I purchased back a small amount of Occidental Petroleum (OXY)  at $60.87 near the close.

Thanks for reading my Diary today and all week.

I hope my output was helpful in your trading and investing.

Enjoy the weekend.

Be safe.

A special congrats to my pal Doc Glen who grinded out a one-stroke victory in The Passaic County Senior Amateur Golf Championship:

Doc won the 36-hole event with a dramatic (third!) birdie on the par-five 18th hole. His one-stroke victory is a repeat of his 2022 win (he came in second last year). 

On any weakness I plan to move to a very large position in cannabis.

The likely sequence of key catalysts that I see include:

* S3 rescheduling passage by October

* The Florida adult use referendum passes in November

* Custody and uplisting issues are resolved in the first half of 2025

As each of these events occur, the shares of cannabis companies should move progressively higher. 

And, as mentioned in my industry position piece earlier this week on TheStreet Pro, the small market capitalizations and limited floats could create a buying frenzy in the space.

I don't want to sound hyperbolic, but a possible tripling in the share prices over the next few years seems a reasonable expectation as the industry becomes much more profitable, faces new geographies (of growth) and institutional buying/ownership finally becomes a reality.

I added to my  (XLF)  short at $41.34 just now.

Raise your hand if you would give $1 to any of the putzes on The Death Star's feature of the Hamptons Conference?

I thought so... no hands.

Recommended Reading

Professor Scott Gallowy's No Mercy No Malice... "AI Laundromat." AI Laundromat | No Mercy / No Malice (profgalloway.com)

nated0gg41

I don't sense that today's weakness in  (NVDA)  is all that important technically, and the move out of large-cap tech is not expected to prove long-lasting. As detailed in last night's note, NVDA -1.97% had not yet formed a TD Sequential Sell signal on daily charts and weekly signals also are not officially in place, based on this same TD Sequential indicator. 

Thus, I fully expect that NVDA very well could regain $135 and possibly test $140 again into next week. However, I suspect that this gradual waning in momentum will eventually be a bigger deal for the stock. At present, it's hard to shake the momentum in this year's best performing NDX stock, or think that yesterday marked "the top." Rather, it's more likely that a bounce starts again next week for NVDA -1.97% and for technology, and that larger weakness will still take more time, and might prove to be a July event, versus late June. 

Overall, I'm not expecting a huge gain for NVDA above/beyond $145, but rather that a period of churning might happen in the weeks and months ahead, where this loses some momentum after this historic run up. Yet, for those short-term traders, I don't sense we'll get too much more selling just yet in NVDA, and this will take some time.

With S&P cash rallying to +2 handles, I am shorting more  (SPY)  and  (QQQ)  calls (in the money for July and August). 

Two names:

Winnebago price target lowered to $68 from $76 at Truist Truist lowered the firm's price target on Winnebago  (WGO)  to $68 from $76 but keeps a Buy rating on the shares after its Q3 earnings miss. The road to recovery for the company has been more tenuous than anticipated and certain headwinds are likely to persist in the near-term, though the firm continues to view Winnebago as a high-quality long-term holding, the analyst tells investors in a research note. With shares now trading at a "depressed" multiple of 6-times expected FY25 EBITDA, Truist continues to recommend the stock to "patient" long-term investor, the firm added.

Occidental Petroleum price target raised to $69 from $68 at Wells Fargo Wells Fargo raised the firm's price target on Occidental Petroleum  (OXY)  to $69 from $68 and keeps an Equal Weight rating on the shares.

* At 11:15 a.m.

So far the witch is casting a spell on NYSE volume only:

- NYSE volume 391 million shares, 210% above its one-month average;

- NASDAQ volume 2.10 billion shares, 14% above its one-month average

- VIX Index up 1.13% to 13.43 

Investment short AFRM looks to be moving to the downside of its recent trading range.

