Morning Comment: So Many Holes in the Dike


We all know that the big story in the market place yesterday was the crash in WTI crude oil for May delivery. There is no question that there were some key technical issues that were involved, but the move into negative territory (deeply negative territory) had to do with the fact that some traders did not want to take delivery of oil. The simple reason for this is that they had no place to put it. The reason they had no place to put it is that demand has completely fallen off a cliff. In other words, to some degree, the explanation for yesterday’s historic decline was quite complicated…but to another degree, the explanation was relatively simple.

Very simply, the action in the oil market yesterday was an important signal of how much the global economy has shut-down. No, oil should never trade below zero, but the fact that it can (and the fact that Brent crude has fallen significantly this morning) shows just how much demand has collapsed.

However, yesterday’s action in WTI goes well beyond that. It also tells us how many different markets have become incredibly fragile. Actually, the fragility of the global market-place first started to become evident several months before the healthcare crisis began. This took place when the Fed had to come-in with their “not QE” QE program…in order to stabilize the repo market. Since then, we’ve seen an assorted number of markets act in a way that made them seem at least somewhat broken. This was especially true in several credit markets before the Fed came to the rescue (once again) with a variety of programs last month…and it became evident once again yesterday in the oil markets……We just believe that when so many different markets are disrupted in such a meaningful way…so ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...
Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments

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 ...

Read More
Comments