Good Thursday Morning
News/Flows: This week is the heaviest news period for the S&P 500 earnings season. The big banks C, JPM, WFC started the week reporting respective earnings and as a group reserving an astounding $28 billion for anticipated credit losses. Be that as it may, markets continued to be buoyed by favorable COVID-19 vaccine news flow with MRNA receiving great interest as a result. Keep an eye on the stock, as many times a stock will top on spectacular news. TSLA stock has been a monster performer bowling over many a short trader as it climbed a parabolic wall. This past Monday the stock had a high volatility very large travel range ($297) on the day, leaving a large bearish tail on the daily chart. The stock has not yet technically broken down, but it deserves to be watched as it is a bull market leader. Should it falter on a rally attempt, it may be a signal that the rest of the large-cap tech market may come under selling pressure as well. In sympathy with TSLA, the NDX index (QQQ) had an “outside down day” this past Monday with a tail (bearish pattern). Rotation is evident as laggard sectors like Healthcare (XLV) are catching a bid. Keep an eye on the healthcare testing companies Lab Corp (LH) ad Quest Diagnostics (DGX) for further evidence.
Hot Shorts @ TradeZero:
BGFV, AIHS, DSS, BGT, CLSK, ALT, NIO, INFI, DLPN, LKNCY
WMI, PSV, RETO, UMRX, WAFU, NIO, SPAQ, ALT, AIHS, OGEN
IMV, PRCP, BOXL, RIGL, INMB, ICON, VNRX, EQ, VXRT, ECOR
When we were new to the markets (early 1980’s) we read as many books on trading / investing by people that had demonstrated a long-term ability to be profitable such as the veteran investor, William J. O’Neil. In The 1960s and 70s he was one of the first to use computer-generated technical and fundamental analysis that formed the basis of his methodology and research for his institutional clients. One of his books that we had found helpful along the way for short-side trading was “How to Make Money Selling Stocks Short” by Gil Morales & William J. O’Neil. Worth a read.
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