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Today’s Summary
Tuesday, December 20th, 2022
Indices: Russell 2000 +0.54% | Dow +0.28% | S&P 500 +0.10% | Nasdaq 100 -0.11%
Sectors: 7 of the 11 Sectors closed higher. Energy led, gaining +1.51%. Consumer Discretionary lagged dropping -1.16%.
Commodities: Crude Oil futures rose +1.13% to $76.23 per barrel. Gold futures gained +1.54% to $1,825 per ounce.
Currencies: The US Dollar Index dropped -0.68% to $103.95.
Crypto: Bitcoin rose +2.75% to $16,898. Ethereum gained +4.25% to $1,217.
Interest Rates: The US 10-year Treasury yield rose to 3.688%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
New lows for the Consumer Discretionary Sector SPDR $XLY as laggards keep on lagging pic.twitter.com/EW7IWY0hGd
— Steven Strazza (@sstrazza) December 20, 2022
Today’s Chart of the Day was shared by Steve Strazza (@sstrazza). It’s a daily candlestick chart of the Consumer Discretionary sector ($XLY) over the past three years. Steve points out that Consumer Discretionary stocks are breaking below their pre-Covid highs, around $132. This level has weathered several tests this year, but it finally cracked. $XLY is down more than -10% so far this month, and -36% YTD. The sector’s two largest components, $AMZN & $TSLA, have been weighing it down recently, as both stocks have also sunk to multi-year lows. This is the 4th largest sector in the S&P 500, and its relative performance often leads the broader market higher or lower. It’s concerning to see this sector breaking down on both an absolute & relative basis like this.
Quote of the Day
“Charts are a very unemotional way to view a stock’s behavior and potential.”
– Richard Driehaus
Top Links
The 8 Charts that Defined 2022 – Means to a Trend
Austin Harrison highlights eight noteworthy charts from this year.
Holly Yen. Wow! – All Star Charts
JC Parets takes a look at today’s move in the Japanese Yen.
Mega-Caps Down $5 Trillion in Market Cap, AMZN Now Down $1+ Trillion – Bespoke
Bespoke examines the market cap destruction that has taken place this year.
A Santa Claus Massacre – The Weekly Grind
Sam McCallum shares a few key charts to watch in the coming weeks.
Equities are Now in an Elongated Purgatory, Says Renaissance’s Jeff deGraaf – CNBC
In this clip, Jeff deGraaf shares his thoughts on the current market environment.
Top Tweets
This could go down as the second-worst year for stocks in the last 40 years.
— Eddy Elfenbein (@EddyElfenbein) December 20, 2022
HOW THIS S&P 500 BEAR STACKS UP AGAINST OTHER BEARS (since 1950)?
? LENGTH: 1 year (avg length: 14 months)
?SIZE: -26% (avg decline: 36%)
?AVERAGE DAILY MOVE: 1.2% (avg move: 0.9%)
?RECESSION: no (just like 3/10 bears since 1950)— Callie Cox (@callieabost) December 20, 2022
$SPX: 5 prior drawdowns in '22 were worse than this one.
And each made a new low. pic.twitter.com/gjbGCVRrlt
— Frank Cappelleri (@FrankCappelleri) December 20, 2022
“Yesterday's decline left the S&P 500 down 6.4% month-to-date in price terms, which puts December 2022 on track for the second-worst “Santa season” since the index began ticking in 1957.” @SPDJIndices pic.twitter.com/3031iOkw2J
— Sam Ro ? (@SamRo) December 20, 2022
The Dow is on track for its best year since 1933 relative to $SPX. pic.twitter.com/jriDiRGPBn
— Elena Popina (@lena_popina) December 20, 2022
NAAIM chart via Morgan Stanley research pic.twitter.com/kaqdWFK1U6
— Joseph Fahmy (@jfahmy) December 20, 2022
For people who expect a "bear market low" around 3200 on $SPX, they don't really know what a bear market really is. The last 3 bear markets, $SPX dropped to 2 SDs BELOW its 20-yr linear regression trendline (last 3 charts). We're currently easily ABOVE the trendline (1st chart) pic.twitter.com/IHuQL6rn8q
— David Settle, CMT (@davidsettle42) December 20, 2022
US S&P 500 Sector's currently above and below the 200-Day Moving Average, simplicity… pic.twitter.com/Uu9ONDyNjG
— Patrick Gushue (@blucollarcharts) December 20, 2022
Latest @BankofAmerica Fund Manager Survey shows investors are most overweight bonds compared to stocks since March 2009 pic.twitter.com/eD7hw9V9lG
— Liz Ann Sonders (@LizAnnSonders) December 20, 2022
Goodbye, Mr. Bond. pic.twitter.com/r46Ov0j7Z6
— Mark Ungewitter (@mark_ungewitter) December 20, 2022
It was a central bank pivot – just not the one many were hoping for.
This one is likely to keep the Risk Off environment intact.https://t.co/x43mtyD05K pic.twitter.com/rbziPDRZdd
— Willie Delwiche, CMT, CFA (@WillieDelwiche) December 20, 2022
8/10
The US 10-year yield is up ~10bps since Monday’s close. It was up ~9 bps Monday.
Or, the US 10-year yield is up ~20 bps this week … and it is still Monday night!
Why?
Can I say it loud enough … JAPAN, IS NOW WORRYING ABOUT INFLATION!!!
3-Day Tick of 10-year yield pic.twitter.com/oca5vSXGlp
— Jim Bianco biancoresearch.eth (@biancoresearch) December 20, 2022
The 2-Year Treasury is now well below the Fed Funds Rate (chart below).
This is the market telling the Fed to stop hiking.
Historically, a FFR-2YR inversion kicks off a chain reaction in fed policy and fixed income.
Quick thread on what history says is next. pic.twitter.com/lcW09upiPY
— Warren Pies (@WarrenPies) December 20, 2022
Great example of a chart rectangle
Christmas is for all things sweet
Sugar weekly chart challenging a BO of 16-mo continuation rectangle. If completed this could launch a bull thrust. Stock up on your gummy bears now. $SB_F pic.twitter.com/W2YAmT6fW5— Peter Brandt (@PeterLBrandt) December 20, 2022
You’re all caught up now. Thanks for reading!