Weekender for 11/5
1. Market Summary
- Stocks start premarket higher, accelerate on more data
- Stronger session as the move expands
- Data strong … and not … as part of the economy is driven by money printing and military spending while the rest of the economy suffers
- Q4 rally shows solid internals, but after Friday’s jobs report, adding more ahead of the weekend is problematic
- Rally likely pauses soon before resuming, providing more entries
- Apple may provide the catalyst for a pause
All must be right in the world. Markets view the Fed as finished hiking interest rates. Bond yields drop sharply. Absurdly divergent economics showed almost freakish strength Thursday. There’s a signpost up ahead. Surely it reads Nirvana.
The Q4 rally continued Thursday, showing even more zeal as the move picks up speed from its tepid start on Friday when the NASDAQ indices notched gains. Futures were positive pre-data and jumped farther on the stronger continuing claims, productivity, and lower unit labor costs. Indeed all is right and good. Later in the morning, September factory orders almost tripled expectations (2.8% vs 1%); more proof of the return of the golden age. Stocks continued their move higher.
NOTE: The figures and information above are from the 11/2 report.
MARKET VIDEO
NOTE: The video is from the 11/1 report.
2. Targets Hit
Technical Trader:
We saw the Q4 rally finally start to gel in late October. Lots of gloom, two miserably failed prior attempts leading into a sharp selloff that took the Nasdaq through the 200-day simple moving average (SMA) but found NASDAQ 100 still holding the 180-day moving average (MA). Patterns were banged up thanks to the repeated selling bouts winnowing out leadership, but in a seasonal Q4 rally, you don’t always have a plethora of great patterns — very nice when you do, but that is just not always the case.
That said, a few areas sported solid patterns, e.g. some big name techs, oil and gas and even shipping. We used those good patterns to take positions when the rally was still a question mark, and when the move really got underway, we were in position to profit as others piled in, driving our positions upside. Thus we were in position to bank some solid gains this past week just as things overall were getting moving to the upside:
Microsoft Corp. (NASDAQ: MSFT): 54% gain in the call options.
Quanta Services Inc. (NYSE: PWR): 100% gain in the put options.
Teekay Corp. (NYSE: TK): 31% gain in the call options.
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Rapid Profits Stock Trader:
Once again, we found some steady gains in the “hard stuff” sectors, e.g. gold miners, uranium miners and minerals in general. While not necessarily the sexiest of stocks, given the criteria in Rapid Profits Stock Trader — price, volume, potential to move — they present a rather buxom package. By watching a broad range of stocks that meet our criteria we are able to develop a watchlist that keeps us ready to make the plays when they present, making 5% gains, 10% gains and more as we catch the stocks breaking higher. By doing so, we were able to bank some solid gains this past week:
Cleveland-Cliffs Inc. (NYSE: CLF): 9.23% gain in the stock.
Harmony Gold Mining Company Ltd. (NYSE: HMY): 7.69% gain in the stock.
Uranium Energy Corp. (NYSEAMERICAN:UEC): 9.72% gain in the stock.
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3. Covered Call Options Play
Centrus Energy Corp. (NYSEAMERICAN: LEU) — Centrus Energy Corp. is currently trading at $52.27. The Nov. 17 $55 calls (LEU20231117C00055000) are currently trading at $2.20. That provides a return of about 12% if LEU is above $55 by the expiration.
