I send this out to my subscribers
Hello, my friends...
01-05-2021 1950hrs
We begin this year in pretty much the same condition as we
did during the last several weeks of 2020. In my view, it is way too late to be
buying, except perhaps for defensive purposes. Although the market has managed
to continue making new highs, the action has been very choppy and on ½ the
volume when compared to the subsequent selling. Please remember that though I
see limited upside potential it does not automatically mean the market is ready
to go plunge off a cliff. As I have discussed in past weekend and market reports,
tops take time to develop (more of a rounding pattern), especially significant
ones (made on weak volume), and even after the final closing highs have been
seen, it is sometimes many weeks or months before a bear market gets underway
and becomes fully developed. Since the NYSE went on my fully bearish longer-term
indicators the Dow has gained 2.0%. The SPX-500 has gained 2.4%. These new
highs have so far been contained within the 5% range rolling top technical that
I consider being significant. I think caution is
warranted, but I cannot say with a high level of conviction as yet that
the market is currently on the brink of a significant decline. In my view, the upside potential over the intermediate to long term is limited. The $64,000
question yet to be answered is whether an intermediate-term correction of 10-
20% will restore the technical health of the market or whether the avoidance of
a health-restoring correction will lead to a major bear market.
Stocks did have a bit of an afternoon trading bot lift
[light volume]. The Dow actually went negative before turning back up. While
the proponents of BitCoin are trying to claim creditability and indestructibleness,
I think that was more of a short squeeze [like we have seen in TSLA of late]
than anything else. The financial news cheerleading media presumes that the
strength in crude oil was based on the surprise cut by Saudi Arabia of a
billion barrels a day in production. But many traders feel that crude oil may
also be up on the idea that a new President may be tested with new Mid East
tensions. Whatever the reason energy stocks led the rally defiantly, and I
think to some degree that put a bid on the Short-crude-trade. At any rate, the
bulls were very-grateful take it, after yesterday's slightly whipsawing
performance. The key will be, can the crude bulls hold onto the gains tomorrow.
That will be an important test.
Oil prices soared today on the
heels of Saudi's self-sacrificial slashing of 1-million b/d output. They said
this action was pre-emptive which, does not seem like a positive
catalyst just how worried are they about their economy? How much did they want
to suck up to Russia with a Biden administration coming into the mix?
“We do that with the purpose of
supporting our economy, the economies of our colleagues in OPEC+ countries, to
support the industry,” Prince Abdulaziz told reporters. The Saudi pledge (if
we can believe their crap) makes for a tighter crude market than traders had
been anticipating and their action sent crude surging to a new 10-month high
with WTI back above $50.00 until the API report was released.
API" the report showed the following
·
Crude -1,663mm (-1.2mm was expected)
·
Cushing +1.003mm
·
Gasoline a gain of 5.473mm (+1.4mm was expected)
·
Distillates a gain of
7.136mm (+2.2mm was expected)
Analysts expected a 4th weekly
crude draw to end the year and they were spot on but the product builds were
very significant... and not very bullish...
As most of you saw in my intraday comments and subsequent
updates yesterday the action was intriguing to say the least. Many of the
indices opened up into new record highs in many cases. The buying apparently
may have come from offshore as global markets and futures were better, but once
the apparent foreign money was deployed there seemed to be no follow-through.
What may also have happened (that I should have thought of ahead of time) was
that while it was the first day of a new month and a new year which might brought
possible new money, what showed up instead may have been people who wanted to
defer profit taking (delaying capital-gains tax) into this fiscal year and less
they waited and began selling as soon as the opening rally stopped. I believe
even people who feared that there is a possibility that capital gains could be
raised assume it would not be retroactive to the beginning of the year but
rather it would take place effective on the date it was passed (in 2021). Soon
into the late day that selling found itself selling into a vacuum (lack of depth
and buyers) and prices began to escalate on the downside and then the
technicals deteriorated further and sell-bots took-over. The markets began to
look like we were about to experience a major one-day key-reversal and that may
have frightened traders and that exacerbated the selling into the early
afternoon hours. We saw that the selling abated somewhat as the European
markets closed (this is when my sell signals
indicated a reversal as such, I covered our trading SHORTS
and reversed into LONGS on the indexes and futures). It was hard
to do so as the deterioration was heavy enough that by mid-day, we were looking
at possibly having the worst first day of trading since 1932. Pavilion dip
buyers and bargain hunting began to show up which trimmed the losses.
