15Oct10:47 amEST

Hey Bears, How About a Courtesy Flush?

The aggressive re-pricing of high-flying software play FSLY after lowered guidance, combined with the dimming prospects with an imminent stimulus deal (not to mention lingering issues of, perhaps, a new round of second wave pandemic restrictions) are all weighing on the broad market this morning.

Bulls are rebutting the FSLY-pricked-the-bubble thesis by arguing that the dip so far is a rudimentary gap-fill on the indices down to this Monday's opening pop higher, especially keying off QQQ at $285.79. Moreover, other high-flying names like NIO ZM are totally ignoring the red so far and surging on higher without a care in the world, thus rendering FSLY to be fairly contained so far. 

My view is that as long as QQQ hovers above the gap from Monday it is tough to draw too many dire conclusions other than the tape is finally cooling off a bit. I would prefer a (courtesy) flush down to the gap or just below it in order to extract just how strong bulls are into sharp dips. However, as long as hot money is permitted to drive names like NIO ZM higher it is going to be tough sledding for bears to gain much downside traction, even with various news items seemingly aligned in their favor. 

As for new ideas, we may very well return to the old March playbook in light of some European re-lockdowns, like KMB, producer of toiler paper and, for example, paper towels. You need those, if you are back in the house all day. And the KMB daily chart, flagging below, indicates as much as it is green with a week to go until the next earnings report. 

Stock Market Recap 10/14/20 ... Value Funds' Doors Closed; O...


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