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DAILY DIARY

Doug Kass

Closing S&P Sectors and More

Closing S&P 500 Sectors 

11-12-24-CSectorsScreenshot 2024-11-12 at 4.18.50 PM

Nasdaq Advance-Decline Intraday

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Position: None

Tuesday's Closing Market Internals

Volume

- NYSE volume 6% above its one-month average

- NASDAQ volume 21% above its one-month average

- VIX: down 1.67% to 14.72

Breadth

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S&P 500 Sector ETFs

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% Movers

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Nasdaq 100 Heat Map

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Position: None

Sector Performance

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Position: None

Cash and Carry

Minneapolis Fed President Neel Kashkari (a non voter this year and next) continues to be surprised by the resilience of the domestic economy:

- Fed will not model Trump policy effects on the economy until those policies become clear; Can't do any modeling before we see the policies

- A tariff is a one time price increase, that is not inflationary in itself; Not clear how other countries would respond to tariffs

- If inflation were to surprise to upside before December, might give us pause

- In a higher productivity environment, the neutral rate is higher, meaning the Fed has less room to cut

- The data will determine how many rate cuts are needed

- We all agree we are above neutral now; We will get more information on "neutral" over the next year

Position: None

More Valuation Trouble

Position: None

Things I Did Today

* Markets dropped by about 0.7% but launched a nice rally off the lows.

* The most significant thing today was the weakness in bond prices and higher yields (of about +10 bps, depending on the maturity).

At 2:30 p.m. S&P cash was -3 handles.

Breadth reversed lower from yesterday's strength (of about 2-1 positive on the NYSE): 

11-12-24-Things-1731440433983blob

Today was another research oriented day, but I did do some trading.

Here are today's "Things":

* I shorted  (NVDA) , on average at $148.33.

* I shorted more  (SPY)  at $598.03 and  (QQQ)  at $513.53.

* At $144.64, I added to Boeing  (BA)  (now medium sized).

* I added to my Tesla  (TSLA)  short at $347.74.

Position: Long BA (M); Short SPY common (S/M), QQQ common (S/M), TSLA (S), NVDA (S)

More Shorting

On the +25 handle from the lows I am shorting more  (SPY)  at $597.56 and  (QQQ)  at $513.06.

Position: Short SPY common (S/M), QQQ common (S/M)

My Weightings System: A Tutorial

I have recently had a number of questions from some new subscribers about my Index and individual stocks weightings (appearing in my disclosures).

Here you go:

For Individual Stock Longs (Revised)

Very Small: Under 0.75%

Small: Between 0.75% and 1.5%

Medium: Between 1.5% and 3%

Large: Between 3% and 5%

Very Large: Over 5%

For Individual Stock Shorts (Revised)

Very Small: Under 0.25%

Small: Between 0.25% and 1.0%

Medium: Between 1.0% and 2.0%

Large: Between 2.0% and 2.5%

For Index Longs

Small: Under 5%

Medium: Between 5% and 15%

Large: More than 15%

For Index Shorts

Small: Under 5%

Medium: Between 5% and 10%

Large: More than 10%

Position: None

Fed Post of the Day

From Jonesy at Hedgeye:

Position: None

Bond Market Update ... And Many More Accumulating Concerns

11-12-24-ostrichunnamed

Equities continue to ignore rising rates — that ascension is conspicuous today:

* The yield on the 1-year Treasury note is +8 bps to 4.394%.

* The yield on the 5-year Treasury note is +12 bps to 4.315%.

* The yield on the 10-year Treasury note is +12 bps to 4.428%.

* The yield on the long bond is +9 bps to 4.572%.

Bottom Line

So we have an overbought on the S&P Oscillator (near 3.5%), a Woodstock-like drug festival in Tesla  (TSLA)  and Nvidia  (NVDA)  0DTE call options, sky-high price-earnings multiples, near universal investor bullishness, evidence that the post-election breadth thrust might be over (look at today's 2-1 negative breadth),  (RSP)  (equal weighted S&P) -0.86% and  (IWM)  (Russell Index) -1.67%)... and now bond yields starting to break out to the upside.

What, me worry?

Position: Short SPY common (S/M), NVDA (S), TSLA (S)

Is the Breadth Thrust About Over?

11-12-24-Breadth-1731429348317blob

(RSP)  (equal weighted S&P Index) -0.64%

(IWM)  (Russell Index) -1.20%

Position: None

Drill, Baby Drill vs. Earn, Baby Earn

If President Trump is going to drill, baby drill.. the energy companies are not going to earn, baby earn.

So, for now, at current share prices, I would avoid most oil-related equities (I have a zero weighting in oil).

As well, the uranium thesis might have weakened.

