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Today’s Summary
Friday, December 4th, 2020
Indices: US Stocks ended the week on a positive note, with all four major indices closing at all-time highs. The Dow Jones Industrial Average rose 249 points or 0.83%. The S&P 500 and Nasdaq moved higher by 0.88% and 0.70%, respectively. The Russell 2000 significantly outperformed, gaining 2.37%.
Sectors: 10 of the 11 sectors closed higher. Energy led for the third day in a row, jumping 5.45%. Utilities lagged, falling 1.00%.
Commodities: Crude Oil futures moved higher by 1.36% to $46.26 per barrel. Gold futures were unchanged and continue to trade around $1,840 per ounce.
Currencies: The US Dollar Index inched higher by 0.10%.
Interest Rates: The 10-year US Treasury yield rose to 0.968%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Here is some back of the envelope analysis using the CNN Fear&Greed Index. Extreme fear signal (<20) was a timely sell in Oct-2018, but a good buy signal in Aug-2019. $SPX moved higher for several weeks after extreme greed signals (>80) in Oct and Dec 2019. Sometimes #greedisgood pic.twitter.com/36TRCDIzjV
— Arthur Hill, CMT (@ArthurHill) December 4, 2020
Today’s Chart of the Day was shared by Arthur Hill (@ArthurHill). It’s a weekly bar chart of the S&P 500 over the past three years, along with the CNN Fear & Greed Index below. One of the biggest concerns lately has been the rise in bullish sentiment. As we know, sentiment is often a contrarian indicator, especially at extremes. The CNN Fear & Greed Index is currently over 80, indicating extreme optimism among market participants. Interestingly, the market actually moved higher for several weeks after the prior two readings over 80. Perhaps CNN should stick to news rather than creating technical indicators. Other sentiment indicators such as the Put/Call ratio and the Investors Intelligence Survey are flashing similar warning signs, which is an issue in the short-term. However, longer-term, the trend is unequivocally higher, and a pullback would likely be welcomed by many as a buying opportunity.
Quote of the Day
“Today was good. Today was fun. Tomorrow is another one.”
– Dr. Seuss
Top Links
Weekly Market Performance – Markets Headed Higher Coming Into December
Here’s a thorough summary of this week’s price action from the team at LPL Financial Research.
Bearing Down Into The Holiday – Bespoke
Bespoke breaks down the results of the latest AAII Sentiment Survey.
Jerry Parker Talks Futures’ Ride Ahead of Jobs Report – TD Ameritrade Network
Legendary trend follower, Jerry Parker offers his perspective on Stocks and Commodities.
Small Stocks See Big Momentum – SentimenTrader
Jason Goepfert shares some insights about the recent surge in Small-Caps.
Stock Market, Individual Stocks & Crypto Analysis – AlphaTrends
In this video, Brian Shannon reviews some individual Stocks and Cryptocurrencies.
Top Tweets
All four major indexes — the S&P 500, the Dow Jones Industrial Average, the Russell 2000 and the Nasdaq Composite Index — closed at records today. That hasn't happened since January 2018.
h/t @luwangnyc
— Katherine Greifeld ? (@kgreifeld) December 4, 2020
Weekly $SPX update: near 3700 and another all-time weekly closing high. Now sitting 12% (!) above 40wk EMA. In Aug when RSI poked above 65 a quick 8% correction followed. How will this one play out? pic.twitter.com/iaJeEmboqq
— Michael Turvey (@MikeTurvey_TDA) December 4, 2020
$IWM Small caps! Looks like that was a runaway gap over the prior highs. Almost a double off the March lows and much stronger relatively than the big boys lately. A bit stretched? Maybe. Strong? Absolutely. pic.twitter.com/Pgq9EVOdAV
— Gregory Krupinski (@G_krupins) December 4, 2020
$IWC at all-time high levels hey! pic.twitter.com/NpDqujGGKH
— Grant Hawkridge (@granthawkridge) December 4, 2020
CBOE equity put/call ratio (5d average) now at its lowest since July 2000 pic.twitter.com/mVzKFQpWP2
— Liz Ann Sonders (@LizAnnSonders) December 4, 2020
This week's Investors Intelligence survey shows bulls rose to 64.7%, the highest level since Jan. 2018. Bulls minus Bears spread rose to 48%, putting it in the 97th percentile of all-time readings. $SPY $QQQ pic.twitter.com/LHSAf950Do
— Matthew Timpane, CMT (@mtimpane) December 4, 2020
Regional banks are making a move! $BKX pic.twitter.com/uazASWWyBL
— MicroSectors (@msectors) December 4, 2020
Energy stocks have (finally) led the market recently. But that needs some context. It's come after 12 years of lagging badly. Here's S&P 500 Energy divided by the S&P 500. pic.twitter.com/khaR4jHPmF
— Eddy Elfenbein (@EddyElfenbein) December 4, 2020
US Dollar Index at a 31-month low. $USD pic.twitter.com/zPnpIz5muI
— Charlie Bilello (@charliebilello) December 4, 2020
WTI highest weekly settle since February (up 5 weeks in a row) as USD drops to lowest since April 2018 $USO $UUP @TheChartReport pic.twitter.com/cZTcyRPRBh
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) December 4, 2020
Since March, it has been and continues to be about credit not COVID. Today HY spreads are at their lowest levels since the outbreak. If the perma-bears were right, credit would not be this firm…..they're just wrong. pic.twitter.com/vbI1a1Cqzh
— RenMac: Renaissance Macro Research (@RenMacLLC) December 4, 2020