02Oct10:35 amEST

Not Even the Best Can Last Forever

While I recognize that it is human nature to gravitate towards continued hot stocks this morning, given the initially shocking news flow of President Trump and the First Lady both testing positive for the CoronaVirus in addition to Congress unable to have a meeting of the minds (being generous with the use of "minds," there), in reality there are other aspects about the tape today which ought to be considered. 

True, the likes of DDOG FSLY TWLO ZM are all hot this morning and have been so for a good while now. Standard virus plays like CODX NBY are also getting bid nicely as a Second Wave play on top of the POTUS/FLOTUS news. 

However, early dip-buyers seem a bit too cocksure that this pullback is no different. It does not mean, mind you, that all longs are off-limits. In fact, I went long a new stock today with Members, although it is a focused niche of the market. But it does mean that the tech rally remains under scrutiny with the QQQ ETF gapping back below the key $280 resistance level this morning. 

In addition, did you see the move higher in rates? Typically, this sort of news flow in the past would send any ole investor into Treasuries as a safe haven. Instead, TLT was immediately dumped on the open. On the TNX multi-decade chart, Index for rates on the 10-Year Note, below, the legendary move lower in rates over our lifetimes (at least mine) looks to be about as long in the tooth as one can be. Nothing lasts forever, not even The Fed's apparent omnipotence to keep rates low.

As a corollary, guess what was immediately gobbled up on the dip at the open to at least stem the tide? A sector no one even cares about anymore, let alone hates at this point: Large cap energy such as RDS.A.  

Stock Market Recap 10/01/20 ... Special Edition: Full-Length...


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