GWO Daily Note 10/31/2019
Market Strategies Newsletter - Special Daily Edition
For Trading November 1st
A Bad Day for W’s
PINS Collapse
Fed, As Expected, Rates Slide
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Today’s market was down from the start with the initial decline coming into a little support -249 by 10:45 and then after some mild consolidation and another fall to the lows -268 around 1:00 with a double bottom for the day at that level at 3:00 and a rally into the close to finish mid-range – 140.46 (.52%), NASDAQ -11.62 (.14%), S&P 500 -9.21 (.30%), the Russell -14.62 (.93%) and the DJ Transports the biggest loser again with the fourth down day in a row -140.34 (1.32%). I find this move in the Transports particularly ominous since the other indexes are within a percent of the highs, or have made new highs, while the transports are again almost 6% off theirs. This speaks directly to how business is doing and taken with the Chicago PMI number today, 43.2 was down from 47.1 and well below expectations of 48.5. Both initial claims and continuing claims for unemployment were up, but not in any substantial way. Clearly there are severe cross-currents, and some defensive posture is appropriate. We may be about to move higher again, but I believe it is the stronger names that will continue to lead. Plenty of “cheap” stocks are cheap for a reason. As rates fell pretty sharply, Utilities and communication services were strong and Energy, industrials and financials were weak. Internals were negative with NYSE 1.7:1 down and NAZ 5:3. DJIA were 24:6 down with AAPL + 38DPs, the only double-digit gainer and on the downside, BA -42, MMM23, CAT 17, GS 16 and UNH -14DPs. We added to our CTL position going out to December and up to the $13’s.
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: Today’s earnings were led early on with continued follow-thru in both AAPL and FB, but as noted above it was a very tough day if your symbol starts with W. Wayfair: W missed and the online seller, down from $173 in March has fallen in the past 4 days from $120 to today’s debacle $82.23 -18.85 (18.65%), while WWE missed on revenues and had a loss of subscribers and this one has been cut almost in half since trading $100.45 in late April and finishing today $56.04 -10.40 (15.65%), and the last W was WDC, with a miss and a finish of $51.65 -9.58 (15.65%) and well off its recent high of $65.14 last month. ETSY, the wunderkind from $6.00 to $73.35 since 2017 has fallen off a bit since its recent high at $71.80 in June finished $44.49 -8.31 (15.74%).
TWLO was lower @ $96.56 -11.14 (10.34%) also well off the recent high of $150 in July, LYFT beat expectations but was still a loss and was $41.44 -2.67 (6.1%), CAR missed on all metrics and gave poor guidance to boot and after recovering from $23 to trade $31 the stock closed $26.10 – 3.65 (12.37%). ANET beat earnings but missed on revenues and gave poor guidance and fell from a close of $244.57 it fell to 182.20 and is currently 184.45 -60.12 (24.5%). Pinterest was a debacle missing and giving very poor guidance and after $36.83 in August it fell to $19.75 and is trading $20.25 -4.85 (19.3%).
It wasn’t all bad news, Cirrus Logic was a star, beating with increased demand from smartphones and closed $67.96 +9.47 (16.19%). This is an almost identical move from last quarters report when it moved $8.03 to $57.08 (16.37%). QRVO beat on all fronts and increased guidance and that took it up to trade at a new all-time high of $90 and it is $88.75 + 7.89. The biggest surprise was the Q3 turnaround in the numbers for Kraft / Heinz: KHC. Today’s report seems to support that turnaround (maybe) as the stock moved higher, recovering from a low at $24.33 to finish $32.33 +3.83 (13.44%).
BIO/PHARMA:stocks wereLOWERwith CELG + .86 and INCY +.26 the only winners on my list. The losers were ICPT -1.63 (2.19%) and VRTX – 3.80 (1.91%).
IBB was $107.27 -.32 (.30%).
CANNABIS:stocks wereLOWERwith CURLF the big loser again today finishing 4.77 -.43 (8.25%), and PYX following -.52 (4.36$). MJ was $19.39 -.04 (.21%).
DEFENSE:wasLOWER with an almost identical decline of yesterday’s gains with ITA $220.10 -1.32 (.60%).
RETAILwasLOWERwith DDS leading the way -2.41 (3.38%), TJX -.96 (1.64%), and CPRI -.56 (1.83%) and TPR -.39 (1.49%). XRT was $43.15 -.52 (1.21%).
FAANG and Big Cap:were LOWERwith AAPL +5.29 and FB +3.72 the winners moving on their earnings from last night. The others were GOOGL -1.90, AMZN -3.99, BFLX -4.00, NVDA -2.45, TSLA -.49, BABA +.67, BIDU -.76, BOX +.08, IBM -1.37, BA -6.11, CAT -2.54 and XLK $83.67 -.05 (.06%).
FINANCIALS wereLOWERwith The slide in rates, GS -2.43, JPM -.83, BAC -.39, MS -.21, C -1.06, PNC -1.05, AIG +.35, TRV +1.28, AXP -.79, XLF $28.68 -.16 (.55%).
OIL, $54.18 - .88. Today’s action was lower, in fact making a lower low than yesterday and finishing near the lows. We closed half the position @ $1.32 on the 100% Up Rule and they closed $1.30 + .20. The stocks were lower and XLE closed $57.96 - .25 (.43%). Earnings on CVX and XOM come tomorrow pre-market.
Prices for Natural gas were higher again today and closed $2.633 -.058. We have already tested support on the bounce from 2.40 and we have rallied to hit just over $2.73 today.
METALS,GOLD: $1,514.80 +18.10,yesterday’s action was a test of $1,485 and it has fallen out of the up-trend line. I said that if we continue to test the $1,480 level, I will get long again. We never got the chance and I’ll have to see what develops here.
BITCOIN: closed $9,305 + 35.We broke to the downside last week but turned sharply higher recovering over $2,655 since breaking $7,500. Today we touched $9,000 before coming back up to close positive. I put a chart and comment on our Discord page (link is above). 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 $11.12 + .27.
Tomorrow is another day.
CAM
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