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The Bull Thread

Discussion in 'Stock Market Today' started by bigbear0083, Apr 1, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
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    Market Gains in Celebration of Mother’s Day
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    With just a few days remaining to Mother’s Day, today’s post is also a reminder. Over the last twenty-five years on the Friday before Mother’s Day the Dow Jones Industrials have gained ground seventeen times. On the Monday after, DJIA has advanced seventeen times over the same time period. Average gain on Friday has been 0.20% and a respectable 0.36% on Monday. However, in five of the last eight years, the Monday following Mother’s Day has been down. Last year, DJIA suffered its worst post Mother’s Day loss, off 2.38%.
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  2. bigbear0083

    bigbear0083 Content Manager
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    Who Needs Roller Coasters When They Can Have the Stock Market?
    Mon, May 11, 2020

    The US equity market's rally off the March lows has spawned moves over a few weeks in individual stocks that would normally take years to play out. Within the Russell 3000 as a whole, approximately 4% of the stocks in the index (125) have more than doubled from their closing levels on 3/23. At face value, that's an extremely impressive reading. However, if you dig a little, you would also find that more than half of those stocks that have doubled are still down YTD. Amusement parks may still be closed, but who needs them when you have a roller coaster ride like the stock market.

    There's not enough space to list each of the stocks that have doubled from their closing levels on 3/23, so in the interest of space, the table below lists the 25 stocks in the Russell 3000 with market caps of $2.5 billion or more that have doubled since 3/23 sorted by market cap. The largest of the 'doublers' listed is Valero (VLO) which just barely made the cut gaining 'only' 102.9%. Behind Valero (VLO), the only other doublers with market caps of more than $10 billion are Twilio (TWLO), Moderna (MRNA), Wayfair (W), and Carvana (CVNA). Wayfair is also the top-performing stock on the list with a gain of over 500%! We're not sure which, but at some point in the last two months, the market's valuation of W was way off the mark. To put Wayfair's YTD move in perspective, though, even with a 500%+ rally, the stock is still up only 112% YTD.

    Just as we pointed out with regards to the entire universe of stocks that have doubled since 3/23, a large number of stocks listed below are also down YTD. Even the largest of the doublers - Valero - is still down 29.3% YTD. Looking through the list, most of the other stocks listed that are still down YTD are from the Energy sector. Below the table, we have also included charts of each stock (except Bill.com which hasn't been public for six months). As shown, many of the stocks listed are trading at extremely overbought levels after their significant rallies, and investors would probably be best served to not chase these names from here. For clients with access, we have also created a custom portfolio, so you can track these names over time to see how they digest and consolidate the recent surges.

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  3. bigbear0083

    bigbear0083 Content Manager
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    Some Stocks Moving Above February Highs
    Wed, May 13, 2020

    In last night's Closer, we noted that as of yesterday's close, the S&P 500 (SPY) sat over 15% away from its 2/19 all time high. But as for the index's individual stocks, about 12.4% have retaken their 2/19 levels. As shown in the chart below, Health Care sector stocks on average are the closest at 5.29% below their levels on 2/19. Consumer Staples are the only other stocks that are less than 10% away from those levels on an average basis. Conversely, Energy, Financials, and Real Estate have the furthest to go, all down around 30% or more.

    [​IMG]

    Meanwhile taking a look across industries, there is only one group of stocks that's currently above its 2/19 levels on an average basis: Pharmaceuticals, Biotechnology, & Life Sciences. While stocks of that industry have pushed above by 1.2% on average, the other groups are not even close with the next closest to doing so being Food & Staples Retailing at 7.6% below 2/19 levels. In addition to Food & Staples Retailing, Food, Beverage, & Tobacco, and Health Care Equipment & Services are the only others that are even within 10% away. On the other end of the spectrum, Banks, Energy, and Consumer Durables & Apparel are down the most.

