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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.

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    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.

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    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.

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    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.”

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    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. Rich456987

    Rich456987 New Member

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    Hi everyone! I'm new here. My name is Rich
     
  12. 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.

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    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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  13. 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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