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- The S&P 500® careened lower by 2.45%; it was its worst day of the month and there were 7 stocks that fell for each stock that rose
- The Russell 2000 suffered its worst sell-off since June (-3.69%) and the NASDAQ composite had its worst sell-off since October (-3.52%)
- The Dow Jones was the relative winner, despite being down 1.75%; it actually ended with a bullish intermediate confirmation signal
- The other three major indices now have bearish intermediate postures (the NASDAQ Composite’s would be considered strongly bearish)
- The NASDAQ Composite and S&P 500 both have “3 Red Arrows” signals now that they’ve fallen below their 30 day simple moving averages
- Money has been fleeing some of the riskier assets in recent days and we saw a huge drop in the Momentum factor from 2nd best to 2nd worst on the Factor Selector
- Surging interest rates were one of the day’s biggest stories; the 10 year Treasury Yield (1.52%) closed higher than the dividend yield of the S&P 500 (1.49%)
- Naturally, bond prices fell strongly with rising yields; a noteworthy change is that even the recently-resilient junk bonds suffered in today’s carnage
- The U.S. Dollar benefitted from the day’s chaos, and may have pushed commodities like gold and oil a bit lower
- Foreign stocks suffered as well and the emerging markets are now trading below a falling 30 day moving average for the first time since October
- Bitcoin was perceived as a risky asset and sold off 5% today; preferred stocks hit their lowest level in over 3 months
- All sectors finished lower today; Utilities suffered the least (-0.90%) but actually finished with an oversold cluster signal
- The worst sectors were those that feature large-cap growth names: Discretionary was down 3.72% and Technology was down 3.50% (both have bearish postures)
- Our trade application example featured selling a put on Pfizer Inc. (PFE) in the hopes of being able to purchase its shares at $31, where it would have an attractive dividend yield; this was an interesting case where the stock was up today but so were its put contract prices
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02/25/21 - Watch today's #MarketOutlook from @Market_Scholarshttps://t.co/v2CnNQBER5
— 𝐁𝐫𝐚𝐧𝐝𝐨𝐧 𝐕𝐚𝐧 𝐙𝐞𝐞 (@BrandonVanZee) February 26, 2021
Mentioned $SPY $DIA $QQQ $SPX $RUT $IWM $USO $TNX $TLT $EFA #Bitcoin $XLE $XLY $XLK $XLU $PBCT $MTUM $TSLA $HYG $BNDX $GLD $XLE $EEM $UUP $TSLA $AAPL $NVDA $MSFT $FB $AMZN $ED $CME $TWTR $PFE
