Morning Comment: Sharp short-term are not always fundamentally based.


We think that the action in the gold market yesterday...and the reasons being given for that move this morning...is a classic example of how Wall Street (stupidly) tries to give a fundamental reason for EVERY SINGLE move in the markets...even short-term ones. The fact of the matter is that gold’s sharp decline on Tuesday...it’s biggest one-day drop in seven years...had very little to do with any new fundamental development. As we had been saying for several days, gold had become so extremely overbought (with a RSI chart reading at 90)...and so extremely over-loved (as bullishness among futures trading reaching 93%)...that gold had nowhere to go but down over the near-term.

This morning, we hear/read that some pundits are saying the reason gold fell so hard because we got some positive news about a vaccine for the coronavirus. Really??? The claims out of Russia from Vladimir Putin were ridiculous...and the Moderna deal for 100 mm vaccine doses was not surprising-news (and it only entails a vaccine “candidate”)......We also heard that gold rallied due to the sharp rise in interest rates. Say what??? Long-term interest rates jumped yesterday because inflation data (PPI) came in stronger than expected. Guess what? Higher inflation is POSITIVE for gold, not negative!!!! In other words, the fundamental news for gold yesterday was bullish...and yet gold still got clobbered.

No, we’re not trying to say that the fundamentals don’t matter. They always matter over the longer-term. However, sometimes...when too many investors move to one side of the boat on a given risk asset...that asset has no place to go but in the other direction of its recent trend. THAT’S what happened to gold yesterday.......Of course, the momentum-based algos also played a role, but they played a role on the upside as well!!!!!!! (It’s comical how ...

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Morning Comment: Gold has become ripe for a short-term pull-back.


It was another low-volume/uneventful day yesterday...until about 2:30, when the stock market rallied strongly over the last hour and half. When you combine the 12 point gain in the S&P 500 this morning with the 20 point gain the futures ...

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Morning Comment: Narrow market...does it matter?


We had another nice day in the stock market yesterday as the tech sector continued to lead the way higher. It does not seem to matter that the rally is a very narrow one, but history tells us that it ...

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Morning Comment: Biggest Near-Term Risk? China.

There is no question that there are a lot of developments from around the globe that are fighting for the attention of the public (and investors) in the mainstream media. Whether it be the continuing Covid-19 crisis, the debate over ...

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THE WEEKLY TOP 10....The risk/reward equation has changed significantly



THE WEEKLY TOP 10


Table of Contents:

1) Is all of the good news already priced into the mega-cap techs over the near-term?

2) Some of the obvious froth in the market place is becoming ridiculous.

3) High yield is ...

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Morning Comment: An August Pull-Back Would Actually Be Healthy


It’s the last day of July and it seems like we’re setting up for an exciting August. In other words, those who are looking for the dog days of summer this year are going to be sorely disappointed. On the ...

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Morning Comment: A Second Warning Shot Across the Bow


It looks like we missed a very compelling week in the markets last week...as the S&P 500 looked like it was finally going to break out of its seven-week sideways range, but fell back within it by the end of ...

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THE WEEKLY TOP 10


I will be on vacation next week, so there will be not “Morning Comments” next week and no “Weekly Top 10” next weekend. Thank you very much.


THE WEEKLY TOP 10


Table of Contents:

1) Liquidity has still been the ...

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Morning Comment: Small-caps Trying to Breakout


Well our call last week that said investors should avoid Chinese stocks on a near-term basis because they had become EXTREMELY overbought has worked out quite well. The Shanghai Index fell 4.5% last night...and has declined 6.7% since we made ...

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Morning Comment: Mega Tech Beginning a Correction?


We saw a decent sized reversal yesterday...as the mega-tech stocks got clobbered after making new highs early in the day. The decline got also go exacerbated late in the day when California announced that that it was basically shutting down ...

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Morning Comment: Amazon is getting VERY overbought

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I love following politics, so I’m one of those crazy people who actually watches political conventions on TV. When I was quite a bit younger, I remember watching Walter Mondale give his acceptance speech as ...

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Morning Comment: Tesla in a Bubble


---Volatility within a sideways range.

---Tesla is in a bubble

---Has the Fed changed the goals of their stimulus injections?



Volatility within a sideways range.

The volume in the stock market has been quite low so far this week...with the ...

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