    [​IMG]

    Those same dynamics can be seen in the table below of the stocks furthest above and below their 2/19 levels. While Health Care stocks like Dexcom (DXCM) and Regeneron (REGN) have surged over 40% since 2/19, some of the biggest losers during the sell off remain beaten down. Of the 20 stocks that are furthest below their 2/19 levels, most have something to do with oil, planes, cruises, or retail stores.

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  4. bigbear0083

    bigbear0083 Content Manager
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    Sixth Straight Decline In Claims
    Thu, May 14, 2020

    This week was another ugly one for jobless claims, although the weekly trend is moving in the right direction. While the 2.981 million print was significantly higher than estimates of 2.5 million, this week marked the sixth in a row that claims were down week-over-week. This week also marked the first sub-3 million print and the lowest number since claims first spiked in the week ending March 20th. While the slowed pace of claims is an improvement, this was a smaller WoW decline compared to the past several weeks. Additionally, with another 2.981 million added this week, the grand total of jobless claims since that March 20th print now sits at nearly 36.5 million, or roughly 11% of the entire US population.

    [​IMG]

    As shown in the chart below, the streak of WoW declines over the past six weeks is now tied for the second longest such streak on record. Back in 2016, 2009, 1994, and 1993 were the last times that claims had fallen for six straight weeks, and there have only been two times that these kinds of streaks ran longer: 2013 and another 1980. Both of those times they ended at seven weeks long.

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    As for non-seasonally adjusted claims the same story holds true. The drop to 2.614 million this week was the fifth consecutive weekly decline and the lowest print since the initial spike in claims in late March.

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    With another lower print, the four-week moving average has also continued to decline. That measure has now declined for three straight weeks to its current level of 3.617 million.

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  5. bigbear0083

    bigbear0083 Content Manager
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    Fresh Highs Short Term and Long Term
    Tue, May 19, 2020

    Stocks ripped higher yesterday with the S&P 500 rising over 3% on the day. For some stocks in the index, this surge in buying helped to finally push price above their ranges that have been in place over the past several weeks. While not every stock in the index that is experiencing this pattern is shown, in the charts from our Chart Scanner tool below, we show 20 S&P 500 stocks that saw this type of breakout from a sideways trend yesterday. These breakouts were not specific to any one group but could be found across the various sectors. While they still have a ways to go until they reach their prior highs, these bullish breakouts also marked the highest levels of these stocks since bottoming in March. For a few stocks, the sideways trends of the past several weeks also coincided with the 200-day and 50-day moving averages which have acted as either support or resistance. That was the case with stocks like Align (ALGN), Best Buy (BBY), CH Robinson Worldwide (CHRW) and Masco (MAS) to name a few.

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    Not only are some stocks hitting their highest level of the past few weeks but some are also reaching their highest levels of the past year. From our 52-week high screen in our Chart Scanner, the charts below show a dozen S&P 500 stocks that rose to fresh 52-week highs as of yesterday. Again these are not bound to any single group instead showing participation across sectors and industries.

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  6. bigbear0083

    bigbear0083 Content Manager
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    50-DMAs in the Rearview
    Tue, May 19, 2020

    With equities continuing to rally, more and more stocks have been moving above their 50-DMAs. As of yesterday's close, 81.78% of stocks in the S&P 500 closed above their 50-DMAs. That is the highest reading since January 17th of this year. That's a pretty impressive reading. For example, even at the February 19th all-time high the reading wasn't this high! As for the individual sectors, Consumer Discretionary, Health Care, Financials, Industrials, Real Estate, Technology, and Utilities are all at their highest level by this measure since the start of the bear market. While not necessarily at new highs, the other sectors are similarly around some of their strongest readings of the past few months.

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    For most of the new bull market, Health Care has been a leader in having the largest share of stocks above their 50-DMAs. The current reading for the sector remains at an impressive 98%. Meanwhile, one market leader and one market laggard, Technology and Energy, also boast more than 90% of stocks above their 50-DMAs. On the other end of the spectrum, Real Estate is the only group with less than half of its stocks below their 50-DMA. Utilities is similarly weak with only a little more than half of its components above their respective moving averages. Rounding out the bottom three, Financials is the only other sector with less than three-quarters of its stocks above its moving averages.

