Morning Comment....Caveat Emptor


It has been a very different kind of year for the stock market and this week has been no different...as the week before Labor Day weekend has not been the normal boring week we usually see in the market place. For the first three days of the week, the market rallied nicely (+2%)...but it gave back much more than that yesterday with a 3.5% decline in the S&P (and -5.2% for the Nasdaq).

The seeds for the decline were sown on Wednesday...when a small number of tech names like TSLA, ZM and APPL got hit hard. When they were unable to bounce-back in the morning yesterday (like they have on other big down-days over the past few months)...and when other mega-cap tech names (including several key chip stocks) rolled-over along with them...the rest of the market fell out of bed.

The situation that we’ve been highlighting in the options market in recent weeks...and the one that has received a lot more attention this week (with the impact of “negative gamma”) played a big role in once again yesterday (but in the opposite direction this time).

To quickly review...there has been an explosion in the buying of call options in the marketplace recently. This has taken place is some of the biggest index ETFs...as well as many of these individual mega-cap tech names. (The fact that many of these stocks/ETFs now have weekly options have made it cheaper for people to play in that market.) When investors buy these options, the brokers (or “dealers”) are usually the main seller. However, their job is to collect the fees involved in these transactions, NOT to take the other side of the trade. Therefore, once they sell those call options, they turn around immediately and buy the underlying stock or ETF (at whatever the ...

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Morning Comment.....Tom Seaver: An


Well, we finally got some good breadth on a strong day in the stock market...as the advancers vs. decliners were 11 to 1 positive on the S&P 500 index yesterday! It was strange that the breadth was only 1.4 to ...

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Morning Comment: Germany's DAX trying to breakout


Back in 1999, every once in a while we would jokingly exclaim, “The stock market will never go down again in our lifetime!” We did said that because it seemed like the stock market would rise every day no matter ...

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Morning Comment: Suckers.....TRAN.....Trump sets the


  • Don’t follow the suckers. In other words, don’t buy the mega-cap tech stocks up at these levels. They’re now ripe for a powerful decline.
  • The Transports have played catch-up quite nicely, but they’re getting overbought on a near-term basis.
  • Love ...
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Morning Comment:


When I was in high school, the only sport that had a very early “pre-season” was football. (Some people called it “double sessions”...we called it “hell week.”) The other sports started before school got going as well, but not as ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) We were wrong about August, but that does not deter our caution about September.

2) Chairman Powell’s comments last week were expected. Kaplan’s comments were quite telling.

3) An extended narrow rally ...

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THE WEEKLY TOP 10

THE WEEKLY TOP 10


Table of Contents:

1) Don’t party likes it’s 1999.

2 & 2a) Narrow rallies are not healthy rallies (so it IS something to worry about).

3) The dollar has much further to bounce.

4) Higher dollar ...

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Morning Comment: Bearish on Commodities, NEAR-TERM


It was a very uneventful day in the stock market yesterday...until late in the afternoon when the market gave back its earlier gains. The catalyst seemed to be comments from the “Fed Minutes” from their last meeting...which said the healthcare ...

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Morning Comment: Pounding the table about a near-term dollar bounce

Balloons, confetti, noisemakers, etc......No, we’re not talking about the Democratic National Convention. We talking about how the S&P 500 finally closed above the February closing highs yesterday...after bumping up against that level for over a week! Of course, there is ...

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Morning Comment: The Dollar Stands at a Key Technical Juncture

There is no question that the stock market continues to act will, but there is also no question that investor enthusiasm is waning as we approach the an all-time high in the S&P 500 Index. This lack of enthusiasm could ...

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THE WEEKLY TOP 10



We think it’s important to remind people from time to time that we always try to highlight issues from both sides of the bull/bear ledger each weekend. Therefore, some of our comments sometimes conflict with one another. However, we always ...

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Morning Comment: Congress won't care until the stock market starts to care.



The S&P did not quite close at an all time high yesterday, but it came about as close as it could without reaching that level on a closing basis...as it missed by only 5 points. In other words, the fact ...

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