Morning Comment: Powell Testimony.....TSLA & Bitcoin at key technical junctures.


We had a widely divergent market yesterday...as some groups rallied strongly as others got hit hard. In other words, the rotation that we’ve seen in the stock market in recent months was on steroids yesterday. Therefore, even though the S&P fell 0.8% on the day, the breadth on the S&P 500 was almost perfectly flat. In fact, there breadth was only 1.7 to 1 negative on the Nasdaq Composite Index...BUT it was almost 5 to 1 negative on the NDX Nasdaq 100 Index. Therefore, we can see that most of the decline in the S&P and Nasdaq was concentrated in the big cap tech names...and thus it was a “narrow” decline in the broad averages.

“Narrow rallies” usually don’t last very long, so “narrow declines” shouldn’t last very long either. The problem is that “narrow rallies” can still last for many weeks, so we don’t want to become too complacent about this action. Let’s face it, the sharp decline in the FAANG stocks in September still caused the S&P to correct 10% back then.......Thankfully, we were very, very, very early with our call to “rotate” towards groups like the bank and energy names (back in September and early October...when the KBE bank ETF was 60% lower and the XOP oil & gas ETF was 80% lower). Therefore we have not had to scramble to play catch-up like many others have had to do in recent weeks.

There has obviously been a lot of focus on the rise in long-term interest rates, but this will be even more in focus today...with Chairman Powell’s semi-annual testimony in front of Congress. There seems to be some concern that he will say something that will disrupt the bond market further today. He has been consistently dovish for many months, so we do not expect ...

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THE WEEKLY TOP 10


I hope you have been enjoying the “Morning Comment” and “The Weekly Top 10”.....We will be ending our extended free trial of the newsletter on March 1st, so if you want to continue to get these unique insights during these ...

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Morning Comment: They're running out of stocks to short.


Uneventful days have been few and far between over the last several months in the stock market (and for the last year for that matter), but we’ve had several of them recently. Yesterday was another one of those days...as the ...

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Morning Comment: Commodities getting ripe for a "breather."


It was definitely a good day for the stock market...as the S&P, Nasdaq and Russell 2000 all closed at record all-time highs. We must say that the “internals” of the market weren’t all that great. The breadth for the S&P ...

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Morning Comment: Amazon (AMZN) is at a key technical juncture


Our call that the short-term rally in silver would not last very long at all...and our call that the heavily “squeezed” stocks that had rallied so strongly recently...were very vulnerable to a big decline...worked-out quite well yesterday. Silver basically gave-back ...

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Morning Comment: Is the "short silver" story part of a "pump & dump" scheme?


We must admit, we just don’t see the big short position in the silver market. Maybe it’s out there...and we just can’t see it. However, when we look at the Commitment of Traders (COT) data, it shows that the net ...

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THE WEEKLY TOP 10


Just a reminder, we are only putting out one “version” each weekend now. The first paragraph will be in bold letters and will serve as the old “Short Version” of the piece (usually a condensed review of the “Long Version.”) ...

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Morning Comment: Wall Street still doesn't "get it" when it comes to the GameStop phenomenon



As we moved through the day yesterday, we couldn’t help asking ourselves whether Melvin Capital...the hedge fund that received a $3bn bailout this week...will end up being like the Bear Sterns hedge funds of 2007? Long before Bear Sterns (the ...

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Morning Comment: Be prepared IN ADVANCE...the signs are all over the place!


There are a lot of things going on today, so we have many candidates for a catalyst for a big move in the stock market over the rest of this week. The futures are trading significantly lower in pre-market trading, ...

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Morning Comment: The REAL Reason Why GameStop's Action Should be a Concern



Everybody has been talking about GameStop (GME) in recent days...which makes total sense given that the stock had rallied over 3,000% from its August level...and it has done this even though its prospects are worse than anything Judge Smells would ...

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Morning Comment: Bitcoin should be a good indicator for the stock market near-term.



The funny thing about Bitcoin right now is that people either want to read or hear everything they can about the asset...or they’re sick and tired of everybody talking about it. (The latter group tends to be the ones who ...

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Morning Comment: Charts on NFLX, GS, and UPS.


As expected, the market reacted well to Janet Yellen’s confirmation testimony yesterday...and the ensuing bounce led to a 50% retracement of last week’s losses in just one day. The rally came on pretty mediocre “internals”...as the volume was nothing special ...

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