Feb 11, 2021
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“Be willing to make decisions. That’s the most important quality in a good leader. Don’t fall victim to what I call the Ready- Aim-Aim-Aim Syndrome. You must be willing to fire.” – T. Boone Pickens
With China celebrating the lunar new year, Asian markets had a quiet overnight session with little in the way of market action or economic data. The quiet trend continued into European and US markets as well with major averages and futures markets little changed on the sessions.
The only area of real action right now is in the crypto space. Bitcoin just briefly rallied to record highs on news that Mastercard (MA) would support crypto-currencies in its network, and then just about a half-hour ago Bank of New York Mellon announced that it was establishing a digital asset unit to support and service the digital asset needs of clients. Bitcoin’s price is off its highs from earlier, but it is still up over 6% on the day.
In economic data, jobless claims were just released, and while they both came in higher than expected, they did manage to decline from last week’s upwardly revised readings.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, an update on the latest national and international COVID trends, and much more.
In yesterday’s Chart of the Day, we discussed the massive rally in crude oil over the last several weeks and how it stacked up to prior periods in the past. Another short-term aspect of the recent rally has been the fact that yesterday marked the fifth straight day that WTI closed more than two standard deviations above its 50-DMA. That’s the first time we’ve seen a streak like that in over three years. Looking at past streaks going back to 2010, these readings didn’t necessarily mark the top of a short-term rally, but they usually occurred closer to the end of a move than the beginning.
Feb 10, 2021
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki
Futures have been drifting higher all morning as positive momentum continues. Interest rates are modestly higher (although those increases have been erased following the release of CPI), and bitcoin is down nearly 3%. All in all, it’s been a pretty quiet morning so far. In economic data, CPI for January was just released and despite some concerns that the report would come in hot, the headline print was right in line with forecasts (0.3%) while the core reading was unchanged versus expectations for an increase of 0.2%. On a y/y basis, CPI is up just 1.4% versus expectations for an increase of 1.5%. As much as the Fed wants it, inflation just won’t seem to budge.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, an update on the latest national and international COVID trends, and much more.
Although the S&P 500 and Dow ended Tuesday modestly in the red, small caps continued to shine as the Russell 2000 extended its winning streak to seven days. In the history of the Russell 2000 dating back to 1979, there have been seven prior winning streaks of seven or more trading days, so they are not particularly uncommon. Based on those prior streaks, the Russell’s performance on day eight has been an average gain of 0.15% (median: +0.18%) with positive returns 71% of the time. So, more often than not seven-day streaks make it to eight.
In more recent history, seven-day streaks have been a little less common. Since the start of 2019, there have only been two other streaks of seven or more trading days and they were both in 2019 (February and June).
Feb 9, 2021
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“The desire to perform all the time is usually a barrier to performing over time.” – Robert Olstein
After six straight days of gains, US equity futures are poised to open lower this morning. If the S&P 500 finishes the day lower, it will be the first down day since 1/29 when the S&P 500 closed below its 50-day moving average. The data calendar is on the light side this morning. NFIB Small Business sentiment was released earlier this morning and came in lower than expected (95.0 vs 97.0) falling to its lowest level since May. Later on, we’ll get the release of the JOLTS report for December.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, recent moves in the dollar, a preliminary analysis of Japanese Machine Tool Orders, an update on the latest national and international COVID trends, and much more.
One of the hallmarks of a bull market is that corrections are swift and shallow, and windows of opportunity for investors on the sidelines is usually narrow. The pullback we saw in late January provides an excellent example. On January 20th, the S&P 500 closed at ‘extreme’ overbought levels which we classify as more than two standard deviations above its 50-day moving average (DMA). Seven trading days later on 1/29, the S&P 500 was down 3.7% from its high and below its 50-DMA for the first time since early November. Faster than the S&P 500 sold off from ‘extreme’ overbought levels to below its 50-DMA, though, it rebounded back to ‘extreme’ overbought levels again. Yes, just six trading days after closing below its 50-DMA for the first time since November, yesterday the S&P 500 finished the session back above its 50-DMA by more than two standard deviations.
