Reopening Trade Doesn’t Care About COVID-19 Spread - Focuses On Vaccines

Rally Continues For Small Caps Large caps fell in a rare pullback for November. However, small caps were up again as they are overbought in the near term. S&P 500 fell 48 basis points and the Nasdaq fell 21 basis points. Small cap index was up 37 basis points. Reopening trade won again which is…

Christmas Looking Grimmer By The Day?

Getting Coal For Christmas While people won’t actually be getting coal for Christmas, almost half will be getting less expensive gifts than last year. As you can see from the chart below, as of the start of November, 45% of Americans said they would be spending less on presents. 41% said they would be spending…

Stocks Rise On Moderna Monday

Yet Another Rally In Small Caps It’s surprising how easy it was to see the rally coming on Monday. It was so easy, some investors over thought it and didn’t buy beforehand. We knew Moderna’s vaccine data would be great and that it would come out this week. A 94.5% effectiveness of the vaccine helped…

Operation Ignore The Economic Data Is Working

Economic Data Is Irrelevant It seems like the only people who care about the economic data are macro nerds. The stock market is rising despite bad data. Many don’t disagree with the rise in cyclical stocks. One theory is that the economy will recover after the vaccines are widely given out this spring. Obviously, slowdowns…

First Small Cap Record Since August 2018 - COVID-19 Ignored

Rally Brings Record Highs The stock market is on fire as the euphoria knows no bounds. This time, stocks are mostly being led by cyclical small value stocks, but growth names have done ok too. Some investors are growing increasingly bearish on the market as there is no reason the big tech stocks should be…

Consumer Weakens Slightly: COVID-19 To Ruin Holiday Spending?

Vaccine Predicted To Stop COVID-19 We are all waiting to see if the economy rolls over or if it continues on its path towards improvement, albeit at a slower pace than earlier in the recovery. Most of the current data shows the economy still on solid footing in November, but things could go awry as…

Option Rolling 101: Lower Risk and Increased Profitability

Option Rolling 101 After nearly 18 years that in the investment education industry, option rolling is one “trick of the trade” that few investors use. If rolling is discussed, it’s typically from a standpoint of weakness. That means that they’re looking to “fix” a losing trade and rolling by significantly increasing risk. What I’m about…

Stock Market Continues To Ignore COVID-19 - Nio Rises AGAIN

Small Decline On Thursday The stock market was experiencing euphoria on Wednesday. This pandemic that is ravaging the country has been ignored. That wouldn’t necessarily say the 1% decline in the S&P 500 on Thursday signaled the market is now taking it seriously. It’s easy for the headlines to claim that’s why stocks fell, but…

Lower Inflation and Better Labor Market

October CPI Mildly Disappoints CPI report had a lot of bang for its buck on Thursday. Yields were already headed lower because the long bond was oversold and because COVID-19 shutdowns are increasing. Adding a disappointing CPI piled onto the trade. October CPI showed less inflation which is the opposite of what the ISM and…

Stock Market Hits Euphoria

Less Than 1% From Record High The stock market is in an extremely euphoric state that doesn’t match the COVID-19 crisis which is set to be very deadly in December. There is high resistance at the current S&P 500 level combined with headlines of incoming shutdowns. Most don’t think there will be a 20% decline…