Welcome Stockaholics to the trading week of April 13th! This past week saw the following moves in the S&P: Major Indices End of Week: Major Futures Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Tuesday Earnings: Johnson & Johnson, JPMorgan Chase, Wells Fargo, Fastenal, First Republic Bank, Infosys, JB Hunt 6:00 a.m. NFIB 8:30 a.m. Import prices Wednesday Earnings: Bank of America, Citigroup, Goldman Sachs, Charles Schwab, PNC Financial, U.S. Bancorp, UnitedHealth, Bed Bath & Beyond, Wipro 8:30 a.m. Retail sales 8:30 a.m. Empire State manufacturing 9:15 a.m. Industrial production 10:00 a.m. Business inventories 10:00 a.m. NAHB survey 2:00 p.m. Beige book 4:00 p.m. TIC data Thursday Earnings: Abbott Labs, BlackRock, Bank of NY Mellon, KeyCorp, Rite Aid, Intuitive Surgical 8:30 a.m. Initial claims 8:30 a.m. Housing starts 8:30 a.m. Philadelphia Fed survey 8:30 a.m. Business leaders survey Friday Earnings: Citizens Financial, Kansas City Southern, Regions Financial, Schlumberger, State Street
Gold Soars Along With Everything Else As Fed Ends Capital Markets As We Know Them As we noted earlier, The Fed's actions this morning mean "free markets are dead." Guggenheim's Scott Minerd summed up exactly what The Fed has done with its actions today: "The Fed has made it clear that it will not tolerate prudent and responsible investing." The Fed just went full Leeroy Jenkins... Something is brewing... And the spot-futures markets are decoupling as physical (geographic) shortages rear their ugly heads again... Source: Bloomberg As Bloomberg notes, the internal mechanics of the gold market are again showing strains under this rally. Gold futures are trading more than $50 above the spot price in London. Until recently, that was unheard of in a metal that’s so utterly fungible, so easy to transport and where trade channels are so deeply established. But with planes grounded and refining capacity severely restricted, don’t expect the arbitrage to break down immediately. Bloomberg's Garfield Reynolds was quick to note, the global business environment is being transformed - we are all socialists now. This is about more than just the failure of earnings estimates to keep up with the virus impact - investors need to disregard projections that an end to the crisis will restore the pre-outbreak status quo. Decades of pushing government out of business are being reversed in mere weeks, with policy makers telling companies where, how and if they should operate - whether they can pay dividends, buy back stock or fire employees. In other words, governments are almost fully taking over free markets, with the profit principle dethroned as the key business driver. This changes the rules of the game for investors. Indeed, as Bob Rodriguez details ominously, With the events of the past three weeks, the perversion and conversion to a dystopian capital market and economic system is virtually complete. As for me, with the Fed's announcement of unlimited QE and its “will buy or support almost anything,” along with the pending passage of a $2-2.5 trillion stimulus package, this is the end of the capital markets as we have known them. We have now entered unlimited QE and MMT where there is no escape. It is the Roach Motel all over again. In Chairman Bernanke‘s 2010 Washington Post op-ed, he argued that QE would lead to a virtuous economic cycle; therefore, the Fed would eventually be able to exit from its QE operations. I argued that once initiated, a reversal would be impossible. It would be like the Roach Motel, “You can check in, but you cannot check out.” With the initiation of the Fed’s complete takeover and control of the US financial economy, there is now absolutely no accurate pricing discovery in the capital markets and we have entered a period of total manipulation. In light of this, the only markets I have an interest in are those where the heavy hand of government is not involved or only minimally involved. This leads me to rare commodities and collectibles. The public equity and debt markets are now nothing more than greater fool markets that are led by the greatest fools of all, the Fed and the Congress. US capital markets, RIP! This is no small matter! When everything is essentially socialized as to risk, a return vs risk evaluation is essentially meaningless since the risk side of the equation has been truncated. Over a period of time which I cannot estimate yet, I will continue my preparation for a far different economic and financial environment. Capital deployment strategies will likely have to change from what has been the norm in the post WW2 environment. We are in a New World Order. So let's survey the damage from The Fed's "there's no limit to what we can do" words and actions this morning... and that is perhaps why USA's sovereign credit risk is beginning to show some cracks... Source: Bloomberg First things first, the market knows best as to when and how the virus peaks... Source: Bloomberg Because the market did a great job of understanding the virus when it first broke out... Source: Bloomberg Stocks loved The Fed's actions but as futures show, the effect of yet another $2.3 trillion in promises wore off fast... Small Caps were best on the day as Nasdaq lagged... This (admittedly shortened) week was among the market's all-time best week's ever...Small Caps were up a stunning 17%-plus and The Dow gained over 12.63% - the second best week since 1938 (+12.845% 2 weeks ago, +12.59% Oct 1974, +14.15% Jun 1938) This was the