D&D Note (7.10.2020) ~ Golden Cross On S&P 500 Helps Amplify Investors Risk Tolerance ~
Yesterday the S&P 500 saw a Golden Cross technical chart formation which happens when the 50 day moving average crosses above the 200 day moving average. In the last 70 years this technical reading has signaled the end of Bear Market every time.
This has helped investors to be bullish today heading into the weekend and to not reduce risk.
However, the 2-10 Treasury spread is still only around 47 basis points and usually need to have that spread get to at least 100 basis points to signal end of recession.
The VIX retreated today but is still in high 20 handle and many see the volatility gauge falling under 26 to be bullish for a move higher in markets.
Trump says that a phase 2 trade deal with China is no longer a priority and basically off the table.
Cannabis stocks rally with CGC gaining over 8% on the day.
Banks rally ahead of their earnings calls with JPM rising over 5% today.
Mega Cap Tech stocks took a breather today as investors rotate into more broad based stock buying.
Netflix price target raised to $670 with a buy rating at Goldman sighting earnings ‘above guidance’.
Amazon price target raised to $3,550 with a buy rating at Citigroup sighting e-commerce dominance.
Also, today Amazon told employees to delete TikTok from their phone citing security risks.
Facebook is considering a political-ad blackout ahead of the election in November.
Tesla shares continue to defy gravity and jump over 10% today to now over $1,540 a share.
Trading volume on the day was low and the lowest volume since day before the Memorial Day weekend.
DOW up 1.44%
S&P 500 up 1.05% (3185.04)
NASDAQ up 0.66%
VIX down -6.73% to 27.29
Oil up 2.25% to $40.51 a barrel.
Gold down -0.08% to $1802.20 an ounce.
The U.S. reports singe-day record spike in Covid-19 cases of 63,200.
Robert Kaplan the president of the Dallas FED says wearing a mask is the most important thing for the economy right now.
Gilead says its drug Remdesivir has reduced deaths from the virus by 62% for patients who use the treatment.
Former FDA commissioner Dr. Scott Gottlieb says that as many as 1 in 150 people in the U.S. are infected with Coronavirus.
Global Virus cases: 12.37 million+
Global Virus deaths: 556,895+
U.S. Virus cases: 3.15 million+
U.S. Virus deaths: 133,777+
~ Dave James / Principal Trader and Market Strategist