From Peter Boockvar:

Succinct Summation of the Week's Events:

Positives,

1)The US June manufacturing and services PMI rose a hair m/o/m to 54.6 from 54.5 with both components up a touch from May. That though is better than the estimate of 53.5. The services component continued to lead the way at 55.1 "buoyed by rising demand. Inflows of new work into the service sector rose at the sharpest rate for a year in June, driven mainly by rising domestic demand. Export orders for services, which includes spending by non-residents in the US, meanwhile fell at the slowest rate seen over the past five months." The unemployment component too finally lifted. Manufacturing rose to 51.7 but S&P Global said "albeit with the latter's recent revival losing some momentum." They said that because "prospects were seen to have darkened in manufacturing, with optimism sliding to its lowest for just over 1 1/2 years and running well below the long run average." Optimism on services though rose to a 3 month high. "Service providers often reported improved sentiment on the back of cooling cost of living pressures and the anticipation of lower interest rates."

2)The June NY manufacturing index rose to -6.0 from -15.6 and 4 pts better than expected, though of course still reflecting contracting activity. The real bright spot was the 6 month activity outlook which jumped to 30.1 from 14.5 and that’s the highest since March 2022. Expectations for new orders seemed to help lift overall confidence as inventory expectations remained low and just maybe the hoped for inventory restock is upon us. Expectations for employment rose too but held steady at low levels for capital spending. The inflation outlook for prices paid and those received fell a touch.

3)From Accenture: On AI, "We also have leaned into the new area of growth, Gen AI, which is comprised of smaller projects as our clients primarily are in experimentation mode."

4)From Lennar: "The demand for housing remains strong, limited by affordability, interest rates and sometimes wavering consumer confidence. Additionally, the chronic housing shortage driven by over a decade of underproduction of housing stock is additionally problematic for families seeking affordable, or attainable supply. Demand remains robust if it can be supplied at an attainable price point with interest rate support that enables the consumer to transact."

5)India's manufacturing and services June composite PMI rose to 60.9 from 60.5 with both manufacturing and services confidence increasing a touch m/o/m.

6)Japan said its May CPI headline rate rose to 2.8% from 2.5% but the core/core rate dipped to 2.1% from 2.4%, each one tenth below expectations.

7)UK May CPI fell to 2% y/o/y as expected but the core rate remains well above at 3.5% and service inflation was up by 5.7%.

8)The Bank of England, RBA, Norges Bank and Bank Indonesia each left rates unchanged as expected.

9)After disappointing in April, Chinese May retail sales surprised to the upside with a 3.7% y/o/y gain, above the forecast of 3%.

10)I'm finally going to the Sphere tonight in Vegas to see Dead & Co.

Negatives,

1)So last week's initial jobless claims jump wasn't such an anomaly. After printing 243k last week (revised up by 1k), the highest since last August, they came in at a still high (relative to trend up until a few weeks ago) 238k for the week ended 6/15, 3k above the forecast. The 4 week average rose to 233k from 227k and that is the highest since last September. Also of note, continuing claims rose 15k w/o/w to 1.828mm, just 1k from the most since November 2021.

2)Core retail sales in May were a bit softer than expected. They rose .4% m/o/m, one tenth less than anticipated and off a lower than estimated base as April was revised lower by 2 tenths to a drop of .5%. They are up 3.1% y/o/y which compares with the 5 year average leading into Covid of 3.6%.

3)May housing starts were almost 100k below expectations at 1.277mm, down from 1.352mm in April. After holding pretty steady above 1mm since last November, single family starts fell under 1mm at 982k, down from 1.036mm in April. Also, multi family construction starts continue to shrink, totaling just 295k in May and the 2nd month in the past 3 below 300k. It was 258k in March and as high as 490k in December. Outside of Covid, multi family starts are hovering around the lowest since 2013. Permits for building multi family units fell to 437k, the smallest figure since October 2018 not including Covid. Permits for single family homes fell by 28k m/o/m to 949k, the least since June 2023.

4)The June NAHB home builder sentiment survey fell to 43 from 45, a 6 month low. The estimate was for a 1 pt gain to 46. Highlighting the challenged affordability problem, the Prospective Buyers Traffic component fell to just 28 from 30 and that is the lowest since December too and well below 50. The NAHB said "Persistently high mortgage rates are keeping many prospective buyers on the sidelines. Home builders are also dealing with higher rates for construction and development loans, chronic labor shortages and a dearth of buildable lots."

