GWO Daily Note 3/18/2020
Market Strategies Newsletter - Special Daily Edition
For Trading March 19th
Another Halt!
Yields Rise
Oil Collapse
Today’s market was actually not as bad as it seemed. We finally got some dramatic action on the downside, and a rally back up into the range that I thought we were building yesterday. The obvious culprit was the Oil. In case you missed it, here is my midday video, #148 https://youtu.be/7eKv4Z2Qox0 . I’m going off script because I have several issues to discuss, and frankly, I’m not really sure we need to go over all the damage that seems to have been done. First of all, the big numbers: DJIA -1338.46 (6.3%) after being -2320, NASDAQ -344.94 (4.7%) after being -648, S&P 500 -131.09 (5.18%) after being -249, the Russell -115.50 (10.44%), and the DJ Transports -496.79 (6.65%) after being -987. Internals were NYSE 15:1 and NASDAQ 8.9:1. Volume increased, especially on NASDAQ. The rally came late in the day and while there was an ECB stimulus package and China lowering rates, it felt to me as if the we were just so “wrung out” that we were due a bounce.
Another issue that came to the surface was provided by Bill Ackman of Pershing Square fame, who called into CNBC and gave, without question, the worst-case scenario for the state of the world. His degree of panic was palpable and frankly a bit overboard. In all his doom and gloom, he also said he was buying selected stocks. He called for the total shutdown of the country for 30 days. I find that as I’ve always said, “everyone is never right” and EVERYONE is panicked. Buy the fear, sell the greed works for me too. Frankly, it scares me too, and that goes into the buy column. Here’s the Ackman call-in: https://www.cnbc.com/2020/03/18/bill-ackman-pleads-to-trump-to-increase-closures-to-save-the-economy-shut-it-down-now.html
My other issue is one that I’ve railed about for months. Buybacks. If you had any doubt of the BS basis for buybacks, the last week should solve it. Now that these companies have been buying stock and cutting their share count to inflate their earnings at the cost of (not the benefit of) shareholder. The fact that most companies have cut off their buying is the giveaway. The point of buybacks is to use your excess cash for the betterment of the firm. At what point on the downside should you be buying stock back? Any time that prices are depressed, and you can’t find a better use for the cash. This is EXACTLY THE OPPOSITE OF WHAT THE CORPORATIONS HAVE DONE. It shows their true intent, and it is disgraceful. That’s all I have to say about it, except that you can count on the massive class-action suits that will be brought.
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:While there is plenty to discuss, I’ll just hit a few high points. All U.S. automakers closing production. Marriott laying off workers and closing many hotels completely and in other floors. Airlines cutting capacity. DAL which 10 days ago said 15%, upped it to 40%, now cutting 70%. Shelter in place expected in many major U.S. cities. If you think it can’t get worse, wait a few minutes. But, as I said above, that’s a time to buy, not sell.
BIOPHARMA:wasLOWERwith most falling sharply, and only gainers REGN +3.31 and VRTX +8.36 (3.97%). IBB was $99.97 -1.33 (1.31%).
CANNABIS:stocks aren’t even worth reporting with losses from the best, GWPH only down 2.85 (3.42%) and the worst PYX -.65 (30.95%). MJ $9.10 -.85 (8.54%).
DEFENSE:wasMOSTLY LOWERwith LMT +20.17 (6.33%) and NOC +5.67 (1.78%) and TDY -58.88 (22.57%) the biggest loser. ITA was $124.90 -12.15 (8.87%).
RETAILwasMIXEDwith JWN +1.47 (7.85%), DDS +2.74 (7.39%), and WMT +5.44 (4.56%) and JCP -.08 (16.34%), and UAA -.97 (9.83%) the biggest loser. XRT was $27.75 -2.39 (7.93%).
FAANG and Big Cap:were MIXEDwith GOOGL -26.87, AMZN +22.16, AAPL -6.19, FB -2.46, NFLX -4.28, NVDA -14.45, TSLA -68.98 (16.03%), BABA -4.81, BA -22.25 (17.92%), DIS -4.73 and XLK $76.35 -1.15 (1.48%). This group was down much harder but rallied late and are higher in extended hours.
FINANCIALS wereLOWERwith insurance stocks the worst. TRV -14.41 (14.95%), AIG -2.80 (12.58%) the banks all down from 3 to 9%, and XLF $19.77 -1.20 (5.72%).
OIL, $20.83 -6.50The stocks wereLOWER with the price of Oil trying to hold $24.00 and fell quickly on the break there touching $20.06. XLE was $23.98 -4.02 (14.36%). The oil rallied in extended hours and is currently $23.23 +2.40.
METALS,GOLD: $1,477.90After the liquidation of the past few day’s gold tried to work higher but gave it up when the oil cracked $24.00. I still expect a move back toward $1,600 to unfold.
BITCOIN: closed $5340 -40.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. Today was another “inside day” which is generally indecisive. 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 $6.01 -.09 today.
Tomorrow is another day.
CAM
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