DAILY DIARY
That's a Wrap!
The day began with a November jobs report that either showed better-than-expected job creation or a huge level of job destruction depending on whether one follows the BLS Establishment or Household Surveys. While the less than cognitively impressive crew at CNBC chose to go with the more optimistic Non-Farm Payrolls number, it quickly became obvious that markets for Treasury debt securities, Fed Funds futures and even equities to a degree saw the labor market issues within the report.
Those problems included sharply rising unemployment for high school grads and those with some college and unemployment dropping like a rock for high school dropouts. This implies that middle class jobs are being lost and replaced by lower-income positions. The unemployment rate among African Americans also exploded higher, which is disturbing. The participation rate and employment to population ratio dropped and still the unemployment and underemployment rates edged higher.
Turning to equities, the S&P 500 gained 0.2% for the session as the Nasdaq Composite moved ahead by 0.7%. Leading names were DocuSign (DOCU) , Lululemon Athletica (LULU) , Hewlett Packard Enterprise (HPE) and Ulta Beauty (ULTA) . Sarge fave Palantir Technologies (PLTR) gained 6.22% after revealing a partnership with fellow defense contractor Booz Allen (BAH) .
Only three sector SPDR ETFs among the 11 closed up for the day, led by the Discretionaries (XLY) as Energy (XLE) and the Utilities (XLU) had a rough session. For those with an interest, Bitcoin was able to retake the $100K level and traded considerably higher than that by day's end.
Have a great weekend everyone and stay safe until we meet again. It's always a pleasure to fill in for Dougie when he is out, and I see it as the honor it is. Hopefully Juan Soto signs somewhere soon, because sports talk radio is getting a little tired of that story. On that note, gang.... go Army, beat Tulane.
Checking Out Honeywell
Yes, we all have interest in Honeywell (HON) since learning of Elliott Management's involvement back on November 12. The stock surged on that day, and then went on to develop what looked like a bull flag that kept going.
Before we knew it, that bull flag had turned into a falling wedge, which as we know, is a pattern of bullish reversal. I initiated a long position in the stock last night. Now, we see Honeywell testing its 21-day EMA from above. So far so good. Relative Strength is neutral, while the daily MACD seems less than convinced that this is the last stop on the way down.
Within that MACD, the 12-day EMA is currently running below the 26-day EMA as the histogram of the 9-day EMA has spent all of December to date in negative territory. At this point, it's not just that 21-day EMA (green line) that has supported the stock, but also the 38.2% Fibonacci retracement level of the August into November rally.
Enough for me? Enough for me to start building a long position and then add on weakness. The aerospace division is the crown jewel of the firm. If Elliott is able to break up the firm, fine. If not, still fine as an increased level of execution will be demanded of management.
Baseball Trivia Answer
Q) Since integration, two MLB players have hit more home runs in a season than Joey Gallo's 21 in 2023 while also batting less than .180. Can you name them?
A) Rob Deer of the Detroit Tigers batted .179 with 25 HR in 1991.
Dan Uggla of the Atlanta Braves batted .179 with 22 HR in 2013.
Today's Quantum Computing Piece
Read it here:
Two Quantum Computing Names Are Exploding as the Sector Catches Fire - TheStreet Pro
Baseball Trivia
Joey Gallo has had an odd major League baseball career. In 2022, splitting time between the LA Dodgers and New York Yankees, Gallo batted .160, while hitting 19 home runs. The very next year, in 2023, while playing for the Minnesota Twins, Gallo batted .177, while ringing up 21 dingers.
Incredibly, Gallo does not hold the post-integration (1947 on) record for most home runs while batting less than .180. As a matter of fact, two players have hit more home runs in a season than Gallo while batting less than .180. Can you name them?
Opportunity Knocking?
Not yet. I don't think.... but it's worth thinking about it.
We all saw Uber Technologies (UBER) and Lyft (LYFT) fall out of bed on Thursday as Alphabet's (GOOGL) Waymo self-driving car unit continues to expand. Waymo is apparently now headed for Miami, after already making a presence in San Francisco, Los Angeles, and Phoenix. Does that mean that services such as what UBER and LYFT offer are done, or at least reduced to food delivery services? I'm not so sure and I don't know how quickly this happens.
UBER broke down from a head-and-shoulders pattern on Thursday, gapping lower and losing contact with both its 50-day and 200-day SMAs. This forced portfolio managers to reduce long-side exposure. Where will support show up? Good question.
Right now, I am looking to perhaps get involved in between the halfway back point (50% retracement level) and the 61.8% Fibonacci retracement level of the entire October 2023 through October 2024 rally. That means, in theory, I wet my whistle between $63.40 and $57.90 depending upon market conditions when it gets there. No, I don't think UBER's goose is cooked.