Position: None

My Tweet of the Day

* On Disney's management plans...

Position: None

Boeing Plan

Boeing's  (BA)  shares are lower today reflecting comments about a slow factory start up following the machinist strike. Boeing factory production will take weeks to ramp up after strike

I added small at $144.67 and then have moved to medium sized (average $144.82).

This is an investment and not a trade and based on management's weak skill set, one has to be patient.

That said, I expect this to be rewarding with a multi-year time frame - which is not for everyone!

Position: Long BA (M)

Inflationary Expectations

Position: None.

Volume, Heat Map, and More in Charts

- NYSE volume is 1% above its one-month average;

- Nasdaq volume is 36% above its one-month average

- VIX: flat at 14.97

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2
3
4
Position: None.

From Peter Boockvar on Valuation

Position: None.

From Liz Young Thomas on SoFi

Position: None.

Subscriber Comment of the Year

dadavehat316

4 minutes ago

Well, my friends, tomorrow will be my last day on the diary. I've got two new properties to fundraise for and develop so that a few hundred more kids can have a better shot at life, as well as a few more books to write. It's been great getting to know many of you, and I've appreciated your ideas and dialogue. I wish you all the best. Here's a short video on the way out...Thanks again, Dougie for all your hard work. If you'd like to stay connected, my info is at the end of the video. Take care, and God bless. https://youtu.be/lo7MUJwl6D0

Position: None.

Minding Mr. Market

When I have been wrong on the markets, as I have been recently, I tend to reduce my trading.

That said, I have reduced my trading to a crawl this week!

Position: None.

NVDA Update

I have added to my  (NVDA)  short at $146.9.

Position: None.

ETF Action in the A.M. on Tuesday

Charts from 8:14 a.m.:

etf1
etf2
Position: None.

Upside, Downside Movers Before the Bell

Upside:

-EVGO +20% (earnings, guidance)
-NVRO +20% (earnings, guidance)
-SE +17% (earnings, guidance)
-SHOP +15% (earnings, guidance)
-HON +9.7% (reportedly activist Elliott to amass a $5B+ stake; to push Honeywell to consider breaking up)
-MBRX +8.0% (receives Institutional Review Board Approval for MIRACLE Phase 3 Pivotal Trial of Annamycin in Combination with Cytarabine for the Treatment of R/R Acute Myeloid Leukemia (AML))
-TSN +6.5% (earnings, guidance)
-LYV+5.7% (earnings, guidance)
-ARCT +3.3% (receives clearance from FDA to begin H5N1 Pandemic Flu Vaccine Clinical Trial)
-JRSH +3.0% (earnings, guidance)
-ONON +2.9% (earnings, guidance)
-HOOK +1.9% (Eseba-vec Highlighted in SITC Late-Breaker Phase 2 trial evaluating eseba-vec/pembrolizumab combination resulted in a 52% ORR in PD-L1 CPS>20 patients and encouraging PFS and OS data, supported by highly durable and tumor-specific T cell response, with good overall safety)

Downside:

-THS -13% (earnings, guidance)
-NVAX -11% (earnings, guidance)
-HTZ -8.6% (earnings)
-ANGI -7.3% (earnings, guidance)
-UVV -6.7% (earnings; files notice of late financial statements filing)
-ZETA -3.9% (earnings, guidance)
-FIVN -3.6% (Wells Fargo Cuts FIVN to Equal Weight from Overweight, price target: $40 from $55)
-HOOD -2.1% (reports Oct metrics)

Position: None.

Charting the Market's Morning Moves

Chart from 8:32 a.m. ET:

mm
Position: None.

Market Moving Comment

This comment likely caused the brief and sudden market drop about an hour or so ago: Ex-Cleveland Fed President Mester sees fewer rate cuts after Trump win

Position: None.

Ludicrous Forecast on TSLA

Considering everything, I would not be surprised if Tesla  (TSLA)  dropped by $30 or more today.

Or not!

Position: Short TSLA (S)

Economic Calendar For the Remainder of the Week

kasscal1
Position: None.

The Fed Today

Fed Speakers Today

10:00 a.m.: Fed Governor Waller (Voter) speaks on "Payments" before the Clearing House Annual Conference, Convene, NYC

10:15 a.m.: Fed Bank of Richmond Barkin (Voter) speaks to the Baltimore Together Summit, Baltimore, MD

2:00 p.m.: Fed Bank of Minneapolis President Kashkari (Non-Voter) participates in the Yahoo Finance Invest 2024 "New Challenges, New Opportunities" conference, NYC

5:00 p.m.: Fed Bank of Philadelphia President Harker (Non-Voter) speaks on "Fintech, AI and the Changing Financial Landscape" before the Carnegie Mellon University Lecture Series, Pittsburgh, PA

5:30 p.m.: Fed Bank of Richmond President Barkin (Voter) speaks before Salisbury-Wicomico Economic Development, Salisbury, MD (Audience Q&A expected)


Position: None.