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  7. bigbear0083

    bigbear0083 Content Manager
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    Relative Strength Bouncing
    Tue, May 19, 2020

    A couple of weeks ago, we highlighted how the Tech sector has been the only sector whose relative strength has been in a strong uptrend for the entirety of the past year meaning it has outperformed the S&P 500. That is still very much the case, but other sectors have shown some interesting patterns.

    Energy has gotten a lot of attention over the past several months for how badly it was beaten down during the bear market and crude oil's rout a little later. Despite that, it has actually outperformed the S&P 500 with its relative strength line rising since mid-March. Part of the reason for this is it has been more volatile, so the gains have been larger than other sectors while it is also still down substantially more YTD than other sectors. Materials is another laggard that seems to have seen its relative strength line versus the S&P 500 bottom roughly around the same time.

    While those two sectors have turned things around by this measure, Financials and Industrials have found little respite. Both sectors have seen a continued grind lower in their relative strength. Consumer Staples, Utilities, and Real Estate are in a similar boat after these defensive sectors saw their outperformance begin to subside as the market rebounded.

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  8. bigbear0083

    bigbear0083 Content Manager
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    How Our Economy Can Bounce Back

    Stocks have weakened as various global concerns keep popping up. Stretched valuations, weakening technicals, and increased tensions between the United States and China have investors on edge. This week, the LPL strategists discuss these important concepts, and more.

    How bad is it
    Retail sales fell 16.4% over the past month, the largest monthly decline in history. Industries like clothing and restaurants were hit especially hard, with clothing sales down 89% over the past year. The good news is this is about as bad as it’ll get, and we are already seeing positive signs such as TSA travelers, fuel purchases, and public transportation showing big jumps over the past two weeks.

    What are the worries
    Stocks are quite expensive, as the forward price-to-earnings ratio (P/E) on the S&P 500 Index is over 20, while many big fund managers are also worried about valuations. The strategists explain that slightly higher valuations make sense with inflation and rates so slow. Technically, there aren’t as many stocks participating in this rally, and this could be a worry, while the summer months historically have been troublesome for stocks. At the same time, the Federal Reserve continues to be a major backstop, as Federal Reserve Jerome Powell has stated the Fed isn’t anywhere near out of options.

    Small business matters
    Small businesses make up 47% of all the jobs in the private sector, and these important contributors are feeling the pain, as many of them have been shut down. Yet, as the strategists note, small business optimism for six months out is the highest it has been in a year and a half, suggesting that the worst could be behind us, and a strong demand could be coming.

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  9. bigbear0083

    bigbear0083 Content Manager
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    Election-Year June: Candidate Clarity Boosts Performance
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    June has shone brighter on NASDAQ stocks over the last 49 years as a rule ranking seventh with a 0.8% average gain, up 27 of 49 years. This contributes to NASDAQ’s “Best Eight Months” which ends in June. June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.2%. S&P 500 performs similarly poorly, ranking tenth, but essentially flat (0.1% average gain). Small caps also tend to fare well in June. Russell 2000 has averaged 0.8% in the month since 1979.

    In election years since 1950, June’s performance improves notably. June is the #5 DJIA month in election years averaging a 0.9% gain with a record of twelve advances in seventeen years. For S&P 500, June is #2 with an average gain of 1.3% (14-3 record). Election-year June ranks #4 for NASDAQ and Russell 2000 with average gains of 1.6% and 1.4% respectively. This performance improvement is most likely the result of presidential candidate field being sufficiently narrowed, and the ultimate nominees being identified.
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  10. bigbear0083

    bigbear0083 Content Manager
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    Leading Indicators Signal Potential Bottom

    Leading economic indicators are signaling that the pace of economic deterioration may be slowing. As shown in the LPL Chart of the Day, the Conference Board’s Leading Economic Index (LEI), a composite of leading data series, fell 4.4% month over month in April. While this is an undeniably abysmal reading, it is an improvement from the -7.4% in March.

