Anybody taking advantage of Coronavirus?

[FireFoley]

XOM, RTX, and PFE are out of the Dow Jones 30 and SalesForce, Amgen and Honeywell are it. It is a meaningless average of 30 stocks. When some do not perform they toss them and add things they want.

History sometimes favors the stocks that get moved out. The one I have my eye on is PFE.

 

[Detroitgator]

XOM, RTX, and PFE are out of the Dow Jones 30 and SalesForce, Amgen and Honeywell are it. It is a meaningless average of 30 stocks. When some do not perform they toss them and add things they want.

History sometimes favors the stocks that get moved out. The one I have my eye on is PFE.

That's a big part of why I use not just the SP500 for analysis, but just as importantly, the EQUAL WEIGHTED SP500 index, ticker RSP.

 

[FireFoley]

That's a big part of why I use not just the SP500 for analysis, but just as importantly, the EQUAL WEIGHTED SP500 index, ticker RSP.

Exactly.

 

[Detroitgator]

Quick Update:

1. 10 yr is SURGING over last few days.
2. Dollar is plummeting this morning.

Both are VERY market positive... we could really see a surge in the next few days.

 

[Gator By Marriage]

Quick Update:

1. 10 yr is SURGING over last few days.
2. Dollar is plummeting this morning.

Both are VERY market positive... we could really see a surge in the next few days.

Still think the top of the wave is 3500?

 

[Detroitgator]

Still think the top of the wave is 3500?

Update to follow shortly... i'm swamped with real work, but i need to do the analysis myself for selfish, arrogant cv nt purposes!

 

[FireFoley]

Quick Update:

1. 10 yr is SURGING over last few days.
2. Dollar is plummeting this morning.

Both are VERY market positive... we could really see a surge in the next few days.

I agree but only to a certain extent. If the 10 yr. goes up too quickly, that will be a detriment to small caps (which BTW can't find any legs and to the highest multiple/growth companies especially at these valuations, but I think closer to 1%.) The lower dollar helps but if it slides as low as some feel, then it will become quite inflationary. I just began to reenter some positions recently that I think will benefit if that whiff of inflation starts to smell. Will be interesting to see if Powell tries to get that pot stirring with his speech on Thursday morning and I want to have some skin in the game if he does open that door.

 

[Detroitgator]

Update:

Again, using SP500 as benchmark...

• 10 yr is surging stronger. Bullish.
• Dollar falling. Bullish.
• Dow Transports surging strong. Bullish.
• Market is technically overbought, but "big Mo" is clearly bullish.
• We are now above my "Rule of 7's" 3rd (and final) Target Projection of 3453.
• Definitely could, even expect, to see 3475-3500 this week or next.... this is where we see everyone start to poor into the market for fear of missing out (FOMO), and I suspect that's what's driving this and Fed buying unlimited debt, and that's the part that has me nervous. Fed can keep driving this up for now, period.
• I would be very cautious about adding or getting in right now, but I wouldn't be selling yet either (other than to take some profits if you wanted).
• Support is now 3425. As long as we stay above that, bulls still in charge.

Other thoughts:

• I mentioned the 1971 bull market rally for comparison, which means this rally could have a lot more leg up before it reverses.
• Even if we get a pullback to the 21 and 34 EMA, we may rally again to 3500+ before we get the Wave 2 major correction.
• To know we have the Wave 2 drop, we'd have to break below 3200 at this point on the way down to 2970 or lower.
• The timeline for this would likely be from now through September.

Bottom line: I'll keep riding this up for now, will not likely add other than by exception after a pullback.

 

[Detroitgator]

I agree but only to a certain extent. If the 10 yr. goes up too quickly, that will be a detriment to small caps (which BTW can't find any legs and to the highest multiple/growth companies especially at these valuations, but I think closer to 1%.) The lower dollar helps but if it slides as low as some feel, then it will become quite inflationary. I just began to reenter some positions recently that I think will benefit if that whiff of inflation starts to smell. Will be interesting to see if Powell tries to get that pot stirring with his speech on Thursday morning and I want to have some skin in the game if he does open that door.

The Fed gives a negative fuk about small caps, so I'm not playing with them. ;) Dumped my R2000 ETF (UWM) about 10 days ago and took the profit because it had nothing but lower tops over and over.

