Top Advisors Corner

Hot Air Blows the Market Over - What to Watch Now

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Literally, just as the circuit breakers halted the market action midday, as they have four times already this week, the "experts" were talking their... what?

Positions?

Egos?

Disregard for the public's safety?

Bill Morris, Principal CEO of MCP Ventures, said on CNBC today, "Best buying opportunity since Financial Crisis." Based on what?

He says "Stocks are cheap" LOL. "Buy now and you will participate in the inevitable recovery." Operative word here is inevitable. The dictionary definition of inevitable is "unavoidable" or "it will definitely happen."

And you can see why I have such issues with folks like Mr. Miller. Can you ride out inevitable? It is inevitable that we will all die, but should we miss living in order to prepare for dying?

No.

Let's live and wait for the market to calm down. In the meantime, I like to believe that the commodities markets will bottom before the equities markets do. Here's why.

With all the stimulus, rates set the stage for some raw material inflation.

With all the supply chain disruption, if the hoarding we see in supermarkets is any foreshadowing, I expect the same from investors with commodities.

The dollar, which I thought peaked early this week, today met the highs of January 16, 2017 - that's right, before inauguration day. Should that peak for real, that will help with the price of physical commodities.

Finally, beans, wheat and coffee all held up and closed green.

So, rather than just make irresponsible, blanket statements based on no real strategy, here is the chart of DBA, the Invesco DB Agriculture Fund.

Note the 3 bottoms at 13.50.

It's a good start.

  • S&P 500 (SPY): Closed over 237.36 Mon low - could be good for some upside if holds
  • Russell 2000 (IWM): Did not close over Mon low 101.43; needs to
  • Dow (DIA): Did not close over Mon low 201.51; needs to
  • Nasdaq (QQQ): Closed over 169.16 Mon low - could be good for some upside if holds
  • KRE (Regional Banks): Closed over 30.83 Mon low - could be good for some upside if holds
  • SMH (Semiconductors): Still in best shape, holding the 200-WMA at 97.32
  • IYT (Transportation): Did not close over Mon low 126.07; needs to
  • IBB (Biotechnology): 95 held, which is key support
  • XRT (Retail): Did not close over Mon low 28.53; needs to
  • Volatility Index (VXX): Came off from the highs, but don't see a reversal pattern yet
  • Junk Bonds (JNK): Did not close over Mon low 91.01; needs to
  • LQD (iShs iBoxx High-Yield Bonds): Did not close over Mon low 115.21; needs to


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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