Daily Chart Report 📈 Tuesday, August 6, 2024
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Today’s Summary
Tuesday, August 6, 2024
Indices: Russell 2000 +1.23% | S&P 500 +1.04% | Nasdaq +1.02% | Dow +0.76%
Sectors: All 11 sectors closed higher. Real Estate led, rising +2.21%. Health Care lagged but still rose +0.46%.
Commodities: Crude Oil futures rose +0.36% to $73.20 per barrel. Gold futures fell -0.52% to $2,432 per oz.
Currencies: The US Dollar Index rose +0.25% to $102.93.
Crypto: Bitcoin gained +3.77% to $56,053. Ethereum rose +1.77% to $2,463
Volatility: The Volatility Index dropped -28.16% to 27.70.
Interest Rates: The US 10-year Treasury yield bounced to 3.896%.
Here are the best charts, articles, and ideas shared on the web today!
Chart of the Day
Human nature never changes… pic.twitter.com/3Q1HZxkfhs
— Macro Charts (@MacroCharts) August 6, 2024
Today’s Chart of the Day was shared by Macro Charts (@MacroCharts).
- While the $VIX exploded on Monday, a lesser-known volatility metric also blew out to extreme levels, signaling excessive fear.
- Macro Charts points out that the 1-month Call-Put Skew reached levels not seen since the pandemic on Monday. This basically means investors were willing to pay a hefty premium for insurance to protect against further downside.
- Investors have only been this desperate for protection a few other times in recent history, including the Covid Crash, Volmageddon, the Yuan Devaluation, and the Flash Crash.
The Takeaway: Investors were extremely desperate for insurance yesterday. Just like car insurance or health insurance, you don’t think you need it until something breaks, and at that point, it’s probably too late; the damage has been done.
Quote of the Day
“Trends are not endless. In fact, the greater the consensus belief in the persistence of a trend, the less likely it is to persist.”
– Arthur Zeikel
Top Links
6 Things to Watch for a Market Bottom – Barron’s
John Roque highlights six things that would help the market establish a bottom.
10 Talking Points About the Recent Volatility – Carson Research
Ryan Detrick puts the recent volatility into perspective.
Where are the New Lows? – All Star Charts
JC Parets points out that there. hasn’t been an expansion in New Lows despite the recent weakness.
QQQ: Critical Levels to Watch as Nasdaq Teeters on the Edge – StockCharts
Karl Montevirgen breaks down the Nasdaq 100 ($QQQ) after yesterday’s sell-off
Top Tweets
$SPX – For a 2nd day in a row we have a similar candle. Green candle with a big upper wick due to heavy selling in the last hour. It doesn’t change the fact that I’m still expecting the bounce out of Monday’s low to top only on Thursday or Friday at the next 17/18 day high. pic.twitter.com/D0QmfYfVRP
— CyclesFan (@CyclesFan) August 6, 2024
Both of Monday’s gaps have been filled. Friday’s haven’t yet . pic.twitter.com/WhOFp61gaN
— Walter Deemer (@WalterDeemer) August 6, 2024
“When in doubt… zoom out”
The $SPX pulled back to the tune of -8% in spring, but thanks to recency bias, humans… well, we forget
So, when you’re living thru a nasty selloff, “slow down” the timeframe of your charts & in this case, notice the $SPX is still above its 10mMA pic.twitter.com/HxdG5oGAgA
— Adam D. Koós, CFP®, CMT, CEPA (@AdamKoos) August 6, 2024
This current move has been a pullback within a larger uptrend… There has been no structural bull market damage done yet… If I am wrong… Let me know! Let’s discuss this! $SPX $SPY #stocks pic.twitter.com/TvAzyG4UyA
— Grant Hawkridge (@granthawkridge) August 6, 2024
The $SPX is working on its FIFTH straight absolute move of at least 1% after LOSING nearly 10% from the July peak.
The last time the index had five consecutive 1% moves was from 1/30-2/3/23…. after an 11% ADVANCE.
Two-way volatility happens in downtrends and also near key… pic.twitter.com/W64ji6aHk1
— Frank Cappelleri (@FrankCappelleri) August 6, 2024
I’m not saying it plays out the same way…but it’s a rough look.
And I just do not like failures. Especially in an asset/sector that has severely underperformed already.
Getting back above $210 is the only way to fix it.
TBD.$IWM $RUT $RTY_F pic.twitter.com/s2i4ciKpiD
— Ian McMillan, CMT (@the_chart_life) August 6, 2024
$QQQ
NASDAQ 100 had a mild recovery today after having touched the 50% Fibo level yesterday and recoup the 200d MAV.
The 412$ level would be a natural support to test over the month of August. pic.twitter.com/Qd33bQOhw1— conradseric, CMT, CAIA, CEFA (@conradseric) August 6, 2024
S&P 500 down at least 1% on a Thursday, Friday, and Monday?
Pretty strong returns across the board. 3 months later higher 90% of the time and up nearly 10% on avg.
A year later up 18 of 21 and up 22.5% on avg.
Huh. Good chance those times felt pretty bad also. pic.twitter.com/srKtgx1vqx
— Ryan Detrick, CMT (@RyanDetrick) August 6, 2024
Looking at what the market does after such a large spike in the $VIX…
2010, 2011, 2015, 2016, 2018 (Feb. & Oct.), 2019 and 2020 saw further downside or double bottoms. Few instances saw an immediate bottom in equities, often experiencing at least a little more downside.$SPX… pic.twitter.com/RJJEsO5HaF— Andrew Thrasher, CMT (@AndrewThrasher) August 6, 2024
Welcome to the blue zone: the top decile VIX readings, often associated strong forward equity returns. Expect more volatility though. pic.twitter.com/Plx5RaQlCm
— Todd Sohn (@Todd_Sohn) August 6, 2024
Since 2000, the VIX has closed above 28.5 just 12% of the time.
But when the VIX has been that high, the S&P 500 has produced an annualized return of greater than 40% (vs an annualized return of less than 1% when the VIX has been below 28.5).
Fade fear. pic.twitter.com/RZW9d4KKzX
— Willie Delwiche, CMT, CFA (@WillieDelwiche) August 6, 2024
Bitcoin-Back in it’s range. pic.twitter.com/RxdLIXwb5b
— Against All Odds Research (@JasonP138) August 6, 2024
Holding range and refusing over- $SOL-d conditions
pic.twitter.com/VS4vUttko3
— Steven Strazza (@sstrazza) August 6, 2024
— StockCats (@RealStockCats) August 6, 2024
You’re all caught up now. Thanks for reading!
The post Daily Chart Report 📈 Tuesday, August 6, 2024 appeared first on The Chart Report.
