The Market Responds Just as Cued

Jul 9, 2020

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01:13 PM PST

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Well, maybe we can chalk up Friday's intraday pullback to the pre-weekend cleanup... meaning traders just didn't want to take a lot of exposure into the weekend and start next week not quite sure what next week might hold. That's a pretty bold assumption though. We've not seen that kind of thinking in a long while. I fear -- maybe even suspect -- the failure from stocks to hold into their intraday gains on Friday is a clue that the opening bullishness was all just part of a temporary pushback, and that the undertow has been and remains bullish.


Let's look at our usual updated S&P 500 chart to start the discussion, though today we're going to add the NASDAQ Composite to the mix since it's telling a story of its own.


As you can see, yesterday' doji bar did indeed spark a reversal today, right on cue. It was a short-lived reversal though. Today's hammer-shaped bar (and upside down hammer) also suggests we're already starting to pivot back out of that bounce and back into a downtrend. At the very least the bulls made sure the index closed under the 100-day moving average line.

Things Are More Bearish Than They Seem

Jul 9, 2020

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01:13 PM PST

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Howdy folks. Was Thursday's action exciting enough for you? Whew! Things looked pretty scary early on, but someone (the Plunge Protection Team?) decided the market wasn't quite ready for a breakdown yet even though all initial indications were stocks had finally fallen off the cliff they've been teetering on for weeks now.


Still, just because the market bounced back today doesn't necessarily mean all is well. It could take a few tries for the bears to completely knock the market off of its perch.


We'll look at what's going on in a moment. There are a couple items we need to take care of first before we forget to look at them.

Sorry Janet, But the Market Can't Digest the "Maybe Later" Message Forever

Jul 9, 2020

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01:13 PM PST

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Well, what a shocker..... NOT. The release of the minutes from the most recent Federal Reserve governors meeting indicated there's almost enough reason to raise interest rates, but not quite enough just yet. We're in that sweet sport where things are moving in the right direction but the Fed can't do anything that might upset the apple cart.


I don't know how long the market is supposed to linger at a "close but not quite to liftoff" status, but apparently it's at least a couple more months. Problem is, pretty soon we're going to run out of runway. By that I just mean while we're waiting for the economy to achieve escape velocity, the economic underpinnings are changing. Some of them may be changing for the worst.


In any case, if the bond market has the right read on Yellen's comments, rates are still apt to raise in the near future, but just barely. The last we looked today, long-term yields were up 15 basis points, while bond values were down about 0.10%. Bond traders were about as undecided as the Fed is. Figures.

Q1 Numbers From Staffing 360 Solutions (STAF): There's Nothing Not to Like

Jul 9, 2020

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01:13 PM PST

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Good morning all. We were going to wait until after the close to send today's newsletter, as we usually do. But, the news was too compelling to let sit for an entire trading day before passing it along.


I'm talking about the fiscal Q1 numbers submitted by Staffing 360 Solutions (STAF) this morning. We knew they were going to be good, as the company had already given us some of the preliminary results. As it turns out, a couple of those numbers were revised in an upward direction, and one of the new figures showed the same marked (though unsurprising) improvement on a year-over-year basis the other numbers did.


We've also got some interesting tidbits from the conference call, which ended just a few moments ago.

Strange Days Indeed

Jul 9, 2020

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01:13 PM PST

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Does everybody remember the lyrics to the sine "Nobody Told Me"? They're not too tough to recall:


Nobody told me there'd be days like these

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