 

[Detroitgator]

Still think the top of the wave is 3500?

Update posted

 

[Gator By Marriage]

Update posted

Thanks. Interesting times in the market right now.

 

[FireFoley]

Update:

Again, using SP500 as benchmark...

• 10 yr is surging stronger. Bullish.
• Dollar falling. Bullish.
• Dow Transports surging strong. Bullish.
• Market is technically overbought, but "big Mo" is clearly bullish.
• We are now above my "Rule of 7's" 3rd (and final) Target Projection of 3453.
• Definitely could, even expect, to see 3475-3500 this week or next.... this is where we see everyone start to poor into the market for fear of missing out (FOMO), and I suspect that's what's driving this and Fed buying unlimited debt, and that's the part that has me nervous. Fed can keep driving this up for now, period.
• I would be very cautious about adding or getting in right now, but I wouldn't be selling yet either (other than to take some profits if you wanted).
• Support is now 3425. As long as we stay above that, bulls still in charge.

Other thoughts:

• I mentioned the 1971 bull market rally for comparison, which means this rally could have a lot more leg up before it reverses.
• Even if we get a pullback to the 21 and 34 EMA, we may rally again to 3500+ before we get the Wave 2 major correction.
• To know we have the Wave 2 drop, we'd have to break below 3200 at this point on the way down to 2970 or lower.
• The timeline for this would likely be from now through September.

Bottom line: I'll keep riding this up for now, will not likely add other than by exception after a pullback.

Good stuff. I have really been thinking about what Powell may/may not say about inflation tomorrow. (just for fun I am going to say Powell intimates no hikes for at least 5 years or until inflation hits 4%, LOL. That would be something) Very strong demand for the 5 year in today's auction, which would probably be the longest duration that might not be affected if the FED can find some inflation. The funny thing is that when the 10 yr went from 62 to 72 basis points, the banks barely moved and I think that was for one day. They have become uninvestable and I doubt I will get any bang at all even if the yield curve steepens tremendously. Reason: They are making no loans outside of those that the Treasury is funneling thru them.

Outside of my economic mind which has nothing to do with the stock market and I am hoping for one more last FOMO by the amateurs, the FLAVOR of the past 3 months has been SPAC (Special Purpose Acquisition Co). Had to know it for multiple exams but seldom encounter it in the real world. Well that is all I have heard for months now. Beginning to smell like when all you had to do was attach a DOT COM to something and immediately you had a stock that was exploding.

 

[FireFoley]

The Fed gives a negative fuk about small caps, so I'm not playing with them. ;) Dumped my R2000 ETF (UWM) about 10 days ago and took the profit because it had nothing but lower tops over and over.

Good move I think. It can't even get into the green today (what else is new) and even the VIX is green LOL Sure it is well off it's bottom but compared to many other of the charts since the March bottom that chart looks like complete dog penus

 

[Detroitgator]

Good move I think. It can't even get into the green today (what else is new) and even the VIX is green LOL Sure it is well off it's bottom but compared to many other of the charts since the March bottom that chart looks like complete dog penus

Mannnnnn... why are you still trying to fight the obvious? Trade what they are giving us as a gift, not what you think is right. My only position in the red today was JPM (fuk that guy!). Smallest gainer today was UCO (oil) at 0.18%, biggest was NFLX at 11.61% (DIS calls that I bought around lunchtime were up 15% by close, but I don't count that in the "trade what they are giving us" category).

 

[FireFoley]

Mannnnnn... why are you still trying to fight the obvious? Trade what they are giving us as a gift, not what you think is right. My only position in the red today was JPM (fuk that guy!). Smallest gainer today was UCO (oil) at 0.18%, biggest was NFLX at 11.61% (DIS calls that I bought around lunchtime were up 15% by close, but I don't count that in the "trade what they are giving us" category).

I know I know. I just like being first. yeah I have JPM. up in it but relative to overall it sucks ballz like all the banks.

Seeing today's A/D line just keeps me shaking my head. But you are correct. 10 stocks is enough to make it happen. Good work and keep the train rolling. I will pick up the amateur's pieces before heading out to my deserted island, LOL

 

[Detroitgator]

Update: Sorry this one is messy and not organized sequentially... i'm slapping stuff down as I do it.

