The Bulls Aren’t Iced Out Yet!

We were just hit with a huge ice storm on the Upper Peninsula that took out my power and internet yesterday afternoon.

Here was our lovely, socially-distanced spring Saturday afternoon, followed by the iced-out scene from Monday:

Michigan snow storm

There’s nothing quite like springtime in Michigan!

But like I always say, you have to be prepared for anything — in life and the markets. I’m certainly not going to let a little snow and ice keep me away from my trading.

Speaking of markets, the shorts are running scared after the epic bullish-base move we saw last week. So I wasn’t surprised to see the averages cool down a little to kick off earnings season.

Now we need to see some follow-through…

We have our line in the sand: 2,800 in the S&P 500.

Why 2,800? Because this is the halfway point of the vicious COVID-19 crash. Go back in time a little more and you can see 2,800 is also a key level of support from last summer — a time when the markets traded sideways for the better part of seven months.

SPX chart

My big disclaimer here is the market might need to test the 2,800 a few times before it extends higher. Thåere are plenty of eyeballs on this area and I’m sure the bulls and bears will put up a strong fight. As of early Tuesday afternoon, the S&P is holding just above 2,800 with an intraday gain of more than 1.5%. That’s a start!

Ultimately, we like the momentum and the shorts are scared. This could be the tipping point…

Of course, there are major disconnects in this market.

Just look at what’s happening with the gold miners right now. Gold continues to post new multi-year highs, but the miners weren’t playing ball — until now.

Early Monday morning, we highlighted the VanEck Vectors Gold Miner ETF (NYSE:GDX) as the gold miner ETF  pushed toward $30 following a massive 10% rally to close out the Easter-shortened trading week. The miners are picking up the pace this week, with my premium readers’ leveraged gold trade posting a 50% gain yesterday.

From a risk-reward standpoint, the miners are a breakout buy.

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money


Chart(s) of the Day: Ready for Some All-Time Highs?

Greg GuenthnerIt’s time for our first earnings season during the current COVID-19 panic — and that could mean plenty of uncertainty as some ugly numbers start trickling in…

Thankfully, investors were ready for some big earnings misses. While big bank stocks took a hit yesterday, the broad market started the day in the green and actually maintained its gains through the early afternoon. Not too shabby!

The averages still have a lot of ground to make up before we can start talking about new all-time highs. But that doesn’t mean some of the strongest names are going to wait around for the Dow or S&P to recover. In fact, two household names have already punched through to new all-time highs this week: Amazon.com (NASDAQ:AMZN) and Walmart Inc. (NYSE:WMT).

AMZN chart

WMT chart

Amazon and Walmart are two no-brainer winners that have managed to cement their services as essential businesses during the COVID-19 shutdown. Amazon continues to lead the way by pledging to hire thousands of new workers to keep up with surging demand, while Walmart is crushing the curbside grocery pickup game.

While the markets are by no means out of the woods just yet, it’s good to see these leaders picking up the slack.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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