Posted November 12, 2020
By Scott Stewart
Relief Rally Put on Pause
Welcome to the Rude Awakening for November 12, 2020.
Scott Stewart coming at you once again here a little after the market open.
Looking a little bit like a soft open to the S&P 500, but the NASDAQ is slightly rebounding here on the day.
As we see this rotation that we've had come out of the tech industry, now it's right back into it again once again, pushing the tech stocks higher on the day.
There's a couple of pieces of news driving the market today.
We'll see where it takes us throughout the rest of the day
Whats Driving Markets?
Number one, jobless claims coming in once again, sort of the three week trend now: little bit better than expected, but still 700,000 jobless claims being reported in the news.
The thing that I think is not being focused on in these jobless claims reports is the fact that there are a lot of permanent job losses in these.
These were all initially of course, pandemic related.
A lot of them were thought to be temporary.
We're now starting to see a trend where a lot of these are going to be permanent job losses.
That's going to have a drag on the economy going forward.
We've also of course got the sort of relief rally that we had with the virus. It was referred to as the vaccine rally.
That's starting to drift away now, as we're learning that the drug with a fantastic 90% efficacy rate needs to be stored at minus 75 degrees Celsius.
And very few pharmacies, very few hospitals are set up to do that. And youll absolutely have an issue with transportation.
UPS, FedEx, the United States Postal Service they are not designed to be able to transport at those temperatures.
The question then becomes, how does the vaccine get disseminated out into the public? These are things that are starting to worry the market a little bit.
Even though we are having this rotation back into the techs, there's a couple of things folks on our watch list today, just to keep your eye on going forward
4 New Watchlist Stocks
An interesting one is DFEN. This is a three times leveraged trading instrument. So this is absolutely not, absolutely not a buy and hold investment vehicle.
It is fully just designed for trading short term trades.
DFEN is what's referred to as the defense ETF, Aerospace and the defense industry.
You can imagine with a Biden presidency that the defense spending may be down.
Obviously we know the travails of the aerospace industry based on the COVID 19 virus.
This thing has taken a massive hit from 70 down to the $12, $13 range, $11 range. If we pull in here though, a little closer, we can look at the last little recent action on this. And it does look like we've had an interesting sell signal set up here. Possibly a move down to the $11 range. So keep that on your watch list.
The cruise lines that had an absolute pop when we got the virus news are now giving that back. Norwegian Cruise Lines (NCLH), still pushing to the downside here.
We're watching that for a downside bearish move right along with Royal Caribbean (RCL). And again, both of these are illustrating very bearish patterns right here, looking for trades to the downside.
Last but not least on our watch list today guys, is ticker symbol VXRT. This is a pharmaceutical company.
They just reported some additional, they posted some additional data on their COVID-19 update. It's getting a little bit of a bump today. There's about four to five different companies, guys, right now that are on the cusp of having their own cure or their own response to this virus. VXRT is one of them. Keep them on your watch list for a possible pop to the upside.
That's your trading information for today folks. We'll be back with you tomorrow. Once again, be safe out there in your trading.
These are the ones were watching today.
We'll be back with you tomorrow for some new insights from the trading desk.
Scott StewartEditor, Rude Awakening