Morning Comment: The Stock Markets Reacting the Way it Should


The news that the Trump administration was going to come forward with a fiscal stimulus plan that includes a payroll tax cut (and maybe even some relief for the energy industry) helped the stock market (which had become quite oversold on a very-short-term basis) bounce strongly yesterday. The rally came on strong volume (6.3bn shares on the composite volume) and breadth that was quite positive (17 to 1 positive on the S&P 500 and almost 5 to 1 positive on the NYSE composite index). However, these strong “internals” were not as extreme as we saw in Monday’s big decline, thus it’s going to be hard for the stock market to see some strong upside follow-through today.

Of course, it’s VERY easy to say that the market is not going to see upside follow through…given that the S&P futures are trading over 80 points lower as we write this morning. So we’re not adding anything compelling by saying this, but we just wanted to point out that the “internals” were not as good yesterday…as they were bad…on Monday. Therefore, it’s not a big surprise that the futures are giving back much of yesterday’s gains…..…Sharp bounces are very normal during deep corrections and even bear markets. So we’re probably going to have to see the situations with the two black swans we’re dealing with right now calm down significantly before we see a sustainable rally.

As we all know, more rate cuts from the global central banks and big stimulus packages on the fiscal side are not going to do anything to contain the coronavirus or help oil prices bounce in a substantial way. Therefore, the “sell the rallies” strategy that we’ve been pushing lately remains firmly in place.

Another key reason why the strategy remains in place is a very simple ...

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Morning Comment: It's About the Credit Markets Now.



Well, we just got a true shock to the stock market. As we said over the weekend, stock investors had several weeks to react to the outbreak of the coronavirus. The moves in other asset prices (like gold and especially ...

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Thursday midday Comment: Short-Term Support/Resistance



The S&P 500 Index is trying to hold its 200 DMA (which is just above 3050). To be honest, the 200 DMA didn’t provide much support in last week’s late-week decline…and didn’t provide a lot of resistance on the days ...

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Morning Comment: Credit Spreads Are Still Raising Concerns


  • Nice “Biden rally,” but a short squeeze provided A LOT of fuel as well.
  • Despite the rally in stocks, Treasury yields and gold prices did not respond in-kind.
  • We also did not see much of a tightening of credit spreads ...
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Midday Comment (very quick)


Our call for a sharp short-term bounce has worked-out very well so far. The S&P now stands a full 6% above its intraday lows from Friday! However, when it got up to its 200 DMA today, the S&P stalled-out. Therefore, ...

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Morning Comment: Ripe for a SHORT-TERM Bounce Soon

The futures have been trading all over the place since they opened last evening at 6:00pm. When we went to bed last night, they have been down by more than 1%...then they flipped to the upside overnight and stood in ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) A recession will mean another credit crisis…even if its smaller than the last one.

2) Victory lap! Also, if you read our work regularly, we hope you will support us.

3) We ...

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Morning Comment: Keeping Your Head While Others are Losing Theirs



We definitely saw signs of capitulation yesterday…more than we saw on Tuesday. Not only was breadth similarly horrible (32 to 1 negative on the S&P 500 and 10 to 1 negative on the NYSE Composite Index), but we finally got ...

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(Quick) Midday Comment: Another Leg Higher For Gold???


It’s still early in the trading day, but gold is breaking above its closing highsfrom January 31st in a fairly significant manner. In other words, it could sell-off later in the day and close below its highs of $1,589) ...

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Morning Comment: What if AAPL Breaks Below Support?


AAPL announced last night that they will miss their quarterly revenue target due to the coronavirus…and that “it will be a slower return to normal” as well……..The decline in AAPL is not a disaster…as it is trading only 3% lower. ...

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Morning Comment....Friday Declines...TSLA Still VERY Overbought


  • Will the “Friday decline” begin a day early this week?
  • China finally admits to under-reporting the extent of the coronavirus.
  • The starting point of the coronavirus is MUCH different than SARS & H1N1. (That’s important.)
  • TSLA announces $2bn stock offing…at ...
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Can FedEx (FDX) Finally Breakout?


Whether FDX can break meaningfully above its 200 day moving average or not should be very important for the stock (and UPS as well).


Ten days ago, we highlighted how UPS had become very oversold…and thus had become ripe for ...

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