5)Existing home sales in May totaled 4.11m, about in line but bouncing around 30 year lows. The median home price rose a still robust 5.8% y/o/y, continuing to squeeze the first time buyer. Months' supply rose to 3.7 from 3.5 but usually rises in the spring selling season. The first time buyer totaled 31% of purchases vs 33% in April, 32% in March and vs 28% one year ago. From the NAR, "Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers," Yun added. "The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning."

6)For the week ended 6/5, real estate construction loans have rolled over to the smallest amount since August 2023.

7)The June Philly manufacturing index remained positive, but barely at 1.3 vs +4.5 in May and vs the estimate of +5.0. The internals were all over the place but I do want to point out prices received which rose to the highest level since July 2023. Prices paid rose to the 2nd highest level of the year at 22.5. 6 month expectations for prices paid rose to the highest level since June 2022 and for those received spiked by 27.4 pts to 58.8, the most since April 2022.

8)The World Container Index Shanghai to Rotterdam route for a 40 foot container jumped for the 9th straight week by another $690 to $6,867, more than doubling over this 9 week time frame and about 4x where it started the year. The price for a trip to LA rose by $416 to $6,441.

9)The Congressional Budget Office raising its fiscal 2024 deficit estimate to almost $2 trillion, up about $400b from the previous guess.

10)From Darden Restaurants: They are doing what they can "in what became an increasingly weaker consumer environment, especially for consumers below the median household income...Consumers are generally concerned about inflation, and they're becoming more concerned about the job market. And what we're seeing are some behavior shifts that we had already started to see. So for Q4, transactions from households with incomes below the median were lower than last years. And that's more pronounced with consumers below $50,000 in income. And these impacts were even greater in our fine dining brands, so that's why you saw Fine Dining had a little bit more negative comp than others."

11)From Kroger: "As inflation moderates, we expect consumer sentiment to continue improving. But near term, many customers are managing economic uncertainty."

12)From Winnebago: "As inflation moderates, we expect consumer sentiment to continue improving. But near term, many customers are managing economic uncertainty...As anticipated, dealers remain cautious with respect to orders in the 3rd quarter, resulting in a higher level of promotional activity on some products compared to the same period last year...Based on industry results to date, ongoing economic softness and reduced order backlogs across the industry, we expect additional restocking by dealers for the remainder of the calendar year."

13)From Carmax: "Total retail used vehicle unit sales decreased 3.1% q/o/q. Comparable store used unit sales decreased 3.8% q/o/q. Though average retail selling price declined y/o/y, we believe vehicle affordability challenges continued to impact our 1st quarter unit sales performance, with ongoing headwinds due to widespread inflationary pressures, higher interest rates, and tightened lending standards."

14)From Accenture: "As you know, this fiscal year our client spending developed differently than we expected at the beginning of the fiscal year. And these conditions continue, with clients prioritizing large scale transformations, which convert to revenue more slowly, while limiting discretionary spending, particularly in smaller projects, with delays in decision making and a slower pace of spending as well."

15)From KB Home: "Longer term housing market conditions remain favorable supported by an undersupply of new and resale homes, solid employment, wage growth, favorable demographics and rising household formations. However, during the 2nd quarter, we did see volatility return to the market correlated to the rise in mortgage rates. Periods of rate increases create uncertainty for consumers, which can delay their purchase decisions."

16)La-Z-Boy executed well in the quarter and why the stock jumped this week but did mention in their call they still see "ongoing challenging traffic trends."

17)Japan's composite June manufacturing and services PMI fell to exactly the flat line at 50 from 52.6 in May with most of the moderation due to a 4 pt drop in services.

18)Australia's manufacturing and services PMI in June slipped to just above 50 at 50.6 from 52.1 with both components down.

