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Today’s Summary
Friday, December 18th, 2020
Indices: US Stocks closed lower in today’s session with the Dow Jones Industrial Average falling 124 points or 0.41%. The S&P 500 and Nasdaq slipped 0.35% and 0.07%, respectively. The Russell 2000 closed lower by 0.41%.
Sectors: 5 of the 11 sectors closed higher. Materials led, rising 0.45%. Real Estate lagged, falling 1.73%.
Commodities: Crude Oil futures moved higher for the fifth straight day, rising 1.44% to $49.24 per barrel. Gold futures were more or less flat, slipping just 0.08% $1,889 per ounce.
Currencies: The US Dollar Index inched higher by 0.12%.
Interest Rates: The 10-year US Treasury yield moved higher to 0.943%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Downward sloping 200 week moving average.$DXY US Dollar Index 1W pic.twitter.com/XPOpqiesBe
— Shane C. Murphy (@murphycharts) December 18, 2020
Today’s Chart of the Day was shared on Twitter by Shane Murphy (@murphycharts). It’s a weekly candlestick chart of the US Dollar Index ($DXY) over the past 23 years. The US Dollar is one of the most important charts to watch right now. This is because so many of the trends and themes we’ve seen in recent months have been partly driven by the weakening US Dollar. The S&P 500, Commodities, Emerging Markets, and even Bitcoin have all benefited from the Dollar decline. This might not surprise you considering these assets are priced in Dollars, meaning it’s literally the denominator of the equation. In a comment to the Chart Report, Shane said, “For starters, the Dollar is below a downward sloping 200-day moving average, so the path of least resistance is clearly lower. We sliced through key support around 92 a couple of weeks ago, and it’s continued to make multi-year lows ever since. The next area of potential support is around 88. If that fails to hold, it could move significantly lower, which should continue to boost risk assets.” For more perspective on this topic, check out this piece from Aaron Jackson, and this note from LPL Financial Research.
Quote of the Day
“A bank is a place that will lend you money if you can prove that you don’t need it.”
– Bob Hope
Top Links
King Dollar – The Rotation Report
Aaron Jackson takes a look at the weakening US Dollar and what it could mean for other asset classes.
Real Santa Claus Rally – Almanac Trader
Seasonality expert, Jeff Hirsch explains everything you need to know about the Santa Claus Rally.
Investors Are Underweight Cash, First Time Since 2013 – All Star Charts
JC Parets points out that investors are underweight cash for the first time in years.
A Rally For the History Books – BullMarkets.co
Troy Bombardia weighs both the bullish and bearish aspects of the current market environment.
Don’t Fight the Trend; Setups in the Tech Sector – AlphaCharts
Brian at AlphaCharts highlights some attractive chart setups with the Tech sector.
Top Tweets
$XLK at all-time highs for the first time in 3.5 months
expect to see big-cap tech resume its leadership for a bit pic.twitter.com/vWqVmBSBQq
— Steven Strazza (@sstrazza) December 18, 2020
Over 92% of $SPX names above their 200-day moving average which is highest reading since 2013. Closest example in modern history to current move is the acceleration off the 2009 low. ST bearish LT bullish? pic.twitter.com/uBjVTzPshT
— David Keller, CMT (@DKellerCMT) December 18, 2020
Still strong breadth for major indices … % of members above 200d moving averages:
S&P 500: 92.3%
NASDAQ 100: 90.2%
Russell 2000: 88.7%
NASDAQ: 81.1% pic.twitter.com/cNA8oAHeFY— Liz Ann Sonders (@LizAnnSonders) December 18, 2020
One for the Weekend: 10-day total of new highs less new lows on NYSE + NASDAQ is finishing this week at its highest level since mid-2013. New highs tend to be evidence of strength, not weakness. pic.twitter.com/mIeMB0neaJ
— Willie Delwiche (@WillieDelwiche) December 18, 2020
The VIX has been above 20 for more than 200 days. That’s only happened 4 times since 1990. pic.twitter.com/mwregZ35d0
— Dani Burger (@daniburgz) December 18, 2020
$CRB index at an inflection point! pic.twitter.com/DkfaWlYcXT
— Grant Hawkridge (@granthawkridge) December 18, 2020
WTI with a fresh 10-month weekly closing high. Up each day this week. 7 straight weekly advances. Nice. $CL_F $USO @TheChartReport pic.twitter.com/c6kiLYV0HI
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) December 18, 2020
Oil showing that relative strength$CL_F vs $SPX pic.twitter.com/oZwlE1TBbO
— David Zarling, CMT (@AdaptivCharts) December 18, 2020
Monster moves across the #Cybersecurity space today$FEYE +31.68%$TENB +18.36%$QLYS +17.01%$PFPT +10.91%$CRWD +10.03%$RPD +8.82%
— Grayson Roze (@GraysonRoze) December 18, 2020
Cybersecurity trampled the broader market on that news today, up +4.04%, but it's been outperforming for a while now. Looking at the Cybersecurity/S&P 500 relative ratio, we see it's been in a solid ascending price channel for years.$HACK $SPY pic.twitter.com/GTWb4e8TOO
— Matthew Timpane, CMT (@mtimpane) December 18, 2020
US Dollar Index vs. Bitcoin over the last 9 months…$USD $BTC pic.twitter.com/pb4Ico6YO1
— Charlie Bilello (@charliebilello) December 18, 2020
The "green revolution" is copper intensive.
Copper trading with green energy and electric vehicles. pic.twitter.com/FKWlNS3cf7
— 3Fourteen Research (@3F_Research) December 18, 2020