Welcome Stockaholics to the trading week of September 7th! 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: What to Watch in the Week Ahead: Monday Labor Day Tuesday 6:00 a.m. NFIB 10:00 a.m. QFR 3:00 p.m. Consumer credit Wednesday 10:00 a.m. JOLTS Thursday 8:30 a.m. Jobless claims 8:30 a.m. PPI 10:00 a.m. Wholesale trade Friday 8:30 a.m. CPI 10:00 a.m. QSS 2:00 p.m. Federal budget
Gamma-Unwind Sparks Markets' Worst Week In 6 Months As Dollar Spikes It's the gamma, stupid! That much accumulated “short gamma” doesn’t just go away in a ~4% flush - the Street is still very much in a dangerous space, and that flow is still out there in full “Resevoir Dogs” standoff fashion both to UPSIDE AND DOWNSIDE (again, short gamma = sell when mkt going lower, buy when mkt going higher) Masa-son, Momo, & Gamma-gutted home-gamers..."do you feel lucky?" Still an ugly week for stocks overall that was the worst since March for the majors... The Momo meltdown continued for the 4th week in the last 5... Source: Bloomberg A very whippy week in bond land as yields tumbled with stocks cratering yesterday and then were also dumped alongside stocks today and accelerated even as stocks bounced back... Source: Bloomberg On the week, yields were mixed with 5Y +3bps, 30Y -4bps... Source: Bloomberg 10Y surged today, back above 70bps... Source: Bloomberg The Dollar managed to rise on the week... for the first time in 10 weeks! Source: Bloomberg Cryptos were lower on the week but Ethereum managed to get back to even as Bitcoin Cash was the laggard... Source: Bloomberg While copper raged higher today, crude crashed and PMs were unable to hold any gains... Source: Bloomberg Oil was ugly with WTI back below $40.. Finally, you now have a long weekend to consider your exposure to this shitshow... ...and what happens next? Source: Bloomberg
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020- S&P sectors for the past week-
Small Caps Best Day After Labor Day In the last 21 years, only Russell 2000 has registered an average gain of 0.16% on the Tuesday after the long Labor Day weekend. DJIA, S&P 500 and NASDAQ have struggled with negative average performance. NASDAQ and Russell 2000 have been up five of the last eight years, but DJIA, S&P 500, NASDAQ and Russell 2000 all have fallen for the last three years on Tuesday. On Wednesday the market’s performance has been varied. DJIA has performed the best, up 76.2% of the time with an average gain of 0.25%. S&P 500 is worst, up only 42.9% of the time with an average gain of 0.13%. Big August: Bullish or Bearish? Big August 2020 logged the 4th biggest August percent gain for the S&P 500 since 1949 and the 6th biggest since 1930. But, is this bullish or bearish for the market in the coming months? Hopefully the table below provides some perspective by comparing the previous Top 20 S&P 500 Augusts since 1949 to July, September, Q4 and the succeeding “Best Six Months” November-April. Subsequent Septembers were down 15 of 20 years for an average loss of -1.0% (median loss of -0.7%). Q4 is positive with gains in 13 of the 20 years for an average gain of 1.0% (median gain of 3.0%). The following Best Six Months are more bullish, up 16 of the 20 years with an average gain of 7.6% (median gain of 8.5%). Looking at just the 7 years that were preceded by big Julys shows some improvement for September but Q4s are worse, containing the largest Q4 losses. Back-to-back big Julys and big Augusts were followed by improved Best Six Months results, up in all 7 instances with a higher average and median gain and the top gain. Analyzing the Jobs Report The jobs market remains strong, as the August nonfarm payrolls came in at a solid 1.37 million jobs created, right in line with expectations. This was the fourth consecutive month of gains, up 10.6 million over this time frame. In March and April more than 22 million jobs were lost, so we still aren’t quite to half of the jobs recovered though. This was the second consecutive month there was a very weak ADP private payrolls number ahead of the monthly jobs report, adding to the worries, but the actual nonfarm payroll number was once again quite solid. Don’t forget, just yesterday we saw initial jobless claims come in at 881,000, the lowest number since the week ending March 14, another improving employment number. The big surprise in today’s report though was the unemployment rate fell to 8.4%, from 10.2% last month and an expected 9.8%. This was the lowest unemployment rate since 4.4% in March. “This was an impressive report and once again showed the economy remained quite resilient,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But 8% unemployment is 8% unemployment, so let’s not get too excited, but we’ll still take this improving trend in the employment picture.” As shown in the LPL Chart of the Day, even though more than 10 million jobs have been created in the past four months, the sad truth is we are still quite a long way from recovering all the jobs lost due to the pandemic. In fact, looking at previous cycles, it has taken years for all of the lost jobs to come back and this time doesn’t appear any different. One thing to consider is could this solid number make it harder for Washington to agree on the next stimulus plan? We are watching this closely, but with the two sides still close to a trillion dollars apart, today’s report will likely do little to help the two sides come to a quick resolution. Last, don’t forget that stocks gained more than 60% in less than six months, so some weakness would be perfectly normal. In fact, looking at the two previous strongest starts to a bull market ever (’82 