GWO Daily Note 1/14/2020
Market Strategies Newsletter - Special Daily Edition
For Trading January 15th
DJIA Catches UP
But Doesn’t Hold
Bank Numbers Great
But not For WFC
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Today’s market started off higher in the DJIA but lower in the Naz and S&P. The gains were on the back of the JPM and Citi numbers, while many of the FAANG names were tired. For the next 4 hours the DJIA clawed its way higher, to a new intraday high, but the “Tweeter-in-Chief” let the cat out of the bag that tariffs were not going away before elections. The market went from the high of 29,045 +147 straight down to -10 before recovering somewhat to close +32.62 (.11%), while the NASDAQ was -22.60 (.24%) and S&P 500 -4.98 (.15%), the Russell +6.13 (.37%) and the DJ Transports was the big winner +101.77 (.92%) on the back of DAL earnings dragging up the airlines and some positive action in the railroads. Market internals were slightly positive on NYSE at 4:1 but Naz was just 1:1. DJIA was 16:14 up with the only double digit changes, UNH +16 and JPM +11 and AAPL -29DPs. The feature of the day was the continuation of the big shorts running early only to falter by mid-day. AAPL was as high as $317.57 but fell back to $312.17 before the close. TSLA hit $547.41 +20 before coming back to $537.92. BYND managed a move back to $135.23 +20 before closing near the low @ $117.05 and then rallied to $126.30 in extended trading on news of a supply agreement but is currently $119.
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 I mentioned above, today’s market was generally running into exhaustion on the FAANG and other momentum names. The JPM and C earnings were excellent, but clearly WFC was a major disappointment. Margins and expenses were the main culprits and the stock, which has been on a steady slide since Q1 2018 from $66.31 on the news that it has been a dishonest, ill-run company which defrauded its customers (you might note my personal experience with them) finally got a new CEO, but he makes the Mark Zuckerburg “apology tour” look tame. I’m sure that people with short memories and attention spans will forget and come back into the stock, but they have a long way to go to rebuild their reputation. The stock closed $49.30 -2.81 (5.39%) and is down from $54 in the last 6 days. JPM was the star with better than expected numbers and return on equity and interest margins, but even it fell off late in the day and after trading over $140 it finished $138.80 +1.60 (1.17%). C did the same and after hitting $83.11 closed $81.91 +1.26 (1.56%).
Momenta (MNTA), a local biotech here in Cambridge working on immune-related diseases, gave guidance that was in-line for YE 2019, and gave guidance for growth in 2020 as well updates on trials and milestone expectations for the year, and the market took notice and the stock, up from $9.51 this past summer, and has had a steady climb to close yesterday $20.50 finished the day $25.36 +4.86 (23.71%) and traded $27.35 in extended hours with a last of $26.65. Also in the Bio-Pharma area was bad news from Stemline (STML) on reduced revenues from ELZONRIS their drug for BPDCN, blastic plasmacyytoi dendril cell neoplasm, an orphan disease with no other approved treatment. Unfortunately, the numbers were a bit lighter than expected and the stock, down from $11.38 on 12/24, had fallen to close yesterday $9.38, and fell on the news to $6.01 and closed $6.57 -2.86 (30.33%).
And while not the typical HOMERUN OF THE DAYthe two-day move in TLRY bears mention. The stock was up yesterday to $17.37 +1.82 (11.7%)%) announced tonight that they have a new CFO Michael Kruteck (from Molson-Coors) and a new COO, Jon Levin (formerly with Revlon) and the stock went as high as $22.65 before finishing $21.95 +4.58 (26.36%) and a two-day move of $6.40 (41%). It has a way to go to try the highs at $300 in 2018.
BIOPHARMA:wasHIGHERwith BIIB 5.07, ABBV +.46, REGN +8.89, ISRG -.43, MYL +.42, TEVA +.84 (9.16%) we took a nice gin on our 2/10 calls, VRTX +3.26, BHC +.40, INCY +4.60 (5.97%), ICPT +4.29 (3.96%), LABU +4.69, and IBB $121.11 +1.95 (1.64%).
CANNABIS:stocks wereHIGHERwith TLRY (see above), CGC +.99, CRON +.37, GWPH +1.89, ACB +.11, PYX +.19, APHA -.35, NBEV unchanged, ACRGF +.03, CURLF +.44, KERN +.14 and MJ $17.99 +.65 (3.75%). This was the group I called the best chance for a January Effect trade.
DEFENSE:wasMIXEDwith LMT -3.02, RTN +.25, GD -.16, TXT +.31, UTX -.51, NOC -3.83, BWXT -.35, TDY +.90, and ITA $231.49 +1.06 (.46%).
RETAILwasMIXEDwith M -.09, JWN -.37, KSS +.29, DDS +.84, JCP -.04 (4.8%), WMT +.18, TGT +1.14, TJX +.20, RL -.36, UAA +.83, LULU -1.41, TPR +.53, CPRI -.34, and XRT $45.61 +.27 (.60%).
FAANG and Big Cap:were LOWERwith GOOGL -11.67, AMZN -26.25, AAPL -5.21, FB -2.91, NFLX -.92, NVDA -5.28, TSLA +11.62, BABA -4.68, BIDU -2.70, BOX -.47, IBM -.82, BA +1.80, CAT -.13 and XLK $95.08 -.45 (.47%).
FINANCIALS wereHIGHERwith GS +1.28, JPM +1.70, BAC +.37, MS +.12, C +1.35, PNC +.91, AIG -.28, TRV +.39, AXP +.46 and XLF $30.84 -.08 (.19%).
OIL, $58.23 + .15. Today’s action was a quiet and short-range day. While we may have to test the $55 – 56.00 range again, if we turn higher now, I’d take a shot on this oversold market. The stocks wereMIXED TOHIGHER with the market and XLE $59.84 +.01 (.02%).
METALS,GOLD: $1,544.60 -6.00after breaking out “of the box” earlier last week, and the Iran news, we traded as high as $1,613 before turning down. I bought the GLD calls after we traded down to my area of support around $1,545 and after the small rally it fell back today. We got stopped out on the 50% Down Rule today but I expect that we will go back in if we stabilize overnight.
BITCOIN: closed $8,750 +550.We broke to the upside today and I was looking for a close above $8,280, which we easily cleared. I now expect a test of $9,200 to $9,500. We own 750 GBTC with an average of $8.99. GBTC closed $10.03 +.89 today.
Tomorrow is another day.
CAM
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