    ”The monthly LEI change tends to bottom early in a recession, and sometimes even before a recession’s official start,” said LPL Financial Senior Market Strategist Ryan Detrick. “Stocks are forward looking, so if investors feel confident that the economic damage will not accelerate from here, they may be more willing to put capital to work. We think today’s LEI number largely confirms April’s strong moves in the equity markets.”

    [​IMG]

    The performance of the 10 underlying components in the LEI does indicate some disconnect between financial markets and the real economy. The two largest positive contributors to the headline LEI number this month were stock prices and the interest rate spread, which were buoyed by a swift and robust monetary and fiscal stimulus. Meanwhile, data series related to manufacturing, unemployment, and construction hurt the index, a reflection of the damage done to the parts of the economy in which workers are unable to perform their jobs remotely.

    As local economies begin to reopen, we look for the industries disproportionately impacted by the COVID-19 virus to begin to rebound. While this will likely be a bumpy process, progress will likely become evident in future LEI releases and confirm that the worst of the economic declines are behind us. We think this should pave the way for further equity gains over a long-term horizon.
     
  11. bigbear0083

    bigbear0083 Content Manager
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    Consumer Confidence Inches Higher
    Tue, May 26, 2020

    Consumer Confidence showed a slight improvement in May, rising from 85.7 up to 86.6 but below consensus expectations for a reading of 87.0. While this month's print was weaker than expected, the fact that confidence didn't decline further is a moral victory and provides additional signs that activity bottomed out in April.

    [​IMG]

    All of the improvement in this month's report came from expectations which ticked higher for the second straight month while the Present Situation component actually made another low, falling to its lowest level since August 2013. It's good to see that consumers are relatively upbeat about the future, but if the Present Situation index keeps making new lows, that will eventually bleed into sentiment towards the future as well. The key here will be Summer. Things will likely spiral in one way or the other. Either people come out and case counts start to spiral higher, or case counts remain stable and social activity spirals higher.

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    One reason we haven't seen a bounce in consumer sentiment towards the Present Situation is that consumers feel increasingly uneasy about the job market. In this month's survey, only 17.4% of consumers believe jobs are plentiful- a level not seen since 2014. This low of a reading is only natural when the majority of retail businesses are closed, but as things start to open back up, the hope, at least, is that job opportunities increase.

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  12. bigbear0083

    bigbear0083 Content Manager
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    Screens Showing More Good Than Bad
    Tue, May 26, 2020

    In our Trend Analyzer and Chart Scanner tools, we run daily screens of things like 52-week highs and lows and Golden Crosses and Death Crosses to name a few. Looking across these screens today, there seems to be more good than bad to start off the summer. As of Friday's close there were a total of 65 new 52 week highs all of which are shown below. Some of these are retailers like BJ's Wholesale (BJ) and Big Lots (BIG) in addition to several Health Care names. Large-cap Tech also makes the list with names like NVIDIA (NVDA) and Shopify (SHOP). Meanwhile, there have been fewer and fewer stocks making new 52 week lows. In fact, there were only six new 52 week lows on Friday.

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    Not only are more stocks reaching new highs than lows but there have also been more golden crosses (when a rising 50-DMA moves above a rising 200-DMA) than death crosses (a falling 50-DMA moves below a declining 200-DMA). As of Friday's close the only death cross across all stocks and ETFs tracked in our tools was for the inverse ETF the UltraPro Short Dow 30 (SDOW). On the other hand, there were 24 golden crosses including equities like Spotify (SPOT) and the S&P Biotech ETF (XBI). In other words, more stocks are not only reaching new highs than lows, but more stocks and ETFs are also seeing their moving averages rising than falling.

