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) Looking forward, we’ll have to compare 2021 earnings forecasts with 2019 earnings, not 2020.

4) Bear markets take overvalued stock markets down to undervalued levels. They don’t stop at fairly valued.

5) The technical support/resistance levels on the chip group (a key leadership group) are well defined.

6) Many leveraged investors have “de-levered”, but few highly leveraged companies have done the same.

6a) There’s a different between “forced selling” and “I give up” selling, but they’re both powerful forces.

7) Nice bounce in crude on relief in terms of supply, but the demand side still sssssssssssssssucks.

8) We’re watching some VERY important support/resistance levels on the DXY dollar index.

9) Let’s give the authorities some time to implement their relief programs.

10) Could the European banks cause another financial crisis?

11) Keeping an eye on the credit markets (and CDS prices for investment grade crop bonds).

12) Shanghai & KOSPI indexes could/should be leading indicators for global improvement.

13) I love NY!

14) Summary of our current stance.


Short Version:

1) The bull market of 2009-2020 was fueled much more by central bank stimulus…AND the leveraging up by investors and corporations that went with it…than it was fueled by fundamental growth. Although the Fed will do want ever it takes to give the markets a safety net, they might not (and maybe cannot) push asset prices higher…in the same strong and/or as sustainable fashion that they did when we came out of the last recession. Therefore, we expect a retest/undercut of the March ...

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

BA & XOM.....Wow, these stocks are incredibly oversold.


This morning we highlighted how Boeing (BA) has become very, very oversold. Of course, BA was already facing serious problems before the coronavirus breakout took place, so it’s incredibly tough to try to pick the exact bottom for this stock ...

Read More
Comments

Morning Comment: Will the U.S. Follow Europe?


WHAT AN UNBELIEVABLE DAY YESTERDAY!!!!! Tom Brady decided to leave the Patriots!!!!.......Oh yeah…the stock market rallied 6% too after a large fiscal plan was proposed….BUT TOM BRADY LEFT THE PATRIOTS!!!!!

Of course, SOME people will try to say ...

Read More
Comments

Morning Comment: Panic At Your Own Risk


  • Are “the authorities” causing a panic?
  • The reaction is so much different that it was after 9/11.
  • Despite turning bearish earlier than most, we’re actually not as bearish as a lot of people this morning.
  • Signs of capitulation and ...
Read More
Comments

Exxon (XOM): Incredibly Oversold


A very smart person we know told us he bought XOM yesterday. He did not follow that up by trying to sell us on this fact, so he was not “talking his book.” He simply stated the fact that ...

Read More
Comments

Morning Comment: More Than a 1-Day Bounce This Time?


In our Morning Comment yesterday morning, we highlighted several signs of capitulation that we were observing. We also said that although a near-term bottom might not come immediately (Thursday), we did expect one to begin very, very soon. Well, we ...

Read More
Comments