Main Street and Wall Street Not Speaking

April 19, 2020

Weekly Market Outlook

By Keith Schneider

blankU.S. stock indexes extended their rally for the most part with the NASDAQ 100 (QQQ) up +1.3% YTD and +6.9% for the week.

However, small caps Grandpa Russell (IWM) closed -1.5% for the week and down -26.3% for the year.

Markets bounced Friday after Gilead Science's disclosed late Thursday they might have a treatment for the coronavirus.

Considering just how critical this could be if it proves out, the 10% pop in Gilead off the news seems meek and inconsistent with the overall market action.

Meanwhile, the divergence between the key indexes highlights the disconnect between Main Street and Wall Street.

It's anyone's guess whether this situation leads to further strength or a retest of the lows.

One thing is certain, the relationship of value stocks vs. growth stocks is at historic lows.

This suggests that the bailout efforts are not reaching mainstream workers.

As a result, some states are experiencing protests demanding that the quarantines be lifted so people can return to work.

The choice is tough, starve, lose your house, or go back to work and risk your life.

Charles Munger, Mr. Buffet's partner, says he has no clue how this will all play out as this "typhoon" is even new for him at 96 years old. He went on to say in an interview this week that even major corporations have no plan in place to deal with the virus and economic shutdown and are "frozen" in a state of shock.

The $130 billion dollars sitting in cash at Berkshire's bank account for rainy days just like now is gathering dust, and no one is picking up the phone asking for Berkshire's help.

Also noteworthy is the fact that both the S&P 500 and the NASDAQ 100 have regained critical moving averages.

The NASDAQ is in a bullish phase. One thing is certain, risk control for any trading in such an uncertain environment is paramount.


This week's highlights are:

  • Risk Gauges are 100% bullish
  • Biotech & Consumer Discretionary outperformed
  • Growth stocks resumed leadership and on a relative basis are at historic all-time highs
  • Energy and Transportation sectors continue to lag
  • The S&P 500 and the NASDAQ 100 regained critical moving averages.

This information is usually reserved for paying members, but…

The Alpha Rotation Model issued a new buy alert on Friday for the SPY!

The Alpha QQQ ETF model is already up 13%, and…
the Alpha QQQ Options model is up 91% on its current trade!

This NEW alert applies to SPY ETF and SPY options memberships.

If you're a member, be sure to check the portfolio before Monday.

If you're not a member, and would like to learn more about the Alpha Rotation model…

Now is the time!

Click here to see last week's training session that will explain all you need to know to decide if Alpha Rotation's extraordinary returns fit your investment style.

Click below for this week's market outlook video.

Stay Safe and Best Wishes for your trading,

Keith Schneider


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