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  13. bigbear0083

    bigbear0083 Content Manager
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    "Not So Fast"
    Wed, May 27, 2020

    While everyone was busy writing the Nasdaq's obituary this morning, the index responded, "Not so fast." After falling more than 2% intraday, the Nasdaq erased all of the early declines and not only finished higher, but actually saw a healthy gain of over 0.5%. To put today's move in perspective, even with the volatility of the last several months, the last time we saw a similar positive reversal (down 2%+ intraday, finished up 0.5%+) was back in February 2018 (2/6 and 2/9).

    Before the two occurrences in February 2008, you have to go all the way back to the Financial Crisis to find another occurrence when there were nine in the period spanning January 2008 through February 2009. The real sweet spot for these types of reversals, though, was in the late 1990s and early 200s. In the runup to the March 2000 peak, there were ten similar reversals and then another 22 from the dot-com peak through the 2002 low. As for the Nasdaq's return going forward, unfortunately, these types of reversals aren't indicative much besides the fact that there was a reversal that day.

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  14. bigbear0083

    bigbear0083 Content Manager
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    Texas Activity Starting To Recover
    Thu, May 28, 2020

    Yesterday the Dallas Fed released monthly activity surveys for the services and retail sectors in May. These surveys are similar to PMIs, with readings above zero indicating more respondents seeing improvement than those seeing declines, and vice-versa. Looking at revenue first, Services businesses reported much less widespread revenue declines than in April. As a reminder, though, a reading below zero still indicates revenue declines, so the May reading still indicates widespread drops in Services spending; that said, the outlook has bounced back into positive territory, which is a great sign.

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    Retail businesses specifically have seen an even bigger bounce in revenues that brings that state’s retail sector to almost zero revenue declines in May. Retail businesses report an even more dramatic reading for future revenue expectations, with the series in totally normal territory at this point.

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    Finally, we note that while revenues look to be firming up, employment is still dropping and there isn’t a big surge in re-hiring yet for services businesses. The company outlook category, despite having half of its drop reversed, is still about where it was at the lows of the last recession.

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  15. bigbear0083

    bigbear0083 Content Manager
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    Small Improvements For ISM
    Mon, Jun 1, 2020

    ISM's monthly manufacturing report for the month of May was released this morning. For the first time since January, the headline manufacturing number was higher month over month, rising from 41.5 in April to 43.1 in May. While that 1.6 point increase is an improvement, it's still indicative of contractionary activity (anything below 50 is contractionary) as has been the case since the March report. In other words, similar to what we have seen in the regional Fed reports, activity in May was still declining but not at as rapid of a pace as in April.

    [​IMG]

    In addition to the headline index, most of the sub-indices also improved month over month in May albeit they are also still showing contractionary readings. In fact, every index is still below 50 except for those of Supplier Deliveries and Inventories. Although those two are above 50, it is not necessarily a positive for broader activity as detailed below. Meanwhile, the only two indices that fell deeper into contractionary territory were those of Customer Inventories and Imports.

    [​IMG]

    As we detailed last month, supply chains faced significant disruptions in April due to COVID-19 and that was reflected in the index for supplier deliveries which spiked to 76; its highest level since April of 1974. Higher readings for Supplier Deliveries indicates that delivery times are longer and lower readings indicate shorter delivery times. While May's survey continues to show long delivery times, it did improve with the index falling 8 points to 68. That was the largest month over month decline for this index since an 8.2 point decline in October of 1981.

    [​IMG]

    Business Inventories was the only other index to come in above 50 in May; reading 50.4. That means business inventories expanded for the first time in a year (since May of 2019 when the the index was 51.4). ISM attributed that growth in inventories to businesses trying to get ahead of the aforementioned longer lead times in addition to all around weaker demand.

