Look at some of the FANG stocks. (March 10, 2020)
T2108 CCL RCL CCL NCLH CCL RCL T2100 T2108 RCL CCL MSFT FB GOOGL SSO GOOGL NFLX NVDA AAPL
I just want to go over a couple of stocks here real quick. The percentage of stocks above their 40-day moving average; on TC2000, it’s a T2108 indicator, you can get stuff like this on stock charts although I think they use the 50-day moving average, it doesn’t matter.
The percentage of stocks above their 40-day moving average, today the lowest was 3.17 percent. Back here in the dark days, December 24th if you remember, this was as low as 3.45. Today actually, was even lower, so this is kind of a new record low over the past several years. I think at one point several years ago it was lower than that but it’s been so long let’s just say that this is a historic low.
So what does that mean? What it means is, that on a short-term basis, this is a short-term trading indicator. It is not a predictor it’s a condition indicator. There are so many stocks that are so oversold; it takes a lot of selling for the market to get to where, virtually, every stock in existence is below the 40-day moving average so snapbacks are kind of imminent, right?
Let’s look at a couple of stocks. Even the cruise ships ( NYSE: CCL ), which by the way, these things should all be named the Titanic. Seriously, we have hit like a big Corona iceberg here. Even these things are rebounding a bit. RCL ( NYSE: RCL ); it would really surprise me if today was THE low in cruise ships. It’s THE low probably for the week but not for these stocks. Are you really looking at this stock thinking, wow, I am going to short me some Royal Caribbean ( NYSE: RCL ) here? This is like a total fool’s errand to be doing that.
The selling here is massive. Should these stocks be at zero? I don’t know it’s not for me to say, it’s the market. But it’s a long way from the Love Boat baby, that’s for sure. You look at this, this has sold-off so much from 140.00 down at one point today to $40.00. That is a 70 percent haircut in less than 2 months, that’s a heck of a haircut to take. That’s not a butch, that’s a skin head.
If you look at Carnival ( NYSE: CCL ) in this light too, a pretty big haircut in a fairly short amount of time. And then Norwegian Cruise ( NYSE: NCLH ), this hasn’t been ugly, this has been “fugly”, really, really bad. And so all of these stocks, they are down so low that then you look at them on the daily chart and say, “Well, I wouldn’t buy Norwegian Cruise ( NYSE: NCLH ) that’s for sure.” Carnival ( NYSE: CCL ), you are probably going to see more upside in this tomorrow. Royal Caribbean ( NYSE: RCL ), you are probably going to see more upside in this thing too. What would I be doing if I was long Royal Caribbean ( NYSE: RCL )? I’m not, I am not long any of these stocks; I would be selling into any kind of strength because that is what’s worked before.
You have to understand this is the dynamic of the market in this deeply oversold environment, where so many stocks are oversold that there are two sides to every trade. There are buyers and sellers and when sellers sell they raise cash, now they are buyers. The only question is, when? When buyers buy stock they raise stock, they buy stock, they exchange their cash for stock, well, they are sellers.. They are sellers we just don’t know when and at what price. But that is most assuredly what’s going on here. And so when you have so much stock sold off for so low that means that there is a lot of cash on the sidelines just waiting to come into the market.
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You even look at Royal Caribbean ( NYSE: RCL ) and Carnival Cruise ( NYSE: CCL ), even those things are coming up. But you look at Microsoft ( NASDAQ: MSFT ), you are probably going to see a little lift in this tomorrow. “Faceplant” ( NASDAQ: FB ), me and Zuckerberg, we go way back, even this will be up a little bit. All the FANG stocks ( NASDAQ: GOOGL ), you are going to see a little lift tomorrow. Unless you are a real quick active trader though, I would be really careful about getting sucked in. But I do think the market is so oversold that we are going to see a little more lift in these stocks.
Actually, while I have been doing this video I have a position going on SSO ( NYSEARCA: SSO ). I keep glancing over at it and I keep making more money. Typically, this is the type of trade that I would be closing out in about 3-minutes and 35 seconds. But I am not going to do that because I feel pretty good that we are going to wind up getting, maybe, $120.00 here tomorrow, that is kind of what I am looking for. We are going to see these stocks ( NASDAQ: NFLX ), I think, get one more day ( NASDAQ: NVDA ) at least of rallies.
I just want you to be prepared for that. It is absolutely the wrong time for you to be selling. If you have a position that you are really losing on maybe give the market another day or two to come up to you and pay you off but I would not be selling right now. I would be, seriously, looking at buying even Apple ( NASDAQ: AAPL ), you are seeing this big downdraft here. A rally, a higher low and now this is coming back well within the Bollinger Bands. So here, look for about $10.00 here, look for about 293.00, 295.00 on this before it gets into some selling.
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