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 bit of a breather anyway. In fact, everybody expected that all of these numbers would be horrible, so we would argue that the drop in WTI crude oil below $20 probably played an important role in the decline as well.

Yesterday’s action had good news and bad news in it. On the positive side of the ledger, volume was very low. At 4.2bn shares on the composite volume, it was the lowest reading we’ve seen since March 4th. However, on the negative side of things, breadth was more extreme yesterday than it was during Tuesday’s gains. For the S&P 500 index, it was 12.6 to 1 negative…and 9.3 to 1 negative for the NYSE composite index. Those readings were 6 to 1 and 2.4 to 1 positive during Tuesday’s decline, so given that Tuesday’s rally was much bigger than Wednesday’s decline, the fact that the breadth numbers were more extreme on Wednesday is another concern.

If there’s one thing for sure, the market has certainly become a stock picker’s market…something we’ve been predicting since late March. Most people are (correctly) talking about the outperformance of the NDX Nasdaq 100 index…as several big cap over-the-counter names like AMZN, NFLX & MFST continue to act VERY well…and all three stand in positive territory for the year (with AMZN & NFLX trading at all-time highs). However, we also have names like WMT and CLX trading in positive territory for the year AND at all time highs as well.

So you can see that it’s not just the big cap ...

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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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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 ...

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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 ...

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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 ...

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