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“If your only goal is to become rich, you will never achieve it.” – John D. Rockefeller
What goes up must come down. After a rough day for tech and bitcoin yesterday, we’re seeing more of the same again today, as Nasdaq futures are down over 1% and bitcoin, while well off its lows, is still down 10%. There’s not a lot of economic news on the calendar today, but we will get updates on Consumer Confidence and economic activity in the Richmond Fed district at 10 AM. Also at 10, Fed Chair Powell will give his semi-annual monetary report.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, inflation data out of Europe, an update on the latest national and international COVID trends, and much more.
Days like yesterday don’t happen very often. Even as the DJIA was up marginally, the Nasdaq finished down more than 2%. The charts below show both indices going back to the start of 1986. Before yesterday, there was only one other day since 2001 that saw a similar setup and that was last July. In the period from early 1999 through May 2001, there were 33 occurrences, and then before that, the only two other occurrences were right after the 1987 crash. Let’s just say that prior divergences like yesterday didn’t exactly occur during periods of low volatility.
While days like yesterday are rare, the way futures are positioned right now, we could see the same thing happen again today. While Nasdaq futures aren’t down quite 2% yet, they’re still down over 1.5%. Needless to say, back-to-back days where the DJIA was up and the Nasdaq was down 2% are extremely uncommon. The only four other times it has occurred since 1986 were in 2000 (4/10-4/11, 9/5-9/6, 10/2-10/3, and 12/12-12/13).