GWO Daily Note 3/16/2020
Market Strategies Newsletter - Special Daily Edition
For Trading March 17th
Markets Halted Again
FED Move Fails to Help
Yields Steady
Today’s market was pounded from the start with the futures overnight falling to down “the limit” prior to our open and were halted almost immediately. We came close to the second halt, but the market stabilized, sort of, and traded without much enthusiasm until Mr. Trump started to speak, and that took us to a new low of the day at -1050 or so. For a while it looked as if we’d also see a new all-time loss on the NASDAQ 2hich looked like it would go -1000, but rallied a touch to close -970.29 (12.32%), DJIA -2997.11 (12.93%), SP 500 -324.90 (11.98%), the Russell -171.66 (14.2%) and the DJ Transports -916.76 (11.55%). Market internals were not quite as bad as the decline would project with NYSE A/D 24:1 and NASDAQ 11:1, but the DJIA was a debacle with all stocks lower and the biggest losers being UNH -317DPs, HD-275, BA -274, AAPL -242, MCD-190, V -162, and MSFT -158. In fact, 10 of the 30 were down triple digits while only 1, WBA was down a single digit. The Fed’s dramatic 1% rate cut down to .25% did little to calm fears as did their open market infusions during the day. The White House did little to engender any confidence, and their lack of any cohesive fiscal plans left the futures “limit down” from early last evening right up to the open, which lasted only a minute, literally, before level 1 circuit breakers halted the market for 15 minutes. We came very close to the second breakers at -13%, but the market seemed to calm down a bit and while trading included more forced liquidation, but the decline was stopped at -2798 by 10:00 (including the 15 minute halt) and we rallied until topping out at 11:30 at -1417. The rest of the day was uneventful until Trump started speaking and we sold off into the close with a new point loss record. Briefing.com listed NO STRONG groups for the 3rd time in 3 days with the weakest including Info tech, financials, consumer discretionary, materials, real estate and of course, energy.
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:I’m not sure that there is really any point to listing all the names and declines here so I’m just going to hit the groups and highlight any outstanding issues. But the main characteristic of this market is forced liquidation. Whether for margin calls, or recently new investors throwing in the towel and leaving the market, it’s pretty extreme. As I’ve said here before, the rallies in a bear market can be very deceptive. Sharp and quick and with high volume, sucking you back in because everyone wants to believe the turn is here.
BIOPHARMA:wasLOWERwith most down nearly 10% and the only multipoint gainer being REGN +4.45. On the downside we had BIIB -21.71, ABBV -9.06 (10.16%), ISRG -66.69 (14.16%), MYL +.13, TEVA -.99 (11.79%), VRTX -21.09 (9.55%), BHC -3.48 (18.51%), INCY -2.34, ICPT -16.81 (23.41%), LABU -8.10 (33.37%) and IBB $95.90 -7.78 (7.5%).
CANNABIS:stocks wereLOWER againand it’s almost a waste to discuss the group, which is severely broken with TLRY, a former $300 stock that has fallen for 14 of the last 16 days from $20 to close today $3.05 -.875 (21.74%). Even the medical company CURLF was $3.20 -.48 (12.83%) and KERN the compliance software $4.16 -.91 (17.95%) and MJ $9.54 -.80 (7.74%).
DEFENSE:wasSHARPLY LOWERwith most down double digits LMT -33.08, RTN -16.29, GD -12.94, TXT -2.22, UTX -13.37, NOC -31.00, BWXT -3.79, TDY -37.18, and ITA $134.25 -23.12 (14.69%).
RETAILwasLOWERwith all down double-digit percentages. M -1.16 (14.45%), JWN -4.40 (20.38%), and on the brand side, TPR (COACH) -4.23 (26.06%), and CPRI (KORS), -4.27 (30.65%) and XRT $28.66 -4.08 (12.46%).
FAANG and Big Cap:were LOWERwith this group the highlight of the crowded trade problems. GOOGL – 129.27, AMZN -40, AAPL -27.97 (10%), FB -21.28 (12.5%), NFLX-30.30 (after making a 52-wk high @393, 10 days ago and 95 higher), NVDA -34.94, IBM -5.71, TSLA -93.62, BABA -12.41, BIDU -8.84, BA -37.34, CAT -2.66, DIS -5.41, and XLK $72.56 -11.63 (13.81%).
FINANCIALS wereSHARPLYLOWERwith the market and the FEDs big rate cut didn’t seem to help. GS –18.60, JPM -13.16, BAC -3.28, MS -4.66 (after Cramer “sanctioned the purchase” last Tuesday at $37 ($6 ago), C -8.79, PNC -17.01, AIG -3.44, TRV -20.94 (19.49%), AXP -8.67, and XLF $20.35 -2.70 (11.71%).
OIL, $28.70 -3.04The stocks wereLOWER with the price of Oil trying to hold $30.00 initially but turning back down and breaking $29.00. This puts it back near the 2016 lows just under $27.00. XLE finished $27.81 -4.38 (13.61%).
METALS,GOLD: $1,486.50 -30.20.After the overnight rally on the Fed news the Gold fell along with the S&P, and other indexes. Gold is clearly suffering through liquidation like the rest of the market, but the FED repo program should stoke the inflation fires, and any bounce in stocks will help.
BITCOIN: closed $4930 -400.We broke to the downside overnight and fell to a low of $4390, and for the first time in days did not make a new recent low. While I want to add the 350 sold just over a week ago, I want to wait and see some stabilization. We still own 400 GBTC with an average of $8.06. GBTC closed $5.44 -.73 today.
Tomorrow is another day.
CAM
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