Morning Comment: Trump Can't Afford a Complete Breakdown in Negotiations

The stock market was able to retrace 2/3 of what it lost on Tuesday during yesterday’s trading. It was actually a better day until there were 20 minutes left before the closing bell. At 3:40pm, the S&P had retraced 75% of its previous day decline…when Reuters reported that Beijing had lowered expectations for progress on any trade deal this week. That news turned a 1.25% gain into a 0.91% advance…and it took the breadth in the S&P 500 index from 14 to 1 positive to just over 6 to 1.

However, it was still a good day for stocks. Although the breadth came down late in the day, 6 to 1 positive is still quite positive. All eleven S&P groups closed in positive territory…and two other leadership groups (the Transports & the semis) both rallied more than 1%. If there was one disappointment, it was the underperformance of the Russell 2000 index. It rallied 0.47%, but since that is still a decent advance, we cannot say that this was the kind of outlier that raises a big red flag.

(BTW, the volume fell to only 2.2bn shares, but that decline almost certainly had more to do with the holiday than a lack of buying interest. FYI, although the volume during Tuesday’s decline was higher than it was on the previous day, it was still only 2.75bn that day. So the rise in volume on Tuesday and its decline yesterday was not a very compelling development.)

Needless to say, the trade negotiations are going to be front and center for investors over the next two days…and any news/tweets/leaks on this subject will dominate the movements in pretty much all of the markets for the rest of this week. What in the world ...

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Morning Comment: Within 2% of Key Technical Support Levels


The S&P is within 1.7% from its first key support level...and two of the three most important leadership groups are even closer to their own support levels. Today's "services" data will be important, but all eyes will ...

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Midday Comment: S&P 500 testing short-term support


For the second time over the past three trading days, the stock market is seeing fairly steep midday sell-off. It’s obviously not a major decline, but 1% is still a meaningful move. However, also for the second time in three ...

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Morning Comment: Great Potential Opportunities in Energy & Bank Stocks


  • Broken “neck-line” and “positioning” issues mean gold should see more downside movement near-term.
  • Energy stocks are suddenly outperforming crude oil…and Saudi production claims misleading.
  • BOJ shifting bond purchases. That’s good for the yield curve…and thus bullish for the bank stocks ...
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Morning Comment: AMZN Facing 2 Critical Support Levels

The impeachment investigation is getting an incredible amount of attention…which is no surprise. Let’s face it, it has only taken place three times in our history. (Actually, since speaker Pelosi hasn’t been a vote in the House, the impeachment process ...

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Morning Comment: Can the Banks FINALLY Outperform?


  • We have been cautious on the banks since early Dec 2016
  • They're flat since then...vs. a more than 34% rally in the S&P 500
  • However, this could change IF two technical moves take place


One month after the ...

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Morning Comment: Impeachment Investigation = Re-pricing a Trade Deal & the 2020 Election


We spent a decent amount of time this morning writing our normal piece. In it, we touched-on yesterday’s consumer confidence data…and what it might be telling us about the U.S. consumer. We also talk about the crash in Bitcoin ...

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Midday Comment: Add Bitcoin to the "Wild Moves" List.


When volatility in many different markets rises in a significant way, it's rarely a bullish development.


Today’s 11% mini-crash in Bitcoin is taking it below the “descending triangle” pattern that I touched on a few weeks ago….breaking well ...

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Morning Comment: The University of Iowa "Wave"


Morning Comment: The University of Iowa "Wave"


  • “Quadruple Witch” expiration today.
  • The current trade talks are not focusing on any of the all-important long-term issues.
  • The global intelligence community was taken completely off guard by the Saudi attacks.
  • China’s stock ...
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Morning Comment: Housing Stocks overbought...Still bullish on energy.


Our calls on the housing stocks have worked out very, very well over the past year. We turned bullish on the group in the 4th quarter of last year...and reiterated that stance over the summer when the ITB home ...

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Morning Comment: Bullish "Game Changer" for Energy Stocks


  • Many see the bounce in oil will be short-lived.
  • However, the "risk premium" HAS to be raise for crude.
  • This should put a floor under crude.
  • This, in turn, should give investors confidence in the group.
  • A group that is ...
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Morning Comment: Can Energy Stocks Finally Outperform?


  • Stocks a bit lower on higher oil prices, but the response if fairly benign so far.
  • Not everybody is so sure that the production will come back quickly…or that the situation will not escalate.
  • The Transports (led by the rails ...
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