Traders feared that today initially could be a rumor mongers delight and
that it would be all about the Georgia election and King-Trump antics. While it
is unlikely that we will have any results for days after. The key overall concern
here is about whether the Democrats will sweep and control the Senate. I do not
at this juncture expect that but if they did sweep with a Vise Presidential tie
breaker vote majority would give them a chance to ram through all kinds of tax
programs etc. By having the simple majority, they will be allowed to name each committee
chair.
We saw today that
December ISM manufacturing index rose to 60.7 from 57.5, and that was
above the estimate of 56.8. This is the highest reading since August 2018. New
orders rose to 67.9 from 65.1, while backlogs grew to 59.1 from 56.9. Supplier
deliveries, implying delays in deliveries because of supply constraints, rose
to 67.6 from 61.7. Inventories, both at the manufacturer and customer levels,
were up slightly and still remain lean. Employment got back above 50 at 51.5
from 48.4. Export orders ebbed a touch to 57.5 from 57.8. Finally, and a big
theme of mine this year as you know, prices paid jumped 12.2 points to 77.6,
the highest level since May 2018. The ISM said, “The manufacturing economy
continued its recovery in December. Survey Committee members reported that
their companies and supplies continue to operate in reconfigured factories, but
absenteeism, short term shutdowns to sanitize facilities and difficulties in
returning and hiring workers are causing strains that are limiting
manufacturing growth potential. However, panel sentiment remains optimistic.”
We saw in 2020 the goods side of
the economy the beneficiary of the collapse in spending on services and it is
likely why manufacturing so outperformed. The need for inventory replenishment
also gave the sector a boost in the latter half of 2020. This strength should
continue this year until the service sector starts to come back and
consumers shift their spending again. At the same time, supply constraints will
continue, inflation pressures will only grow, and we will see in the back half
of 2020 how this shakes out when factory floors are mostly immunized.
Some new
ideas:
Ø
Developed
01-05-2021 “SHORT” Bloated financial stock (looking for a double
top failure) “GS” Ranks
a B+ Swing-Trade, I am looking to take (400/ 100 for the portfolio) “GS” (LIMIT ORDER
at $287.85 to step in) “GS ” is a SHORT
I prefer a push into overhead resistance at $297.00+/- and or > than < $279.85 target
$250.05 then $237.05 its optionable
Ø
Next earnings release: 01/19 before market,
confirmed. EPS consensus: $6.41 (they reported $9.68 last quarter) Revenue consensus: 9.66 billion (they reported 10.700 billion last quarter)
Ø
Developed
01-05-2021 “SHORT” solar index “TAN” Ranks
a B+ Swing-Trade, I am looking to take (800/ 200 for the portfolio) “TAN” (LIMIT ORDER
at $111.85 to step in) “TAN ” is a SHORT
I prefer a push into overhead resistance at $119.00+/- and or > than < $109.85 target
$87.05 then $70.05 its optionable
Ø Developed 01-05-2021 “RLAY” Ranks a B+ Swing-Trade, “Biotechnology
stock” I am looking to take (1000 for me / 500 for the portfolio) (LIMIT ORDER at $27.50 to step in) “RLAY ” is a LONG I prefer a technical solid retracement to
$26.40+/- and or a drop below and
support established at $31.00 target $39.05 then $45.05 its NOT optionable 12% Short
interest
Ø
Developed
01-05-2021 “GBIO” Ranks
a B+ Swing-Trade, I am looking to take (1000 for me / 500 for the portfolio) (LIMIT ORDER at $17.50 to step in) “PLTR ” is a LONG I prefer a technical solid retracement to
$16.40+/- and or a drop below and
