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Today’s Summary
Wednesday, December 21st, 2022
Indices: Russell 2000 +1.65% | Dow +1.60% | S&P 500 +1.49% | Nasdaq 100 +1.48%
Sectors: All 11 Sectors closed higher. Energy led, gaining +1.90%. Materials lagged but still gained +0.87%.
Commodities: Crude Oil futures rose +2.70% to $78.29 per barrel. Gold futures were unchanged at $1,825 per ounce.
Currencies: The US Dollar Index rose +0.25% to $104.23.
Crypto: Bitcoin slipped -0.44% to $16,824. Ethereum inched lower by -0.24% to $1,214.
Interest Rates: The US 10-year Treasury yield fell to 3.664%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Once a company becomes the highest-cap stock in the S&P 500, does it pay to own it rather than the SP500 index? This @NDR_Research analysis shows the answer since 1972 is no. It paid more than 8.3x more to own the index rather than the highest-cap stock. Diversification pays. pic.twitter.com/hO7in59sOl
— Day Hagan Asset Management (@DayHagan_Invest) December 21, 2022
Today’s Chart of the Day comes from Ned Davis Research (@NDR_Research). The chart shows the S&P 500 (blue) and the performance of owning the largest stock within the index. Over the decades, the largest stock in the S&P 500 has changed from IBM to GE, to Wal-Mart, to Apple, etc. If you only owned the largest S&P 500 stock, you would be up 1,794% over the past 50 years. That’s far less than the 14,913% gain you would have by simply owning the index over the same period. This chart serves as a reminder that leadership changes over time and it’s important to stay diversified.
Quote of the Day
“Hope is the worst four-letter word for a trader.”– Scott Ramsey
Top Links
Twas Three Nights Before Christmas (Russell 2000 Version) – Quantifiable Edges
Rob Hanna points out that the next 8 trading days have historically been strong for the Russell 2000.
Small-Caps Lead During Seasonally Bullish Trading Ahead of Christmas – Almanac Trader
Jeff Hirsch looks at how the major averages have performed around Christmas.
Why Short-Term Investors Should Snatch NDX Rejects – Schaeffer’s Investment Research
Rocky White examines how stocks have historically performed after being kicked out of the Nasdaq.
Fill the Gap Episode Fifteen, with Special Guest Ian McMillan, CMT – The CMT Association
In this podcast, the CMT association interviews Ian McMillan on his career and investment process.
The U.S. Economy ‘Is Likely Not Going Into a Recession” Strategist Says – Yahoo Finance
Ryan Detrick offers his thoughts on stocks, the economy, and the Santa Claus Rally.
Top Tweets
Today’s Market Mood: Risk-On
1. Stocks up >1% on relief rally
2. $SPX bulls try for 50 DMA
3. Dow still above 200 DMA
4. Yields hold support on Fed
5. Commodities up 1%Watch that Dow, makes potential case for $SPX to join higher in 2023.
— Abigail Doolittle (@TheChartress) December 21, 2022
Final heat map of the S&P 500's $SPY performance from today pic.twitter.com/V5Oqs5rXgS
— StockMKTNewz – Evan (@StockMKTNewz) December 21, 2022
The official Santa Claus Rally period starts on Friday.
Note these 7 days have been higher six years in a row.
Hasn't made it to 7 years in a row since the '70s (hit 8 in a row then).
The longest ever was 10 in a row in the '50's/'60s. pic.twitter.com/xZXN2u4coo
— Ryan Detrick, CMT (@RyanDetrick) December 21, 2022
December could be a a microcosm of 2022: investors riding out a 6% month-to-date decline as they hope for a final week rally that averages 1.3%. pic.twitter.com/VHfBOuhRoz
— Willie Delwiche, CMT, CFA (@WillieDelwiche) December 21, 2022
An interesting moment here on for the "Santa Clause Rally." The S&P 500 is battling the 50-day moving average in blue, the ⚓️VWAP from Aug high in green, and the ⚓️VWAP from Oct low in purple. @TheChartReport @alphatrends pic.twitter.com/4ZhzmjDGFR
— Shean Fletcher, AAMS®, AIF® (@SheanFletcher) December 21, 2022
The chart of the Dow continues to hold above ⬆️⬆️ the 200 DMA, but the Nasdaq 100 ? and the $SPX are both below ?? $INDU $DIA $SPY $SPX $QQQ $NDX pic.twitter.com/ZaFmdmvI2e
— Greg Schnell, CMT (@Schnellinvestor) December 21, 2022
although the discretionary sector is no doubt weak, the homebuilders are an industry group within and they're, shall we say diverging, from the broader sector… pic.twitter.com/u4gwWqK6IJ
— David Cox, CMT, CFA (@DavidCoxRJ) December 21, 2022
Healthcare a beneficiary of Tech weakness, S&P % weight at new high. pic.twitter.com/fGTcUgAvsK
— Strategas (@StrategasRP) December 21, 2022
here's an update on who likes the weaker US Dollar the most pic.twitter.com/SLjV24jAql
— J.C. Parets (@allstarcharts) December 21, 2022
Chart of the Day: Silver setting new 52-week highs vs. the Russell 2000 pic.twitter.com/WvEnX7vDzc
— Grindstone Intelligence (@GrindstoneIntel) December 21, 2022
A spoonful of sugar makes the monies grow bigger.
Big breakout in the Sugar ETF $SGG, all while rising above a climbing 40-week and 10-week MA.
There's more to commodities than oil & gas. pic.twitter.com/aMNYp8juJa
— Adam D. Koós, CFP®, CMT, CEPA (@AdamKoos) December 21, 2022
Is inflation in the price of steak coming to your butcher?
Have the moo cows escaped from the feedlot?
Feb Live Cattle $LE_F LEG23 has made new contract highs, completing a massive ascending triangle
What moo you? pic.twitter.com/YqyZIeaaf7— Peter Brandt (@PeterLBrandt) December 21, 2022
You’re all caught up now. Thanks for reading!