Friday Lunchtime Tweet
$AMZN 1-year ago: "Falling behind in GenAI. Secular tailwinds slowing. Hard to make a lot of money in fulfillment. Can ads really move the needle? What is Andy Jassy doing?" $AMZN Today: "Setting the GenAI innovation curve. Secular tailwinds reaccelerating. So many fulfillment margin levers to pull. The ads opportunity is exciting. Jassy is good at this."
Answer to a Subscriber Question 2
On Nvidia (NVDA) ...
In my opinion, NVDA is still very much on trend.
Answer to a Subscriber Question
On Vertiv Holdings (VRT) :
As long as the lower trendline of the Pitchfork holds.
My Take on the Jobs Report
My Take on November Jobs...
You Can Take Your Jobs Optimism and Shove It - TheStreet Pro
Charting Lululemon
Lululemon Athletica
The chart of Lululemon (LULU) shows a vague but existent inverse head-and-shoulders pattern with a neckline (pivot) at $337.
If long, my price target probably would have been around $405.
If reached, I may take a short position or a bearish options position in the name. Not there yet.
The Bottom 10: Here Are the Worst-Performing S&P 500 Stocks of 2024
From Seeking Alpha this morning...
No. 10: Dollar General (DG) , -38.3% YTD.
No. 9: Boeing (BA), -39.6% YTD.
No. 8: APA Corporation (APA), -39.9% YTD.
No. 7: Estee Lauder (EL), -45.3% YTD.
No. 6: Enphase Energy (ENPH), -45.7% YTD.
No. 5: Dollar Tree (DLTR), -48.1% YTD.
No. 4: Celanese Corp (CE), -54.9% YTD.
No. 3: Moderna (MRNA), -55.8% YTD.
No. 2: Intel Corp (INTC), -58.4% YTD.
No. 1: Walgreens Boots Alliance (WBA), -66.7% YTD.
Do you own any of these? I am long INTC, but have not been all year long. I am down 6.7% in that name.
Happy Birthday Message
Happy Birthday to perhaps TheStreet Pro's most talented contributor, Carley Garner!
Most Important Interview of the Week (If You're Long Palantir)
Trading Palantir, RocketLab, SoFi and More
From this morning's Market Recon column:
On Thursday, I added to existing long positions in both SentinelOne (S) and Intel (INTC) on weakness. I also initiated a long position in Honeywell (HON) , also on weakness as that name continues to surrender ground after soaring almost a month ago after news broke that activist investor Elliott Management had taken more than a $5B stake in the name. I had missed that move and had to bide some time to get in.
Palantir Technologies (PLTR) and RocketLab USA (RKLB) both had nice days on Thursday, and both are trading higher overnight. I have taken profits in neither as these are long-term investments that I feel have not yet reached their potential. In fact, I did add to my long position in RKLB on weakness earlier this week.
SoFi Technologies (SOFI) looks like it has started to enter into a potential basing period of consolidation. I have been asked by readers about where to add or re-enter. My feeling right now is that I am waiting for either the stock to drop down to its 50-day simple moving average or its 50-day simple moving average to catch up to the stock.
Sarge quantum computing names D-Wave Quantum (QBTS) and Quantum Computing Inc. (QUBT) were both hot on Thursday and have remained so overnight. Though we are up a quick 20%+ in QBTS, we are nowhere near thinking about taking profits. These positions are in the build-up phase and are being bought when weak and held for now on strength.
Ahead of the Numbers
S&P Futures: -2 vs FV.
Nasdaq Futures: +8 vs FV.
US Dollar Index: 105.79, +0.07%
WTI Crude: $67.73, -0.73%
US Ten Year Note: 4.18%
US Two Year Note: 4.17%
US Three Month T-Bill: 4.45%
Gold: $2,661.60, +0.5%
Silver: $31.74, +0.63%
Bitcoin: $98,020, -1.14%
Early Friday Morning Tweet
Funny. Nothing to do with markets.
President-Elect Chooses an AI/Crypto Czar
Venture capitalist and podcaster David Sacks will join the Trump administration as the “White House A.I. & Crypto Czar.”
Trump says venture capitalist David Sacks will be AI and crypto 'czar'
Rise and Shine!
Good Morning!
Your old buddy Sarge here in Dougie's place, doing his best Earl Morrall.
Today is Friday, but not just any Friday. Today is November BLS Employment Report Friday, which comes before the release of November CPI this coming Wednesday, which in turn will come before the FOMC policy decision and press conference on December 18th. That's two weeks from yesterday.
It's been a hot and cold week so far. Large-caps and tech have largely outperformed small-to mid-caps and everything not so tech. However, overnight.... retail came back to life as Ulta Beauty (ULTA) and Lululemon Athletica (LULU) roared post-earnings.
We certainly can not say that we haven't had some opportunity come knocking this week even if we, or at least I, failed to open a couple of doors. That said, let's get fired up and prepare for the day ahead. Push-ups, sit-ups or whatever gets you going. Then some coffee. After all that, nothing but romping and stomping until the folks downstairs beg us to stop. Let us rock.