Morning Comment: It's About the Credit Markets Now.



Well, we just got a true shock to the stock market. As we said over the weekend, stock investors had several weeks to react to the outbreak of the coronavirus. The moves in other asset prices (like gold and especially Treasuries) were staring people right in the face…and telling them that a correction in stocks was in the offing……In the case of the price of oil, however, almost nobody could have seen that it would drop over 20% overnight (down more than 30% at one point). (We say, “almost nobody”….because somebody spent $2.6 million to put-on the June $34/29 put-spread last week. So somebody knew something.)

The double-whammy of the continued problems from the coronavirus…and the new (major) oil price-war induced by the Saudis…has caused stock markets around the globe to fall out of bed. The domestic futures are “down limit” (down 5%) as we write…and the broad U.S. stock index ETF’s are indicating that they’ll open down 6% or so in pre-market trading as we write. So things are obviously looking quite ugly this morning.

This newest development has wide-ranging implications. If crude oil stays in the low-to-mid $30s for any period of time, it’s going to lead to bankruptcies and significant layoffs in the oil patch. It’s also going to have a substantial impact on the high yield market…just like it did during the crash in oil that took place in 2015 (into early 2016).

In other words, as we have been saying for a while now, the REAL problems facing the markets today have to do with stresses in credit markets…and the rate at which these stresses will accelerate just rose DRAMATICALLY. Not only has the stress level risen dramatically, but it has done so OVERNIGHT!

Therefore, the issue of “forced selling” will come to ...

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Thursday midday Comment: Short-Term Support/Resistance



The S&P 500 Index is trying to hold its 200 DMA (which is just above 3050). To be honest, the 200 DMA didn’t provide much support in last week’s late-week decline…and didn’t provide a lot of resistance on the days ...

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Morning Comment: Credit Spreads Are Still Raising Concerns


  • Nice “Biden rally,” but a short squeeze provided A LOT of fuel as well.
  • Despite the rally in stocks, Treasury yields and gold prices did not respond in-kind.
  • We also did not see much of a tightening of credit spreads ...
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Midday Comment (very quick)


Our call for a sharp short-term bounce has worked-out very well so far. The S&P now stands a full 6% above its intraday lows from Friday! However, when it got up to its 200 DMA today, the S&P stalled-out. Therefore, ...

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Morning Comment: Ripe for a SHORT-TERM Bounce Soon

The futures have been trading all over the place since they opened last evening at 6:00pm. When we went to bed last night, they have been down by more than 1%...then they flipped to the upside overnight and stood in ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) A recession will mean another credit crisis…even if its smaller than the last one.

2) Victory lap! Also, if you read our work regularly, we hope you will support us.

3) We ...

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Morning Comment: Keeping Your Head While Others are Losing Theirs



We definitely saw signs of capitulation yesterday…more than we saw on Tuesday. Not only was breadth similarly horrible (32 to 1 negative on the S&P 500 and 10 to 1 negative on the NYSE Composite Index), but we finally got ...

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(Quick) Midday Comment: Another Leg Higher For Gold???


It’s still early in the trading day, but gold is breaking above its closing highsfrom January 31st in a fairly significant manner. In other words, it could sell-off later in the day and close below its highs of $1,589) ...

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Morning Comment: What if AAPL Breaks Below Support?


AAPL announced last night that they will miss their quarterly revenue target due to the coronavirus…and that “it will be a slower return to normal” as well……..The decline in AAPL is not a disaster…as it is trading only 3% lower. ...

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Morning Comment....Friday Declines...TSLA Still VERY Overbought


  • Will the “Friday decline” begin a day early this week?
  • China finally admits to under-reporting the extent of the coronavirus.
  • The starting point of the coronavirus is MUCH different than SARS & H1N1. (That’s important.)
  • TSLA announces $2bn stock offing…at ...
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Can FedEx (FDX) Finally Breakout?


Whether FDX can break meaningfully above its 200 day moving average or not should be very important for the stock (and UPS as well).


Ten days ago, we highlighted how UPS had become very oversold…and thus had become ripe for ...

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Morning Comment: Use Some Common Sense!


  • Stock investors need to be using more common sense right now.
  • If they do that, they'll turn more cautious.


We saw an headline this morning that read, “Futures unchanged over concerns about the coronavirus.” CONCERNS…WHAT CONCERNS??? The stock market is ...

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