Morning Comment: The Action of the Next Few Weeks Will be Critical


With the stock market becoming quite overbought on a near-term basis, we have been saying this week that we expected the stock market to begin a pull-back after the Fed meeting/press conference, but we didn’t expect to quite as immediately as it seems to be taking place this morning. In other words, even though Chairman Powell’s cautious comments about the bounce-back in economic growth...and concerns over a second wave of the coronavirus...are getting the blame for the 2.5% drop in the S&P futures since the press conference yesterday, the market was going to pull-back soon one way or the other.

Don’t get us wrong, we’re not trying to say that these issues are not having an impact this morning. We’re just saying that some other issues would have gotten the blame if the above-mentioned issues had not developed. In fact, the fact that there ARE some new legitimate concerns...is one of the reasons the decline is coming even quicker and more severely than we had been thinking. Therefore, these new issues are good reasons to think that it is very likely that any pull-back right now will last more than just one or two days.

Of course, ever since the market bottomed in March, we’ve had quite a few mornings where the futures were looking a lot lower...and the market was able to close well above its opening levels. In the worst case scenario, it closed at/near its opening level. This is much different than we saw in February and March...when the futures would indicate a steep decline in pre-market trading AND the market would continue lower after it opened. However, this morning’s decline is a bigger one than we’ve seen the majority of the time over the past three months, so we’ll have to see if the market can ...

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Morning Comment: Watching the Aussi Dollar


The rally we saw in the stock market after Friday morning’s employment report was a very good one on several levels. It came on a big jump in volume (over 7bn shares on the composite volume) and very good breadth ...

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Morning Comment: Critical levels...Stay nimble my friends.


About a week ago, we said that the best thing that could happen to the stock market would be it to take a “breather” before it continued much higher. That, we said, would give it a better chance of rallying ...

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Morning Comment: Can European Stocks Be The Big Surprise of This Summer?


We’ve all starting to hear a lot of comparisons between this year and 1968 now that racial tensions and riots have been added to the list of other wild developments for 2020. It sure seems like President Trump is taking ...

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Morning Comment: BAC breaks out....Complacency surrounding China


We’d like to start this morning’s piece with a scenario that would provide the best chance of a strong (further) rally after yesterday’s advance in the S&P 500 above its two key resistance levels (its 3,000 level and its 200 ...

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Morning Comment: A look at the chip stocks....and gold.


A big bounce in the bank stocks created a very strong reversal in the broad stock market yesterday…and helped the S&P 500 rally 3% off of its early morning lows and close more than 1% higher on the day. The ...

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Morning Comment: Very Simply, Follow the (Smart) Money


Well, we can add another billionaire investor to the list of those who believe the stock market is going to see another decline. Stan Druckenmiller says the risk/reward for equities is the worst he’s seen in his career. To repeat, ...

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Morning Comment: Can the Fed Solve the Economic Problems With Liquidity This Time?


The golf courses here in the People’s Republic of Massachusetts finally re-opened this past weekend. It was funny. For the first time in history, husbands played golf with their friends on Mother’s Day. Previously, in order to preserve domestic tranquility, ...

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Morning Comment.....BABA: A leading indicator for future global growth?


The markets seem to come to a stand still yesterday…as the volume was even lower than Friday’s and the average volume of the past two days has been more than 25% below it two month average. The fact that the ...

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Morning Comment: Follow the (smart) money


The stock market got rocked pretty hard on Friday after several key companies reported earnings and tensions between the U.S. and China began to rise again. The 2.8% decline in the S&P 500 came on horrible breadth (17 to 1 ...

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Morning Comment: Beware of the "Rising Bearish Wedge"


The stock market saw a pull-back yesterday…which was not a big surprise given how much it had rallied over the previous five week…and how much it had shot-up on Wednesday. In other words, the market was getting extended on both ...

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QQQ's....An


After the close yesterday we highlighted how Amazon had seen an “outside-down” day….and that this kind of development is frequently a signal of exhaustion of a rally…especially when it comes after a strong/sharp rally. AMZN did fall another 2.6% today…and ...

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