• Hit our 3453 target, but big Mo can take us higher, like 3500+. Still in the Wave 5 up.
• 3500 is a major level of upward resistance, both technically and psychologically.
• SP500 is overbought on the RSI.
• Rule of 7's Target 3 is 3612, but we don't know yet if that means we hit that in this Wave 5, or not until after a pull back.
• I still expect the Wave 2 drop, but I ain't no top guesser! Conditions are increasing for a pullback, whether small to the 21 and 34 EMAs before another push higher, or a deeper correction (Wave 2) before Wave 3 runup. Still would need SP500 to close below 3200 to indicate big Wave 2 down... there is a lot of cushion for a smaller correction and more run up.
• Comparison to 1971 market is still the most correlated, not 2009. There were a ton of "overbought" signals on the RSI then too and it kept going up, until we finally got a "bearish divergence" on the RSI, and we don't have that yet today, so indications are more up for now.
• Putt/Call ratio is below 0.70 which is a strong "over bullish" sign. This means people are buying tons of Calls (I'm one of them) which means they are betting on "up" for the market. It's a contrarian indicator when this ratio is this bullish.
• R2000 is looking weak and chopping sideways, but still in bottom half of its 2 SD up channel. R2000 is a typically a leading indicator for other markets. Watching for 1537 to hold as support.
• RSP (equal weighted SP500) is also chopping sideways with no up. RSP need to hold above 109.
• SP500 mini-futures also chopping sideways, but with a "bullish flag".
• Dollar - is still down near its major support, which would indicate that it "should" bounce up and revert to its mean, but until it breaks above 93.70, it still dead for now. Trend is still down/bearish (stock market positive).
• Bottom line right now: things are still bullish, but all leading indicators are not showing "up" anymore like they have been in the past few months. Really have to see what happens when we start hitting 3500... do we "take it out" and go higher, or do we break down...
• 3418 is now support. Close below that would indicate at least a small correction.
• Still advise caution in terms of adding any positions. We could blow through 3553 and go higher, but probability is that we hit 3500 area, then pullback towards 3450-60.

 

[Concrete Helmet]

Tech is twitchy today...market numbers look good right now but I'm taking on a little water....damned 10yr needs to get back in it's rightful place...

 

[Detroitgator]

SP500 just barely breached 3500 for a blip... 3500.66 we'll see what happens

 

[Detroitgator]

bumping along just under 3500 and 10yr jumped today

 

[FireFoley]

bumping along just under 3500 and 10yr jumped today

Well well well what I thought would take 3-6 months sort of happened today. After listening to Powell blather on about nothing, the knee jerk reaction was driving the 10yr, down to 64 basis points. Then I guess the smart people entered the room and started thinking like me and @Detroitgator have mused about and said oh shyt, this is not as sweet as it looks and drove the 10yr up to around 75 basis points. Okay not that high a rate, but a large % move. Will it reverse? time will tell.

But here is what the FED said without saying it. We are not raising the overnight rate in the next 10+ years we don;t give a shyt if inflation goes to 10%. We have no idea how to measure inflation b/c we don;t see any. Well that is b/c you don;t take into account rising stock prices, rising bond prices, rising metals prices, rising house prices (okay they use something called owner's equivalent rent). There is plenty of inflation, just not a lot that goes into the CPI (which the elecronic prices help keep that down and oil is dead.). They admitted to having no idea what full employment is and why when it was sub 4% wages went no where. That is b/c it was closer to 10% you imbecil's and now that you think it is 10% it is actually 20%. You have 28 million getting unemployment help and another 40 or so Million out of the labor force but able to work, but they don;t get counted.

So now what. The treasury is auctioning record amounts of debt, so the shorter maturities will probably be well bid b/c short rates are going no where. But if any "inflation" does rear its head, then the longer rates will go up b/c their is no way short rates will move b/c the FED has said so. So if that happens it causes borrowing costs for companies to go up b/c of more rate competition. So all of sudden these companies that do not make any money and actually lose hundreds of millions of dollars a year look a little less attractive. I still do not know what the timetable is for this action and I do not think it is today, but if the 10, 20 and 30 rates do continue to rise it will be quite interesting how the market views it.

As an aside, not anything too technical but I think the most recent high settlement in the 10yr has been about 72 basis points. so a settle above that could be something just to keep a short term eye on.