Morning Market Thoughts

Morning Market Thoughts

Market Update

Good morning. We’re setting up for a lower open today, though nothing like yesterday’s beat down. Yesterday, the S&P and other major indexes rebounded off the 50-day moving average. That’s a bullish development and I suspect that we will see a rebound from today’s opening bell.

I recently mentioned that two sectors which need to start working before we were likely to challenge new high: Energy and financials.

This morning, oil is up just a bit, and the energy stocks are following suit. I still think it’s early to be getting into these stocks, but I do not think it’s too early to watch them. Other than some large fund managers who are talking their book, I don’t see a lot of bullishness in the energy sector. But I do see a lot of them saying the same thing I’m saying — “Energy is going to turn around at some point, and I’m watching oil.”

The financial sector is really held hostage by Washington DC. If it appears that POTUS will be able to enact a significant tax cut (If I was a betting man, I’d bet on the home team rather than the visiting team), then we’ll see financials move higher. Of course, the FOMC will have a lot to say about banking stocks…but they are temporarily out of the headlines, which is never a bad thing.

The Oakland Raiders are going to become the Las Vegas Raiders in a few years. While I’ve never been a Raiders fan (other than when they play the 49ers), I’m pretty agnostic about the move other than the obvious: Raider fans are beyond loyal. They are rabid body painters. They’re some of the most loyal fans in the league, and I’m bummed for them that their team is leaving. With that said, let’s look ahead.

While the move to Vegas doesn’t happen for a few years, this is going to be an inestimable boon to the casino industry. The market looks forward, but I’m not sure that anyone is looking that far ahead. However, Wynn Resorts (WYNN), MGM Resorts (MGM), and Las Vegas Sands should be on your screen. In particular, WYNN is coming out of a one-year base. MGM is at the low end of a multi-year cup & handle, and LVS has fallen back to a low-risk entry level.

Loved the trading talk in the forum “trading desk” yesterday — lots of great ideas that members were sharing. That’s how we make money!

See you there.


By the way, I don’t know why I said “inestimable boon”. It just felt right, I guess.

Are you a Teslonian? Even if you aren’t, you should look at Tesla (TSLA). Here’s your trade. (March 27, 2017)

Free Chart


In this video I want to look at Tesla ( NASDAQ:TSLA ), here is why: You can see where I think the stock broke, which is right when it broke down through this trendline. Like a lot of stocks, you can look a some of the optical networking stocks, it is broken and then it just finds this consolidation level, it never really starts to move lower.

So what is up with Tesla ( NASDAQ:TSLA )? Today the stock broke out; it continues Friday’s move on heavier and average volume. Whatever the reason for that is, there is news that they may be able to steal some market share because their Model 3 is really safe. Okay, sure. And so now this is moving higher again. I think if you are a ‘Teslonian’ then you hold this stock, you bought some more today and you are very happy, and that is fine.

The way this stock is looking now on a weekly chart, it has never traded logically anyway with respect to valuation, so just think about it. And if you are sitting here listening to this video thinking, “How stupid I am, because of course it is a great value stock.” No it is not! That doesn’t mean that it is not a great stock for you to own. It just means that this stock has never really traded on fundamentals any more than Amazon ( NASDAQ:AMZN ) has traded on fundamentals.

But with that said, Tesla ( NASDAQ:TSLA ), I bought some today and I haven’t owned Tesla ( NASDAQ:TSLA ) in a long time. But if the stock moves up above 300.00 I would be inclined to be buying some more. But for now this is really just a trade, I have a bunch of calls on it. If the stock starts trading up here to 290.00 I am going to start getting an itchy trigger finger; and the closer that it comes to 300.00 the more I will be inclined to be taking some profits.

But for the time being here is what you need to know: Heavy volume on these down days, look at the big red bars, but the preponderance of high bars is the green stuff. That indicates institutional buying. You want to be long this stock. It is a high momentum stock, it is just starting to get it’s legs back under it again. I think it goes higher from here.