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Weekly Market Recap Jun 10, 2018

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Last week was much like the ones we saw throughout 2017!  Up, up, up nice and slow…. with little volatility.   And new record highs.  Market news was quiet in general despite “global trade tensions”.   Really ….it was difficult to find much market moving news!  (Insert crickets chirping hee)

For the week the S&P 500 closed up 1.6% while the NASDAQ added 1.2%.  Some catch up from the S&P 500 after lagging the NASDAQ of late.

In economic data, U.S. factory orders fell by 0.8% in April, driven by a decline in commercial aircraft.  Tuesday, ISM services surged to 58.6 in May from 56.8 – any reading over 50 signals expansion and this one is near 60!  The U.S. trade deficit shrank 2.1% in April—before the Trump tariffs took effect—and tumbled to a seven-month low. But the gap is still on track to widen in 2018 to the highest level in a decade.

Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.

Elon Musk has launched a company to build tunnels underground.  He is selling flamethrowers at $500 a pop to help fund said company.   The first 1000 were sold last weekend.  This is a real story.  Seriously.

The devices, technically called “Not a Flamethrower” to skirt federal shipping regulations, shoot a two-foot flame.

The company had a good week even aside from that, surging 9.7% Wednesday, after Chief Executive Elon Musk told shareholders that the electric-car maker was “quite likely” to meet its production goal of 5,000 Model 3 cars a week.

The week ahead…

President Trump and North Korea’s Kim Jong-un will meet in Singapore on June 12; on the same day, the Federal Reserve will kick off its two day policy meeting. On Wednesday, the Fed has essentially telegraphed a rate hike to investors.  The ECB is expected on Thursday to outline its plan for eventually winding down its purchase of monthly bond buys—a process many economists expect to be completed by the end of the year.

May retail sales Thursday are expected to hit at +0.3%.

Index charts:

Short term: The S&P 500 finally broke out of this range marked in yellow.

The Russell 2000 was the first to breakout and still looks strong albeit over extended.

The NYSE McClellan Oscillator remains in a positive spot.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Nektar Therapeutics (NKTR) plunged 42% after “underwhelming” results from clinical trials of its cancer drugs in combination with Bristol-Myers Squibb’s cancer drug Opdivo.

Twitter (TWTR) is joining the S&P 500 index!  The stock reacted positively to the news Tuesday.

Thursday, Five Below (FIVE) jumped 22% after the discount retailer late Wednesday reported earnings that beat forecasts.

Furniture retailer Conn’s (CONN) jumped 21% Thursday after reporting earnings that topped forecasts.

Have a great week and we’ll see you back here Sunday!



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Strategies & Ideas

Weekly Market Recap Oct 14, 2018

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Wednesday and Thursday finally brought some fireworks to a very complacent market.   The S&P 500 had not had a 1% move in 74 days until Wednesday’s drawdown.

Rising yields were nailed as the culprit but months of rallying eventually require some sort of shake out – whatever the catalyst.  Wednesday’s sell off was the worst day for the S&P 500 since February and the worst for the NASDAQ since June 2016.

The market losses are “a reaction from investors finally realizing we are in a higher interest-rate environment, and given the elevated level of stocks, market participants were likely looking for a reason to sell,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Higher interest rates typically bring on tighter financial conditions which could dampen growth going forward and equity markets are reacting to that.”

Yields on the 10 year fell back to their “breakout” level late in the week.

The Chinese market’s “reversal” was stunted by the selling in U.S. markets – now back to new recent lows.

It was such a rough week even gold got a bid as a “safe haven”.

This selloff in housing stocks continues unabated. Rising mortgage rates and high prices seem to be working together to hurt the sector.

One would think the selling would knock off some of the most speculative stocks but “market leader” Tilray (TLRY) held in amazingly well.

For the week the S&P 500 fell 4.1% while the NASDAQ sunk 3.7%.

Economic news was not market moving.

Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.

