So, today is a “getaway” day at Cabot—basically a day off to hit the beach early and pre-plan some marinades for tonight’s grilling. For those of us doing the double duty of work and parenting/educating, a day off from the grind is much needed (and appreciated).
That said, we all saw what happened with the market yesterday (ouch) and this morning (yay), so thought I would give some quick thoughts on the market and (below) some updated stops.
When it comes to the market, yesterday was bad, no doubt, but it was just one day and it came after a monster run—before Thursday, the Nasdaq was 13% above its 50-day line! (More on that in a second.) Thus, even after the drop, the intermediate-term trend for the major indexes remained firmly up.
Plus, we have two blastoff indicators that flashed green over the past two weeks. Granted, 2020 could be the “rulebreaker” year given the unusual things going on, but until proven otherwise, these indicators (which have excellent track records) are feathers in the bulls’ cap.
And we saw another interesting study yesterday from Ryan Detrick of LPL Financial—this is just the 7th time since 1955 that the S&P 500 got at least 11% above its 50-day line. Six months later, the S&P was up every time by an average of 8%, and 12 months later, the average gain was 20%.
Anything is possible, but just going with the evidence, the odds continue to favor the market moving higher in the weeks and months ahead, though short-term, some further wobbles wouldn’t be surprising.
Leading stocks have been trickier, as most are in three- to five-week consolidations at this point. That said, we’ve seen very few breakdowns to this point, so these look like normal rest periods that also should lead to higher prices.
All in all, we remain bullish—but as always, we’re keeping our eyes open. If we see a bunch of breakdowns and further abnormal market selling (another couple of giant losses), we’ll likely pare back. But at this point, we’d remain heavily invested. Given the hiccup, we’re likely to knock our Market Monitor down a notch come Monday, but we’ll have to see.
SUGGESTED SELLS
Guardant Health (GH)
LiveRamp (RAMP)
MyoKardia (MYOK)
As usual, probably more coming on Monday but we’ll see.
SUGGESTED STOPS
Allogene (ALLO) near 40
ASML (ASML) near 314
Avalara (AVLR) near 92.5
Ciena (CIEN) near 48
CrowdStrike (CRWD) near 80
Five9 (FIVN) near 93
Fortinet (FTNT) near 123
Halozyme (HALO) near 22
Immunomedics (IMMU) near 28
Neurocrine Bio (NBIX) near 110
Nvidia (NVDA) near 310
1Life (ONEM) near 28.5
Pan American Silver (PAAS) near 24
Pelaton (PTON) near 38.5
Pinduoduo (PDD) near 59
Schrondinger (SDGR) near 56.5
Teladoc (TDOC) near 145
TG Therapeutics (TGTX) near 16.5
Tradeweb Markets (TW) near 57
Wheaton Precious Metals (WPM) near 37
Zoom Video (ZM) near 180
Zscaler (ZS) near 86