Energy Looks Tired, One New Stock Today

Dow: +39.58…
Nasdaq: -31.96… S&P: -2.57…

Starting tomorrow, Janet “Aunt Bea” Yellen limps to the podium to discuss interest rates.  She has gone from the world’s most loveable lawn gnome, to the most irrelevant person in global society. If the Great Gatsby was still throwing gigs in the Hamptons she wouldn’t be on is list.

It began overnight when non-OPEC oil producing nations agreed to cut production. This followed OPEC agreeing to cut 1.2 million barrels last week. Overnight, oil saw a mega surge on this news to over $54/barrel. The S&P futures traded up as much as 10 points in the overnight session but slowly began to fade. By the time the stock market opened this morning the S&P 500 was flat and the NASDAQ was solidly lower.

I talk to hedge funds daily. Most are as confused as fathers day in Appalachia right now. Should they start shorting or buy more?  Take profits or let it ride????

My feeling is that it all depends on your cost basis, your time frame and what you are long. Personally, as I said in the video, I don’t think we will see a major selloff until after year end.  If you have big gains, that you have been riding for a while, I think you take a bunch off and buy them cheaper. You always get to buy stuff cheaper.  Don’t wait for that last uptick. Don’t be that guy.

You know that I have been obsessing lately about overbought conditions. Today, just with a small pullback in some sectors, things drifted into a more realistic range. That’s good. A few days of consolidation can make these overbought readings come into line.  If it wasn’t such a seasonally bullish time, I would be all cash though.

We are definitely overdue for a “thumping”, so don’t be surprised f it comes out of nowhere. No one rings a bell at bottoms or tops.

Personally, I love  December in the market. Santa is in his workshop, volume is low, the kids are home from college, and my wife unlocks me from the attic and removes my head muzzle. It’s all good, such happy times.

Regarding TEDU

When a stock opens below my stop I will usually not take the stop unless it’s a disaster then I will take the loss. Today TEDU opened below our stop and it closed  just 25c below stop. Now my stop will be today’s low. If it breaks that, I”m out.

I added AQXP today as long to the P&L sheet. It’s possible my favorite biotech for 2017 (as long as it doesn’t miss a clinical endpoint and go to 5). I love the chart a lot and it has been behaving nicely through all this biotech turmoil.

Correction…in today’s email alert I said if it got above 17.75 it can go to the high teens. I meant the 16 level, not 17.75.

See you in the morning.




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