iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,631 Blog Posts

This Rally Isn’t As Strong as You Think

Breadth is at only 68% and all of the economically sensitive sectors, like airlines, semis, and cruise ships, that have been hit by fears are not participating, at least not to the degree you’d expect on a +750 day. More importantly, and I cannot stress this enough, the 10yr bond is not rising in yield, now 1.08%, down 5bps.

The net result is a feverish rally in DIVIDEND STOCKS. You know, the sort of nonsense you’d never look at: CLX, ED, PG, and KMB. While the markets look fantastic on a superficial level, underneath the surface ZEN is down for the day.

The trade is simple, stay small and bet against this rally on an intra-day level. Should it hold, close out the trades and get long shit that didn’t rally today. Often times the real move is the day after the initial burst, as the wall of worry crushes in the helmets of weak shorts caving into obscurity.

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10 comments

  1. numbersgame

    I closed out my SOXL position. In the near term, I agrre it can go either way. In the long term, fear-induced panic will strike again.

    An example of denial (and the subtle racism is the US):
    Italy.
    – over 2000 cases from the alps all the way to sicily
    – over 50 deaths
    – exported infectees to **27** countries and counting, includign the United States
    Trump administration: “Welcome to America, Mario!”

    Also, here is how it going so far:
    January:
    China -> US (4 states)

    February
    China -> US
    China -> ? -> Iran -> US
    China -> ? -> Italy -> US
    China -> ? -> South Korea -> US
    China -> ? -> US

    Most importantly, investors are severely underestimating the problem in Washingotn State. Basically, conatainment has been lost, and it’s just a matter of time before the US case rate looks like SK, Iran, and Italy.

    Health care worker’s self preservation instincts are going to put a stop to the CDC’s “Don’t ask, don’t test” COVID-19 policies. So we’ll also see a spike in current cases that are presently diagnosed as the flu.

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    • purdy

      “Welcome to America, Mario!”
      Italians might call that comment racist …but they aren’t whiny little bitches.

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      • numbersgame

        You’d have to be a whiny little bitch to complain about a name (I didn’t use any stereotypes).

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        • numbersgame

          Two thumbs down?
          I guess we found the real snowflakes: peopel whinign that *liberals* are too politically correct.

          I apologize for the butt-hurt I caused. I amend my statement to, ““Welcome to America, person from Italy!” I hope no ones losese sleep over this now.

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  2. og

    Gotta admit Robin Hood being down today is pretty hilarious. What’s the advantage of using them if everyone else is offering free trades now?

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  3. awanka

    I don’t think the shorts are quite ready to pack it in and go home.

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  4. alty

    Good day to eat a sandwich and collect theta

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  5. jbandy

    Rallies following a massive sell-off never start out with broad-based strength the 1st day. Wouldn’t read too much into it. However, I do think we are in for some bad news on the US coronavirus front as the government gets its act together and actually is able to test the number of people it should be testing. I smell a fast ramp of cases by end of week which may shock people and the market.

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  6. purdy

    Boring trading today ..considering the end of the world and all. Nothing to do but tweak Numbers …bought some TBT.

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