Update 100: Stock Market- Acceleration @ A Slower Pace? Read More
July 2, 2020 Option Professor Opinions & Observations
Hi Everybody…..Big fade on the close BUT We told you last week that if we HELD SUPPORT S&P 2950 area; the market could get on the bicycle. It did. Short Week but a good week as the stats from Q2 were very impressive such as Dow best results since 1987 & the S&P 500 best in 22 yrs.. Of course; most stats sound good until you put them in context (coming out of collapses 1929-1987 2201-2008) the rebounds % is impressive. Today’ unemployment report of plus almost 5 mill jobs sound great but many more are out of work. End of July the extra 600 buck goes out the window possibly and some say over 50% of restaurants on yelp are out of business. HERE”S THE DEAL….earnings and bank losses are coming out BUT if we can settle this market down a little (TRANSLATION get the VIX into the 20-25 area buy end of summer); we could really get a run as big money on the sideline has been SCARED of VIX north of 30..something we’ve told you about for a long time. So the under invested and sideline cash and year end book squaring could help us win. Yeah…we do have an election..the Fed moves markets…Washington talks.
Want to learn what sectors we like? …email [email protected]
Stock Market
We established a HIGH POINT in June of SP 3250 area…now let’s see if July can take it out…if not you have a monthly high surrounded by lower highs and that could set up an August opportunity..keep some powder dry in case. For those who contacted us early this week..the big call was Amgen about breaking 245 and wow did we get a run. Fed Exp popped big and those of you who caught swing trading using moving averages & RSI caught that one BEFORE the blast off. We have our favorites on our Radar List for sectors ect for the second half of the year…..others like GOOG GS Palo Alto RTX (Industrials), CHEGG and the usual suspects 5G, Cyber security & Cloud. Too much to cover so we encourage you to email us at the address below.
Second Half Focus?…email [email protected]
Bond Market
This going to be short and sweet this week. Will Rogers used to say “I’m more concerned about the RETURN OF MY MONEY more than the RETURN OF MY MONEY….Hey that sounds like Powell’s Policy cause that’s what you get. . The Fed has bought so much paper in the 1-3 year maturities that the prices are high. IG and Junk either don’t give much yield or do not pay you enough for loaning money to dodgy companies EXCEPTION is b or BB paper with firms that have GOOD FREE CASH FLOW. Looking for yield?…some say look to bank preferred’s with juicy yields & equities that pay great dividend with GOOD PAYOUT RATIOS. In fact; that may be a theme as yield thirsty investors plow into DIV_PAYERS We got NEGATIVE YIELDS after you back out inflation….How long do you think investors will go for thatNo Brainer for Us.
Got questions on our Fixed Income Radar List? [email protected]
US Dollar/International Markets
The Dollar did a minor fade but not nearly enough to support the SECULAR BEAR market enthusiasts of which we are NOT one nor break the 95-95 SUPPORT wherein we would be more attentive to all this bear talk. The Japanese Yen-Aus$ Can$ all failed to get above their Moving Averages BUT the one we told you TURNED BULLISH @ 111 is the EURO. It has pulled back off the highs but a CLOSE ABOVE 115 could get their currency to spike. That brings us to the Main THEME….It may be TIME TO DIVERSIFY portfolios with exposure to EUROPEAN STOCKS & BONDS! You have every right to ask WHY?? Well; the SHORT ANSWER is the ECB put DOUBLE the expected STIMULUS & the Germans who FINALLY put out a HEFT STIMULUS to boot! The Euro is trending UP and the VALUATIONS are very compelling so keep an eye on it as the weeks unfold ass a diversification and follow the money.
Crude Oil
Stockpiles came out light but we are still suspicious of oil in the 40’s near term. The Virus has people jammed up so demand could be dodgy and the energy shares are holding on for dear life after a 20% pullback (VDC) but was OK Thurs before July 4th…but a lot of beaches are closed ect..so??? Longer term we have said since March…If the RESTART continues Oil in the 50’s next year looks probable as supplies L shaped & Demand V shaped.
Gold Silver Copper
Call us crazy (you wouldn’t be the first) but we think there is a LOT of risk to Gold if doesn’t get its butt above and stay above 1800-1900 spot prices. It got ABOVE this week but was pushed back down. Of course we think LONG TERM the Gold is a long BUT with 1-2-3 yr MOVING AVERAGES still in the 1500’s 1400’s & 1300″s ….and with William Devane is now again a household name (Gold Ads)….everyone thinks its up up up….we say wait for sustained breakout to add & keep powder dry if the stampede that has gone in then becomes movie theatre where someone screams FIRE! Silver moves more with stocks…hold 16 bucks get above $19-21…you may say A Star is BORN! Copper has been on the move as it tries to get above 3 bucks….our buddies at FCX went from 10.75-12 before settling at 11.50..buckle up more to come
What’s on our metals Radar List? simple email [email protected]
Soybean/Sugar
Yee of such little faith…..we began to feel that we were WAITING FOR GODOT in Soybeans…but the planting reports seem to light a fire as prices went from 8.55 to over 9 bucks…..we thought the summer planting season and weather ect. could play a role….let’s see..we’ve been bulls since 8 bucks. Sugar was another slippery one but it followed suit with beans going from 11.40 to 12.25 this week BUT both markets have MORE WOOD TO CHOP as resistance levels loom above..until we see sustained weakness…up is the bet
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