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 composite volume 25% below the 10 week average. This is not a surprise at all...given that we’re coming out of a long holiday weekend and investors are waiting for the earnings season to begin. This lack of volume does not indicate a boring market, however, as Monday’s strong gain was followed by yesterdays 1% decline...which shows that volatility is still with us. That said, this volatility has been taking place within a range on the S&P 500, DJIA and Russell 2000 indexes. So even though the Nasdaq has rallied 14 out of the past 17 trading days, the broad stock market has been range-bound for over a month.

Speaking of tight trading ranges, the Treasury market has been in one for more than three months now. That’s right, except for 4 brief days in early June, the yield on the U.S. 10yr note has been stuck in a range near its all-time lows...between 0.5% and 0.75%. When you combine this with the rally in gold above $1,800, you can see that investors are hedging their bets in the high flying tech names they own (just like they did in January and February of this year).

Tesla is in a bubble

Speaking of these high flying tech names, there is no question in our minds that Tesla (TSLA) is in a bubble. That does not mean it cannot go higher...and it also does not mean they will not become the kind of innovative company that changes an entire industry in the way Amazon (AMZN) has over the past 25 years. However, ...

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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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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 ...

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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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