Morning Comment: Happy Birthday America


There’s no question that today is going to be a very “thin” day in the markets, so anything can happen as we move through the day...but there’s no question that the better-than-expected employment report has the stock market rallying strongly once again this morning. The bond market is not seeing the same kind of outsized move...as the yield on the 10yr note still stands at/near 0.7%. That’s a bit higher than it was earlier in the week, but it’s still well below the June highs. Also, gold is a bit lower, but the $3 decline is not material at all. In other words, the Treasury & gold markets are not reacting in a big way...or at least not anywhere near the same level that the stock market is reacting (with its 40 point gain in the S&P futures as we write).

Even though this divergence is very, very similar to what we saw in late January and early February...it does not mean that the stock market is going to roll-over immediately. Of course, the odds that they’ll roll-over to the same degree it did in late February and March are incredibly low...given the stimulus that is being added to the system is huge. However, we do have to realize that the stock market really hasn’t done anything over the last month. So as good as the bounce has been off of the lower-end of that range on the S&P 500, the rally has definitely lost some steam....and the Fed’s balance sheet has stopped growing. (No coincidence there.)

Therefore it is our opinion that the rally will continue to be a very narrow one...which means it will remain a fragile one...and leave it vulnerable to high levels of volatility. That’s a traders dream and an investor’s nightmare, but it’s something ...

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Morning Comment: UPS testing key resistance.

The stock market’s bounce yesterday was certainly a good one...as the S&P 500 retraced 2/3 of its losses from Friday. The move came on very good breadth, but very low volume. The breadth was 8 to 1 positive on the ...

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Morning Comment: Is the bank rally failing once again?


The stock market is beginning to look eerily like it did in early February this year...just before the market rolled-over. Investors are ignoring a big pick-up in the coronavirus cases...and the rally is a very narrow one once again. Thankfully, ...

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Morning Comment: Talking Tough on China Just Became a lot Harder To Do


The stock market rallied nicely yesterday...with the tech laden Nasdaq leading the way once again. The 1.1% rally in the Nasdaq Composite took it back above 10,000 and slightly above its early June highs. We have to point out, however, ...

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Morning Comment: U.S. Open Tennis--Yes; Wimbledon--No. Actually, It Makes Perfect Sense.


Chairman Powell’s comment yesterday that the Fed will “slow their bond buying program as the markets improve” knocked the stock market down mid-morning. On Monday, the Fed’s announcement that they are going to buy individual corporate bonds as part of ...

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THE WEEKLY TOP 10....The Next Few Weeks Are Critical


THE WEEKLY TOP 10: The Next Few Weeks Are Critical.


Table of Contents:

1) We’re going to have to rely solely on stimulus for a further rally in stocks after the big run-up.

2) The problem is that nobody ...

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Morning Comment: The Action of the Next Few Weeks Will be Critical


With the stock market becoming quite overbought on a near-term basis, we have been saying this week that we expected the stock market to begin a pull-back after the Fed meeting/press conference, but we didn’t expect to quite as immediately ...

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Morning Comment: Watching the Aussi Dollar


The rally we saw in the stock market after Friday morning’s employment report was a very good one on several levels. It came on a big jump in volume (over 7bn shares on the composite volume) and very good breadth ...

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Morning Comment: Critical levels...Stay nimble my friends.


About a week ago, we said that the best thing that could happen to the stock market would be it to take a “breather” before it continued much higher. That, we said, would give it a better chance of rallying ...

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Morning Comment: Can European Stocks Be The Big Surprise of This Summer?


We’ve all starting to hear a lot of comparisons between this year and 1968 now that racial tensions and riots have been added to the list of other wild developments for 2020. It sure seems like President Trump is taking ...

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Morning Comment: BAC breaks out....Complacency surrounding China


We’d like to start this morning’s piece with a scenario that would provide the best chance of a strong (further) rally after yesterday’s advance in the S&P 500 above its two key resistance levels (its 3,000 level and its 200 ...

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Morning Comment: A look at the chip stocks....and gold.


A big bounce in the bank stocks created a very strong reversal in the broad stock market yesterday…and helped the S&P 500 rally 3% off of its early morning lows and close more than 1% higher on the day. The ...

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