The week ahead…

Markets look quite oversold short term and the start of earnings season may turn attention back to underlying fundamentals.  The bears have constantly been crushed during this bull market run so let’s see if this is yet another case of that.   Retail sales will also be reported.

Third quarter earnings will be a major driver as companies report over the coming weeks. According to FactSet, analysts are looking for earnings growth of about 19% and sales growth of 7%.

Index charts:

Short term: Amazingly both the S&P 500 and NASDAQ closed right on their 200 day moving averages to close out the week.  Obviously both charts now have some damage to them after months of unrelenting rallying.

This Russell 2000 had been the worst performer going into this selloff, and obviously looks poor.  It couldn’t even rally Friday like the other indexes.  That said it’s extremely oversold short term.

The NYSE McClellan Oscillator tipped into the rarely seen -90 range Thursday which usually portends some sort of near term bounce.   Last time we saw this sort of extreme reading was February.

Long term: Finally something to sweat about?  The NASDAQ hit the bottom of it’s channel for the first time since 2016!

Charts of interest / Big Movers:

Tuesday, Affimed (AFMD) sank 24% after the biotech drug developer put two clinical trials on hold following the death of a study participant.

Wednesday, Imperva (IMPV) soared 28% after it announced it would be acquired by private-equity firm Thoma Bravo LLC in a deal valued at $2.1 billion.

The LONG rumored bankruptcy of Sears Holdings (SHLD) finally seems afoot.  The stock skidded 17% Wednesday after the Wall Street Journal reported that the troubled retailer has hired M-III Partners LLC to prepare a bankruptcy filing.  This was confirmed late Sunday.

The Chapter 11 filing to reorganize debts of the parent of Sears, Roebuck and Co and Kmart Corp follows a decade of revenue declines, hundreds of store closures, and years of deals by billionaire Chief Executive Officer Eddie Lampert in an attempt to turn around the company he bought in 2004.  Shares in Illinois based Sears closed at about 41 cents on Friday, down from over $100 in the years after hedge fund star Lampert, once hailed as another Warren Buffett, merged it with discount store Kmart in a $11 billion deal in 2005.

“Pot” themed traders now seem to be looking at Pyxus (PYX) as the next Tilray – note the performance (and explosion of volume) in a terrible week overall!  Again a very highly speculative space – this is a tobacco company with “cannabis plans” announced February.  This reminds one of cryptocurrencies and all the crazy trends of the decades before.  That said, short term speculators can still make money until the music stops playing.

Have a great week and we’ll see you back here Sunday!



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Jeffrey Gitomer Interview with Michael Covel on Trend Following Radio

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Jeffrey Gitomer
Jeffrey Gitomer

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Jeffrey Gitomer is an author, professional speaker, and business trainer, who writes and lectures internationally on sales, customer loyalty, and personal development. He is best known for “The Little Red Book of Selling” and his newest book, coming out at the end of October, is “Truthful Living: The First Writings of Napoleon Hill.”

Jeffrey was introduced to the Napolean Hill Foundation about 10 years ago and volunteered to start writing for their newsletter with an article every Friday. Napoleon Hill was the founding father of positive attitudes. In 1917 he had a course in advertising and selling. At the end of every course he would lay out positive thinking. When the Napolean Hill Foundation found these writings, what they call “After the Lesson Visits by Napolean Hill,” the foundation approach Jeffrey about writing a book outlining his teachings. Jeffrey did not hesitate to say yes – and after years of pining over these lecture notes, his newest book was formed.

What energizes Jeffrey and motivates him to write? He loves what he does. Every day is a great day for him. He doesn’t have two days that are alike, or two books alike, or two speeches alike. He is most excited about “What is next?”. Jeffrey lives in the moment but is ready for tomorrow and his ideas, strategies, and connections – they are all in place to set him up for success in the present day and the next.

