Daily Chart Report ? Tuesday, January 21st, 2020
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Today’s Summary
Tuesday, January 21st, 2020
Indices: US stocks closed lower in today's session with the Dow Jones Industrial Average falling 152 points or 0.52%. The Nasdaq slipped 0.19%, while the S&P 500 moved lower by 0.27%. The Russell 2000 was the weakest of the major averages, falling 0.81%.
Sectors: Real Estate led, gaining 1.06%. Energy lagged for the third straight session, falling 1.79%.
Commodities: Crude Oil futures fell 1.02% to $58.24 per barrel. Gold futures were unchanged and continue to trade around $1,558 per ounce.
Currencies: The US Dollar Index was unchanged.
Interest Rates: The US 10-year Treasury yield moved lower to 1.78%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today's Chart of the Day was shared in an article by Schaeffer's Investment Research. The S&P 500 is currently 11% above its 200-day moving average; the most extended it's been in about two years. While many take this as a sign that the market is overbought, Schaeffer's points out that it's historically been a bullish signal. The table on top shows the S&P 500 forward returns across multiple time frames, using the past 19 times that the index traded 10% above its 200-day moving average. The table below shows the typical returns for the S&P 500 as a benchmark. Not only were the average returns positive across each time frame when the S&P 500 was this extended, but they were also significantly better than the typical average returns. They go on to explain: "it’s not an indication of an overbought market. In fact, it has been a buy signal, and with the two-week average return 3.5 times higher than the typical average return, it doesn’t suggest waiting." For more, check out the entire article here.
Quote of the Day
"Trading is a psychological game. Most people think they are playing against the market, but the market doesn't care. You're really playing against yourself."
– Martin Schwartz (Trader)
Top Links
This Climb is Different? - Of Dollars and Data
In this piece, Nick Maggiulli examines whether investors should be worried that big tech stocks are dominating the market.
The Small Caps are Waking Up - Momentum Monday
In their weekly Momentum Monday video, Howard Lindzon, and Ivanhoff highlight some of the strongest stocks and trends in the market.
Are Utilities Pointing to Lower Rates Ahead - All Star Charts
Tom Bruni of All Star Charts discusses what the recent strength in Utilities could mean for Bonds.
Snap Out of It - Bespoke
Bespoke points out that the social media stock, Snapchat ($SNAP), is breaking out of what they call a "beautiful breakout pattern."
How High Above the 200-day Can the S&P Get? - The Reformed Broker
Josh Brown addresses concerns that the S&P 500 is overextended from its 200-day moving average.
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