Morning Comment: Suddenly Range-Bound


  • After retracing 50% of its decline, the S&P 500 index has suddenly become range-bound
  • Can Chevron (CVX) finally see a sustainable rally?
  • What does Invesco’s (IVZ) dividend cut tell us about the future?


After retracing 50% of its decline, the S&P 500 index has suddenly become range-bound

The rally in the morning yesterday hit a wall in the noon-time hour after reports that Gilead’s (GILD) drug Remdesivir “flopped” in its first trial hit the news-tape. The company quickly stated that the studies for the coronavirus treatment is still inconclusive…and several analysts stated that the drug still has a 50/50 chance of succeeding…but that was not enough to keep the stock from closing down 4% on the day. It also led the broad market to finish the day unchanged (and 1.65% below its morning highs). The big reversal came on a decent sized jump in volume…as the composite volume was 15% higher than the last nine trading days. (We didn’t go back a full two weeks because using 10 trading days would have included March’s expiration day.)

Since we started the week last week, the S&P 500 has traded in the relatively tight range of 5.8%. This means that the range of the last nine trading days has been smaller than the single-day ranges we saw on several occasions during the stock market crash of February and March! In other words, things have definitely settled down ever since the S&P retraced about 50% of its Q1 losses…and the market seems to be nearing an inflection point. As we’ve said many times, this is exactly where the “first bounce” stalled-out in the bear markets of 2000-03 and 2007-09, so if the market rolls over any time soon, it could/should raise the level of volatility once again. Either way ...

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Morning Comment: More Holes in the Dike (Think Italy)


The S&P 500 has fallen almost 5% over the past two days and the DJIA has lost over 1,200 points, but after a 28% rally in less than a month, these are not the kind of numbers that will ...

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Morning Comment: So Many Holes in the Dike


We all know that the big story in the market place yesterday was the crash in WTI crude oil for May delivery. There is no question that there were some key technical issues that were involved, but the move into ...

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Morning Comment: Narrow Rallies Rarely Last Very Long.


Some very negative news on the economic front got most of the blame for yesterday’s 2% decline in the stock market yesterday, but given that the market had rallied 27% over just three weeks, it was getting ripe for a ...

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Morning Comment: Don't Chase the Rally at These Levels.


The stock market was able to regain about 2/3 of its early morning losses by the close yesterday…as the technology sector was able to rebound nicely during the day (after it declined in the morning on several ratings downgrades ...

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Morning Comment: The Retailers & Housing Stocks Should Be The Important Indicators


After a very disappointing day on Tuesday (when the market dropped over 3% from its intraday highs), the stock market bounced-back quite nicely yesterday. The S&P 500 rallied 3.4% and finished on its highs of the day for the ...

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Morning Comment: The morphing of the coronavirus.


By the time we reached midday yesterday…and the stock market was up 10% from last Friday’s close…it seemed like the bullish talk within the market place had begun to grow. In other words, the number of people who (like us ...

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THE WEEKLY TOP 10


THE WEEKLY TOP 10


Table of Contents:

1) We expect a much more gradual rebound after this recession than the consensus believes.

2) That said, the initial bounce in stocks will be strong…even if it becomes more gradual later.

3 ...

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Morning Comment: The Battle Lines Are Well Defined For The Chip Stocks


  • Nice rally yesterday…on good volume…but mediocre breadth.
  • Can the rally in crude oil help (and offset the employment data) again?
  • In the future, 2021 earnings expectations will need to be compared to 2019, not 2020.
  • The support/resistance levels for ...
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Morning Comment: Liquidation Phases Sometimes Come in Waves


The news that ABT could be coming up with a coronavirus test that gets results in 5 minutes and that JNJ announced a lead vaccine candidate over-shadowed the rising numbers of Covid 19 cases and deaths from over the weekend…to ...

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Morning Comment: Keep one eye on the Russell 2000 index


We continue to make excellent (and profitable) calls on the stock market. After strongly suggesting that investors raise cash in January and early February...and then saying rallies should be sold for several weeks after that, we called for a ...

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Morning Comment: What Happens When "Forced Selling" Subsides?


There is no question that the bounce in the stock market yesterday was a good one…as the “internals” were quite strong. Breadth was a whopping 44 to 1 positive on the S&P 500 index and 13 to 1 positive for ...

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