks away, Rocky White examines how the S&P 500 has historically performed around elections.
We’re Buying the Euro – All Star Charts
Ian Culley shares his outlook on the Euro-US Dollar currency pair.
Episode #452: Jerry Parker & Salem Abraham – Lessons From A Lifetime of Trading – The Meb Faber Show
Here’s a good podcast about trend following with Meb Faber, Jerry Parker, and Salem Abraham.
Top Tweets
Big red. pic.twitter.com/HnCgN1nwKe
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) October 26, 2022
S&P 500 pushed above 50-day intraday, then closed below it. Finished session above 3790-3817 band. $SPX pic.twitter.com/JbuBrDVBli
— Chris Ciovacco (@CiovaccoCapital) October 26, 2022
Looking at this chart of the 200 week moving average acting as support for $SPY really puts things into perspective.
Especially when you consider that's 3.8 years. pic.twitter.com/eE65Fxj8ZQ
— Jay R. Ligon (@TheeDisruptor) October 26, 2022
The @NDR_Research 3-day price thrust indicator fired yesterday. It's the only short-term thrust indicator in our tool box that did not signal earlier this year.
Still taking a "trust but verify" approach to short-term technical indicators, but it's notable. pic.twitter.com/EWuslPMdAX— Ed Clissold (@edclissold) October 26, 2022
highest % stocks > 20-day EMA for Dow Jones stocks in more than a year… pic.twitter.com/jgnBh785WW
— David Cox, CMT, CFA (@DavidCoxWG) October 26, 2022
We're at a point in the calendar where $SPX returns tend to have a clear upward bias, but that bias is further enhanced when sentiment is overly bearish. One of the risks is that offsides positioning develops into FOMO as the year draws to a close. pic.twitter.com/jjv4yayIIq
— RenMac: Renaissance Macro Research (@RenMacLLC) October 26, 2022
Pullback in dollar is gaining momentum as euro moves back through parity and yen bounces. pic.twitter.com/Wg2zvVuJno
— Kathy Jones (@KathyJones) October 26, 2022
The dollar's uptrend isn't dead yet. pic.twitter.com/WrR2byyRyc
— Markets & Mayhem (@Mayhem4Markets) October 26, 2022
The US Dollar index is now down 4.4% from its intraday high on 9/28. Today it broke below its 50-DMA and is the farthest below its 50-DMA since 1/13/22 at -0.94%. pic.twitter.com/OALa7Av4xF
— Bespoke (@bespokeinvest) October 26, 2022
The 3-month/10-year yield spread — historically the most accurate predictor of recessions on the yield curve — just fell negative.
In the past, it's taken Fed cuts to reverse the inversion (start of Fed cut cycles = blue circles) pic.twitter.com/DTuoPX5j7C
— Callie Cox (@callieabost) October 26, 2022
Spreads between 2y & 10y Treasury yields (blue) and 3m & 10y yields (orange) both negative for first time since August 2019 pic.twitter.com/KuS1TSplAE
— Liz Ann Sonders (@LizAnnSonders) October 26, 2022
It's official. Meta/Facebook has lagged the market since its IPO ten years ago. pic.twitter.com/m7hWUV4mSI
— Eddy Elfenbein (@EddyElfenbein) October 26, 2022
— Not Jerome Powell (@alifarhat79) October 26, 2022
You’re all caught up now. Thanks for reading!