Bearish news flow, bullish price action
Record unemployment rate, historic drop in retail sales, escalation of the trade war with China, company cutting earnings outlooks, an unprecedented health crisis that might have changed the way we live, work and play forever, rock-star-status money managers (Tepper, Druckenmiller, Buffett) saying that the market is overvalued and at levels that offer the worst risk/reward for being long since the late 2000s. And after all of this, the U.S. indexes went down for two and half days last week before dip buyers stepped in and bought pretty much everything. The underlying price action continues to be constructive. In fact, if you just look at the charts and don’t consume any news, you would wonder why there is so much bearishness out there. There have been constant mini sector rotations lately but the three groups that have been consistently leading the market are still biotech, precious metals, and software.
The market continues to provide incredible trading opportunities on a daily basis. Here are just a few of the ideas and comments I shared with subscribers last week: