EB Daily Market Report - Thursday, August 13, 2020

Tom Bowley - August 13, 2020

StockCharts TV Guest Appearance

I have just recorded a guest appearance on StockCharts TV's "The Pitch", where each guest gives 5 stock ideas moving forward. The show will air later today at 6:30pm ET. Dave Keller hosts the show and I joined both Dave Landry and Grayson Roze. Check it out and let me know what you think!

Reminder: Annual Membership Special

Just a friendly reminder to make sure that everyone is aware that we're currently running our best annual deal of the year for a limited time - $697 for 14 months (2 bonus months)! That's less than $50 per month and can save you a bundle. The special began at Monday's "Top 10 Stocks - Sneak Preview" event and will run through this Saturday, August 15th. We'll likely have a similar fall special in a few months, so this special would mostly apply to the following:

monthly members paying $97 per month
members currently enjoying their 30-day trial
annual members whose subscription will expire within the next 2-3 months

To clarify, for those currently on a no-cost trial, you will still receive the balance of your free trial and THEN the 14 months would be added on to the end of your trial.

If interested and you have any questions, please be sure to contact "[email protected]".

Executive Market Summary

Futures were skewed more towards the NASDAQ once again today as growth stocks return to favor
Commodities are up mostly fractionally, although silver ($SILVER) has risen 4% today
Tesla (TSLA) continues its rapid ascent, up another 5.72%
The 10 year treasury yield ($TNX) is flat today after weekly initial jobless claims were reported slightly below expectations
Communication services (XLC, +0.94%) and technology (XLK, +0.75%) are leading today's advance
Cisco Systems (CSCO, -11.27%) is selling off after reporting its latest quarterly results last night after the bell

Market Outlook

During my Trading Places LIVE episode at StockCharts TV this morning, I made a very bold prediction, one that most of my peers might scoff at. But if I'm one thing, it's consistent. I've believed in this secular bull market throughout many turbulent periods over the past several years, and it's served me well. I honestly believe the S&P 500, after breaking out above 3400, will be off to the races. I have set a minimal target on the S&P 500 at 10,000 by the end of this decade, a tripling of the current index value. Call me crazy, you won't be alone!

The above is a 15 year weekly chart using the Andrews Pitchfork tool at StockCharts. I fully expect that we'll remain mostly in the upper half of this pitchfork throughout much of the next decade, with an occasional dip below during cyclical bear markets - and I do see more rough periods in the next decade. I don't believe we're going to go up every day, but I do believe we'll see plenty of new money lifting equities, along with rotation from global bonds helping to lift stock prices as well.

Sector/Industry Focus

Renewable energy ($DWCREE) remains one of the strongest industry groups in the market right now. It broke out of sideways consolidation during the first week of August and it's not looking back:

Two of my favorites in this space - from a leadership perspective - are SolarEdge Technologies (SEDG) and Enphase Energy (ENPH), which are up another 4.68% and 5.46%, respectively, on today's session. The low interest rate, high growth environment plays perfectly into both these companies. As soon as the market began to rotate back towards growth stocks these past two days, you can see the impact it's had on renewable energy stocks.

ChartLists

My strategy is to try to buy stocks on pullbacks, rather than chasing. So one easy method to do this is to pull up one of our ChartLists - I used the Strong Earnings ChartList (SECL) - and sort it by largest % drop using the "Summary" feature at StockCharts. As I look at several of the big losers on this ChartList today, I found one that interests me and one that screams to stay away:

SSTK:

SSTK is using this recent advance as an opportunity to raise additional capital. That has a dilutive effect and typically sends shares lower. SSTK announced the price of this offering would be $48.50. I believe the selling is overdone as key price support begins to emerge in the 43-45 range. SSTK exploded recently vs. its publishing peers, a very strong group since the March low.

MU:

I have not been a fan of MU for quite some time. Despite being part of an incredibly strong semiconductor industry, MU is now at a 52 week relative low vs. its semiconductor peers and the benchmark S&P 500. This underscores the importance of sticking with industry leaders.

Earnings Reports

Here are the key earnings reports for today and tomorrow, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks (or active trade alerts) that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning:

Thursday, August 13:

AMAT, NTES, BAM, BIDU, IQ, FTCH, IIVI, TPR

Friday, August 14:

DKNG, MSGS, MSGE

Economic Reports

Initial jobless claims: .96 million (actual) vs. 1.15 million (estimate)

Happy trading!

Tom