19)In the Eurozone, they saw a dip in its composite PMI too to 50.8 from 52.2. The estimate was 52.5. Manufacturing weakness continued on at 45.6 while services fell a touch after May's strength. Specifically Germany's manufacturing PMI fell to just 43.6 while services continued to well outperform. In France, both components remained below 50. As for overall Eurozone business confidence, it fell to the lowest since February. S&P Global's bottom line, "Is the recovery in the manufacturing sector ending before it began?" And, "The services sector continues to keep the Eurozone afloat."

20)The UK PMI fell to 51.7 from 53 and the estimate was for no change. All of the drop was due to some moderation in services while manufacturing held above 50. On inflation, S&P Global said "stubbornly persistent service sector inflation remains evident in the survey." You hear me keep talking about rising shipping costs and the belief that goods prices have bottomed and they said "companies' costs are rising, most notably in manufacturing, where shipping costs in particular are spiking again and adding to a renewed rise in inflationary pressures from goods."

21)The Swiss National Bank cut their benchmark rate back under inflation with its surprise 25 bps cut to 1.25%.

22)The German June ZEW investor confidence index in their economy was little changed at 47.5 vs 47.1 in May and 2.5 pts below expectations. The Current Situation component remained deeply negative though at -73.8 vs -72.3 last month. The ZEW said simply, "Both the sentiment and the situation indicators stagnate."

23)In China, industrial production grew by 5.6% y/o/y, just below the estimate of 6.2% growth. Property investment, not surprisingly, continued to shrink. Also of note, home prices continue to fall and this does flow into consumer wealth as much of it is tied up in apartment ownership. Home prices fell .7% in May m/o/m, the 11th straight month of m/o/m declines. Prices are lower by 3.9% y/o/y.

I have converted all of my short  (SPY)  and  (QQQ)  common to short calls.

Picking on some more  (MSOS)  now under $7.20.

List as of 8:24 a.m.

List is as of 8:41 a.m.

Upside:

-SRPT +38% (receives expanded FDA approval for ELEVIDYS (delandistrogene) in treatment of DMD in patients ages 4 and above)

-UMAC +19% (selected to provide the first drone for Red Cat’s FAN line of First-Person view Lethal Strike Systems)

-CLOV +12% (Chairman purchases 878K common shares)

-AKYA +5.2% (Craig-Hallum Initiates AKYA with Buy, price target: $7.50)

-SPR +4.6% (reportedly Boeing nears deal with Airbus and Spirit Aerosystems following months of negotiations)

-ASAN +3.8% (announces $150M repurchase; affirms FY24 and Q2 guidance)

-FDS +3.1% (earnings, guidance)

-HRMY +3.1% (CitiGroup Initiates HRMY with Buy, price target: $48)

-GILD +2.7% (Sunlenca (lenacapavir) shows 100% efficacy for HIV prevention)

-ITRM +2.6% (announces FDA Advisory Committee meeting to discuss NDA for Oral Sulopenem for the treatment of Uncomplicated Urinary Tract Infections)

Downside:

-ABL -18% (prices 10M shares at $8/share)

-NNE -6.4% (earnings)

-SWBI -4.3% (earnings, guidance)

-PLTR -3.5% (hearing Monness Crespi Cuts PLTR to Sell from Hold, price target: $20)

-TREE -2.5% (reportedly the unit's stolen data is being offered on the Dark Web)

-MIGI -2.4% (announces May monthly Rev $4.5M, +19% y/y)

-NVDA -1.8% (Seligman Investments's Paul Wick trimming stake)

-HTZ -1.7% (upsizes and prices offering of 2029 notes from $750M to $1.0B)

From Peter Boockvar:

Still sounding like a 1.5% type economy/Global PMI's roll in, UK mentions 'spiking' shipping costs

Hearing from Darden, Kroger, Winnebago and Carmax, two of course catering to services and two to goods, the consumer continues to be very 'choiceful' and the spending hesitancy remains. Accenture tells us that outside of AI, tech spend is mixed. I'll say again, this very much feels like a 1.5% economy and not one growing at 3%.