    [​IMG]

    As previously mentioned, demand is understandably weak with New Orders coming in at 31.8. That means nine of the last ten months have seen a contraction in New Orders with May being a fourth consecutive month. That is despite the month over month pickup from 27.1 in April. The industries that are reporting growth in New Orders include Textile Mills, Nonmetallic Mineral products, Food, Beverage, and Tobacco, and Paper Products.

    [​IMG]

    As a result of that weakness in demand in addition to issues with suppliers, the reading on Production also remains weak. Similar to New Orders, including this month there have been contractionary readings in eight of the last ten months. May marked a third consecutive month even with the 5.7 point month over month rise. So again, things are still deteriorating but at a slower rate than in April. Of the previously mentioned industries that reported growth in New Orders, only Food, Beverage, and Tobacco, and Paper Products also reported growth in Production. Additionally, the industries for Furniture and Wood Products also reported increased production.

    [​IMG]

    Looking at the commentary section of this month's report, it backs up some of the findings in the data and offers some other insights. For example, one Transportation Equipment respondent reported that they have experienced "issues with suppliers that are affecting production." Interestingly, they also report that measures like social distancing are also having an impact while another respondent from the Machinery industry reported that they are evaluating the necessity of certain oversees operations.

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  16. bigbear0083

    bigbear0083 Content Manager
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    High Yield Credit Rally Really Rolling
    Tue, Jun 2, 2020

    While the US equity rally has been more "slow and steady" than "big and bold" in the last couple of weeks, credit markets have been flying. In the chart below we show the spreads on CDX HY, the index of high yield credit default swaps used as a reference for junk bond markets. As shown, the back half of May has been a very good period for high yield investors as spreads have run almost 200 bps tighter. They're now at the tightest levels since the March blow-out in spreads as US equities plunged into the fastest bear market since the Depression. We covered high yield spreads in more detail in last night's Closer report, which is available to Bespoke Institutional members.

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  17. bigbear0083

    bigbear0083 Content Manager
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    Hard to Find A Stock Below Its 50-Day
    Tue, Jun 2, 2020

    In today's Morning Lineup, we noted that 100% of S&P 500 Industry Groups are now above their 50-DMAs. But individual stocks have been equally as impressive in regards to their 50-DMAs. As of yesterday's close, 96.24% of S&P 500 stocks finished the day above their 50-DMAs. Including yesterday, there have only been five days since 1990 that has seen as strong if not stronger readings. All of those occurred in mid-February and early March of 1991. So it has been quite some time since the S&P 500 last had this many stocks trading above their 50-days.

    Given the strong reading for the broader index, for the first time since March of 2016, there are four sectors with 100% of their stocks above their 50-DMAs: Communication Services, Energy, Industrials, and Materials. Consumer Discretionary is also close at 98.41%. Every other sector has at least 90% of their stocks above except for Utilities. Granted, it is by no means weak or far behind the rest of the pack with a reading of 89.29%.

    [​IMG]

    The charts below from our Daily Sector Snapshot show the percentage of stocks above their 50-DMAs by sector over the last year. For the sectors with 100% of their stocks currently above their 50-DMAs, it has understandably been a while since the last time they read 100%. For Communication Services, the current string of days with 100% of stocks above their 50-DMAs has been the first since September of 2018. For Energy and Industrials, this has been the first time since February of 2019 and for the Materials sector, the last time that 100% of stocks were above their 50-days was July of last year.

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  18. bigbear0083

    bigbear0083 Content Manager
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    Best 50-Day Rally Ever

    In many ways, what we’ve seen so far in 2020 has been both record-breaking and devastating. From the S&P 500 Index peak on February 19 to the bear market lows March 23, stocks lost 33.9%. Now, 50 trading days later, stocks have gained 39.6%, for the largest 50-day rally since the S&P 500 moved to 500 stocks in 1957.

    “There are no rollercoasters that can replicate what stocks have done so far in 2020,” exclaimed LPL Financial Senior Market Strategist Ryan Detrick. “Here’s the catch though: Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish.”