support established at $20.00 target $27.05 then $34.05 its optionable on 01/04/2021: Generation Bio reports two non-viral
gene therapy milestone achievements; Data confirm delivery of closed-ended DNA
to the liver via novel, cell-targeted lipid nanoparticles ALSO Generation
Bio files for 7.5 mln share common stock offering
Ø Developed 01-05-2021 “PLTR” gaining government contracts Ranks a B+ Swing-Trade, I am looking to
take (1000 for me / 400 for the portfolio) (LIMIT ORDER
at $13.00 to step in) “PLTR ” is a LONG I prefer a technical solid retracement to $12.40+/- and or a drop below and support established at
$16.00 target $22.05 then $29.05 its optionable Palantir Technologies Inc. builds and
deploys software platforms for the intelligence community in the United States
to assist in counterterrorism investigations and operations. It offers Palantir
Gotham, a software platform for government operatives in the defense and
intelligence sectors, which enables users to identify patterns hidden deep
within datasets, ranging from signals intelligence sources to reports from
confidential informants, as well as facilitates the handoff between analysts
and operational users, helping operators plan and execute real-world responses
to threats that have been identified within the platform.
Ø
Developed 01-05-2021 “QURE” Ranks a B+ Swing-Trade, I am looking to
take (1000 for me / 300 for the portfolio) (LIMIT ORDER
at $22.50 to step in) “QURE ” is a LONG I prefer a technical solid retracement to $21.40+/- and or a drop below and support established at
$30.00 target $45.05 then $53.05 its optionable QURE Provided a clinical update on
its hemophilia B gene therapy program; co's Phase III HOPE-B study has been
placed on clinical hold by the FDA following the submission of a mid-December
safety report relating to a possibly related serious adverse event associated
with a preliminary diagnosis of hepatocellular carcinoma (HCC) in one trial
patient who was treated with AMT-061 in October 2019 and who also had multiple
risk factors associated with HCC. Co will conduct investigations into whether the
gene therapy made any possible contributions to the development of HCC. At
two-month lows.
Ø
Developed
01-05-2021 “ABNB” Ranks
a B+ Swing-Trade, I am looking to take (1000 for me / 300 for the portfolio) (LIMIT ORDER at $13.20 to step in) “ABNB ” is a LONG I prefer a technical solid retracement to
$102.40+/- and or a drop below and
support established at $120.00 target $145.05 then $166.05 its optionable
Developed 01-05-2021 “DASH”
Ranks a B+ Swing-Trade, I am looking to take (1000 for me / 300 for the portfolio) (LIMIT ORDER at $13.20 to step in) “DASH ” is a LONG I prefer a technical solid retracement to
$90.40+/- and or a drop below and
support established at $109.00 target $125.05 then $146.05 its optionable
Ø
Developed
01-05-2021 “WW” Ranks
a B+ VALUE & Swing-Trade, I
am looking to take (2000 for me / 600 for the portfolio) (LIMIT ORDER at $13.20 to step in) “WW ” is a LONG I prefer a technical solid retracement to
$12.40+/- and or a drop below and
support established at $16.00 target $23.05 then $37.05 its optionable
I restarted the Growth and Value
Play portfolio as of 01/01/2021, we had record returns in 2020,
should be impossible to repeat gains of over 1000%, the portfolio has been
reset to $25,000, not including
the carry overplays
I have placed bets that they could try to gap-up and romp
the markets into this 1st trading week of the New-Year!
WE are knocking on the entry door on a number of our SHORT inverse
leverage funds, see notations, most are optionable as such we can buy
longer-dated calls, a vertical call spread or a covered call situation...
