For Trading May 20th

DJIA Rally Falters

POWELL & Mnuchin Visit the Hill

Today’s market was slightly stronger, and we started the day with the Housing starts and permits, and they really didn’t have much effect since they were lower, but just about as expected. Permits were actually -20.8% but better than 27.6 from last month. After being down around 200 by 10:00AM, we fought back up to just slightly over unchanged and stayed around that level until 3:00 when we broke to the downside for good. The DJIA finished -390.51 (1.59%), NASDAQ -49.73 (.54%), S&P 500 -30.97 (1.05, the Russell -25.96 (1.96% and the DJ Transports -93.93 (1.13%). Market internals were nothing special with A/D 1.7:1 on the NYSE and 1.9:1 on the NAZ. Volume was a bit light and the weakest sectors were Energy, financial and real estate. The DJIA was 3 up and 27 down with the biggest losers being HD -50, BA -34, UNH -30, GS -26, and PG -25 DP’s.

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, and we’ve grown to almost 1900 members. I also did this video titled “How to survive being an options trader and not blow up your account,” over the long weekend. I think it’s very informative as a guide to stock selection and option choices. The link is https://youtu.be/Y7H9RpWfLlo Enjoy!!

Tonight’s closing comment video https://youtu.be/pgkZIcywPX8

SECTORS: The news was Housing starts and permits that were no surprise, but we also had earnings from WMT. The retailer beat expectations and when I did my Pre-open comment the stock was actually trading $132.60 +4.94 (3.9%) in the pre-market trading session. The stock never came close to that number opening $131.60 and falling back to close $124.95 -2.71 (2.12%). HD also reported but it was a miss that was blamed on COVID-19 related expenses had weighed on profits. The stock gapped down to open $240.45 and then traded to $237.80 and closed $238.10 -7.25 (2.95). In retail, KSS also reported, and while WMT turned out to be a disappointment, KSS didn’t have the option to be open, and it showed. After the numbers, they suspended the dividend and said they were replacing several brands in favor of more women’s activewear.

FOOD SUPPLY: was LOWER with TSN -2.02, BGS -.29, FLO -.11, CAG -.75, MDLZ -1.07, KHC -.92, CALM -1.31, JJSF -3.78, SAFM -8.00 (5.63%), LANC -2.56, GO unchanged and PBJ $30.72 -.43 (1.39%).

BIOPHARMA was LOWER with BIIB -5.80, ABBV -.42, REGN +.71, ISRG -7.14, GILD -2.28, MYL -.39, TEVA +.25, VRTX -1.63, BHC +.34, INCY -1.54, ICPT +.92, LABU -4.40 (8.47%) and IBB $130.68 -3.10 (2.32%).

CANNABIS: This group was MIXED with TLRY +.16, CGC +.98, CRON +.03, GWPH +2.05, ACB -2.23, PYX -.74 (26.06%), NBEV +.04, CURLF -.87 (13.36%), KERN +.49, and MJ $12.66 -.28 (2.16%).

DEFENSE: was LOWER with LMT -5.94, GD -3.29, TXT -.70, NOC -3.17, BWXT -.32, TDY -2.35, RTX +.25 and ITA $149.14 -2.24 (1.48%).

RETAIL was LOWER with M -.30, JWN -.62, KSS -1.41 (7.48%), DDS -1.18, DELETING JCP AS OF TONIGHT, WMT -2.41 see above, TGT -1.36, TJX +.74, RL -.66, UAA -.28, LULU -3.67, TPR -.62, CPRI -.88 and XRT $38.04 -.48 (1.25%).

FAANG and Big Cap: were MIXED with GOOGL -11.17, AMZN +28.54, AAPL -.42, FB +5.16, NFLX -.66, NVDA +5.46, TSLA -2.53, BABA +2.47, BIDU +2.01, CMG +10.72, CAT -2.02, BA -4.24, DIS -1.85 and XLK $95.41 -.35 (.37%).

FINANCIALS were LOWER with GS -3.36, JPM -1.53, BAC -.62, MS -.82, C -1.10, PNC -2.56, AIG -.76, TRV -1.30, AXP -.76, V -.99, and XLF $21.59 -.54 (2.44%).

OIL, $31.96 +.31. Oil was higher today with the close right on the falling 50-day moving average. I thought that the most recent downside break occurred from just under $29.00 and may stop this move too, but as we saw, it went right through that level. All the stocks on my list were lower with XLE $37.84 -1.09 (2.8%).

METALS, GOLD: $1,745.60 + 11.20. After breaking the downtrend line around $1727 we came all the way back to test it this morning, before we continued higher and closing strong.

BITCOIN: closed $9,680 -65. After breaking out over $7500 we have moved as high as just over $10,000 before gapping down overnight to trade as low as $8,400 earlier this week. We continue to recover higher prices and today broke above the $10030 close from which we gapped down on Monday. We added 350 shares of GBTC Wednesday @ $10.02 to our position of 400 @ $8.06, bringing our average price to $8.97. GBTC closed $11.38 -.03 today.

Tomorrow is another day.

CAM