From Darden Restaurants, owner of everything from Olive Garden to the Yard House, Seasons 52, Capital Grille, LongHorn Steakhouse and Ruth's Chris, among others:

"I'm proud of our ability to stay disciplined and control what we can control. This continued focus enabled us to have a strong year in what became an increasingly weaker consumer environment, especially for consumers below the median household income."

They saw labor cost inflation at about 4%. Also, "Seafood deflation this quarter helped partially offset mid single digit beef and produce inflation." Overall they expect commodities inflation of approximately 2% in their fiscal 2025 and believe the labor inflation will stay at 4%. And they see comp growth of 1-2%.

In terms of pricing for the consumer, "so in that 2.5% to 3% range probably."

On the consumer, "Consumers are generally concerned about inflation, and they're becoming more concerned about the job market. And what we're seeing are some behavior shifts that we had already started to see. So for Q4, transactions from households with incomes below the median were lower than last years. And that's more pronounced with consumers below $50,000 in income. And these impacts were even greater in our fine dining brands, so that's why you saw Fine Dining had a little bit more negative comp than others."

From Kroger:

"As inflation moderates, we expect consumer sentiment to continue improving. But near term, many customers are managing economic uncertainty. While we expect Health & Wellness profitability pressures to continue into the 2nd quarter (aka, pharmacy business and likely reimbursement issues)."

"As we've seen over recent quarters, customers continue to seek value and are shopping with us differently based on their financial situations. Spending from premium and mainstream customers continue to be strong...Within our most budget conscious household, we are starting to see positive momentum and we grew households in this segment after experiencing declines last year. Historic multi year inflation across the economy, high interest rates and reduced government benefits disproportionately affect these customers and are influencing their spending behaviors."

"Kroger's longstanding commitment to low prices and personalized promotions creates real value for our customers at a time when many of them need it more than ever."

They are also benefiting from food at home prices now growing more slowly than food away.

From Winnebago:

"In the eight weeks since our Q2 earnings call, RV industry retail demand has remained both inconsistent and sluggish, with limited evidence that economic conditions are improving for outdoor recreation consumers as we move into the 4th quarter of our fiscal year.

Still optimistic though for the long term. While this environment necessitates near term caution and discipline, the secular future growth of outdoor recreation engagement by consumers is undoubtedly a key driver for the health of our business long-term."

"As anticipated, dealers remain cautious with respect to orders in the 3rd quarter, resulting in a higher level of promotional activity on some products compared to the same period last year."

"Based on industry results to date, ongoing economic softness and reduced order backlogs across the industry, we expect additional restocking by dealers for the remainder of the calendar year."

Carmax just reported and in its press release they said "Total retail used vehicle unit sales decreased 3.1% q/o/q. Comparable store used unit sales decreased 3.8% q/o/q. Though average retail selling price declined y/o/y, we believe vehicle affordability challenges continued to impact our 1st quarter unit sales performance, with ongoing headwinds due to widespread inflationary pressures, higher interest rates, and tightened lending standards."

Shifting to IT spend and Accenture and not everything is about AI:

"As you know, this fiscal year our client spending developed differently than we expected at the beginning of the fiscal year. And these conditions continue, with clients prioritizing large scale transformations, which convert to revenue more slowly, while limiting discretionary spending, particularly in smaller projects, with delays in decision making and a slower pace of spending as well."

On AI, "We also have leaned into the new area of growth, Gen AI, which is comprised of smaller projects as our clients primarily are in experimentation mode."

Shifting to the global PMI's that are out today. Japan's composite June manufacturing and services PMI fell to exactly the flat line at 50 from 52.6 in May with most of the moderation due to a 4 pt drop in services. Australia's slipped to just above 50 at 50.6 from 52.1 with both components down.

India on the other hand continues to power economically as its composite PMI rose to 60.9 from 60.5 with both manufacturing and services confidence increasing a touch m/o/m.

Specifically with Japan, the service drop "was partially attributed to labor constraints. Service providers have indicated that they have attempted to hire more staff, but faced a tight labor market in the service sector which prevented a stronger increase in employment."

