Daily Chart Report ? Thursday, May 14th, 2020
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Today’s Summary
Thursday, May 14th, 2020
Indices: US Stocks closed higher after clawing back some of the day’s earlier losses. The Dow Jones Industrial Average advanced 377 points or 1.62%. The S&P 500 and Nasdaq gained 1.15% and 0.91%, respectively. The Russell 2000 was the weakest of the major indices but still managed to close positive by 0.35%.
Sectors: 10 of the 11 sectors closed higher. Financials led, gaining 2.57%. Consumer Staples was the only sector to close lower, slipping 0.25%.
Commodities: The June Crude Oil futures contract jumped 8.98% to $27.56 per barrel. Gold futures gained 1.43% to $1,741 per ounce.
Currencies: The US Dollar Index was flat.
Interest Rates: The US 10-year Treasury fell to 0.623%.
Here are the best charts, articles, and ideas being shared on the web today!
Chart of the Day
Likewise, AAII bulls minus bears at -25% this week. That’s bearish sentiment. A durable low in a bull market, but not in a bear market $spx pic.twitter.com/zWHOOm6wIR
— ukarlewitz (@ukarlewitz) April 23, 2020
Today’s Chart of the Day was shared on Twitter by Urban Carmel (@ukarlwitz). It’s a chart of the S&P 500 over the past 20-years. The blue indicator in the lower pane is a 4-week moving average of the bull-bear spread from the weekly AAII Sentiment Survey. This indicator is at its lowest reading since March 2009, which tells us sentiment is extremely bearish right now. As we know, sentiment is often a contrarian indicator, especially at extremes. The fact that the bull-bear spread is at an extreme low (under -20) should be interpreted as bullish, right? Not so fast. Urban points out that during bull markets, extreme bearish sentiment readings (green vertical lines) are often a sign that the S&P 500 has put in a low. On the other hand, in bear markets, these signals are virtually meaningless, as shown by the red vertical lines. If we’re truly in a bear market regime here, using this popular sentiment gauge as a contrarian indicator is not all that useful.
Quote of the Day
Whichever the way the world goes,
Is perfectly all right with me!”
– Raymond Smullyan (Philosopher)
Top Links
Sentiment Still Sits Bearish – Bespoke
Going along with our Chart of the Day, here’s a breakdown of the latest AAII Sentiment Survey from Bespoke.
Market Breadth Begins to Turn Negative – Market Misbehavior
David Keller highlights the lack of participation going on within some of the major indices.
Update on the Big Three SPY, QQQ, IWM – TrendInvestor Pro
In this video, Arthur Hill takes a look at the S&P 500, Nasdaq, and Russell 2000.
Global Breadth Remains A Headwind For Stocks – All Star Charts
As stocks around the world have gone virtually nowhere over the past few weeks, Steve Strazza points out that breadth is deteriorating under the surface.
I Don’t Know… – Howard Lindzon
Here’s a good read from Howard Lindzon, in which he discusses how difficult it is to read the tape in this market environment.