GWO Daily Note 1/8/2020
Market Strategies Newsletter - Special Daily Edition
For Trading January 9th
DJIA Reverses 800 Off Lows
Finishes +161
Bonds, Oil & Gold Lower
TSLA Closes in on $500
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Today’s market started off lower by just 60 after last night’s decline on the Iran bombing of al-Asad base in Iraq but within minutes we were unchanged and higher. The lows overnight in the DJIA were 28,084 but we were never below 28,522 today. There were similar moves in all of the futures with Oil exploding up to $65.65 (finished 59.61), Gold to $1,613 (1,560), S&P 3181 (3250), DJ (28,770), NAZ 8678 (8944), Bonds 159-19 (156-12). These moves are amazing in size. The only time I’ve ever seen this kind of reversal overnight was Election night 2016. So, the closes were DJIA +161.41 (.56%), NASDAQ +60.66 (.67%), S&P 500 +15.87 (.49%), the Russell +5.29 (.32%) and the Transports +96.08 (.88%). The NAZ and S&P made new all-time highs. Market internals were 3:2 on NYSE and 1.3:1 NAZ. DJIA was 21:9 with the biggest losers, BA -40, WBA -24DPs, BA on the crash in Iran and WBA on earnings.
So, my opinion on what happened last night: I was impressed by the restraint of the “Tweeter-in Chief” and was somewhat pleasantly surprised. Not sure I could have done the same. My assumption is that China (his only possible success) caused the restraint, since they absolutely support Iran. But after thinking about it all day, and this is where being an OLD guy pays off, I recalled the nuclear proliferation of the 50’s and 60’s and the doctrine called “MAD,” mutually assured destruction. And it occurred to me that that doctrine may have gone through changes over the years, but it seems that with all of the posturing, that no one actually wants the kind of war that we would have on the escalation with a state that has nothing to lose. There are no wars like WW1 or WW2, or Korea or Viet Nam. We’re not landing 150,000 young men on the shores of the Arabian Sea (as in Normandy), the technology of war having changed so dramatically. One other minor comment based on history, wars are both highly inflationary and the stock market loves them. (Good thing nobody told Trump). During WW1 and WW2, the DJIA rose 152%. We had up markets during Korea and both Bush Gulf/Iraq wars. We’re still in Afghanistan, but the market has under 9,200 in October 2001 when that mess started. Just the facts…
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 clearly governed by the Iran news, but there were still earnings related issues. Walgreen (WBA) was the problem with softness in both the RX and front of the store sales. Volumes grew a paltry 1.8% and while the company said they stand by full year guidance, the stock finished $55.83 -3.46 (5.84%). There are rumors that KKR is interested in a deal, but no word from either company. The BA news was about the crash of a Ukrainian Air 737 in Tehran. While there is no information regarding any manufacturing issue, the stock sold off to close $331.37 – 5.91 (1.75%).
On the downside, as I mentioned here 10 days ago, ITCI, a “homerun of the day” that had moved from $12 to $43 on news of their approval of a new schizophrenia drug, decided to replenish their cash with a new offering, did 10 million shares at $29.50 sending the stock back to $26.34 -4.66 (15.03%).
On the upside we had Applied Therapeutics (APLT) had solid topline results for Galactosemia, a metabolic drug, which sent the stock, which traded around $10 all last year and doubled in late October, and had risen to close $26.16 yesterday opened $31.75, traded $40.14 and finished the day $35.18 +9.02 (34.48%).
And, today’s HOMERUN OF THE DAYwas Shiftpixy (PIXY) a company that has designed a staffing platform for the disruptive “gig” economy and has assigned 60% of its contracted book of biz for $20million and expects to replace its cash-flow to breakeven in their next-gen platform business. The stock was reversed 1:40 in December and close yesterday $8.07, opening today $24.51 and trading to $27.50 before closing $19.25 +11.18 (138.54%).
BIOPHARMA:wasHIGHERwith BIIB +2.47, ABBV +.73, REGN +9.29, ISRG -1.02, MYL +.05 TEVA -.11, VRTX +6.21, BCH -.07, INCY -.51, ICPT +1.56, LABU +2.29 and IBB $120.89 +1.74 (1.46%).
CANNABIS:stocks wereMIXEDwith TLRY +.67, CGC +.35, GWPH +2.75, ACB -.05, PYX -.07, APHA +.03, NBEV -.05, ACRGF +.18, CURLF +.12, KERN -.45 and MJ $15.39 +.15 (.92%).
DEFENSE:wasMIXED with No moves over 1% and ITA $229.80 -1.53 (.66%).
RETAILwasMIXEDwith M +.45 (on better sales), JWN +.66, KSS -.79, DDS -.06, JCP +.02, WMT -.18, TGT -.07, TJX +.33, RL -.29, UAA -.28, LULU +3.78, TPR +.18, CPRI +.43 and XRT $45.40 +.09 (.20%).
FAANG and Big Cap:were HIGHERacross the board with GOOGL +9.93, AMZN -11.36, AAPL +5.60, FB +3.04, NFLX +9.25, NVDA +1.07, TSLA $495.05 +26.99 (5.75%), BABA +1.37, BIDU +1.90, BOX -.11, IBM +1.31, BA -5.02, CAT +1.30, and XLK $93.51 +.99 (1.07%).
FINANCIALS wereHIGHERwith GS +3.03, JPM +1.62, BAC +.41, MS +.86, C +.86, PNC +.96, AIG +.60, TRV +1.45, AXP +3.34 and XLF $30.73 +.20 (.66%).
OIL, $59.61 -3.09. Today’s action was downhill from the start after trading as high as $65.65 last night on the Iran news, but today after tensions were seemingly over, prices fell all day. The stocks wereLOWER with the XLE $59.71-1.00 (1.65%).
METALS,GOLD: $1,560.20 -14.70after breaking out “of the box” earlier last week, and the Iran news, we traded as high as $1,613 before turning down. On a technical basis, I would be a buyer anywhere near 1,540-1,545.
BITCOIN: closed $8110 -170.We broke to the upside on the news and traded up to 8595, a new recovery high. I said “I really interested to see what happens with the 5 and 20-day MA’s now since they are within .02 of each other. Well, they resolved to the upside and I believe we will try 8,000 again but as a pull-back this time. We own 750 GBTC with an average of $8.99. GBTC closed $9.33 -77 today.
Tomorrow is another day.
CAM
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