In this episode of Trend Following Radio:

  • Personalization
  • Service as the foundation of success
  • Truthful living
  • Communication

Mentions & Resources:





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Weekly Market Recap Oct 7, 2018

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Certainly the chart of the week was not in the stock market but the bond market.  The yield on 10 year bonds surged over recent highs, which rattled the indexes late in the week; in fact these are levels not seen since 2011.

“Yields spiking up this week have caught many by surprise and some repricing is happening; however, the reason yields are rising are positive, not negative,” said Jamie Cox, a managing partner at Harris Financial Group, who argued that higher yields are a result of a strong economy.

In other news TRADE WARS(tm)!! with Canada seemed to have come to an end which bolstered the market Monday.

The Chinese market was closed for holiday last week but let’s see if it can continue this reversal which would indicate “those in the know” are seeing a trade deal being done…

Oil remained strong:

Housing stocks do not appear to like those rising interest rates!

For the week the S&P 500 fell 1.0% while the NASDAQ sunk 3.2%.

Economic news of interest: (1) ISM Manufacturing came in at a very strong 59.8 Monday, a tad bit below expectation, (2) ISM Services rose to 61.6 which was the 2nd highest reading on record!

The big one was of course (3) the employment report for the month of September:

The economy created a modest 134,000 new jobs in September, but it was enough to push the U.S. unemployment rate down to a 49 year low of 3.7%.   The last time the jobless rate was lower was in December 1969.  Economists had expected a gain of 168,000 nonfarm jobs. The average hourly wage paid to American workers rose 0.3% to $27.24 an hour.   Employment gains for August and July were revised up by a combined 87,000. The government said 270,000 new jobs were created in August instead of 201,000. July’s gain was raised to 165,000 from 147,000.

“Overall, a strong report that will keep the Fed firmly on track to continue raising rates once a quarter, with the next hike likely to come in December,” said senior U.S. economist Michael Pearce of Capital Economics.

Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.

The week ahead…

All eyes on those bond yields.

Index charts:

Short term: NASDAQ broke a trend line Thursday that connected at the recent lows since summer; meanwhile the S&P 500 has been so impervious to selling it had not even touched the 50 day moving average since early July… until Friday.

This Russell 2000 had not really joined the party with the other indexes and actually fell as far as the 200 day moving average at its low Friday.

The NYSE McClellan Oscillator has been red for a long time while the major indexes have continued to rally – that is usually not the case.  THAT said, the Russell 2000 has been weaker during this time and now we are seeing some of this correlation coming back even in the senior indexes.  At this point we are a bit oversold so one would normally expect a bit of a bounce near term.

Long term: Still very positive for the “buy and never sell” crowd.

Charts of interest / Big Movers:

Monday, Tesla (TSLA) Chairman and Chief Executive Elon Musk settled a Securities and Exchange fraud probe. The settlement will force him to step down as chairman and cost him and the company a combined $40 million in fines. He also reportedly told employees in a weekend email that the electric-car maker is on the verge of making a profit.  However, all those gains disappeared by Friday when Greenlight Capital’s David Einhorn argued that Tesla was following the same doomed path as Lehman Brothers. The criticism comes a day after Chief Executive Elon Musk took to Twitter to mock the Securities and Exchange Commission and accuse the agency of helping short sellers.

General Electric (GE) has been a bit of a disaster in 2018 but Monday the stock surged 7.1% after the industrial conglomerate said its chief executive officer, John Flannery, was being replaced after a little over a year in the role.

Tuesday, Stitch Fix (SFIX) tumbled 35% after it late Monday reported fourth-quarter earnings that beat expectations, though revenue was slightly under forecasts and it missed estimates for active clients, considered a key metric for subscription-based companies.

Thursday, Barnes & Noble (BKS) soared 22% after the bookstore chain said its board of directors has decided to enter a formal review process to evaluate “strategic alternatives” for the company.

Tilray (TLRY) is still holding up and consolidating.  The Canadian based cannabis company announced the pricing of $450 million in convertible debt late Thursday, valuing the company’s stock at a 15% premium.

Have a great week and we’ll see you back here Sunday!



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