4-Day Tear in the Market
Welcome to the Rude Awakening for Thursday, November 5, 2020.
As I record, pre-market here about a half hour out of the market open.
We’re looking at a monster rally once again into the marketplace.
We are on a four-day tear here in the market, as the market seems to love this concept, this idea, of a divided government with possibly a Democratic President and a Republican-held Senate.
The money flow is huge to the upside right now.
It looks like it’s going to be another strong day as we go forward. We’ll juxtapose that against a couple of items that are coming out today…
Number one, jobless claims.
We still have three quarters of a million individuals this past week filing for jobless claim benefits. So, we continue to see that type of a drag on the economy.
We’re also watching the hotspots all over the world with the virus.
We’ve got France, we’ve got the UK, we’ve got several other places in the world now looking to go back to full shutdowns, if you will.
Of course, that’s going to be a drag on the economy as well, but right now it’s the election that is the marketplace driver.
We have a lot of activity in the marketplace today.
Your Buys Watchlist
We’re still in earnings season.
We mentioned to you yesterday, BABA, which reported before the market bell today. They beat on earnings, but the stock has fallen today, nearly 5%.
This is a heavyweight in the industry, so this drop might be something to put on your watch list if you’re looking to get a good entry point into BABA.
Peloton (PTON) has been a darling stock of the pandemic. These guys have absolutely killed it. They’re subscription-based exercise machines, and they’ve been in back order, and they have been absolutely killing it on their earnings reports.
PTON reports earnings after the bell today. So, you definitely want to keep that on your watch list.
Another one that we’re looking at on a buy list right now is General Motors (GM), reporting earnings better than expected, as well. We’ve got a very strong buy candle in their stock yesterday. They’re up about 2% right now.
Then, last but not least, folks, very interesting money flows into the treasury market.
As a reminder, there is an inverse relationship with bond values and interest rates. As interest rates fall bond values rise; as interest rates rise bond values fall.
Well, we’ve got interest rates now falling tremendously here, falling to a three week low today this morning, and that’s, of course, pushing the TLT up right to it’s 50-day moving average. This is something that I would put on my watch list for either a bullish or bearish trade here, depending on whether we get a breakout to the upside or the downside. This should have some movement today because we do have the Fedspeak coming out later today. We don’t expect a lot of changes with the Fed’s announcement today but, of course, that always can throw a monkey wrench into our trading plan. So, be wary of that, be aware that the Fed will be coming out here around lunchtime with their review. We continue to believe that they will just continue to be accommodative to the markets.
This is your update, guys, for today, Thursday, November 5, 2020. We’ll come back to you tomorrow with another daily update, have a good safe trading day, and we’ll talk to you soon.
A lot of stuff happening in the marketplace, folks.
Be safe out there. We will talk tomorrow!
Editor, Rude Awakening