Morning Market Thoughts
Good morning. we’re looking at a stronger open this morning, with the S&P futures up about 7 points. After a weekend where we shot down a Syrian aircraft, London was the victim of a possible terrorist attack (nothing definitive so far), and Brexit negotiations are beginning, it’s good to see a resilient market. On top of that, the FOMC’s rate hike seems to be digested by the market, with very little acid reflux.Just a few items to note this morning,
1. Clovis Oncology (CLVS) is screaming up more than 50% (o $92.30) on news that it’s oncology drug Rubraca will have a much wider use for treating ovarian cancer. Typically, a stock that’s up this much is a short candidate, and that very well may be the case here. 20% of the float is short, so there is certainly a short squeeze dynamic impacting the stock. However, biotech is a different animal than other stocks. Sometimes these things just don’t come back. If you are an active trader, you may want to watch the stock for direction. It could go either way, so don’t bring a directional bias into your trading decisions. For most of us, this can just be viewed as an opportunity lost. I know some of you are long CLVS (I’m not). Good for you! Just don’t let the profit slip away.
2. The scuttlebutt is that Whole Foods Markets (WFM) may be the subject of a higher bid than the $42/share that Amazon (AMZN) is offering. The shares are up a bit higher this morning, and are trading 2% above the offer price.
3. The Paris Air Show opens this week, and it would pay to watch Boeing (BA) and Lockheed Marting (LMT). Boeing makes the F/A 18 Super Hornet, which is a bit cheaper than Lockheed Martin’s F-35. President Trump is said to be mulling over a big purchase of new aircraft to update our air force. As you know, Boeing stock has been on a tear since last October, up 44% in just 8 months. That’s pretty impressive for a Dow component. At $198, the stock is just below obvious resistance of $200.
There are plenty of stocks that are working, even in a choppy environment. Strive for consistency and focus only on stocks that are working for you, or are consolidating within an uptrend. On the latter, only buy them when they appear close to breaking out. More money is made through patience than anything else. And more money is lost through hyperactivity and impulsiveness than anything else — because that’s when big mistakes are made.
See you in the forum.
–Dan
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