As for inflation there and ahead of a possible rate cut and trimming of QE in July, "Average input costs rose at the fastest pace in over a year while output price inflation softened in June, particularly in the service sector." The result is a margin squeeze and "Anecdotal evidence suggested that the effects of a weak yen and rising labor costs brought up cost inflation."

Japan also reported its May CPI where the headline rate rose to 2.8% from 2.5% but the core/core rate dipped to 2.1% from 2.4%, each one tenth below expectations. The market reaction was mixed as inflation breakevens didn't move while JGB yields ticked higher following the modest selloff in Treasuries and European bonds yesterday.

In the Eurozone, they saw a dip in its composite PMI too to 50.8 from 52.2. The estimate was 52.5. Manufacturing weakness continued on at 45.6 while services fell a touch after May's strength. Specifically Germany's manufacturing PMI fell to just 43.6 while services continued to well outperform. In France, both components remained below 50. As for overall Eurozone business confidence, it fell to the lowest since February.

With pricing, both input and output prices did fall but still pacing well above pre Covid levels.

S&P Global's bottom line, "Is the recovery in the manufacturing sector ending before it began?" And, "The services sector continues to keep the Eurozone afloat."

The UK PMI fell to 51.7 from 53 and the estimate was for no change. All of the drop was due to some moderation in services while manufacturing held above 50.

On inflation, S&P Global said "stubbornly persistent service sector inflation remains evident in the survey." You hear me keep talking about rising shipping costs and the belief that goods prices have bottomed and they said "companies' costs are rising, most notably in manufacturing, where shipping costs in particular are spiking again and adding to a renewed rise in inflationary pressures from goods."

On a stock futures rally back to positive this morning I just re-shorted some  (SPY)  and  (QQQ)  common at $545.37 and $481.47, respectively — in premarket action.

Yesterday I covered some of my recent SPY and QQQ common short rentals for profits (reducing from medium sized to small sized:

Profit Taking on QQQ and SPY

I just took over a $6 profit on QQQ $481.20 and $4 profit on SPY ($546) done in premarket this morning as well as Monday and Tuesday Index shorts (common).

Back to small sized on the common.

Position: Short SPY common S and calls S QQQ common S and calls S

BY DOUG KASS JUN 20, 2024 12:56 PM EDT

* The end of the beginning or the beginning of the end...

Close my eyes, she's somehow closer now
Softly smile, I know she must be kind
When I look in her eyes
She goes with me to a blossom world

- The Beach Boys, Good Vibrations

The markets' one way move (from the lower left to the upper right) paused yesterday as the league leader, Nvidia  (NVDA) , stalled.

Whether or not this is the end of the beginning or the beginning of the end — we will only know with hindsight.

Regardless, weak breadth and narrow leadership has been the unhealthy market constant.

And then there are growing political, geopolitical, economic, inflation and interest-rate ("higher for longer") and valuation headwinds.

Finally, remember, market structure works both ways — to the upside as well as the downside.

I remain net short — having lifted my short exposure as recently as during Thursday morning's market strength.

Happy Birthday, Brian Wilson:

And from another iconic Hollywood, California based entertainer:

… You're out on the streets looking good
And baby, deep down in your heart, I guess you know that it ain't right
Never, never, never, never, never, never hear me when I cry at night
Babe, and I cry all the time

But each time I tell myself that I, well I can't stand the pain
But when you hold me in your arms, I'll sing it once again

- Big Brother and Holding Company with Janis Joplin, Piece Of My Heart 

From "Jazzy" Jeff Hirsch's Stock Traders Almanac:

NASDAQ’s June surge ran into a bump today, falling 0.79%, but NASDAQ’s Seasonal MACD indicator remains positive. Continue to hold associated positions in QQQ and IWM. It would take a single day decline exceeding 499.75 NASDAQ points (–2.82%) to turn NASDAQ’s MACD negative.

When NASDAQ’s Seasonal MACD turns negative we will send an email to all active members. At that time, we will finish repositioning our Portfolios for the “Worst Months.” We do anticipate adding to existing bond ETF and cash holdings in the Tactical Seasonal Switching Strategy portfolio.

