Morning Comment: UPS testing key resistance.

The stock market’s bounce yesterday was certainly a good one...as the S&P 500 retraced 2/3 of its losses from Friday. The move came on very good breadth, but very low volume. The breadth was 8 to 1 positive on the S&P 500, so that was quite nice, but volume was the second lowest since February (if you throw out the day before Memorial Day...otherwise it was the third lowest). The MUCH better data on Pending Home Sales got much of the credit for the rally...as that number jumped a whopping 44%. However, it is not out of the realm of possibility that some month-end window dressing...and some make-up from Friday’s Russell Reconstitution...may have played a role in the bounce as well.

The advance took the S&P back above its 200 DMA, but it’s still quite close to its all-important 3,000 support level, so the stock market is far from being out of the woods. There are certainly some reasons to believe that this bounce can hold up for a few days more. Chairman Powell and Secretary Mnuchin speak in front of Congress today...and Mr. Mnuchin is sure to paint a positive picture about the economy. Also, today is the last day of the quarter, so we would see some quarter-end window dressing. Finally, we have a long weekend coming up...and the market tends to do well around long weekends.

Of course, there is no guarantee that yesterday’s bounce will last longer. Let’s face it, the last time Mr. Powell spoke publicly, it created a downdraft in the market place. In fact, they pre-released his opening comments...and he is going to warn the country that the re-opening of the economy could create as many problems as it solves (and might even create more problems than it solves). Therefore, we could still ...

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Morning Comment: Is the bank rally failing once again?


The stock market is beginning to look eerily like it did in early February this year...just before the market rolled-over. Investors are ignoring a big pick-up in the coronavirus cases...and the rally is a very narrow one once again. Thankfully, ...

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Morning Comment: Talking Tough on China Just Became a lot Harder To Do


The stock market rallied nicely yesterday...with the tech laden Nasdaq leading the way once again. The 1.1% rally in the Nasdaq Composite took it back above 10,000 and slightly above its early June highs. We have to point out, however, ...

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Morning Comment: U.S. Open Tennis--Yes; Wimbledon--No. Actually, It Makes Perfect Sense.


Chairman Powell’s comment yesterday that the Fed will “slow their bond buying program as the markets improve” knocked the stock market down mid-morning. On Monday, the Fed’s announcement that they are going to buy individual corporate bonds as part of ...

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THE WEEKLY TOP 10....The Next Few Weeks Are Critical


THE WEEKLY TOP 10: The Next Few Weeks Are Critical.


Table of Contents:

1) We’re going to have to rely solely on stimulus for a further rally in stocks after the big run-up.

2) The problem is that nobody ...

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Morning Comment: The Action of the Next Few Weeks Will be Critical


With the stock market becoming quite overbought on a near-term basis, we have been saying this week that we expected the stock market to begin a pull-back after the Fed meeting/press conference, but we didn’t expect to quite as immediately ...

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Morning Comment: Watching the Aussi Dollar


The rally we saw in the stock market after Friday morning’s employment report was a very good one on several levels. It came on a big jump in volume (over 7bn shares on the composite volume) and very good breadth ...

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Morning Comment: Critical levels...Stay nimble my friends.


About a week ago, we said that the best thing that could happen to the stock market would be it to take a “breather” before it continued much higher. That, we said, would give it a better chance of rallying ...

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Morning Comment: Can European Stocks Be The Big Surprise of This Summer?


We’ve all starting to hear a lot of comparisons between this year and 1968 now that racial tensions and riots have been added to the list of other wild developments for 2020. It sure seems like President Trump is taking ...

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Morning Comment: BAC breaks out....Complacency surrounding China


We’d like to start this morning’s piece with a scenario that would provide the best chance of a strong (further) rally after yesterday’s advance in the S&P 500 above its two key resistance levels (its 3,000 level and its 200 ...

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Morning Comment: A look at the chip stocks....and gold.


A big bounce in the bank stocks created a very strong reversal in the broad stock market yesterday…and helped the S&P 500 rally 3% off of its early morning lows and close more than 1% higher on the day. The ...

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Morning Comment: Very Simply, Follow the (Smart) Money


Well, we can add another billionaire investor to the list of those who believe the stock market is going to see another decline. Stan Druckenmiller says the risk/reward for equities is the worst he’s seen in his career. To repeat, ...

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