Daily Chart Report ? Tuesday, April 28th, 2020
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Today’s Summary
Tuesday, April 28th, 2020
Indices: US Stocks closed lower after giving back some of the day’s earlier gains. The Dow Jones Industrial Average inched lower by 32 points or 0.13%. The S&P 500 and Nasdaq fell 0.52% and 1.40%, respectively. Small-Caps outperformed, with the Russell 2000 managing to close higher by 1.26%.
Sectors: Energy led, gaining 2.29%. Health Care lagged, falling 2.02%.
Commodities: The June Crude Oil futures dropped 3.44% to $12.34 per barrel. Gold futures were little changed, slipping just 0.09% to $1,722 per ounce.
Currencies: The US Dollar Index changed just 0.07%.
Interest Rates: The US 10-year Treasury yield moved slightly lower to 0.615%.
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 David Zarling (@AdaptivCharts). It is a ratio chart showing the cap-weighted S&P 500 ETF $SPY, vs. the equal-weighted S&P 500 ETF, $RSP. When the line is rising, it means cap-weighted is outperforming equal-weighted and vice versa. Yesterday, the S&P 500 equal-weighted outperformed cap-weighted by the widest margin since 2009. David points out that this ratio has been in a well-defined range since early March, and it is now testing the lower bounds of that range. David also notes that momentum has been weakening over the past few weeks, as shown by the 14-period RSI indicator below. If this ratio breaks down from this range and confirms the bearish-momentum divergence, it means cap-weighted is underperforming equal-weighted. This would likely be an environment where the largest stocks like Apple, Amazon, Microsoft, Google, and Facebook underperform some of the Smaller-Cap stocks in the S&P 500, as these five Mega-Cap names make up over 20% of the cap-weighted index. Expect a resolution from this ratio in the next few days, as all five stocks mentioned above report earnings this week.
Quote of the Day
– Annie Duke (Professional Poker Player)
Top Links
Small Mean Reversion – The Irrelevant Investor
Michael Batnick weighs-in on the recent outperformance of Small-Cap Value stocks.
Outperformers Underperform – Bespoke
In this note, Bespoke highlights the drastic intraday sector rotation that occurred today.
Tofpik: Negative Oil Prices Renders Market Tools Useless – Bloomberg
Here’s a quick interview with Technical Analyst, Eddie Tofpik. He shares his thoughts on Brent Crude Oil futures, and adresses some of the difficulties with analyzing WTI Crude Oil futures right now.
Monday’s Small-Cap Surge – SentimenTrader
Jason Goepfert examines the impressive outperformance from Small-Cap socks.
Is this January 2009 or May 2009? – All Star Charts
Stocks, Bonds, and Gold have moved higher together over the past few weeks. In this piece, JC Parets take a look at which asset class is likely to break first.
Top 10 Tweets
Investors are rolling into the July contract early, leading to a big price gap between June & July futures. Traders seem to think WTI will be worth $7 more per barrel next month. I don’t understand what could materially change with the supply-demand dynamic by then. pic.twitter.com/qyHkYwFytL
— Lisa Abramowicz (@lisaabramowicz1) April 28, 2020