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 help the stock market rally more than 3%. It also got help from the rebalancing that seems to be going on for those investors who need to keep their equity market weighting up at a specific level.

We would point out, however, that the internals in the market yesterday were not as strong as they were during last week’s strong mid-week rally. The volume was 22% below the March daily average…and breadth was quite disappointing for a day that took the three major averages higher by 3%. It was just 3.5 to 1 positive on the S&P 500 index…and just 1.5 to 1 positive on the NYSE Composite Index!!! The upvolume vs. down-volume was only slightly positive as well. Thererefore, the “internals” of the stock market yesterday were not anywhere near as impressive as they were during the three-day midweek rally last week.

That said, it’s not a big surprise that the internals were not all that good. Given that the uncertainties surrounding the coronavirus are still very large, it’s no surprise that investors are not piling into the market and buying stock hand over fist. Yes, the “internals” were quite good last week, but that came in the immediate after-math of the end of some massive “forced selling.” When the market becomes “washed-out” after “forced selling” ends, the internals are always going to be exceptional in that initial rally. So the fact that they’ve faded a bit this week is not a major problem…at least not yet.

On top of the news from ABT and JNJ ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

Morning Comment: What is the Nasdaq's Recent Action Telling Us?


Political games by Democrats in Congress created yet another substantial decline in the U.S. stock market yesterday as the DJIA and S&P 500 fell about 3%. Don’t get us wrong, we do believe that “emission standards” are very important ...

Read More
Comments

Morning Comment: Can the Markets Actually Rally into Quarter-end?


We are all going through something we have never gone through before, but that doesn’t mean that history does not repeat itself. During financial crisis…when the markets were falling out of bed and on the verge of melting down…Congress played ...

Read More
Comments

BA & XOM.....Wow, these stocks are incredibly oversold.


This morning we highlighted how Boeing (BA) has become very, very oversold. Of course, BA was already facing serious problems before the coronavirus breakout took place, so it’s incredibly tough to try to pick the exact bottom for this stock ...

Read More
Comments

Morning Comment: Will the U.S. Follow Europe?


WHAT AN UNBELIEVABLE DAY YESTERDAY!!!!! Tom Brady decided to leave the Patriots!!!!.......Oh yeah…the stock market rallied 6% too after a large fiscal plan was proposed….BUT TOM BRADY LEFT THE PATRIOTS!!!!!

Of course, SOME people will try to say ...

Read More
Comments

Morning Comment: Panic At Your Own Risk


  • Are “the authorities” causing a panic?
  • The reaction is so much different that it was after 9/11.
  • Despite turning bearish earlier than most, we’re actually not as bearish as a lot of people this morning.
  • Signs of capitulation and ...
Read More
Comments

Exxon (XOM): Incredibly Oversold


A very smart person we know told us he bought XOM yesterday. He did not follow that up by trying to sell us on this fact, so he was not “talking his book.” He simply stated the fact that ...

Read More
Comments

Morning Comment: More Than a 1-Day Bounce This Time?


In our Morning Comment yesterday morning, we highlighted several signs of capitulation that we were observing. We also said that although a near-term bottom might not come immediately (Thursday), we did expect one to begin very, very soon. Well, we ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments