Clorox Wipes. The World is Fixed.

I had about half of today’s post written early this morning before finding out that Target had a fresh supply of Clorox wipes in stock. So, I hurried over to grab a three-pack along with some snacks for the kids. When I came back, I saw that the economy was back to normal, COVID had been cured and all was well in the world again!

While stocks surged at the open I always tend to root for a down open to begin the week with firming during the day and strength into the close. That’s the old trader in me. With a little more than hour gone in the day, all signs point to a trend day where stocks finish near the highs of the day. Sooner than later, the major indices minus the NASDAQ 100 will once again test the upper end of the month long trading range. If that’s right now, I will be a bit leery that stocks break higher and don’t look back.

Historically, the more pronounced and obvious the trading range, the more likely it is to fake investors out before the real move occurs. I am not yet saying that this will be the case here. All I am saying is that it is something to be on the lookout for. My key stat today will be if we see at least 90% of the volume going into stocks that close higher.

I also want to keep a close eye on one of my favorite canaries in the coal mine, high yield bonds. With the Fed announcing a program to purchase them on April 9, they definitely screwed up conventional analysis, or at least the way I look it. I am sure there are people much smarter than me who have figured out how to normalize the action in junk bonds.

Assuming today ends as well as I think it does, this sets up a very interesting battle between the bulls and bears this week. One group is going to get run over. Perhaps, both do…

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Paul Schatz, President, Heritage Capital
Paul Schatz, President, Heritage Capital
If you have at least $250,000 of investable assets and would like to schedule a complimentary meeting, call, or video conference with me, please click on my calendar here email me at Paul@investfortomorrow.com or call the office directly at 203.389.3553.

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