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Betting on Bristol-Myers Squibb


Here’s a quick take on BMY.  We believe the stock has returned to a very low risk entry zone.  Following last month’s earnings report BMY took an ugly hit after opening the Oct. 26 session with a damaging downside gap.  Further loses were well contained by a solid support zone that includes the January and August highs as well as powerful breakout gap left behind back on September 7th.  BMY rebounded quickly but was unable to maintain upside momentum.  Last week shares dipped again and are testing the $61.00 to $60.00 this week as well.  We believe the stock is a low risk buy near current levels.  On the downside a close back below $59.00 would be a clear warning sign that a deeper pullback is ahead.  Until then we remain positive on the current set up.

At time of publication we are long BMY in some managed accounts.


Netflix Update


Netflix is beginning the week with a nice bounce.  The stock has been consolidating above a major support zone near the $191.00-$189.00 area for the last four weeks.  NFLX may be on the verge of a fresh rally leg after regaining its footing.  We’ve been positive on shares since early August and are long the stock in some managed accounts.   A close back below $188.00 would indicate a deeper pullback is ahead.  

Strong Earnings

As the current earnings season begins to wind down, Ryan Detrick has some interesting data: 

90% of the S&P 500 Index has reported and year-over-year earnings growth is tracking +8.1% (over +11% excluding insured losses from the financial sector). Once again, coming in above the expectations.

Three key takeaways from earnings season:

1.) SP 500 revenue 1% above estimates

2.) WP500 earnings estimates for the next 4 quarters have risen 0.4% during the season (usually is lowered)

3.) Tech sector beat estimates by 11% – continues to lead


Hat tip LPL Research/Ryan Detrick

It’s Still Very Quiet Out There

 Nearly 96% of this year’s trading days have remained within a 1% range.  The longest such streak in history:


 Hat tip Charlie Bilello

The Trump Bump

How does it rank?


Hat tip Ryan Detrick


Deep Blue Destroyer


From  ATLANTIC OCEAN (Nov. 7, 2017) The Arleigh Burke-class guided-missile destroyer USS Oscar Austin (DDG 79) transits the Atlantic Ocean. Oscar Austin is on a routine deployment supporting U.S. national security interests in Europe, and increasing theater security cooperation and forward naval presence in the U.S. 6th Fleet area of operations. U.S. Navy photo by Mass Communication Specialist 2nd Class Ryan Utah Kledzik

The Nightmare of Communism Won’t Die

For your weekend reading pleasure, a great article from Robert Tracinski:

Key bit:   Today marks the 100th anniversary of the October Revolution that set off the long global reign of terror of Communism. (For obscure reasons having to do with the outdated calendar used in Russia at the time, the October Revolution actually happened in November, and the Soviet Union traditionally celebrated it on November 7.) A century of Communism achieved four main results for the people who suffered under it: poverty, oppression, war, and mass death.

Countries taken over by Communists, from China and Russia to Cuba and Venezuela, were either plunged from relative prosperity into starvation or walled off for decades from the growing prosperity of capitalist countries—often right next door, enjoying all the same benefits of geography and culture. Think of the contrast between East and West Berlin, between Cuba and Chile, between mainland China and Hong Kong, between North and South Korea.

Still Breaking Records

The Dow Jones Industrial Average has not had an intra-day move of more than 1% in the last 60 trading days.  That’s the longest such run in history:


Hat tip Charlie Bilello

Costco Set Up Well For More Upside


Costco is putting some distance on its 200 day moving average as the week comes to a close.  Today shares are up 1% and will close at the best levels since the massive June 16 collapse.  The stock’s current post earnings rebound has been very impressive.  Over the last ten sessions COST has closed in the red once.  During this streak the stock has blown through multiple layers of resistance, most significant was the October 6th breakdown gap left behind after the last earnings release.  This powerful move has set the stock up well for a continued run.  We regard the $168.00 to $165.00 area as a very solid support zone.  A dip back down to this area will provide a low risk entry opportunity.   A close back below $163.00 would indicate more consolidation is ahead.  A logical upside target is the massive breakdown gap left behind after the Amazon/Whole Foods news.  COST fell over 7% on June 16 after opening with a huge downside gap.  We believe Costco is on its way to $178.40(June 15 low). 

At time of publication we did not have a position in COST.

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