Themes and Sectors

This table is a valuable resource for momentum-based short-term traders:

11-12-24-Themes-1731410476791blob
Position: None

From The Street of Dreams

From JPMorgan:

US: Futs are weaker as the bond mkt reopens and stocks look to pause ahead of a batch of macro data this week, including 16 Fedspeakers (5x today). Pre-mkt, Mag7 and Semis are under pressure with TSLA -4.6%, NVDA -1.1% with HC names among the notable gainers. Bond yields are 3-6bps higher as the curve twists flatter; yields are pulling the dollar higher. Cmdtys are weaker with Energy outperforming. Today’s macro data focus is on SLOOS, 1-year inflation expectations, and Small Business Optimism; plus, 5x Fedspeakers.

and...

EQUITY AND MACRO NARRATIVE: In a muted session, the indices printed new all-time highs and today markets look to pause as they reassess the market narrative and market direction. Keep an eye on the bond market to see whether stocks have any increased sensitivity ahead of inflation data. Fedspeakers seem poised to be dovish this week, so that may be supportive of a tactical long bond play.

Position: None

Remain Calm, All Is Well

* What the f**k happened to the Delta I used to know?

D-Day (Bruce McGill): War's over, man. Wormer dropped the big one.

Bluto: What? Over? Did you say 'over'? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!...

It ain't over now, 'cause when the goin' gets tough, the tough get goin'. Who's with me? Let's go! Come on!...(He ran to the front door but no one followed him)

Bluto (returning): What the f--k happened to the Delta I used to know? Where's the spirit? Where's the guts, huh? This could be the greatest night of our lives, but you're gonna let it be the worst. 'Ooh, we're afraid to go with you, Bluto, we might get in trouble.' (shouting) Well, just kiss my ass from now on! Not me! I'm not gonna take this. Wormer, he's a dead man! Marmalard, dead! Niedermeyer...

Otter (Tim Matheson): Dead! Bluto's right. Psychotic, but absolutely right. We gotta take these bastards. Now, we could fight 'em with conventional weapons. That could take years and cost millions of lives. No, in this case, I think we have to go all out. I think this situation absolutely requires a really futile and stupid gesture be done on somebody's part.

We're just the guys to do it...LET'S DO IT!

- Animal House Bluto's Big Speech - Animal House (9/10) Movie CLIP (1978) HD

We have nothing to fear - remain calm, all is well.

Position: None

Charting the Technicals

"Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win."

- Sun Tzu

Bonus — Here are some great links:

People Are Still Sad

Focusing on What Stocks Will Lead

Secular Bull Market With Substantive Rotation

Emotional Bodyguard

Position: None

Checking in on the Oscillator

The S&P Short Range Oscillator remains overbought at 3.19% vs. 3.16%.

Position: Short SPY common (S/M)

Tweet of the Day (Part Trois)

Position: None

Goodbye Yellow Brick Road

* Has the term "Intelligent Investor" become an oxymoron?

When are you gonna come down?
When are you going to land?
I should have stayed on the farm
I should have listened to my old man

You know you can't hold me forever
I didn't sign up with you
I'm not a present for your friends to open
This boy's too young to be singing
The blues, ah, ah

So goodbye yellow brick road
Where the dogs of society howl
You can't plant me in your penthouse
I'm going back to my plough

- Elton John, Goodbye Yellow Brick Road

Picture of the day:

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Position: None

Tweet of the Day (Part Deux)

Position: None

Cannabis Tweet of the Day

A redemption:

Position: None

Tweet of the Day

Position: None

(Very Early) Premarket Trades

* Shorted  (TSLA)  at $357.11.

* Shorted  (SPY)  at $598.26.

* Shorted  (QQQ)  at $513.79.

Position: Short SPY common (S/M), QQQ common (S/M), Tesla (S)
Doug Kass - Watchlist (Longs)
ContributorSymbolInitial DateReturn
Doug KassVKTX4/2/24-32.96%
Doug KassOXY12/6/23-16.60%
Doug KassCVX12/6/23+9.52%
Doug KassXOM12/6/23+13.70%
Doug KassMSOS11/1/23-22.80%
Doug KassJOE9/19/23-15.13%
Doug KassOXY9/19/23-27.76%
Doug KassELAN3/22/23+32.98%
Doug KassVTV10/20/20+65.61%
Doug KassVBR10/20/20+77.63%