biggest short-squeeze week ever... The Dow tagged a 50% retracement, then fell... The Dow is up 30% from its lows... The other big story of the day was OPEC's utter failure - after spreading rumors of a possible 20mm production cut... they managed less than half of that for just two months... ...and WTI went from +12% to -8% on the day... The Dollar traded lower today... Source: Bloomberg As The Fed's actions may have alleviated short-term dollar liquidity stress... Source: Bloomberg Treasury yields were lower today (even with stocks bid), but the curve continued to steepen with the short-end outperforming... Source: Bloomberg 10Y remains rangebound... Source: Bloomberg The Fed's "we'll buy any and all of your crap" policy sent HY credit markets soaring with HYG having its best day ever... Notably, HY "caught down" to VIX today again... Source: Bloomberg Crytpos were flat to modestly lower today, holding the week's gains... Source: Bloomberg Source: Bloomberg This week's ugliness in crude and strength in silver has left the Oi/Silver ratio at a record low... well below the apparent 'floor' of 1.5 ounces of silver per barrel that has been in place for 35 years... Source: Bloomberg Kyle Bass once said, "Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!" Source: Bloomberg It seems that insurance is starting to pay off. So stocks have two of their best weeks ever... and the US economic data suffers its worst monthly crash ever... Source: Bloomberg The reason stocks rallied... Fun-durr-mentals? Nope! Source: Bloomberg Simple! - The Fed injected $440BN in last week, total is now $6.3 trillion And stocks are now more expensive than they were at the peak in price... Finally as Mercutio McG (@JAMcGinley), noted so poignantly, "if the market gets back to ATHs while we are shutdown, it only proves the bears right. That the whole thing was a giant Fed fueled ponzi."
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
Big Annual Declines Are Rare Stocks have rallied nicely off the March 23 lows on the back of a bold policy response from the Federal Reserve (Fed) and lawmakers in Washington, DC, which was followed by signs that a peak in growth of COVID-19 cases may come soon. At Wednesday’s close, the S&P 500 Index stood 19% above the March 23 closing low but down 17.7% for the year. That begs the question whether a positive year is possible with a pretty big hole still left to dig out of. “A positive year for the S&P 500 is still possible but will require a steady recovery in economic growth and corporate profits in the second half of the year,” noted Jeffrey Buchbinder, LPL Financial Equity Strategist. “We remain hopeful that COVID-19 can be contained over the next month or two and enable the US economy to begin to open up early this summer, but it’s just too early to tell.” As we see in the LPL Chart of the Day, big down years are rare. In fact, since 1950, the S&P 500 has fallen more than 15% just four times (1973-74, 2002, 2008). All indexes are unmanaged and cannot be invested into directly. Past performance is no guarantee of future results. So might 2020 look like 2009, a big up year for stocks as the worst of the financial crisis passed and markets looked ahead to recovery? That year the S&P 500 was down 25% year to date before rallying to end the year higher. Or is this another 1973-74, or even 2000-2002, with stocks in the doldrums for an extended period? Given the possibility that the bear market catalyst might be removed over the next couple of months, we expect the bear market recovery to be relatively swift by historical standards—potentially faster than the 20-month average and hopefully closer to the non-recession bear market recovery average of 10 months. The key to a possible rebound, beyond timely containment of COVID-19, will be investor confidence in recovery. The bold policy response, part of our Road to Recovery playbook, is helping bridge many businesses to the other side of the crisis. We think chances are good that 2020 ends up being closer to the middle of the accompanying chart rather than the far left. During these uncertain times, it’s important for investors to keep in mind that markets are forward looking. The latest bounce off of the late-March lows provided evidence that market participants are doing just that. We don’t know if a durable stock market low is in just yet, and volatility may pick up again as more bad economic news and corporate stress is revealed. Our resolve is being tested, we but we remain optimistic about prospects for a strong recovery in the second half of the year. Good Friday Trading: Strength Before Weakness After Tradition can provide some solace in these historic and trying times. So as the Hirsch household grates fresh horseradish root among other family traditions to prepare for our first tele-Seder on Zoom for the first night of Passover tonight I like to wish everyone a sweet Passover and a happy, healthy and safe Easter. In keeping with our traditional seasonality posts, here is the update on the trading patterns around the Good Friday NYSE Holiday. I took the picture above of the mosaic on the interior of the dome of the Church of the Holy Sepulchre in Old City of Jerusalem in August 2018 on our family trip for my oldest son’s bar mitzvah. It seemed apropos for today. Good Friday is the one NYSE holiday with a clear positive bias before and negativity the day after. DJIA, S&P 500, NASDAQ and Russell 2000 all have solid average gains on the day before but