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Today’s Summary
Monday, December 7th, 2020
Indices: US Stocks were mixed in today’s session. The Dow Jones Industrial Average fell 148 points or 0.49%. The S&P 500 slipped 0.19%. The Nasdaq closed higher for the ninth straight day, rising 0.45%. The Russell 2000 was flat (-0.06%).
Sectors: 3 of the 11 sectors closed higher. Communications led, gaining 0.63%. Energy lagged, falling 2.34%.
Commodities: Crude Oil futures fell 1.08% to $45.76 per barrel. Gold futures moved higher by 1.41% to $1,866 per ounce.
Currencies: The US Dollar Index rose 0.18%.
Interest Rates: The 10-year US Treasury yield slipped to 0.923%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
This is Russell's 3rd multi-months break out in the last 20 years. The 2013 break out led to a 45% rally. The 2016 – to a 35% rally. Rallies lasted for 2 years. If history is to repeat, $RTY might reach 2300-2400 in the next 12-24 months.
Small caps will continue to outperform! pic.twitter.com/ORTqma8Mrm
— Yuriy Matso (@yuriymatso) December 6, 2020
Today’s Chart of the Day was shared on Twitter by Yuriy Matso (@yuriymatso). It’s a monthly candlestick chart of the Russell 2000 over the past two decades. The night before the US Presidential Election, Yuriy made a timely observation that the Russell 2000 has a history of breaking out after US Elections. Well, it sure looks like history is trying to repeat itself as the Russell 2000 has surged to record highs in the past month. According to Yuriy, the prior two post-election rallies (2012 & 2016) both lasted about two-years and ran about 45% and 35%, respectively. The Russell is currently trading just under 1900 and a similar size rally would bring it up to ~2300-2400. Small-caps have been dead money for the past few years. Now that they’ve finally broken out, it’s not all that crazy to think we could see a similar scenario play out over the next 1-2 years.
Quote of the Day
“If we become increasingly humble about how little we know, we may be more eager to search.”
– Sir John Templeton
Top Links
Investors are Bulled Up. For Good Reasons – The Rotation Report
Here’s a good read from Aaron Jackson in which he outlines the bull case for Stocks.
SPAC Mania While Mega-Cap Stocks are Sleeping – Momentum Monday
In their weekly Momentum Monday video, Howard Lindzon and Ivanhoff highlight the strongest stocks, trends, and themes across the market.
Copper Bulls Getting Greedy As Price Reaches Resistance – See It Market
Chris Kimble points out that bullish sentiment on Copper futures is starting to get extreme as price tests a key resistance level.
C.O.T Copper Longs – Bespoke
Bespoke takes a quick look at commodity positioning.
Closer To The Begining Than The End – The Weekly Trend
In this podcast, David Zarling and Ian McMillan weigh-in on some of the major technical developments going on right now.
Top Tweets
Nearly 92% of stocks in the S&P 500 are trading above their 200-day Moving Average.
We've seen it before in $SPX – like in 2013, a few times between 2009 and 2011, and early 2004.
All turned out to be fantastic long-term entry points w/ years of gains ahead of them. pic.twitter.com/F3MnIFZbGx
— Grayson Roze (@GraysonRoze) December 7, 2020
A chart from last night's Thrasher Analytics letter….
On Friday, for the first time since January, just about every major index hit a new high:
S&P 500
S&P 400
S&P 600
Nasdaq 100
Nasdaq Composite
Dow Jones Industrial
Dow Jones Transport pic.twitter.com/V6Eyy4REdM— Andrew Thrasher, CMT (@AndrewThrasher) December 7, 2020
S&P as overbought as December 2009. pic.twitter.com/gL9Pe0nNbT
— Strategas (@StrategasRP) December 7, 2020
The riskiest stocks are outperforming… Micro-Caps acting like this is yet another thing you usually only see in bull markets $IWC pic.twitter.com/Qtk5LZTTJP
— Steven Strazza (@sstrazza) December 7, 2020
More evidence of optimism & complacency: CBOE put/call ratio has finished in the 60's 4 days in a row (and is in the 50's today). On 10-day basis its at a new cycle low. pic.twitter.com/BFZumOOFBr
— Willie Delwiche, CMT, CFA (@WillieDelwiche) December 7, 2020
An incredible 9 months:
The average 180 day % change of the world's 10 biggest stock markets (US,Japan,China, Germany,CAN, AUS,India…) and 4 commodities markets (oil/gas/ copper/sugar) is at a stunning 55%!
Over the past 30 years, this is how multi-year bull markets started pic.twitter.com/u51cZxt1uJ
— Troy Bombardia (@bullmarketsco) December 7, 2020
Speculative copper positions are the highest on record. Irrational macroeconomic exuberance, etc etc. pic.twitter.com/lDWKRiiKkY
— Dani Burger (@daniburgz) December 7, 2020
$HG_F Copper pic.twitter.com/mvxKEDMgJV
— Jason (@JasonPerz138) December 7, 2020
Metals & Mining vs. Broad Market ? $XME $VTI pic.twitter.com/6BMqnwb71k
— Drew Wells, CMT, CIMA® (@DrewTheCharts) December 7, 2020
#commodity index showing a big booty! pic.twitter.com/fOdf5GgWER
— Grant Hawkridge (@granthawkridge) December 7, 2020