Morning Market Thoughts

by DAN Good morning. We’re setting up for a lower open today, though nothing like yesterday’s beat down. Yesterday, the S&P and other major indexes rebounded off the 50-day moving average. That’s a bullish development and I suspect that we will see a rebound from today’s opening bell.

I recently mentioned that two sectors which need to start working before we were likely to challenge new high: Energy and financials.

This morning, oil is up just a bit, and the energy stocks are following suit. I still think it’s early to be getting into these stocks, but I do not think it’s too early to watch them. Other than some large fund managers who are talking their book, I don’t see a lot of bullishness in the energy sector. But I do see a lot of them saying the same thing I’m saying — “Energy is going to turn around at some point, and I’m watching oil.”

The financial sector is really held hostage by Washington DC. If it appears that POTUS will be able to enact a significant tax cut (If I was a betting man, I’d bet on the home team rather than the visiting team), then we’ll see financials move higher. Of course, the FOMC will have a lot to say about banking stocks…but they are temporarily out of the headlines, which is never a bad thing.

The Oakland Raiders are going to become the Las Vegas Raiders in a few years. While I’ve never been a Raiders fan (other than when they play the 49ers), I’m pretty agnostic about the move other than the obvious: Raider fans are beyond loyal. They are rabid body painters. They’re some of the most loyal fans in the league, and I’m bummed for them that their team is leaving. With that said, let’s look ahead.

While the move to Vegas doesn’t happen for a few years, this is going to be an inestimable boon to the casino industry. The market looks forward, but I’m not sure that anyone is looking that far ahead. However, Wynn Resorts (WYNN), MGM Resorts (MGM), and Las Vegas Sands should be on your screen. In particular, WYNN is coming out of a one-year base. MGM is at the low end of a multi-year cup & handle, and LVS has fallen back to a low-risk entry level.

Loved the trading talk in the forum “trading desk” yesterday — lots of great ideas that members were sharing. That’s how we make money!

See you there.

-Dan

By the way, I don’t know why I said “inestimable boon”. It just felt right, I guess.

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