July Almanac & Vital Stats

July historically is the best performing month of the third quarter, however the mostly negative results in August and September tend to make the comparison easy. “Hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% combined with strong performances in 2013, 2018, and 2022 have boosted July’s average gains since 1950 to 1.4% and 1.3% respectively. DJIA, S&P 500, NASDAQ and Russell 1000 have been up nine straight Julys (2015-2023). Russell 2000 has been up seven times in the same period (down in 2015 and 2021). Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been the weakest rally of all seasons (page 74, Stock Trader’s Almanac 2024).

July begins NASDAQ’s worst four months but is also the sixth best performing NASDAQ month since 1971, posting a 0.9% average gain. Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new capital. This creates a bullish beginning, middle, and a mixed second half. On average, over the last 21 years, nearly all of July’s gains have occurred in the first 13 trading days. Once a bullish day, the last trading day of July has had a bearish bias over the last 21 years. In election years since 1950, July has tended to be a dull month filled with choppy trading.

July’s first trading day is the third best performing first trading day of all twelve months with DJIA gaining a cumulative 1679.02 points since 1998. Over the past 21 years, DJIA’s first trading day of July has produced gains 81.0% of the time with an average advance of 0.38%. S&P 500 has advanced 90.5% of the time (average gain 0.46%). NASDAQ has been similarly bullish advancing 85.7% of the time (0.51% average gain). No other day of the year exhibits this amount of across-the-board strength, which supports the case for declaring the first trading day of July the most consistently bullish day of the year over the past 21 years. Although, the third from last day of August is rising to challenge for this title.

Trading on the day before and after the Independence Day holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and/or finish late. Since 1980, DJIA, S&P 500, NASDAQ and Russell 2000 have recorded net losses on the day after.

Election-year July rankings are something of a mixed bag, ranking #6 for DJIA and S&P 500, averaging gains of 0.6% and 0.7% respectively (since 1950). For NASDAQ (since 1971) election-year Julys rank #9 with an average loss of 0.1%. Despite a modest average gain, election-year Julys rank #10 for Russell 2000 with six losses in eleven election years since 1979.

NASDAQ’s 12-Day Midyear Rally

In the mid-1980s tech’s influence in the market began to grow and the market’s focus in early summer shifted to the outlook for second quarter earnings of technology companies. In anticipation of positive results, over the last three trading days of June and the first nine trading days in July, NASDAQ typically enjoys a rally. This 12-day run has been up 30 of the past 39 years with an average historical gain of 2.5%. Look for this rally to begin around June 26 and run until about July 12.

After the bursting of the tech bubble in 2000, NASDAQ’s mid-year rally had a spotty track record from 2002 until 2009 with three appearances and five no-shows in those years. However, it has been quite solid over the last thirteen years, up twelve times with two losses. After struggling in the bear market of 2022, NASDAQ resoundingly rebounded last year to gain 4.1% compared to a total July gain of 4.0%.

Our NASDAQ Seasonal MACD Signal remains positive keeping the portfolios positioned to benefit from the Midyear Rally. The best scenario would be for NASDAQ to quickly shake off today’s weakness and resume its June surge higher.

Housekeeping item.

I have covered my small  (DJT)  short at about $27/share in premarket trading.

From late April:

Short DJT

Back short (DJT) ($42, +$3.50) - via deep in the money short calls for April and May.

Position: Short DJT calls (S)

BY DOUG KASS APR 26, 2024 3:06 PM EDT

Rule #5. The public buys the most at the top and the least at the bottom.

“I don’t think it’s productive to wallow in regret. But if you’ve lost money in a stock and you don’t learn anything, that’s wasted money. Figure out what it is that you did wrong and don’t do it again.”

- Joel Tillinghast

Bonus - here are some great links:

Will S&P equal weighted topple the markets? 

Price pays...

How long can volatility go?

Time for a market pause?

The Oscillator has been in a narrow range over the last several days — at between -1% to -3%.

So still in a slight oversold.

Currently at -1.55%.

Wolf Street howls about global steel production.