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Today’s Summary
Wednesday, December 23rd, 2020
Indices: US Stocks were mixed in today’s session. The Dow Jones Industrial Average rose 114 points or 0.38%. The S&P 500 closed flat (0.07%), while the Nasdaq slipped 0.29%. The Russell 2000 outperformed, gaining 0.87%.
Sectors: 8 of the 11 sectors closed higher. Energy led, rising 2.21%. Real Estate lagged, falling 0.95%.
Commodities: Crude Oil futures moved higher by 2.34% to $48.12 per barrel. Gold futures rose 0.42% $1,878 per ounce.
Currencies: The US Dollar Index fell 0.36%.
Interest Rates: The 10-year US Treasury yield inched higher to 0.941%.
The US Stock Market and Bond Market will close early tomorrow, and be closed all day Friday, December 25th.
We will resume our daily email on Monday, December 28th. Happy Holidays!
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
The #SantaClausRally starts tomorrow (final 5 days of the year and first two of the following year).
Going back to 2000, it is pretty clear if these usually bullish 7 days are higher, it bodes well for January and the full year.
If Santa fails to call? Trouble could be coming. pic.twitter.com/k5gUlb7yfy
— Ryan Detrick, CMT (@RyanDetrick) December 23, 2020
Today’s Chart of the Day was shared on Twitter by Ryan Detrick of LPL Financial Research (@RyanDetrick). Ryan points out that the Santa Claus Rally begins tomorrow. This phenomenon, popularized by the Stock Traders Almanac, refers to a bullish seven-day stretch that takes place in the last five trading days of December and the first two trading days of the new year. This seven-day stretch is more likely to be positive than any other seven-day stretch of the year. Over the past 70-years, the S&P 500 has risen 77.9% of the time, for an average gain of 1.33%. Now before we get too bulled up, there’s a flip side to this coin. As the founder of this phenomenon, Yale Hirsch, once said, “If Santa Claus should fail to call, bears may come to Broad and Wall.” In other words, if returns are negative during this seven-day stretch, it would be a big red flag. As you can see, every time these seven days have been negative over the past 20-years, January has also been negative. So whether you’re bullish, bearish, or neutral, it would be wise to keep an eye on the action in the S&P 500 over the next seven trading days. For more on this, check out the full note here.
Quote of the Day
“No one has ever become poor by giving.”
– Anne Frank
Top Links
Todd Sohn’s Picks – TD Ameritrade Network
Todd Sohn of Strategas Research offers up some attractive chart setups including, $AAPL, $SHOP, $SONO, $WWE, $SRPT, and $MSGE.
Consumer Staples Can’t Keep Up – All Star Charts
JC Parets points out that relative weakness from the Consumer Staples sector is a positive sign for the broader market.
3 Reasons Why You Shouldn’t Wait For the Stock Market to Crash – The Irrelevant Investor
Michael Batnick explains why it’s silly to wait for a market crash to invest over the long-term.
Risk Management – Marea Market Musings
Dan Russo emphasizes the importance of having a risk management strategy.
The Simple Trick That Can Help You Hold Winners For Longer – The Lund Loop
Brian Lund shares some words of wisdom from the late Jon Boorman.
Top Tweet
The Russell 2000 closed above 2000 for the first time ever.
$RUT $IWM— Stocktwits (@Stocktwits) December 23, 2020
$IWM is on pace for its 8th consecutive weekly gain of 1% or more – its 7th consecutive ATH weekly close – and it’s 7th consecutive week of outpacing $SPX.
“Horizontal lines are useless” some said.
Mute them. pic.twitter.com/liHbGqiKDx
— Steve Deppe, CMT (@SJD10304) December 23, 2020
Historic momentum surge for small-caps pic.twitter.com/yqEMW6tmir
— Strategas (@StrategasRP) December 23, 2020
Small caps have been gaining ground on Big Tech. Who will outperform in 2021? $IWM $QQQ pic.twitter.com/Trnmn5EJD5
— MicroSectors (@msectors) December 23, 2020
As we wrap up 2020, here's our snapshot of the path the S&P 500 took to get to this point in the year. Easy to forget those crazy days in February and March — look at the daily swings. $SPY https://t.co/H4p1RcpfIn pic.twitter.com/W97nePV9fW
— Bespoke (@bespokeinvest) December 23, 2020
One last look at a chart which defined 2020:$SPY cumulative After-Hours return since the March 23 bottom: +53%.
Day session return: +7%.
ALL the gains after March 25 were After-Hours – everyone lost money during daylight hours… in one of the biggest rallies of all time. pic.twitter.com/9c3iZ3wmHR
— Macro Charts (@MacroCharts) December 23, 2020
The Dollar Index led commodities in 2011 by putting in a higher low as the CRB Continuos Contract peaked. It appears the $DXY may have done it again this year by putting in a lower high while the $TRCCI possibly bottomed. pic.twitter.com/GC1mnDx2kK
— Ian Culley (@IanCulley) December 23, 2020
$TSLA Back down to earth soon? This ripped about 50% during the last month so a little consolidation would be normal…but then again it is TSLA pic.twitter.com/wGiv7CgXNi
— Gregory Krupinski (@G_krupins) December 23, 2020
YTD returns of major asset classes from Nasdaq (+47%) to crude oil (-23%). Bitcoin, not pictured, up 229% YTD. https://t.co/X4qBeDAmiI@StockCharts $QQQ $IWM $TLT $WTIC $GOLD $GLD $USD $DXY $UUP $EEM $BTCUSD pic.twitter.com/DaXRPptJD3
— David Keller, CMT (@DKellerCMT) December 23, 2020
The best performing large cap stocks of the year
Nio $NIO +1,069%
Plug Power $PLUG +1,043
Tesla $TSLA +672%
Enphase $ENPH +590%
Moderna $MRNA +566%
Farfetch $FTCH +515%
Peloton $PTON +473%
Zoom $ZM +464%
SunRun $RUN +406%
Denali $DNLI +405%
DraftKings $DKNG +403% pic.twitter.com/0pwX0jasKc— TradingView (@tradingview) December 23, 2020