Home 2020 Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street


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There is still no indication this Bull market is about to roll over on negative sentiment” — Paul Ebeling

Last Week’s Action

Stocks opened well and closed well, but the PHLX Semiconductor Sector (SOX) is lagging notably and the big NAS Comp stocks could not put in a strong session on the moves.

Housing starts beat expectations and continue strong. Sentiment continues higher, and the year-end rally continues to people do not seem worried.

While the rest of the market continues in its year-end and Holiday rally, the chips are quiet, but set up to run North

The SOX is a Key market leader. It last tapped it 50-Day MA in late October, jumped higher and has since rallied up the 10-Day EMA. It put in 3 taps at the 10-day EMA after it sold hard 2 wks ago, but posted a doji last Friday a wk that triggered the current move. Itt is still below the prior week’s high.

The Technicals

NAS Comp gapped up on high volume and good breadth.

S&P 500 gapped to a new high last wk, so will likely see some profit taking in here.

This is a shortened Holiday wee, most participants have left their desks.

Spirits have been running high up and down Wall Street.

Global stocks are now worth around $100-T. American companies have raised a record $175-B in new public listings. And about $3-T of corporate bonds are trading with negative yields.

All the while the virus chaos continues, the economic cycle stays on life-support and businesses get hammered in New York and California by draconian lockdowns.

Driven by aid/relief/stimulus and bets on a post-coronavirus world, day traders and institutional professionals are enjoying the easiest and best financial conditions in history.

Sentiment indicators are moving to euphoria, as people are eager to invest amid fears they will miss the Santa Claus rally. All of it in a yr of death, disease and economic calamity.

As Christmas Holiday shopping season wraps, US equity investors are gauging whether long-languishing shares of brick-and-mortar retailers can sustain their recent rebound in anticipation of a full economic reopening in Y 2021.

The SPDR S&P Retail ETF, which tracks a broad group of retailers such as department and specialty stores, is up nearly 40% this year.

Its gain reflects a rally that has lifted shares of companies in sectors particularly sensitive to the economic cycle, such as industrials and energy, in the wake of COVID-19 vaccine deliveries.

Those numbers pale in comparison with the massive gains online companies such as Amazon.com Inc, Etsy Inc and Wayfair Inc have notched this year, after the virus chaos and fear mongering accelerated the shift toward internet shopping.

Some analysts believe that more traditional retailers may be able to narrow that gap in the new year. The view aligns with a broad bet that vaccines against the coronavirus will spur widespread economic reopenings across the US, helping the industries that have suffered most from the effects of COVID-19. There is a pent up demand, and The People will soon be going out to shop.

Investors will focus on the University of Michigan’s (MSI) widely followed consumer sentiment index, which remains below pre-virus marks but has recently ticked higher.

More consumer spending could come from additional stimulus checks to individuals included in a $900-B coronavirus aid package that Congress has approved and President Trump will sign shortly.

Have a healthy, Happy Christmas Holiday week, Keep the Faith!


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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.