30Oct12:09 pmEST

The Worst Halloween Treat Ever

It may seem like a boring, awful treat for bulls on this Halloween eve to have the insurance stocks outperforming nicely into this broad market selloff so far today. After all, the sector is almost never discussed beyond the usual Berkshire Hathaway/Buffett "moat" tropes from time to time. 

However, with rates moving higher (See: TLT yesterday and today, for example), Treasuries have suddenly stopped being an obvious safe haven in times of distress. That may or may not resurface if equities continue to sell-off after the election, by the way. 

But what we do know is that in the initial stages of higher rates we often seen banks and insurance firms fare reasonably, on a relative (to, say, QQQ names) if not outright absolute basis. These sectors are seen as profiting (again, initially) from higher rates. 

And so on a day when a firm like GSHD is surging higher after beating top and bottom-line earnings, why would anyone bother to notice when we have AAPL AMZN FB GOOGL TWTR, etc., all serving as sexier fodder for financial news/FinTwits. 

I view that snub as a mistake, as GSHD was a strong chart even before earnings and should be watch going forward for a lower risk long entry than today. 

Another name to watch: LMND, an IPO this year. The stock came public in July and caught some initial hot money but burned those traders out the subsequent months. 

Now, however, there is the possibility for a well-defined base bottom, seen on the daily chart, below, as the name is up 4% or so into a bloody tape. 

Earnings are scheduled for November 11th, giving it some time to move with peers if insurers catch a decidedly un-sexy, not-so-sugary-treat rotation higher as rates inch up but so do out of favor value sectors. 

Stock Market Recap 10/29/20 ... Weekend Overview and Analysi...


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