Morning Comment: Phase One Deal Priced-in....AAPL Quite Overbought



In our opinion, both the U.S. and China want and need a “Phase One” trade deal…and thus one will be signed in the not-too-distant future. Not only do both side want and need one, but a significant break-down in the Phase One negotiations would have a devastating effect on both the U.S. & China markets…and hurt both economies…so a deal is definitely probable.

The one problem we have with this scenario is that all investors seem to agree that a Phase One deal is inevitable…and thus have been pricing-in this inevitability already. Let’s face it, any time there has been any new that there were some problems in the negotiations, the stock market has barely blinked. Any dip has barely lasted a few hours, so it seems to us that although a definitive Phase One (signed) deal would be positive, we doubt it will create a further rally of 10% (the way some people think it will).

This does not mean that the broad stock market is going to be hit hard any time soon, but it could/should see a mild pull-back (a "breather"). One development that could provide a partial catalyst for a “breather” would be a pull-back in AAPL. AAPL is becoming very, very overbought on a short-term basis. It's weekly chart is has reached levels on several readings that are similar to the ones that were reached just before short-term pull-backs in the past.

Don't get us wrong, there are fundamental and technical reasons to like AAPL on a long-term basis, but it is getting ripe for a breather on a short-term basis. To see the charts we're talking about...and to get these kinds of insights on a daily basis,please click here to subscribe to my market newsletter, "The ...

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Morning Comment: 3 Industrial Stocks Looking to Make Big Moves


  • The XLI industrial stock ETF has broken key resistance, but it’s getting overbought near-term
  • GE is coming off of a VERY, VERY overbought level and looks ripe for a tradeable decline.
  • FDX is overbought near-term, but has a lot of ...
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Morning Comment: Energy Stocks Poised or a Powerful Breakout


The energy stocks have been lagging the market all year (until very recently)...and they are now poised to breakout in a powerful way if the energy stock ETF (the XLE & XOP) can break above the key resistance levels ...

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Morning Comment...Micron (MU): The Stock Trader's Dream Stock!


  • MU is a stock trader's dream. It's liquid and it's never boring. It either rallies in a meaningful way...or declines in a significant way.
  • We're watching the 50 DMA on MU. Whichever way it "breaks ...
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Morning Comment: 10yr Yield Right Back to Critical Level


China moves the goal posts (again).

There has been another change in the trade negotiations with China...as China is now asking for a scaling back of some existing tariffs as a prerequisite for signing the "Phase One" deal. We ...

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Morning Comment: Is a "Melt-up" Possible? (Answer: Yes.)

China has moved the goal posts on the "Phase One" trade deal...by asking for the U.S. to remove some of their existing tariffs. If President Trump caves-in to these demands, it will only prolong the "Economic Cold War ...

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Morning Comment: Natural Gas Breaking Out???


  • Good day for stocks on Friday, but getting overbought near-term
  • A mild, short-term pull-back would actually be healthy
  • Natural gas is breaking out
  • However, it needs more upside follow-through for confirmation
  • COG is the stock with the best potential in ...
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Can Gold retest its Aug/Sept Highs???


A quick look at the short-term chart on gold.

Gold has risen back above its 50 DMA today…and it has broken above its short-term trend-line (going back to the early September highs). If it can now break above $1,520 ...

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Morning Comment: WATCH THE DOLLAR!!!


  • Powell indicates that rate HIKES are off the table…but who really thought they were ON the table between now and the 2020 election???
  • Over the past 10 months, Chairman Powell has skillfully moved the ball firmly into President Trump’s court ...
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Morning Comment: Several Markets at Critical Junctures


It’s never ceases to astound us how human nature works when it comes to the markets. Back in late August…when the stock market was falling…people were talking about an earnings recession…if not a full blown economic recession. Today (in October ...

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Morning Comment: SEVERAL Markets at Critical Junctures

  • Good day for the stock market, but need more follow-through
  • 10yr Treasury note yield near key resistance (of 1.9%) level
  • Several different markets at critical junctures
  • None of the recent market moves have been compelling...yet
  • When things DO ...
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Morning Comment: Is the Trend for Emerging Markets About to Change?

The action in the broad stock market has been quite benign recently…as the S&P 500 index has traded in a range of less than 1% this week…and a range of less than 1.4% since Monday of last week. We’d ...

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