    As shown in the LPL Chart of the Day, the 39.6% gain in 50 days was the greatest 50-day rally ever, besting the previous best in October 1982. What’s important to note here is that many of these rallies took place coming off major market lows, and delivered quite strong returns going out 6 to 12 months.

    [​IMG]

    Although we have near-term worries given this historic run, as some sentiment indicators such as put/call ratios are showing some froth, from a bigger picture perspective, this strong 50-day rally offers a reason to think stock prices may be even higher this time next year.
     
  19. bigbear0083

    bigbear0083 Content Manager
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    S&P 500 Stocks Outpacing Analyst Price Targets
    Fri, Jun 5, 2020

    This morning's jobs report shocked the financial world -- most notably the economists whose job it is to provide estimates. The consensus estimate among economists for May nonfarm payrolls was projecting a loss of more than 7 million jobs. The actual number that was reported did not just show a smaller than expected job loss, but it actually showed a gain in jobs of more than 2.5 million.

    We're seeing a similar situation play out in the equity analyst community. With the S&P 500 now up 40%+ since its low less than three months ago, the average stock in the index is now trading above its consensus analyst price target that looks 12 months out. Analysts have simply not been able to catch up to the rapid rise we've seen for equity prices.

    It's extremely rare to see share prices move above consensus analyst price targets. We don't have the historical daily data on this, but anecdotally we can't remember a time when the spread has been this wide. As shown below, at the end of 2019 when the S&P finished a massive rally, equity prices were 5.5% below the consensus price target. That was seen as a very tight spread prior to what we're seeing now. At the lows in March, the average share price had dropped all the way to $92.50 compared to an average consensus price target of $143.20. That projected a gain of 54.9% at the time!

    Since March 23rd, the average share price has risen from $92.50 up to $138.40, while the average analyst price target has fallen from $143.20 to $136. Current price targets no longer project a gain for the average S&P 500 stock, but rather a 1.7% drop.

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  20. bigbear0083

    bigbear0083 Content Manager
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    High Flying Airlines
    Mon, Jun 8, 2020

    It has been a slow crawl, but as the economy has begun to reopen travelers are slowly beginning to take to the skies again. Although TSA Total Traveler Throughput is still down 83.47% from last year, it has made headway over the past several weeks. Daily total throughput has averaged 361K over the past week compared to its worst day in mid-April when throughput was down over 96% YoY, averaging around just 95K travelers per day. In other words, air traffic has been improving but is far from out of the woods and still down significantly from last year.

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    That small improvement in addition to drastic underperformance earlier this spring has acted as the catalyst for massive buying into the sector. One ETF that has served as a proxy for airlines recently has been the US Global Jets ETF (JETS) which tracks airline industry-related stocks from around the globe. From its high on February 12th to its low on March 19th (both prior to the broader market's respective high and low) JETS had fallen over 61%. After trending sideways for a bit and successfully retesting those lows, JETS has ripped higher. As of today, it is up over 75% from its recent 5/13 low.

    With such a massive gain in less than a month, it has left its 50-DMA far in the rearview sitting 46.9% above its 50-day (though it is still 16.5% below its 200-DMA). That also means JETS is now at its most overbought levels ever since it first began trading in 2015 (second chart below). Tacking on another 6.4% gain today, JETS is trading 3.6 standard deviations above its 50-DMA. Prior to this run, the most overbought JETS ever became was 3.06 standard deviations above its 50-DMA in 2016.

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    As for the individual US airlines, it is broadly the same story. The surge in buying over the past few weeks has left those S&P 1500 stocks in the airlines industry up 60% or more since 3/23. United (UAL) and American Airlines (AAL) have gained the most with both stocks up over 100% since 5/13. As with JETS, these names are all extremely overbought now with all but three airlines (Hawaiian- HA, Allegiant- ALGT, and Southwest LUV) more than 3 standard deviations above their 50-DMAs. That is around some of the most overbought levels of the past decade as shown in the table below.

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