Daily Chart Report ? Wednesday, March 18th, 2020
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Today’s Summary
Wednesday, March 18th, 2020
Indices: US Stocks closed lower with the Dow Jones Industrial Average tumbling 1,338 points or 6.30%. The S&P 500 and Nasdaq dropped 5.18% and 4.70%, respectively. The Russell 2000 was the weakest of the major indices, plummeting 10.42%.
Sectors: All 11 sectors closed lower by more than 2.50%. Consumer Staples led, but still fell 2.57%. Energy lagged significantly, crashing 14.36%.
Commodities: Crude Oil futures continued to free fall by 16.52% to $22.39 per barrel. Gold futures dropped 2.69% to $1,488 per ounce.
Currencies: The US Dollar Index rallied 1.42% to its highest level since 2017.
Interest Rates: The US 10-year Treasury yield moved higher to 1.27%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Today’s Chart of the Day was shared on Twitter by Macro Charts (@MacroCharts). It is a chart of the S&P 500 over the past month. Today, the index tested the infamous December 2018 low (red line). As you can see, price initially broke through that crucial level this morning but managed to close back above it. Macro Charts suggests that this is a potential failed breakdown. A failed breakdown or “bear trap” occurs when price breaks support, fails to follow-through to the downside, and instead moves back above support. Failed breakdowns tend to lead to sharp moves higher. As we like to say, “out of failed moves, come fast moves in the opposite direction.” When price breaks an obvious support level like this, bulls get stopped out of their long positions and bears pile in short. When price does not continue lower and gets back above support instead, bulls chase to get back into their long positions, and bears are forced to buy to cover their shorts. Macro Charts emphasizes that we will need price to follow-through to the upside over the next few days to confirm this potential failed breakdown.
Quote of the Day
“Three great forces rule the world: stupidity, fear and greed.”
– Albert Einstein (Physicist)
Top Links
Should You Buy Stocks Now? - Of Dollars and Data
Data scientist, Nick Maggiulli, takes a look at the extremely high reading in the Volatility Index ($VIX), and whether or not it's signaling a buying opportunity in stocks.
Stock Market Video Analysis 3/18/20 - AlphaTrends.net
Brian Shannon recaps the wild price action we've seen so far this week and lays out some important levels to keep an eye on.
The Buck's Bounce - Bespoke
In this note, Bespoke examines the heightened volatility in the US Dollar Index ($DXY) as the index has surged back to multi-year highs.
S&P 500 Stocks with Year-to-Date Gains - The Reformed Broker
In both bull, and bear markets it often pays to own stocks that are outperforming the broader market. Here's a quick look at the 12 stocks in the S&P 500 that have managed to hold on to their year-to-date gains.