GWO Daily Note 1/2/2020
Market Strategies Newsletter - Special Daily Edition
For Trading January 3rd
New High Abound
APPLE TOPS 300
Bonds Rally Off Lows
RAD Falls Back To Earth, Again
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Today’s market started off higher by about 200 on the news of Chinese lowering the “reserve requirement” to prompt more lending. The market took no notice of the “initial claims for unemployment” rose to the highest level (4-week moving average) since January 2018. Bonds, especially the long end started lower but came back very strongly on continued soft manufacturing numbers out of China and Europe, and the possibility that the overbought market is due for a pullback, and investors moving to a more defensive stance. As I have written, I’m using our position for the later move that I label a “flight to safety.” By 10:30 we had fallen to the low of the day, +89, and started a sideways to higher move and just after 2:45 we broke to new highs again and in the last 15 minutes we added an additional 100 DPs and finished +330.36 (1.16%), NASDAQ +119.59 (1.33%), S&P 500 +27.07 (.84%), while the Russell, lower all day finished -1.70 (.10%) and the Transports were +93.03 (.85%). A/D was roughly 1.4:1 on both NYSE and the NAZ. DJIA was 24:6 with the big winners AAPL, BA, MMM, GS, and MCD. We bought a small position in LULU 1/17 220 puts at $1.65 to $1.70 (closed $1.55) and we still have our position in TLT calls @ $1.33 (closed 1.40) and I shorted the RAD 300 again@ $16.87 (trading 14.40 in extended hours). When I start to hear statistics like AAPL is now a market-cap greater than the entire energy sector, that makes me nervous. I love the stock, and the products, but when did a consumer electronics company become bigger that the industry that powers our cars and planes, our manufacturing sector, and our power grid?
Again: CAUTION IS REQUIRED.
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 market was not really that unusual for the first trading day of the year, since there is a massive amount of money that flows in from pensions, 401K’s and bonuses paid either at year-end or in the new year to delay tax liability. Early on, there was a little selling of the big winners but it was overcome by the rally. As mentioned in the headlines, AAPL rose to close $300.25 and is now $300.85 +7.20 (2.46%) in extended trading. TSLA got a new price target from Cannacord today, calling for $515 from 375, and it is trading $430.98 +12.65 (3.02%). Many of the Chinese stocks were strong with BABA at a new high $219,82 +7.72 (3.64%) and BIDU $138.22 +11.82 (9.35%).
There were several biopharma names in the news with varying results. INCY had a failed trial and after closing $85.97 -1.35, it has fallen to 73.01 but is now 77.28 – 8.59 (10%). Also on the downside was Durect (DRRX) who had a failed trial for its Plaque psoriasis treatment and it fell from a recent recovery high of $3.95 to trade $2.05 and close $2.62 -1.18 (31.05%).
But the Disaster Du Jourwas Novan (NOVN), which reported a failed study on molluscum contagiosum, a viral skin infection that causes lesions. The stock, public since mid-2016 has traded as high as $30.90, had fallen to trade as low as $ .65 last year, had traded $3.72 last week but fell to a low of $ .77 with a last of$ .86 – 2.55 (73%).
And, the HOMERUN OF THE DAYwas Pulmatrix, Inc. (PULM) whose licensing and development agreement with JNJ for their Lung Cancer Initiative will net it $7.2 million upfront and additional $2 million milestone payments in its study on COPD. The stock had been trading between $ .61 and $1.02 and closed $ .84 on 12/31 and opened today $1.62, traded $1.79 and finished the day $1.62 +.76 (88.37%).
BIOPHARMA:wasLOWERwith BIIB -2.49, ABBV +.95, REGN -2.13, ISRG +6.11, MYL +.55, TEVA -.24, VRTX +1.05, BHC -.01, INCY -10.21 (see above), ICPT -5.24 (4.23%), LABU -1.15, and IBB $119.97 -.54 (.45%).
CANNABIS:stocks wereLOWERwith TLRY -.71, CGC -1.03, CRON -.32, GWPH -.25, ACB -.11, PYX -.64, APHA -.21, NBEV -.02, ACRGF -.08, CURLF -.15, KERN -.41 and MJ $16.90 -.22 (1.29%).
DEFENSE:wasHIGHER with LMT =9.82, RTN +5.25, GD +1.66, TXT +.88, UTX +3.88, NOC +11.73, BWXT +1.55, TDY +11.41, and ITA $227.38 +5.30 (2.39%).
RETAILwasMIXEDwith M -.42, JWN -.82, KSS -1.90, DDS -3.43, WMT +.17, TGT -2.13, TJX +.69, KR -.33, RL +1.56, UAA +.18, LULU +1.78, TPR -.04, CPRI +.13 and XRT $45.66 -.35 (.76%).
FAANG and Big Cap:were HIGHERacross the board with GOOGL +29.29, AMZN +51.38, AAPL +7.20, FB +4.57, NFLX +6.43, NVDA +4.73, TSLA +12.67, BABA +7.66, BIDU +11.66, BOX +.46, IBM +1.38, BA +7.05, CAT +2.85, and XLK $93.40 +1.73 (1.89%).
FINANCIALS wereHIGHERwith GS +4.41, JPM +1.76, BAC +.43, MS +1.13, C +1.38, PNC +.74, AIG +.43, TRV +.56, AXP +1.79, and XLF $31.13 +.35 (1.14%).
OIL, $61.18 + .12. Today’s action was a rally after testing 60.50 again today and back to just slightly higher. The stocks wereHIGHER with the XLE $60.64 + .60 (1.00%).
METALS,GOLD: $1,228.10 +5.00after breaking out “of the box” earlier last week, and has moved higher, and is now approaching the resistance around 1535 range. Today’s high was $1534 and we’ll see how it acts when it approaches $1,542.
BITCOIN: closed $7040 -210.We broke to the upside but ran into a brick wall just under $8,000. I was very disappointed to see the break, although we are right back to the lower Bollinger Band. I’m really interested to see what happens with the 5 and 20-day MA’s now since they are within .02 of each other. We own 750 GBTC with an average of $8.99. GBTC closed $7.98 -.21 today.
Tomorrow is another day.
CAM
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