THE WEEKLY TOP 10

Table of Contents:

1) The stock market has already priced-in a “Phase One” deal.

2) Earnings growth (and future estimates) do not justify this level in the stock market.

3) We’re seeing small (repeat, small) cracks in the consumer.

4) So many indexes and ETF’s have become quite overbought on a near-term basis.

5) Having said this, a “melt-up” from here is not out of the question.

6) Healthcare is overbought, but looks very good on a longer-term basis.

6a) UNH detaches from Sen. Warren…and is breaking out.

7) The Russell 2000 & the Transports still have a lot of catching up to do.

8) The semis look great, but one concern is the cracks that are showing up in MU.

9) AAPL is very overbought and quite ripe for a tradeable pull-back.

10) The Presidential Election: It’s NOT “The economy, stupid”…it’s “The stock market, stupid.”

11) Summary of our current stance.

Short Version:

1) We think we can all agree that if the “Phase One” deal negotiations completely break-down, it’s going to be quite negative for the stock market. However, we do agree with the consensus that says a Phase One deal will indeed be agreed to and signed before too, too long. However, we’re not as sure as the consensus seems to be that a smaller deal will be a catalyst for a significant (further) move higher in the stock market.

2) Another reason to question whether the stock market can rally a lot further from current levels is earnings. Earnings growth has badly lagged behind the stock market this year. So it’s hard to convince us that earnings growth in the mid-single digits next year…following zero growth this year…will be enough to justify a stock market at its current level…much less one ...

• We're close to a trade deal....again.
• Any deal will be a much smaller one than the one they were "close to" back in April...when the stock market was more than 5% lower.
• Will Hong Kong cause a ...

In our opinion, both the U.S. and China want and need a “Phase One” trade deal…and thus one will be signed in the not-too-distant future. Not only do both side want and need one, but a significant break-down in ...

• The XLI industrial stock ETF has broken key resistance, but it’s getting overbought near-term
• GE is coming off of a VERY, VERY overbought level and looks ripe for a tradeable decline.
• FDX is overbought near-term, but has a lot of ...

The energy stocks have been lagging the market all year (until very recently)...and they are now poised to breakout in a powerful way if the energy stock ETF (the XLE & XOP) can break above the key resistance levels ...

• MU is a stock trader's dream. It's liquid and it's never boring. It either rallies in a meaningful way...or declines in a significant way.
• We're watching the 50 DMA on MU. Whichever way it "breaks ...

China moves the goal posts (again).

There has been another change in the trade negotiations with China...as China is now asking for a scaling back of some existing tariffs as a prerequisite for signing the "Phase One" deal. We ...

China has moved the goal posts on the "Phase One" trade deal...by asking for the U.S. to remove some of their existing tariffs. If President Trump caves-in to these demands, it will only prolong the "Economic Cold War ...

• Good day for stocks on Friday, but getting overbought near-term
• A mild, short-term pull-back would actually be healthy
• Natural gas is breaking out
• However, it needs more upside follow-through for confirmation
• COG is the stock with the best potential in ...

A quick look at the short-term chart on gold.

Gold has risen back above its 50 DMA today…and it has broken above its short-term trend-line (going back to the early September highs). If it can now break above $1,520 ...

• Powell indicates that rate HIKES are off the table…but who really thought they were ON the table between now and the 2020 election???
• Over the past 10 months, Chairman Powell has skillfully moved the ball firmly into President Trump’s court ...

It’s never ceases to astound us how human nature works when it comes to the markets. Back in late August…when the stock market was falling…people were talking about an earnings recession…if not a full blown economic recession. Today (in October ...