Feb 8, 2021
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“Everyone is digging deeper into their own trench and rarely standing up to look in the next trench over, even though the solution to their problem happens to reside there.” – David Epstein – Range
Equity markets are picking up this week right where they left off last week, and the major averages are all indicated to open the week higher. The big news of the morning has been Tesla’s (TSLA) announcement that it has purchased $1.5 billion in bitcoin with its cash on the balance sheet. TSLA is hardly considered a tradtional company, but when one of the largest companies in the world starts to hold bitcoin on its balance sheet as a substitute for cash, the market takes notice. Not surprisingly, bitcoin is trading up ~15% in the wake of TSLA’s announcement.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, crude oil prices, an update on the latest national and international COVID trends, and much more.
Weeks like the last one don’t come around all the time. With a 4%+ gain for the S&P 500, every one of the index’s major sectors finished in positive territory for the week. Leading the way higher, Energy surged over 8%, while Communication Services, Financials, and Consumer Discretionary all tacked on more than 6%. Following the rally, though, most sectors are overbought, including Communication Services and Real Estate which are both at ‘Extreme Overbought’ levels (more than two standard deviations above their 50-day moving average). Given the strength, we were a bit surprised to see that three sector ETFs still have timing scores that rank as ‘good’ in our Trend Analyzer.
Feb 5, 2021
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“Gambling, beer and football filled the horizons of their minds.” – George Orwell
It may be Super Bowl weekend, but most people looking to enjoy a couple of beers watching the game this year will be following the lead of George Thorogood and drinking those beers alone- or at least with nothing more than a small group! Before we get to thinking about Sunday’s game, though, we still have the last trading day of the week to get through, and what a week it has been. The S&P 500 is up over 4% and on pace for its best week since the Election.
The January Non-Farm Payrolls report was just released and the results were mixed. While total Non-Farm Payrolls rose less than expected (49K vs 105K), the Unemployment Rate fell to 6.3% versus expectations for 6.7%. Average hourly earnings were slightly weaker than expected at 0.2% on a month over month basis, but because of revisions showed a larger than expected y/y increase. The average workweek spiked up to 35 hours which is a level that hasn’t been seen in years. Despite millions of jobs lost since the start of the pandemic, Americans who are working are working more and earnings more than they have in years.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, economic data out of South Korea and Europe, an update on the latest national and international COVID trends, and much more.
What a difference a week makes. In last week’s Bespoke Report and our B.I.G. Tips report from Sunday evening, we noted that after the declines from the prior week, major US index and sector ETFs had sen their timing scores in our Trend Analyzer shift from mostly ‘Poor’ to ‘Good’. Below is a snapshot of where things stood for US indices through last Friday’s close. Over the trailing five trading days, every index ETF was down, but with the exception of the Micro-Cap ETF (IWC), every ETF had a ‘Good’ timing score.
After the gains of the last four trading days, the picture has changed a lot. Over the last five trading days, every ETF in the Trend Analyzer was up over 1% and most are up well over 2%. With these gains, all of the ETFs have now moved back into overbought territory, and all of the timing scores have now shifted to ‘Neutral’ or ‘Poor’. That doesn’t mean that the market will necessarily pull back from here, but the risk/reward is skewed more towards the risk side again. As always, pick your spots.
Feb 4, 2021
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“An investor without investment objectives is like a traveler without a destination.” – Ralph Seger
There’s not a whole lot going in in the markets this morning…yet. While futures are indicated just modestly positive, there’s a bunch of economic data on the calendar starting with jobless claims (779K vs 830K, lowest since November), unit labor costs (6.8% vs 4.0%), and productivity (-4.8% vs -3.0%) all just hitting the wires. One interesting item of news out of the UK was that even as the Bank of England took a large haircut to 2021 growth forecasts (from 7.25% down to 5.0%), it said it does not plan to signal that negative rates are on the way. That being said, the Bank did instruct banks to start preparing for negative rates nonetheless. How’s that for certainty?
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, a discussion of recent moves in the all-important iron-ore market, moves in the euro, an update on the latest national and international COVID trends, and much more.
To say that the last week has been a see-saw for the market would be an understatement. Last week, the S&P 500 went from overbought levels (one standard deviation above 50-DMA) to below its 50-DMA in the span of three trading days. Just two trading days later, the S&P 500 was not only back above its 50-DMA, but it was also back at overbought levels. That may not sound like all that an extreme of a reversal, but going all the way back to the start of the S&P, there have only been 14 other periods where the S&P 500 closed below its 50-DMA after being at overbought levels within the prior three trading days and then went on to close at overbought levels within the next three trading days. Looking at the occurrences on the chart, it hasn’t been a very consistent market signal, but it does shed light on just how volatile the last several trading days have been.
