Financial News vs. Noise
Another day dominated by the mega cap tech names. The S&P looks like it’s clearly on it’s way to test 4400, once again driven by the Magnificent 7. Breadth was once again negative, but not as skewed as Monday. Powell has minor speaking engagements today at 1:40 and tomorrow at 2. We also have a 10 year bond auction today. Rates continue to be the tail that wags the dog so this could be market moving.
Precious metals miners were interesting yesterday. Many of the junior golds opened down big, only to recoup most of those losses before day’s end. Silver was down, but AG ended up over 3%. This continues to be my main area of focus. With rates coming down, regional banks still struggling, and a war in the Middle East, this is the spot I feel most comfortable being long. Gold and silver are both down pre market, so could be a chance to reload, or I could be totally wrong, we will see.
My sense is that the energy area is going to be interesting. Yesterday I was short VLO which I covered. Oil prices have come down a lot, and are negative this morning, but I sense the oil stocks could be getting close to being buyable. XLE may be the easiest way to play, using the 200 day as tight stop. It’s below at the moment, putting it still in a short sale position, albeit extended a bit.
Coal got crushed yesterday, but a name like BTU is not far from rallying back over the October 26 low. ARLP is another potential as it had an undercut and rally at it’s 50 day, but it doesn’t trade nearly as well as BTU.
Uranium names have sold off into support and a name like NXE is 4 cents above it’s 50 day moving average.
As I mentioned in yesterday’s note I held GEO and CXW into earnings, which didn’t look to smart to start the day, but ended up working very well. I am out of both as they are now somewhat extended, however I love this theme and will be looking for spots to go back in. I continue to be long KTOS, which has retraced almost all of it’s earnings decline.
On the short side I continue to campaign TRUP and AX. Want to be careful having too much short exposure overnight, but will be shorting those names intraday on any weakness.
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News vs. Noise
I don’t think the guys who caused this mess actually fixed it, assuming it is in fact fixed. Why the Fed Shouldn’t Get Credit for the Fall in Inflation-WSJ
Warning on U.S. commercial real estate drags German bank shares lower-MarketWatch
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