are all net losers on the day after Easter since 1980. NASDAQ has been notably strong, up 18 of the last 19 days before Good Friday with the one loss occurring in 2017. The day after Easter has the worst post-holiday record though average losses are steeper after Presidents’ Day. The S&P 500 was down 16 of 20 years from 1984-2003 on the day after Easter but is has been up eleven of the last sixteen years. Gold Up, Dollar Down Thu, Apr 9, 2020 For a majority of the past year the US dollar has been fairly range bound, but the massive move away from risk assets more recently led to major buying for what is globally considered a safe haven currency. From its 52 week low and high on March 9th and March 20th, respectively, the dollar index rose 8.28%. But since that peak just before the equity market's bottom, the dollar index has come back down; currently ~3.25% below that high. With the dollar lower, another safe haven that tends to trade inversely has benefited: gold. Since late February, the yellow metal had struggled to break out to new highs, but this week it has finally broken out. Currently, gold is at its highest level since late 2012. All or Nothing Days on the Rise Wed, Apr 8, 2020 We consider an 'all or nothing day' to be a day where the net daily breadth reading (daily advancing stocks minus declining stocks) for the S&P 500 is above +400 or below -400. While these types of days were practically non-existent in the 1990s, beginning in the early 2000s, their frequency started to rise with the increased popularity of trading in the S&P 500 ETF (SPY). Whereas investors used to buy and sell individual stocks, the increased popularity of SPY moved the market more towards the type of environment where investors were buying and selling the market. All or nothing days also increase in frequency during periods of increased market volatility, and that trend has been no different this time around either. The chart below shows the 50-day moving average of all or nothing days going back to 1990. Over the last 50 trading days, more than a third of all trading days have been all or nothing days. The only two other times where the average was higher in the last thirty years were in December 2008 and November 2011. The average got close to current levels back in late 2015 and early 2016 but was never able to quite get above 33%. Looking at the frequency of all or nothing days on an annual basis shows another interesting trend. So far this year, there have been 19 all or nothing days for the S&P 500. We may be barely a quarter into 2020 so far, but this year's total already ranks above more than half of the 31 years since 1990. In fact, the S&P 500 is currently on pace to have 70 all or nothing days in 2020, which would tie 2011 for the most ever in a given year. It's only April, but 2020 is shaping up to be the year of record volatility. Health Care Gets No Booster Shot From Sanders Wed, Apr 8, 2020 Bernie Sanders dropped out of the Presidential race today, and while his chances of ever securing the nomination were slim to none, his dropping out does reduce a small amount of uncertainty. The chart below illustrates this trend as the Vermont Senator's odds to win have dropped dramatically since Super Tuesday. As we have noted in the past, the odds of winning for the more progressive candidates on the Democratic ticket have typically had an inverse relationship to the Health Care sector's performance because their policies are more likely to shake up the business model of companies in this sector. Despite that relationship, Health Care stocks saw little in the way of a boost from Sanders dropping out of the race. There wasn't a single point in the trading day today where Health Care was the top-performing sector in the S&P 500, although its performance relative to the S&P 500 did pick up slightly in the afternoon after the Sanders announcement. Volatility Remains High Tue, Apr 7, 2020 Given the big rally off the lows of late March, we've had a number of questions related to the VIX and why it remains high. As of Tuesday afternoon, the VIX was in the mid-40s which is very high relative to readings over the last decade but actually down significantly from its recent highs above 80. The reason the VIX is still in the 40s is because the market remains volatile. While volatility is typically associated with markets that are moving lower, it can actually go both ways, which is exactly what we're seeing now. The charts below do a good job of illustrating just how extraordinary the market's swings have been in recent weeks. In many cases, it's unlike anything anyone reading this has ever seen before. Over the last five weeks, the S&P 500's average absolute daily percentage change has been +/-4.8%. That's higher than we saw at the height of the financial crisis, after the 1987 crash, and in the late stages of the Great Depression. The only time the S&P's average daily move over a five-week period was greater was after the Crash of 1929. Tuesday's rally also puts the S&P 500 on pace for its 13th straight day of moving up or down 1% or more. That's a longer streak than anything seen during the Financial Crisis and just two shy of the 15 straight days we saw in October 2002 at the lows of that bear market. Before that, though, the only other period where there was a longer streak of 1% daily moves was during the Great Depression. While 13 straight daily 1% moves is extreme by any measure, what makes this current streak even more notable