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Pushing higher... but more GOOD news fuel needed ....


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#1 dTraderB

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Posted 14 November 2020 - 08:36 AM

As posted last week, ATHs were almost sure, we got the shallow pullback and then it roared ahead.  

I partially agree with the analysis below. Bullish, new ATHs, but it requires more GOOD NEWS, on anything - vaccine, politics, stimulus, etc etc 

Market is also somewhat vulnerable when rally has been on NEWS & EXPECTATIONS 

 

 

 

Screen-Shot-2020-11-13-at-10.57.47-PM.pnFree Weekly Analysis: 

It was an eventful week. After five days of counting, Biden was finally declared winner of the election Saturday. Monday morning we got outstanding news one of the vaccine candidates tested 90% effective in preventing Covid infections. And Friday, Covid-19 infections smashed all previous records and topped 150k daily cases for the first time.

Mix all of those gigantic headlines together and the S&P 500 ended the week higher by 2%. Not bad.

The vaccine headline is obviously outstanding news. Biden’s win is good or bad depending on who you were pulling for, but mix those two viewpoints together and it is largely a wash. And 150k daily Covid infections are most definitely dreadful.

From this smorgasbord of hugely bullish and hugely bearish headlines, stocks had free reign to do whatever they wanted. If the market wanted to crash, there were far more than enough excuses to trigger a stampede for the exits. On the other hand, if stocks wanted to explode higher, Monday’s 4% gap higher was more than enough to trigger a wave of breakout buying. And what did we end up with? A modest move higher.

This muted reaction tells us this market is not vulnerable to a collapse lower and it is not ready to explode higher. Sentiment is good enough to keep us near the highs and even drift modestly higher, but that’s about it. If the market was on the verge of a huge move in either direction, it would have happened this week.

As I wrote earlier this week, prices were setting up for a 3,500 to 3,650 trading range and I don’t see anything from week’s price action that changes my mind. It is okay to own this market, but keep a stop near 3,500 support and the adventurous should be ready to short a violation of this level. But as long as the index holds above 3,500 support, things are actually looking pretty good for stocks despite these dreadful Covid headlines.

 



#2 dTraderB

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Posted 14 November 2020 - 08:38 AM

NYSE Breadth made a new high. Common stocks only fell shy. Not concerning yet but something to keep an eye on because same happened in Feb this year and October 2018


#3 dTraderB

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Posted 14 November 2020 - 08:39 AM

Looks like Insiders decided they had had enough. Note: the peaks and troughs rarely line up with the market so don't try to do that. Insider actions are often early.
 


#4 dTraderB

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Posted 14 November 2020 - 08:41 AM

Just as traders go risk-off in bonds, more than 90% of small-cap stocks have shifted into uptrends.


#5 dTraderB

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Posted 14 November 2020 - 08:43 AM

VACCINE OPTIMISM vs VIRUS SURGE

 

Markets may drop on bad VIRUS news but then surge to new ATHs on any good vaccine news --- and MODERNA may deliver next week, maybe on MOnday

 

 
 
OAxLuUGH_bigger.jpg
 
JPMORGAN: Chase card-spending has “fallen notably.. in a variety of retail categories .. There is some sign that recent declines have been largest in states where COVID-19 has been spreading most rapidly .. our tracker is down about 7%-pts over the last two weeks in North Dakota”


#6 dTraderB

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Posted 14 November 2020 - 08:47 AM

Multiple expansion based on lower rate assumptions Peter.
Quote Tweet
 
 
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Pete Petrone
 
@Pete_Petrone
· 17h
@DougKass Dougie. Been meaning to ask. What prompted you to raise your fair value on S&P? Was it multiple expansion or eps revision?
I have shorted $SPY at $357.75 and $QQQ at $290.35. (This brings me to medium sized SPY and QQQ shorts). Enjoy the weekend!

 



#7 dTraderB

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Posted 14 November 2020 - 08:49 AM

McClellanOsc_923.gif

 

 

https://www.mcoscill...t_breadth_data/



#8 dTraderB

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Posted 14 November 2020 - 08:52 AM

https://www.yardeni....ockbullbear.pdf



#9 dTraderB

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Posted 14 November 2020 - 08:55 AM

US investors haven’t been this bullish since early 2018 (right after the US tax cuts). https://thedailyshot.com
 
 


#10 dTraderB

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Posted 14 November 2020 - 08:59 AM

 
 
The good, the bad & the predictable: Consumer spending made an impressive recovery on the back of generous government transfers Recovery is incomplete & phase 2 will be slow & bumpy Rising #COVID19 infections mean + fear & renewed regulation will constrain income & spending
Heather Long
@byHeatherLong
· 18h
This is a worrying chart. Credit card spending is falling again, according to Chase data on ~30 million customers. It is sharply down in Iowa and North Dakota, where virus is surging. Bottom line: Controlling the virus is key to economic recovery