No Operation Warp Speed for This Sector

Although some notable "virus stocks," namely NVAX REGN, are benefitting from Operation Warp Speed (the White House administration's ambitious effort to fast-track Covid-19 vaccine development through a private/public partnership) are up nicely on news of more funds being committed to the likes of NVAX, the prominent casino stocks most certainly are not operating at warp speed, or anything close to it. 

One would think, given the extreme strength in China yesterday, that casino stocks like Macau exposure may be ripe for a vicious rally.

However, LVS WYNN remain bearish on most timeframes and look at risk, alongside MGM, to break lower imminently if the broad market so much as flinches now that the Fourth of July is in the rearview mirror and yesterday's post-holiday squeeze undoubtedly forced some stubborn shorts to either cover or seriously consider covering soon.  

As we have been noting since March, both here and with Members, the major casinos are likely in for an extremely unpleasant stretch over the next six-to-eighteen months as the lingering effects of the pandemic on the social consciousness run contrary to the risk-taking mindset needed by a plethora of gamblers for casinos to thrive. 

MGM, below on its daily timeframe, has built up a sizable portfolio of brick-and-mortar casinos across the country, beyond its many properties on the Las Vegas Strip. But with the likes of The Borgata in Atlantic City still shuttered during what is seasonally the busiest time of year down the Jersey Shore, we could easily see the highlighted support trend-line break lower soon. Dating back to the March lows, the light blue line has held true, albeit as upside bounces proved to be increasingly pedestrian. 

In other words, I view MGM as a quality short setup, particularly if broad market dip-buyers run into any semblance of typical summer doldrums anytime soon.