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Todayβs Summary
Monday, December 18, 2023
Indices: Nasdaq 100 +0.64% |Β S&P 500 +0.45% |Β Dow 0.00% | Russell 2000 -0.14%
Sectors: 4 of the 11 sectors closed higher. Communications led, gaining +0.99%. Real Estate lagged, falling -1.33%.
Commodities: Crude Oil futures gained +1.45% to $72.82 per barrel. Gold futures rose +0.24% $2,041 per oz.
Currencies: The US Dollar Index inched lower by -0.08% to $102.51.
Crypto: Bitcoin gained +3.16% to $42,650. Ethereum rose +1.07% to $2,218.
Volatility: The Volatility Index roseΒ +2.44% to 12.57.
Interest Rates: The US 10-year Treasury yield inched higher to 3.935%.
Here areΒ the best charts, articles, and ideas shared on the web today!
Chart of the Day
"But AAII net bulls hit an extreme high! That's contrarian bearish."
Response:
1) Smooth out the data
2) Even when the smoothed data hits an extreme, market peak may not occur until months/quarters later (eg. '11, '15, '21)$SPY $QQQ pic.twitter.com/SPoPostnQU— Brian G (@alphacharts) December 18, 2023
Today’s Chart of the Day was shared by Brian G. (@alphacharts). The recent face-melting rally has aroused animal spirits in a big way.Β Last week’s AAII Sentiment SurveyΒ showed 51.3% of investors were bullish, while just 19.3% were bearish. Bulls outnumbered bears by the widest margin since April 2021. Sentiment can be an excellent contrarian indicator when it’s at an extreme. However, extremes are rare by definition. Brian points out that smoothing the data with a moving average can help you identify when sentiment is unsustainable. Even once this slower sentiment indicator reaches an extreme, the market can continue higher for months while remaining frothy.
Quote of the Day
“The public is often right during the trends, but wrong at both ends.”
β Humphrey B. Neill
Top Links
Winds of Change – The Rotation Report
Aaron Jackson highlights the shifting market environment.
Risk-On Message Being Sent Out By The Market – JottingOnCharts
Grant Hawkridge gauges risk appetite using several key ratio charts.
Itβs Malicious Intent – All Star Charts
JC Parets reminds us to tune out the noise and focus on price action.
Rockin’ Around – The Weekly Trend
In this podcast, David Zarling and Ian McMillian discuss some of the most noteworthy technical developments across the markets.
The Market Rally Has More Room to Go, Says Renaissance Macro’s Jeff Degraaf – CNBC
Jeff deGraaf of Renaissance Macro shares his thoughts on the current market.
Top Tweets
S&P 500 RSI jumps above 80 for the first time in more than 3 years and has now reached its most overbought level since September 2020 pic.twitter.com/M64GymhsYN
— Barchart (@Barchart) December 18, 2023
S&P 500 up 7 weeks in a row.
On the surface, one might think this is bearish.
Not true, as these tend to happen in bull markets.
Up a yr later? 25 out of 29 times (86.2%). pic.twitter.com/qVE9vjnsAX
— Ryan Detrick, CMT (@RyanDetrick) December 18, 2023
Druckenmiller (2018)
"The inside of the stock market is the best economist I know".Recent 52-week highs in key cyclical industries:
Home construction $ITB
Small caps $IWM
Steel $SLX
Semis $SMH pic.twitter.com/2axaoHBASP— Larry Tentarelli, Blue Chip Daily (@bluechipdaily) December 18, 2023
I was promised a crisis pic.twitter.com/ezENmUjm8Y
— J.C. Parets (@allstarcharts) December 18, 2023
Last week there were seven sectors with 90%+ of stocks above their 50-DMAs, with Real Estate, Utilities, and Financials having the highest readings. pic.twitter.com/XM0g3tRLid
— Bespoke (@bespokeinvest) December 18, 2023
The weirdest-looking bull in decades…possibly ever.
The S&P 500 is up 23% this year, yet 71% of stocks are underperforming the index (the biggest % since at least 2000) pic.twitter.com/SZNk8aMi69
— Callie Cox (@callieabost) December 18, 2023
The S&P 500 equal-weighted index is near its all-time high and round-tripped from range lows to range highs in only seven weeks. And 90% of the index is above its 50-day moving average. These are strong breadth numbers, but they can often occur at short-term trading highs. pic.twitter.com/ZWu7anl3AK
— Jurrien Timmer (@TimmerFidelity) December 18, 2023
anyone else notice that steel stocks went out at 12-year highs? $SLX pic.twitter.com/zg2isHaJbW
— David Cox, CMT, CFA (@DavidCoxRJ) December 18, 2023
Bonds appear to have entered a secular bear market. Even in the inflationary 1960s & 70s, however, UST10Y commonly reverted to its rising 200wma. From this perspective, a countertrend move could run much further than expected. Perhaps toward 3% or lower in 2024. pic.twitter.com/UEpSzPMbqO
— Mark Ungewitter (@mark_ungewitter) December 18, 2023
#Bitcoin Potential breakout coming w/ today's outside bar forming. $BTCUSD pic.twitter.com/Yn26XRcYQz
— Jake Wujastyk (@Jake__Wujastyk) December 18, 2023