Morning Comment: A Second Warning Shot Across the Bow


It looks like we missed a very compelling week in the markets last week...as the S&P 500 looked like it was finally going to break out of its seven-week sideways range, but fell back within it by the end of the week. However, it is still quite close to the top-end of that range, so we certainly cannot call it a "failed breakout.".....The weakness in the mega-cap tech stocks that developed as the week progressed...despite some good earnings reports from several of them...was the key catalyst for the pull-back from the highs. Yes, there was more talk about regulation for some of these companies...and we're sure that did have an impact...but that “regulation issue” is not new-news either. Therefore, we strongly believe that the overbought condition that many of these names had reached early last week played a key role in the decline as well. (As we highlighted recently, stocks like AMZN and TSLA had become extremely overbought and thus they had become ripe for a meaningful decline.)

Of course, most pundits will say the decline was only fundamentally based...but they never spent any time working as a trader, so they fully don’t understand what really moves markets. These stocks were ripe for pull-backs...no matter what happened on the fundamental side of things...and the fact that many of them got clobbered despite positive earnings results was a clear indication that this is true.

More importantly, this was the second big decline in successive weeks in these mega-cap names (the FAANGs...plus MSFT, NVDA & TSLA). When the first one took place (on July 13th), we called it a “shot across the bow” for the group (and the stock market). We believe that last week’s action was a second “shot across the bow”...and that investors should take heed. In other ...

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THE WEEKLY TOP 10


I will be on vacation next week, so there will be not “Morning Comments” next week and no “Weekly Top 10” next weekend. Thank you very much.


THE WEEKLY TOP 10


Table of Contents:

1) Liquidity has still been the ...

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Morning Comment: Small-caps Trying to Breakout


Well our call last week that said investors should avoid Chinese stocks on a near-term basis because they had become EXTREMELY overbought has worked out quite well. The Shanghai Index fell 4.5% last night...and has declined 6.7% since we made ...

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Morning Comment: Mega Tech Beginning a Correction?


We saw a decent sized reversal yesterday...as the mega-tech stocks got clobbered after making new highs early in the day. The decline got also go exacerbated late in the day when California announced that that it was basically shutting down ...

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Morning Comment: Amazon is getting VERY overbought

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I love following politics, so I’m one of those crazy people who actually watches political conventions on TV. When I was quite a bit younger, I remember watching Walter Mondale give his acceptance speech as ...

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Morning Comment: Tesla in a Bubble


---Volatility within a sideways range.

---Tesla is in a bubble

---Has the Fed changed the goals of their stimulus injections?



Volatility within a sideways range.

The volume in the stock market has been quite low so far this week...with the ...

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Morning Comment: Happy Birthday America


There’s no question that today is going to be a very “thin” day in the markets, so anything can happen as we move through the day...but there’s no question that the better-than-expected employment report has the stock market rallying strongly ...

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Morning Comment: UPS testing key resistance.

The stock market’s bounce yesterday was certainly a good one...as the S&P 500 retraced 2/3 of its losses from Friday. The move came on very good breadth, but very low volume. The breadth was 8 to 1 positive on the ...

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Morning Comment: Is the bank rally failing once again?


The stock market is beginning to look eerily like it did in early February this year...just before the market rolled-over. Investors are ignoring a big pick-up in the coronavirus cases...and the rally is a very narrow one once again. Thankfully, ...

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Morning Comment: Talking Tough on China Just Became a lot Harder To Do


The stock market rallied nicely yesterday...with the tech laden Nasdaq leading the way once again. The 1.1% rally in the Nasdaq Composite took it back above 10,000 and slightly above its early June highs. We have to point out, however, ...

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Morning Comment: U.S. Open Tennis--Yes; Wimbledon--No. Actually, It Makes Perfect Sense.


Chairman Powell’s comment yesterday that the Fed will “slow their bond buying program as the markets improve” knocked the stock market down mid-morning. On Monday, the Fed’s announcement that they are going to buy individual corporate bonds as part of ...

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THE WEEKLY TOP 10....The Next Few Weeks Are Critical


THE WEEKLY TOP 10: The Next Few Weeks Are Critical.


Table of Contents:

1) We’re going to have to rely solely on stimulus for a further rally in stocks after the big run-up.

2) The problem is that nobody ...

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