is that it would be the second 13-day streak of 1% moves in the last 27 trading days. That's right, from 3/2 through 3/18, the S&P 500 went 13 straight days of moving up or down 1%. Then, on 3/19, the S&P 500 broke that streak by rallying just 0.47%. Since then, though, it's been 1% all the time again with the S&P 500 on pace for its 13 straight daily move of 1% again. Looking at this another way, in the last five weeks (25 trading days) the S&P 500 has seen a 1% move 24 times. The only other time that has occurred was during the Great Depression when there were two separate occurrences. Semis Holding Up Relative to Market Tue, Apr 7, 2020 In a post yesterday, we noted that the relative strength of semiconductors versus energy had finally eclipsed its record high from the dot-com boom in March 2000. Semis have not only exhibited relative strength versus the energy sector; they've demonstrated strength versus the broader market as well. Take the relative strength of the Philadelphia Semiconductor Index (SOX) versus the S&P 500. In the early stages of the market decline from the February highs, semiconductors saw a sharp drop in their relative strength, but in late March, the SOX surged relative to the broader market and actually hit a record high on March 24th. With Technology playing an increased role in the stay-at-home and work-from-home economy, it makes sense that semis would hold up relatively well. From that high on 3/24, we saw a modest pullback in the strength of the semis relative to the S&P 500, which then bounced again in recent days. Going forward, the key for the semis is over which level it breaks first. Will it be the March high or the short-term low three days later on 3/27 that followed. Whichever way it breaks will likely dictate which way the broader market goes as well.
Here are the current major indices pullback/correction levels from ATHs as of week ending 4.10.20- Here are the current major indices rally levels from correction low as of week ending 4.10.20- Here is also the pullback/correction levels from current prices-
Stock Market Analysis Video for April 9th, 2020 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 4.12.20 Video from ShadowTrader Peter Reznicek
Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (4/13) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (4/13-4/17) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== It would be pretty sweet to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
Here is a look at this upcoming week's Global Economic & Policy Calendar- (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET POSTED!)
Here are the most anticipated Earnings Releases for this upcoming trading week ahead. ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 4.13.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Monday 4.13.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. Tuesday 4.14.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 4.14.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 4.15.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 4.15.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 4.16.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 4.16.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 4.17.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 4.17.20 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
And finally here is the most anticipated earnings calendar for this upcoming trading week ahead- ($JPM $JNJ $RAD $BAC $WFC $UNH $CONN $C $APHA $FAST $ABT $GS $INFY $BBBY $TSM $BLK $PNC $CBSH $FRC $PGR $USB $AMRN $SLB $LAKE $ISRG $LOVE $BK $JBHT $KEY $SON $WIT $KSU $BLX $STT $GHG $HOMB $MUSA $RF $BMI $WAFD $CFG $SRC $MRTN) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning April 13th, 2020 <-- click there to view!
Eyeballing oil below $20 next week at some point. Historic drop in oil consumption in April will lead to market selloff of futures even with 10mmbrl cuts by OPEC
I sold out of 3/4 of my calls this past week. I entered a ton of DIA and SPY puts near the close, April 27th and May 1st expiration and they're pretty far OTM. The failure to close above 24600 means this rally is not sustainable for any serious basis, and I am targeting fresh lows in the coming two or three weeks. Lows should be set at 15800-18000, and from there I am targeting a massive move to the upside and 40,000 in 2022. Also bought GLD puts and some more US$ calls.
I was just trying to find out about getting a straddle option monday on the Rus 2000 IWM any suggestions? I`ve never played options before.
Glad to see someone else looking the same direction I am. I have a boat load of 5/15 220 PUTS I bought on Friday. Where do you see SPY ending up?
If the FEDs don't intervene but so far they keep interfering so some May08 and 15 expiry also for back up just in case.
Man gold and silver have gone nuts this week. All the normal retail storage bars/coins are sold out for Silver even at $120-150 above spot value for kilo stackers. 1oz Silver coins are going for $5-6 above spot right now even secondary market. $jnug $nugt $gld $sil going to go nuts Monday.
how about physical silver such as serving trays, wine glass sets and misc. silverware all approx. 100 to 130 yeas old and in excellent condition? We haven`t gotten a price on it yet but would like to sell on a good spike in price
OPEC, Russia approve biggest ever oil cut amid coronavirus pandemic https://www.investing.com/news/comm...ver-oil-cut-amid-coronavirus-pandemic-2138038
