Market Strategies Newsletter - Special Daily Edition
For Trading October 22nd
BA Pummeled, Again
Application Software Still Weak
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Today’s market was a split affair with BA leaning hard of the DJIA. By the end of the day the DJIA was higher, +57.44 (.21%) while BA contributed a -87 DPs, and it had rallied back from -$19.60 to close -13.06 (3.8%), while the NASDAQ +73.45 (.91%), S&P 500 +20.52 (.69%), the Russell +14.66 (.95%), and the DJ Transports, the biggest gainer +143.38 (1.36%). It was mostly about several big drug stocks coming to terms with a couple of Ohio counties on Opioid settlements that drove that sector and rising interest rates helping out the financials, and the big surprise, energy up all day even as Oil fell this morning and then closed mid-range but still lower. A/D were a solid 2:1 on both NYSE and NAZ. The DJIA were 20 UP, 9 down and PFE unchanged. AAPL was the leader +28DPs on an upgrade from Raymond James with a price target of $280. On the downside was BA, followed by IBM -10DPs after Friday’s debacle on earnings. In the last 2 trading days BA is down from $372 to $331 or roughly 11% while IBM has fallen 8%. All that said, the rest of the market has rallied hard, and pretty much across all sectors.
Our “open forum” on Discord, which allows me to interact with subscribers and others to allow direct questions and chart opinions on just about any stock, continues to grow with more participants every day. It is informative and allows me to share insights as the market is open and moving. The link is:https://discord.gg/ATvC7YZ and I will be there and active from before the open and all day. It’s a great place to share ideas and gain some insights.
SECTORS: Other names in the news: As I mentioned above, AAPL got a big upgrade but there was plenty else going on. Oil was lower but HAL reported and even though there was a revenue miss, the stock moved higher to close $19.61 + 1.18 (6.4%), and the energy sector led all others. BA was downgraded by UBS, Credit Suisse and Rob. Baird, based on increased scrutiny and the uncertainty of the return for the 737MAX. Rates edged higher and that helped push the financials with JPM finishing $123.55 +2.99 (2.5%). Semiconductors were strong again with 28 of 30 components of the Philadelphia Semi Index higher and AMD +1.13 (3.7%), MU +1.69 (3.9%) and ON +.67 (3.6%).
There are several DJIA components reporting tomorrow, and they were higher today with MCD +1.80, UTX +1.50, PG +1.37, and TRV +.44. If I didn’t know better, I’d say we are in a roaring bull market!...
Kennametal: KMT, an industrial, reported a miss on Q1 earnings and gave guidance for sharply lower revenues, well below expectations and the stock was down hard in the thin, pre-market trading touching $22.92 , down almost $8, but fortunately cooler heads prevailed and the stock actually opened higher and while it was lower on the day, it finished $29.80 -.81 (2.96%).
After the close, an old favorite of mine, STMP reported a new deal for E-commerce sellers with UPS for a “multiple tech-enabled service foe new customers and partners. The stock, down from its heyday high in late 2018 of $285, to a low in May of this year of $33.04, had worked its way back to close today $76.13, gapped up on the news in extended hours trading to hit $96, is currently $94.00 +17.87.
A group that has suffered pretty dramatically of late, “application software” with several downgrades continues week after a full week of lower prices. The list includes ADBE, downgraded by Citi, which fell from $281 to 265 managed to stabilize to close +1.32 (.50%), Service Now (NOW) down from $280 to make a new low @ 239 was -2.10 (.90%), Work Day (WDAY) $186 to $151 was 154.09 -.45 (.29%), and Salesforce (CRM) down from $153 to 142 was $144.50 +.46 (.32%).
BIO/PHARMA:stocks wereMostlyHIGHERwith TEVA, on news of Opioid settlements, the big gainer +.64 (8.53%), VRTX +10.87 (6.17%) on a FDA approval of TRIKAFTA for Cystic Fibrosis. IBB was $103.79 +1.52 (1.49%).
CANNABIS:stocks wereHIGHERwith TLRY +.84, CGC + .08, CRON +.19, GWPH +3.46, ACB +.01, PYX +.02, APHA +.05, NBEV +.10, ACRGF _.09, CURLF -.14, KERN -.21 and MJ $19.92 +.31 (1.58%).
DEFENSE:wasHIGHER with LMT +1.48, RTN +2.49, GD +1.07, TXT +1.20, UTX +2.54, NOC +1.58, BWXT -.48, TED +1.83 and ITA $214.68 -1.24 (.57%).
RETAILwasHIGHERwith M +.30, JWN +1.13, KSS +.44, DDS +.36, JCP -.02, WMT +.56, TGT +.74, TJX -.45, KR +.18, RL +1.50, UAA +.40, LULU -1.61, NKE +.12, TPR +.68, CPRI +.43 and XRT $43.22 +.51 (1.19%).
FAANG and Big Cap:were HIGHERwith GOOGL -.13, AMZN +25.49, AAPL +4.28, FB +3.99, NFLX +2.10, NVDA +6.11, TSLA -2.49, BABA +4.27, BIDU +.66, BIX +16, IBM _1.49, BA -13.02, CAT +1.69 and XLK $81.78 +.87 (1.08%).
FINANCIALS wereMIXEDwith the rise in rates and GS +2.73, JPM +3.07, BAC +.69, MS +1.29, C +2.15, PNC +2.01, AIG +.58, TRV +.55, AXP +2.31 and XLF $28.50 +.39 (1.39%).
OIL, $53.51 - .36. Today’s action was lower, but the stocks did better regardless. Earnings for HAL helped buoy some expectations on the service side. If we can close over $54.07 (today’s high was 54.40, but we need a strong close, we will be set up to trade back to the $56.00 -57.00 range. The stocks were higher. The XLE finished $58.05 +1.02 (1.79%).
Prices for Natural gas were lower today and closed $2.441 -.076. We have already tested support on the bounce from the test just under 2.20 but we may have to test the lows again. We sold out TELL 10/7.50 calls last week and finally got the fill on our order @ $ .45 Monday, and they closed $ .40 -.23.
METALS,GOLD: $1,488.10 -6.00,today’s selloff brings us back to the point of breakdown. We are in a no-man’s land here and until we gain some direction I won’t enter a new trade.
BITCOIN: closed $8,205 +245.We continue to trade in this area of support and a break thru the 8,380 close would send us up to test 8785. We were stopped out of the GBTC position and I bought back 350 of the 750 I want to own @ $9.45, keying off the 200-day MA down at $8.70.and we rallied and with a low of 9.25 and a high of $10.28, I added another 400 GBTC at $9.83, and they closed $9.07 +.34.
Tomorrow is another day.
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