GWO Daily Note 11/6/2
Market Strategies Newsletter - Special Daily Edition
For Trading November 7th
Non-Farm Productivity Misses
Earnings Misses Pummeled
Bond Recover a Bit
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Today’s market was about as exciting as watching paint dry. We actually made both the high and the low in a 15-minute period between 11:45 and 12:00 with the high of +34 followed by the low -85. It was a day that may have been a good, quiet consolidation of recent gains, even though the 15-minute span was caused by the “Lucy pulled the ball away, again, action of the Trump administration about the signing on “phase 1,” whatever that actually means. That said, the market did revert back to the upside, slowly all afternoon, to finish -.07 (.00%), NASDAQ -24.05 (.29%) on weak chip stocks, S&P 500 +2.16 (.07%), the Russell was the big loser -10.07 (.63%), and the DJ Transports finished -20.94 (.19%). Internals were negative again but not excessively with NYSE 5:4 and NAZ 5:3 down. The DJIA was split 19 UP and 11 Lower with the big gainers MCD and HD +13DPs and the Losers BA -27, CVX -14, DD -13, XOM and WBA -12DPs. Energy was the weakest sector and real estate, healthcare and consumer staples the strength.
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 the earnings parade continues the winners are rewarded and the misses pummeled. We started the day with WW, formerly Weight Watchers with a miss both top and bottom lines and the stock, recovering from its decline from its high of $105 mid-2018 to a low of $16.71 in June to close yesterday $37.51, open the day $30.50 and trade $29.35 before recovering to close $31.94 – 5.57 (14.85%). Next on the list was Match: MTCH also with a double miss and lowered guidance. Already down from a high of $95 in August closing $68.77 – 2.44, trading down to $61.50 before closing near the high $67.00 -1.77 (2.57%).
Then came the good news, with CVS beating top and bottom and giving more upward guidance. This is one of my “Stocks for total Return” bought at a covered-write adjusted price of $48.77 and having already received several dividends, rally hard to a new high for the year closing $70.93 +3.58 (5.32%).
Also early news was a proposed buyout (probably better called a business combination) of XRX ($8Billion) and HPQ ($27B). HPQ closed nearer the low at $19.57 +1.16 (6.3%) after trading as high as its open at $21.67. We’ll see if this goldfish can swallow the whale. Aircastle: AYR, an aircraft leasing and rental firm also received a buyout from a combination of Marubeni and Mizuho. The stock, which had a low of $15.75 last Xmas eve, had closed $27.58 and had gapped from $22 to $26, 10 days ago, closed $32.27 +4.69 (17.01%) and above the offer of $32.
Supernus Pharma: SUPR had bad news on an ADHD trial and the stock, down from $61.25 last summer to close yesterday $29.13 fell to $19.35 before closing $20.0 -9.13 (31.34%).
After the close we had several reports but I’ll start with one of ours, CTL. The stock was downgraded this morning by Guggenheim and fell to $13.07 -.60 and spent the day between that low and the close of $13.36 -.31 (2.27%), BUT, when they reported, it was another story. The stock had a minor miss on revenues but better than expected and margins gained, for the 4th quarter in a row. The stock traded as high as $14.05 before finishing $13.56 +.20. Tomorrow should be interesting for this one, but we sold half of our position in the options on our 100% Up Rule, so we had no financial exposure.
On the downside we had ROKU, a stock that started the year around $30 and hit $176.55 in mid-September had finished the day $141.05 and beat on top and bottom lines but missed on the New Subscribers and the stock fell to $117.56 and is trading $120.22 -20.83 (14.2%). EXPE also missed and after closing $135.36 it too fell hard, trading 116.65 and is currently 117.88 – 17.78. WYNN reported lower Macao numbers and it too fell from a close of $122.56 to $116.17 but recovered to 128.96 and is $125.50 +2.94. Must be a very encouraging conference call.
Last, Broadcom: AVGO beat and after being on a steady move higher from $267 last month to close 313.16 was about unchanged.
BIO/PHARMA:stocks wereLOWERwith TEVA the big loser - .40 (4.68%), followed by MYL -.64 (3.6%) and BHC -.46 (1.76%). The IBB was $108.25 -1.27 (1.16%).
CANNABIS:stocks wereLOWERwith GWPH the big loser, even though they had a dramatically smaller loss and reported sales of $86MM for their flagship drug, Epidolex, the cannabinoid drug to treat some forms of epilepsy. The stock was higher by 38% this year but fell to $118 -18.16 last night and continued today to $111.86 -22.89 (16.99%). Also lower were KERN -.44 (9.59%), APHA -.22 (4.28%) and ACRGF -.22 (4.05%). MJ was $19.39 -.25 (1.27%).
DEFENSE:wasHIGHER with no gainers of over 1%. ITA was $225.00 +.43%).
RETAILwasLOWERwith only LULU +6.40 (3.29%) and UAA +.27 (1.51%) meaningful gainers. The biggest losers were M -.68 (4.07%), KR, yesterday’s big winner -.83 (2.98%), TPR -1.02 (3.78%), and the XRT $44.76 -.19 (.42%).
FAANG and Big Cap:were MIXEDwith GOOGL -4.02, AMZN -6.31, AAPL +.23, FB -2.72, NFLX -1.13, NVDA -1.96, TSLA +8.98 (2.83%), BABA +1.95, BIDU +4.35 (4.03%), BOX +.06, IBM +1.10, BA -3.79, CAT -.88 and XLK $84.98 -.04 (.05%).
FINANCIALS wereMIXEDwith lower rates with GS -.22, JPM +.20, BAC -.03, MS -.19, C -.41, PNC +.68, AIG +.71, TRV +1.08, AXP +.92 and XLF $29.64 +.16 (.54%).
OIL, $56.35 -.88. Today’s action was another try at the overhead supply trading to a new recent high at $57.85 before coming down hard to a low of $56.11 and closing much closer to the lows. The stocks were lower with the XLE finishing $60.10 -1.19 (1.94%).
Prices for Natural gas were much higher again today and closed $2.828 - .034. We have already tested support on the bounce from 2.40 and we have rallied to hit just under $2.90 today.
METALS,GOLD: $1,493.60 +9.40,yesterday’s decline was stopped at support at $1,480 and we reversed our position from short to long within $1-2 of that low. Today’s failure to follow lower and finish up on the day was a good sign for us. We own the GLD 11/22 141 calls @ $ .76 and they finished the day $1.07, for a decent gain. I can only warn that today was an “inside day” which generally is considered insignificant as it related to trend, so we will be careful to watch for weakness below yesterday’s lows.
BITCOIN: closed $9,360 - 60.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 within an acceptable range for me. I expect this to continue. A close above $9,565 is need to send us higher. 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 $11.20 -.45.
Tomorrow is another day.
CAM
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