and ’09) both saw some weakness right around now. 3 Charts To Watch If You Are Bullish The S&P 500 Index just closed the door on its best August since 1986, making new all-time highs along the way, while also closing up five months in a row. First things first, make no mistake about it; this is a new bull market. That of course doesn’t mean it will last years like previous bull markets, but a nearly 57% gain in 5 months is what we’d classify as a bull market. Here are all the bull markets going back to the Great Depression and where this one ranks. Now let’s dig into the 5 month win streak. It is quite rare for stocks to gain from April through August, as the summer months tend to be somewhat tricky. Yet, we found there were six other years that saw these 5 months all close higher and the rest of the year was higher five times, with some solid returns in there. In fact, the only year that was lower the rest of the year was 2018, mainly due to the Fed policy mistake in December 2018. “What might surprise many investors is 5 month win streaks are actually incredibly bullish going forward,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In fact, a year after a 5 month win streak has seen the S&P 500 higher 25 of the past 26 times.” As shown in the LPL Chart of the Day, the S&P 500 Index gained more than 35% during this 5 month win streak, the most ever. Yet, the future gains after 5 month win streaks is very impressive, higher 25 out of 26 times a year later. An object in motion tends to stay in motion and this sure seems to be the case here. Historic August Opens Door To Worst Month Of The Year What a month August has been so far, with the S&P 500 Index up more than 7%, for the best August since 1984. Not to be outdone, this is the first time in history August saw two separate 6-day (or more) win streaks. Last, with one day to go, the S&P 500 has gained 16 days so far this month, for the most since 16 in April 2019. Meanwhile, it is the most up days for any August since 2003. “Well, 2020 has laughed at many of these things, but be aware September is indeed the worst month of the year on average,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But what caught our attention was both September and October have a negative return during election years, with October the worst month of the year. Could investors get election jitters again in 2020?” As show in the LPL Chart of the Day, September tends to be a weak month. In fact, it is the weakest month on average since 1950. Additionally, the last two times August was up more than 5% were 1986 and 2000; the S&P 500 fell 8.5% and 5.4% in September those years. Breaking things down by just an election year shows that August actually tends to be strong. That obviously played out this year, but now will the weakness we usually see in September and October play out? Finally, after today, the S&P 500 will be up 5 consecutive months. Looking at the other years that saw a similar summer rallies, there tended to be more strength the final 4 months of the year, with only the Federal Reserve policy mistake of December 2018 blemishing this impressive track record. Yes, this record equity run is extremely stretched, but we would continue to use any pullbacks as an opportunity to add to longer-term core equity holdings, as the economy continues to come back quicker than most expected.
Here are the current major indices pullback/correction levels from ATHs as of week ending 9.4.20- Here is also the pullback/correction levels from current prices- Here are the current major indices rally levels from correction low as of week ending 9.4.20-
Stock Market Analysis Video for September 4th, 2020 Video from AlphaTrends (VIDEO NOT YET POSTED!) ShadowTrader Video Weekly 9.6.20 Video from ShadowTrader (VIDEO 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 9.7.20 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! (NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF LABOR DAY.) Monday 9.7.20 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! (NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF LABOR DAY.) Tuesday 9.8.20 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 9.8.20 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 9.9.20 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 9.9.20 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 9.10.20 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Thursday 9.10.20 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 9.11.20 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. Friday 9.11.20 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- ($PTON $WORK $LULU $CHWY $KR $ZS $COUP $LOVE $AEO $HQY $GFN $GME $ORCL $PLAY $RH $HDS $UXIN $MCFT $FCEL $CASY $MEIP $NAV $REVG $NSSC $ABM $SCWX $PHR $ALOT $CVGW $DSGX $ZUMZ $GIII $AVAV $BIOX $BIGC $LAKE $LTRX $BBCP $VRNT $FARM) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning September 7th, 2020 <-- click there to view!
REMINDER: U.S. MARKETS ARE CLOSED ON MONDAY, SEPTEMBER 7TH, 2020 IN OBSERVANCE OF LABOR DAY. Here is the CME Globex holiday schedule for the Labor Day holiday-
Well CWH is a nice surprise for me today, might sell off my position today though since this market is so volatile
I'm thinking the same thing on my position, though my target price was back at $42... market has been shit the last few days though.
NASDAQ not too far away from a 10% correction, my guess is we will probably get that correction before we bottom out for the short term
Its funny when a 10% correction simply takes you back to where you were a few days ago. 10% corrections were a terrible thing back in the olden days
