For Trading February 19th

For Trading February 19th

CALL ME CRAZY, BUT

APPLE COMES CLEAN, OTHERS SHOULD FOLLOW

Can Anything Hurt this Market?

Today’s market was lower from the start hitting the low -281 around midday, before AAPL actually started to stabilize and move to new highs (still down) of the day. The DJIA rallied but could only make it back to close -165.89 (.65%), the NASDAQ +1/56 (.02%) and a new high, S&P 500 -9.87 (.29%), the Russell -4.06 (.24%) and the DJ Transports +2.66 (.02%). Internals were negative with NYSE 3:2 lower and NASDAQ just 1.2:1 down. The DJIA was weaker at 23 down, 7 up, with AAPL the biggest loser -40 DPs and GS -27, while UNH lead the gainers +23 and MSFT and WMT + 13 each.

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: The early news was the AAPL lowering forecasts for Q1 revenues and while the stock had traded $310.07 in extended hours, it opened $315.35, it never traded below $314.61 and although still lower on the day, it finished near the HOD at $319.00 -5.95 (1.8%). WMT missed estimates but edged up to finish $119.63 +1.88 (1.5%) with the news “better than feared.” Margins were squeezed and there were disappointing results from Thanksgiving to Xmas. While maintained as a buy at CFRA, the price was lowered from $135 to $130. They too expect COVID-19 impact of “a couple of cents” in Q1. Clothing sales were weak.

I can’t believe that with the psychology of this market, of lowered expectations, that others won’t follow and lower the bar for themselves. You can call me crazy, but I just do not believe that any of the teleprompter reading folks who have no real sense of the history of the market can possibly opine on what the value is based on their “knowledge” of the unknowable. The last time I saw this malady takeover this group was when they were talking about the tangible book value of the banks. If you recall, that was at the height of the DOJ and Treasury using the banks as their proverbial ATMs, levying fines and penalties adding up to $100billions of dollars. Naturally, the pundits were wrong and banks continued to suffer. A Black Swan event is by its very nature, unknowable. The most recent week’s numbers were not just an addition to, but rather a factor of what was known just 10 days ago. And that assumes that we’re getting the truth. I’m not “Debby Downer,” but it is my job to try to inform, and this issue will surely get better, but we have no real clue of when or at what cost.

Also on the downside this afternoon was GRPN, which missed on all metrics and has decided to exit the “goods” category. They have also proposed a reverse split of between 1:10 and 1:12 to be voted on at the annual meeting. They also added 2 new women to the board in Valerie Mosley (Valmo Ventures) and Helen Vaid, Global Chief Customer officer for Pizza Hut. The stock, down from a recent peak at $5.99 closed the day with a halt, news pending, and reopened to trade down to $2.26 and is currently $2.28 -.77 (25.25%).

One last item, we sold short 200 shares of SPCE, Virgin Galactic Holdings, after the dramatic rise from a low of $6.90 in December when it was still a SPAC (special purpose acquisition company) pre-acquisition for SPCE. The stock worked its way higher through January and in the past 6 days ran from $18.28 to touch $38.72 today. This was similar to the RAD move on its unexpected earnings (ran from $7 to $23.88 in 6 days) that we also went short. While this is not for the weak of heart, we proceeded in a very common-sense manner on both. This video shows the how and why we made the trade and the parameters we followed on both. It’s just 4 minutes and I think you’ll find it informative. https://www.youtube.com/watch?v=eE2Glt09VsA&feature=share

BIOPHARMA: was HIGHER with BIIB +4.10, ABBV -.29, REGN -1.90, ISRG +1.31, MYL -.62, TEVA +.10, VRTX +2.11, BHC +.35, INCY +.85, ICPT +2.03, LABU +.83 and IBB $122.61 +.14 (.11%).

CANNABIS: stocks were LOWER with TLRY - .30, CGC -.12, CRON -.14, GWPH -2.94, ACB +.07, PYX -.13, NBEV -.09, CURLF -.13, KERN -.25, and MJ $16.38 -.05 (.30%).

DEFENSE: was LOWER with LMT -2.40, RTN -3.18, GD +.08, TXT -.44, UTX -2.18, NOC +1.48, BWXT +.72, TDY -.88, and ITA $236.33 -1.76 (.74%). RETAIL was LOWER with M -.60 on the downgrade of its bonds to Junk status, , JWN -.33, KSS -.62, DDS -1.90, JCP +.002, WMT (see above), TGT +1.87, TJX +.08, RL -1.23, UAA -.46, LULU +4.82, TPR -1.11, CPRI -.43 and XRT $45.01 +.19 (.42%).

FAANG and Big Cap: were HIGHER with GOOGL +.71, AMZN +24.58, AAPL (see above), FB +3.87, NFLX +7.60, NVDA +9.15, TSLA +70.97 (8.87%), BABA +1.22, BIDU -.37, IBM +.40, BA -1.60, CAT -1.41, DIS -.34, and XLK $101.71 -.25 (.25%).

FINANCIALS were LOWER with GS -3.87, JPM -1.52, BAC -.52, MS -.32, C -1.17, PNC -2.74, AIG +.53, TRV -1.88, AXP -.27 and XLF $30.93 -.24 (.77%).

OIL, $52.05 +.07. Today’s action was a decline to below $51.00 and a rally all the way back to close near the highs. I am still bearish, but I expect that rally to a better entry point near $53.50 -54.50. I’ll use SCO, the inverse ETF. The stocks were LOWER with the XLE $54.13 - .45 (.82%).

METALS, GOLD: $1,603.60 +17.20. After the expected breakout above the closing high of $1587.90 we rallied hard to move solidly over $1,600. We had a few contracts bought by subscribers that had better entry points and didn’t get stopped out on the decline and sold half at $1.49 and the balance at $1.73. After a consolidation we bought the GLD 3/6 152 calls @ $1.10 and they closed $1.23.

BITCOIN: closed $10,250 -245. We broke to the upside to hit $10,620 last week and on Monday the international traders drove BTC down to $9,505 but today we rallied all the way back to close 750 off the lows and right near the highs. A solid performance. We own 750 GBTC with an average of $8.89. GBTC closed $13.31 + .11 today.

Tomorrow is another day.

CAM