GWO Daily Note 11/4/2019
Market Strategies Newsletter - Special Daily Edition
For Trading November 5th
More Record Highs
MCD & UAA Battered
Bond Don’t Care What the Fed Says
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Today’s market was up at new highs right from the start heading to +170 on the DJIA and by 12:30 we had drifter a bit coming back to +85 or so. By 3:15 we had slid back to a new low +65, but at day’s end we were +114.76 (.42%), NASDAQ +46.70 (.56%), S&P 500 +11.36 (.37%), the Russell +8.07 (.51%), and the Transports, playing catch-up +243.34 (2.27%). Market internals were ok, but not overwhelming for new all-time highs with NYSE 1.6:1 and NAZ just 3:2. DJIA was 18:12 (same as NAZ 3:2) with BA +40, CVX +36, and MMM + 33DP’s with MCD -36 and PG -32DP’s. As I mentioned above, the bond market could care less about what Mr. Trump or Fed Chairman Powell have to say. Bonds had another big day down with the ETF (TLT), already down from $141.68 on Fed day last week and closing tonight $138.71 -1.85 (2%). From Thursday’s close @ 2.00 we have risen to 2.10. Yeah, I can see why we needed a cut…
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: the biggest news were the MCD and UAA troubles over the weekend with Steve Estabrook’s firing by his board of directors for his “bad judgement” in having a consensual relationship with another employee. For those of you who didn’t see my narrative in the Weekly Strategies last night, I find this to be a symptom of the dramatic over-reach of the politically correct. This was not a “touchy-feely” executive who took advantage of an underling or caused an HR problem by creating a “hostile environment,” but rather a guy who was responsible for rescuing a business that reported its Worst Year ever,and was the guy who engineered a turnaround that secured the jobs of 1.9 million employees and franchise owners. Pendulum swung too far! And, the stock seems to agree since it opened 190.11 -3.83 and continued lower to $187.55 before closing $188.66 -5.28 (2.72%).
Under Armour: UAA was an actual BADsituation, clearly set at the feet of their founder and outgoing CEO, Kevin Plank and his board. The company has been under investigation since 2017 in a “federal accounting probe,” never reported or included in the company filings. This has grown to a probe by the DOJ and the SEC and is now a criminal investigation. Just as a matter of record, the company had had 3 CFO’s since 2016-2017. Mr. Plank surprised Wall Street last week announcing he was stepping down as CEO on January 1, 2020. The stock, split 3 times from 2012 to 20116 and had an adjusted low of around $1 to a high of $52.94 in late 2015 before going through a decline in earnings and stock prices making a low of $11.40 in 11/17. It had recovered to just under $28 in July, but gapped down this morning to open $17.82 -3.83 and continuing to $16.83 before closing $17.14 -4.00 (18.92%), a new low for the year.
Twillio: TWLO wasn’t dishonest, just stupid, and the stock, written about here last week when it fell on earning, from $109 to 92.89 with poor guidance, showed just how bad their numbers were, giving new guidance today, since they came across some “errors in calculation.” The stock had recovered a bit to $97.00, fell back to $91.64 and closed $92.01 -5.05 (5.2%).
Wright Medical, NV: WMGI, a device maker that has spent it’s 8-year listed life between $15 and $28 received a buyout offer from Stryker: SYK, for $4Billion or $30.75, a 40% premium from Friday’s close. It finished the day $29.04 +7.03 (31.94%).
UBER reported yet another quarterly loss on increased revenues. This stock epitomizes the old joke, “we only lose a little on each ride, but we make up for it in volume.” Shareholders weren’t amused. The stock had closed $31.08 but traded down to $28.70, within pennies of its all-time low of $28.31 last month before closing $29.37 – 1.71. Best I can say about this dog is that its oversold, and that’s a stretch.
Also reporting today were Ferrari: RACE, which managed a margin of 34% (vs. roughly 8 -9% industry standard) and blew through the old high to close $169.99 +8.61 (5.34%). Adobe: ADBE, which gave new and improved guidance ahead of their 12/12 earnings release. The stock had closed $277.50 but in late trading rose to $295.25 and closed $289.30 + 11.80 (4.25%).
BIO/PHARMA:stocks wereHIGHERwith TEVA the biggest gainer +.45 (5.39%) and MYL a distant second +.37 (1.88%). On the downside we had BIIB -6.30 (2.11%) and the IBB $109.43 -.42 (.38%).
CANNABIS:stocks wereLOWERwith ACRGF -.38 (6.28%) and PYX -.54 (4.95%). Gainers were TLRY +.49 *2.27%) and CGC +.47 (2.38%). MJ was $19.59 -.01 (.05%).
DEFENSE:wasLOWER with the big losers NOC -11.37 (3.23%) and LMT -4.67 (1.23%). ITA was $223.08 -.52 (.23%).
RETAILwasHIGHERwith most stores unaffected but the debacle at UAA -4.00 (18.92%) SEE ABOVE, and LULU -4.00 (1.99%). KSS was the big gainer +2.01 (3.86%) and M +.34 (2.1`8%). XRT was $44.40 +.72 (1.65%).
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 wereHIGHERwith the rise in rates (see above) with GS +2.49, JPM +1.20, BAC +.60, MS +1.60, C +1.37, PNC +1.20, AIG +1.17, TRV -.52, AXP +.49 and XLF $29.37 +.25 (.86%).
OIL, $56.54 +.34. Today’s action was another try at the overhead supply between $57.00 -57.50 but could not hold and it finished about 2/3 down on the range, even though it was +.34. The stocks were all higher with the XLE finishing $61.21 +1.93 (3.26%).
Prices for Natural gas were much higher again today and closed $2.821 + .107. We have already tested support on the bounce from 2.40 and we have rallied to hit just over $2.84 today.
METALS,GOLD: $1,511.10 -.30,the last several days we tested resistance around $1,515 -1,520 and we have been turned back now 4 times in the last 7 trading days. The short position in the GLD 141 puts is precarious, as we try every day, but if we don’t see a break to the upside, I think we go back to test support around $20 lower.
BITCOIN: closed $9,565 +330.We broke to the downside recently but turned sharply higher recovering over $2,655 since breaking $7,500. After the rally to just over $10,000 we have been flagging out in a bullish manner and today’s close is a new closing high. I expect this to continue. 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 $11.82 +.62.
Tomorrow is another day.
CAM
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