For Trading April 1st
A Normal Day?
Late Selloff No Real Features
Today was as close to a normal day as any I’ve seen in the last 6 weeks. Futures were all over the place last night and opened to the downside this morning but before 10:00 we were back on the upside banging against the 2,640 level for the fourth day in a row. Support around 2,575 seems to be present and we rallied off it several times. However, today’s pickup to a slight new high for the week and closing on the low of the day leads me to the conclusion that we are running out of steam. This week’s range is a meager 95 S&P points, and the Friday close of $2,541 may be an important number. If we go no higher and get back into last week’s range (2191 to 2637) we can head back towards the area of a necessary, test of the current bottom (and I use that term with extreme caution).
The volume continues to shrink daily, with the absence of the normal “end of quarter” rebalancing trading. Market internals were just okay with NYSE losers with a slight edge and NASDAQ 1:1. Volume was average for an average day, as were treasury prices. Most of the economic numbers are pre-COVID-19 and I think useless. The DJIA was considerably weaker than the market with 25 down and only 5 up. The only big (?) gainer was CAT on the news that the Great Orange might suspend or delay tariff charges, and it was up only $29 DPs. This has become an incredibly hard market to trade since the IV has become so extreme that if you want to trade an SPY position (as I did today) in order to make even a short-term trade the option prices are so absurd as to skew the risk to unreasonable levels. The example today was a simple one. At a price on the SPY around $259.50, the SPY 4/8 240 puts were $3.30…that’s a week from tomorrow, and $20 out of the money, for $3.30.If for any reason, volatility subsides, these thing will lose a major piece of its premium. If you’re right, and it happens fast, great, however, if it takes more than a day or two, to get started, or moves up, even though it’s not what I expect, it just withers away.
Our “open forum” on Discord, which allows me to interact with subscribers and others to allow direct questions and chart opinions on just about any stock, continues to grow with more participants every day. It is informative and allows me to share insights as the market is open and moving. The link is: https://discord.gg/ATvC7YZ and I will be there and active from before the open and all day. It’s a great place to share ideas and gain some insights, and we’ve grown to almost 800 members.
SECTORS: Other names in the news: Since it’s late, I’m going right to two of my favorite topics: Today’s Disaster Du Jour was Amarin Corp (AMRN), a biotech that got an unfavorable ruling on patent litigation related to a potential generic version of Vascepa. The company said it will not affect worldwide patent protection. The stock received several downgrades from Oppenheimer, Goldman, and Stifel, and after closing $13.58 yesterday, it opened $4.22 and finished the day $4.00 -9.58 (70.54%)
On the upside we had two winners with Vivus (VVUS) introducing a remote monitoring platform for use when there is Social Distancing. VVUS is a long way down from its highs in the last decade but came to life today and after closing $ .95 yesterday with an open of $4.00 and finished the day $3.60 +2.65 (279%).
But the HOMERUN OF THE DAY goes to SGBX, maker of modular units for easy and quick construction received a MOU from Transcend Onsite Care to use their technology for container-based modules for medical care. After closing on Monday @ $2.06, it opened $3.80, traded $9.74 and closed $9.30 +7.24 (351.46%) before continuing higher in late trading hitting $12.75 and is currently $10.35.
BIOPHARMA: was MIXED with TEVA the big winner @ 8.87 +.36 (4.23%), REGN +13.90 (2.94%), VRTX +6.03 (2.06%) and LABU -1.09 (4.72%), and IBB $106.35 -2.;49 (2.29%),
CANNABIS: This group was MIXED CRON -.69 (10.88%) the biggest loser, while CURLF -.22 (5.3%) and MJ $11.40 -.15 (1.3%).
DEFENSE: was LOWER with RTN -10.23 (7.24%), UTX -4.25 (4.32%), NOC -12.73 (4.06%) and ITA $142.90-4.67 (3.16%).
RETAIL was LOWER with the group down across the board. M -.53 (9.87%), JWN -.69 (4.37%), KSS -1.60 (9.98%), DDS -4.23 (10.27%), WMT -2.00, TGT -3.68 (3.83%), TJX -1.33 (2.8%), RL -4.75 (6.68%), UAA -.51 (5.33%), LULU -6.56 (3.38%), TPR -.27, CPRI -.50 and XRT $29.78 -.24 (.80%).
FAANG and Big Cap: were LOWER with GOOGL +.69, AMZN -25.95, AAPL -4.21, FB -1.20, NFLX +1.04, NVDA -6.09, TSLA +13.37, BABA +.23, BIDU +1.05, BA -5.78, CAT +3.49, DIS -4.30 (4.31%) and XLK $79.48 -2.42 (2.95%).
FINANCIALS were LOWER with GS -7.12 (4.45%), JPM -4.75 (5.08%), BAC -1.07 (4.85%), MS -1.51 (4.33%), C -2.63 (6.57%), PNC -6.37 (6.31%), AIG -1.81 -1.81, TRV -5..59 (5.45%), AXP -6.14 (6.8%) and XLF $20.82 -.59 (2.76%).
OIL, $20.48 +.39. The stocks were MIXED even with the price of Oil trading higher. NBL was the big winner +.58 (10.92%), DNR -.18 (8.5%), and XLE $28.72+.10 (.35%).
METALS, GOLD: $1,596.60 -46.60 After the recent gains, Gold has failed to break through the highs around $1700 and have fallen back. I will reassess and look for a new entry point.
BITCOIN: closed $6475 + 95. We traded in another short range again today and finished mid-range on the day. While I want to add the 350 sold just over a week ago, I want to wait and see some stabilization. We still own 400 GBTC with an average of $8.06. GBTC closed $7.12 +.07 today.
Tomorrow is another day.