Bonds Rallied. Stocks Rallied. Just Not In the Way We Like.
The Market
We were green on the day. And bonds rallied!
But ask yourself: if I had told you rates would come down as they did, wouldn’t you have expected stocks to be up a lot more? I would. Yet they were not.
In fact, as you go through the stocks today, we see that defensive groups were up, like staples and drugs. Yes, I know the drugs are in a category on their own right now, but in the last week, we have Utes rallying (they could still use another dip) and now staples.
Banks? Not only red but by more than two percent. As a reminder, I still do not like the banks. I think they are over-owned and over-loved.
Industrials? Red. Semis? Red. Software: Mixed. Transports: Red.
I can go on, but you can see today wasn’t the finest day in the market, considering bonds finally rallied. I think that still leaves the market vulnerable over the course of the next week.
One last note I want to highlight is that XLE closed the day red. It was barely red, but red it was, after being higher on the day. This group is overbought and in need of a pullback.
New Ideas
TLT has some resistance in this 83 area, and there are some bond auctions in the next week, but I do expect we will see it cross over that line. I do not have a target yet.
Today’s Indicator
The Volume Indicator sits at 51%, the middle of nowhere.
Q&A/Reader’s Feedback
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To me, Apple ($AAPL) is quite similar to NVDA in that it has a strong tendency to go sideways for long periods of time, and then it has a spurt with no follow-through and another extended sideways period. Right now, I would say if it pulls back in the next week or so, it’s a buy for a trade to fill that gap overhead (to 330-ish), but otherwise, it’s in one of those extended sideways moves.
Bank of America ($BAC) is in the bank group, which I do not currently like. It has achieved its upside target (low 60s), and while it hasn’t done anything wrong (although today’s action is not great) I think it is way overdue for a decent pullback.
Wells Fargo ($WFC) is also a bank and therefore not a stock I currently like, but as a chart, you can see how much it has lagged. I might have another look at it if it tags that downtrend line (low 80s), but right here, I think it is vulnerable.
A week or so ago, we looked at Coinbase ($COIN), and I said I leaned toward nibbling on the Bitcoin names because sentiment was so poor. Today’s rally has run right into some resistance, and since I think BTC and its derivatives are just for trades, I’d probably take a little off the table here. Otherwise, if it can cross that line, then it still has resistance in the 170 area so I would not chase but would buy dips back to the line.
Bitmine Immersion ($BMNR) at least has a more developed base than the other BTC charts. I’d look for initial resistance in the 22-23 area.
Palantir ($PLTR) is holding okay up here. I’d love to see a pullback to the 160 area to test support. Since there is resistance all the way up it’s hard to think it will be an easy ride from here.
