11Nov10:08 amEST

Face/Off Day

On this Veterans Day, the bond market is closed (along with banks, post offices, etc.), but we know stocks are open. As we noted for Members back around Labor Day, it would essentially be a "straight shot" with no breaks until Thanksgiving. 

With this in mind, TLT is still trading, since it is an actively-traded ETF of Treasuries. Thus, the bond market closure does not mean TLT halts for the day. 

And after the recent selloff in Treasuries as rates ticked higher, there is a bit of a reprieve today as TLT flips green as I write this (meaning rates inch back down). 

As we have been discussing, higher rates (TLT down) can mean that Wall Street financial models need to adjust, and mega cap tech winners get sold as capital rotates to, broadly, value sectors and materials/miners/oils/banks/insurers to initially benefit from higher rates. 

That said, the respite in TLT here sees the Nasdaq clearly outpacing the other parts of the market for a bit of a role reversal from what we have seen of late. In my view, this type of action only reinforces the correlations in play.

In other words, watch rates even more closely going forward for clues about whether tech is truly unwinding or, instead, if we are gearing up for a classic holiday rally to put the cherry on top of a wild 2020--We expect the likes of SQ ZM to bounce aggressively after getting sold hard of late; it's just an issue of whether buyers run into resistance much sooner than they have grown accustomed to since the March lows. 

Separately, it seems we have all forgotten about SIRI, the iconic satellite radio brand. On the updated daily chart, below, you can see the stock peeking its head above the 200-day moving average so far this month. We know the name has been a tease for many years now, but with value plays waking up it may be worth doing some research on this one to see if the market is signaling a brighter future.  

Stock Market Recap 11/10/20 ... Just One More Thing...


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