Morning Comment: The Battle Lines Are Well Defined For The Chip Stocks


  • Nice rally yesterday…on good volume…but mediocre breadth.
  • Can the rally in crude oil help (and offset the employment data) again?
  • In the future, 2021 earnings expectations will need to be compared to 2019, not 2020.
  • The support/resistance levels for the SMH (a KEY leadership group) are well defined.


Nice rally yesterday…on good volume…but mediocre breadth.

It was great to see the stock market gain ground for the second time this week yesterday. It was also nice to see that the composite volume was higher than Wednesday’s volume. It was not quite as strong as it was during Tuesday’s decline…and the breadth was quite mediocre (just 2 to 1 positive on the S&P 500 and only 1.5 to 1 positive for the NYSE Composite index). Therefore, the “internals” have not improved much this week. However, you have to start somewhere…and to think that these “internals” turn around significantly after the recent scary decline would be too much to ask. In other words, even though the internals were not great yesterday, it’s not a problem yet…as long as they improve in a more meaningful fashion on any “rally days” over the next week or so.

Can the rally in crude oil help (and offset the employment data) again?

The rally came despite an horrendous number in the jobless claims data, so that was positive as well. However, as we highlighted yesterday morning, the expectations are SO low for this week’s employment data (including today’s NFP data)…that we did expect any outsized moves to these reports. We’ll see if that continues today, but the main reason for the bounce in the stock market was the rebound in the crude oil market.

The reports that the Russians and the Saudis were close to an agreement to cut production helped the black gold bounce more ...

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Morning Comment: Liquidation Phases Sometimes Come in Waves


The news that ABT could be coming up with a coronavirus test that gets results in 5 minutes and that JNJ announced a lead vaccine candidate over-shadowed the rising numbers of Covid 19 cases and deaths from over the weekend…to ...

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Morning Comment: Keep one eye on the Russell 2000 index


We continue to make excellent (and profitable) calls on the stock market. After strongly suggesting that investors raise cash in January and early February...and then saying rallies should be sold for several weeks after that, we called for a very ...

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Morning Comment: What Happens When "Forced Selling" Subsides?


There is no question that the bounce in the stock market yesterday was a good one…as the “internals” were quite strong. Breadth was a whopping 44 to 1 positive on the S&P 500 index and 13 to 1 positive for ...

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Morning Comment: What is the Nasdaq's Recent Action Telling Us?


Political games by Democrats in Congress created yet another substantial decline in the U.S. stock market yesterday as the DJIA and S&P 500 fell about 3%. Don’t get us wrong, we do believe that “emission standards” are very important for ...

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Morning Comment: Can the Markets Actually Rally into Quarter-end?


We are all going through something we have never gone through before, but that doesn’t mean that history does not repeat itself. During financial crisis…when the markets were falling out of bed and on the verge of melting down…Congress played ...

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BA & XOM.....Wow, these stocks are incredibly oversold.


This morning we highlighted how Boeing (BA) has become very, very oversold. Of course, BA was already facing serious problems before the coronavirus breakout took place, so it’s incredibly tough to try to pick the exact bottom for this stock. ...

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Morning Comment: Will the U.S. Follow Europe?


WHAT AN UNBELIEVABLE DAY YESTERDAY!!!!! Tom Brady decided to leave the Patriots!!!!.......Oh yeah…the stock market rallied 6% too after a large fiscal plan was proposed….BUT TOM BRADY LEFT THE PATRIOTS!!!!!

Of course, SOME people will try to say that the ...

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Morning Comment: Panic At Your Own Risk


  • Are “the authorities” causing a panic?
  • The reaction is so much different that it was after 9/11.
  • Despite turning bearish earlier than most, we’re actually not as bearish as a lot of people this morning.
  • Signs of capitulation and the ...
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Exxon (XOM): Incredibly Oversold


A very smart person we know told us he bought XOM yesterday. He did not follow that up by trying to sell us on this fact, so he was not “talking his book.” He simply stated the fact that he ...

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Morning Comment: More Than a 1-Day Bounce This Time?


In our Morning Comment yesterday morning, we highlighted several signs of capitulation that we were observing. We also said that although a near-term bottom might not come immediately (Thursday), we did expect one to begin very, very soon. Well, we ...

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Morning Comment: The Stock Markets Reacting the Way it Should


The news that the Trump administration was going to come forward with a fiscal stimulus plan that includes a payroll tax cut (and maybe even some relief for the energy industry) helped the stock market (which had become quite oversold ...

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