MaR Nov 12 2020

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Market Report for Nov 12 2020

You can’t outperform the market if you buy at the same time as the majority

Trade Zones:
MRTN

Market Trend:
Up

Market YTD:
Nasdaq Composite +31.4% YTD
S&P 500 +10.6% YTD
Russell 2000 +4.1% YTD
Dow Jones Industrial Average +3.0% YTD

Market Volume:
NYSE Vol: 925 mln (B)
Nasdaq Vol: 3.7 bln (A)

New Positions:
SNAP – swing
SQ
ZM

Portfolio % of Return:
Stocks: +744.36
FX & Comms: +2.25

PORT Nov 12 2020

Comments:
Leadership reverted back to tech, where it has been for most of the year. This now takes us to a stage where we can evaluate if there was a real rotation or was it just a shiny penny.

If it is real, those same stocks that were moving up on news of a vaccine should start to pick up after their pullback and then outperform the market. If it was fake then we should see more weakness on those stocks.

CCL is a stock we are very familiar with. On the news of a vaccine, it jumped up before the market opened. How many traders would have bought at the top only to now be stopped out with a loss?

CCL Nov 12 2020

What those traders should have done is to wait and see is if price moves back up and then provides an opportunity on a BuF or similar. Level 3 had a couple of posts a week before the vaccine came out regarding all of this so they were well prepared to either buy before the dumb money or wait until phase 3 results came out. Anne and I do not try to predict and so needed to see some information of a vaccine success which we saw the day after mentioning it on the webinar.

Based on historical evidence and current market behaviour, we are still thinking the market will move up. However, the market moves up with the least amount of investors onboard. So beware tree shaking, fake breaks and mock money flow.

Let’s go trade!