Bears Bruised and Battered

January 18, 2018.

Bears Bruised and Battered

They said that the “stock market has no memory” from one day to the next, but more than anything it seems that this market is looking to punish anyone who would dare be bearish.

One could have argued on Tuesday that the big intraday reversal pointed to a development that signaled a change developing in the character of the market, but after yesterday – with no sign whatsoever of the continued negativity – one can feel safe casting aside that gloomy thought. A bet on negative momentum in this market or a bet that correction buyers won’t surface was a bet that simply hasn’t paid off for a very long time now.

Indexes have gone back to grazing new highs. The S&P 500 closed for the first time above the 2,800 point level, which gives up little choice but to adopt the trend in the best way we possibly can. Momentum players flooded to the chip sector yesterday (SMH) after stellar numbers from ASML. The stocks that stood out in the sector included ASML, which soared 6.87%, NVDA which rallied 2.09% and KLAC which soared 5.42%.

Daily Summary: The Dow Jones ended nicely up by 1.25%, the S&P 500 rising 0.94%. The NASDAQ tacked on 1.03%.

The Dow Jones, which was the strongest of the 3 large stock indexes, outperformed thanks to Boeing (BA), Intel (INTC), IBM and Microsoft (MSFT).

Apple (AAPL) also stood out with gains of 1.65%, closing at an all-time high of $179.10. Investors’ optimism grew after the company announced a new series of investments in the U.S. including a $5 billion investment in its Advanced Manufacturing Fund. Apple also assessed that its contribution to the U.S. economy over the next 5 years would come to $350 billion. Traders took that as a sign of optimism.

Juno (JUNO) stood out after soaring 51% after the news release that it would be acquired by Celgene (CELG).

The cryptocurrency sector found a certain level of support after an ugly opening. It succeeded in closing significantly above the daily bottom, but volatility in the sector is here to stay. Bears who expected disaster could leave the day satisfied, but experienced traders were simply happy to see renewed volatility, which creates new trading possibilities. Bitcoin, which fell yesterday beneath the $10,000 level, succeeded in recovering slightly, now trading about $11,000 after having toppled 12% 2-days ago. Ethereum tumbled 17% beneath the $900 level. At the same time, 2 new ETFs that track blockchain were launched: BLCN and BLOK. At the same time, you won’t only find blockchain stocks on these ETFs. The leading securities on BLCN include INTC, OSTK, IBM, CSCO and Hitachi. At best, some of these companies only have a faint connection to blockchain. The ETF, BLOK, that notwithstanding, is still doing better.

In summary: the bulls are still rallying nicely and at a strong clip this year. It’s back to the racetrack!

Thursday: Traders will continue to react to the earnings season, after a certain level of disappointment from banks’ reports which were released on Wednesday – and especially GS and BAC. The earnings reports of financial firms that will be released today before opening include MS, KEY, BK and BBT. After closing, be primed for the numbers of IBM.

Today’s Economic Calendar will give us a fair share of numbers for investors to mull over, starting with weekly unemployment claims at 8:30 N.Y. time. Building starts will be released at the same hour, along with the Philadelphia Fed’s business forecast survey. Crude weekly inventory numbers will be released at 11:00.

Thursday’s Hot Stocks: AA, MS, PTC, PLXS

IPOs: None

Have a great trading day!

Today’s Picks – Day Trading!

New York Strategy Swing

Today’s Picks – Swing “New-York Strategy”

  No.1 –  MARK  

No.2 – RIOT