Whole Lotta Red

Tale of the Tape

Good evening folks. Sometimes you just feel like flopping yourself into a pool off the high dive in a kayak. And so went the market today. 

There was a whole lotta red out there and the heat map tells the tale. 

The S&P 500 lurched 2.5% to close at its lowest level in a couple weeks. All of the major indices fell more than 2% and all S&P sectors dropped at least 1%.

Financials are at an inflection AGAIN (See more below).

Only 7 of the Nasdaq 100 stocks closed higher and only 1 of the S&P 100 stocks closed higher. Bad breadth. 🤢

S&P 5003,050-2.59%
Russell 20001,389-3.45%
Dow Jones25,445-2.72%

Stocks that Didn’t Suck

There were some stocks out there that didn’t suck. Spotify, Peloton, Avalara, and Zoom all closed green today. These stocks have been incredible. 

Spotify is up 106% since its March 16th low.

Peloton is up 184% since its March 12th low. 

Avalara is up 125% since its March 19th low. Today was $AVLR’s 9th consecutive day closing green. 

Zoom is up 275% YTD.

Danger Zone 🛩

The airline ETF, $JETS dropped 5.94% hitting a low of $16.18. 

$JETS is in the “danger zone”.

This $16/$17 area that once acted as resistance is now barely hanging on as support. Today was the lowest close since June 2. Will $JETS hold? Place your bets…

Financials Are Having a Level

Financial stocks have been terrible for a long time, but during this rally off the March 23 low, there have been a few moments when they actually looked pretty good relative to the S&P 500. 

Alas, they’re back to their punk ash ways. $XLF is near its own “danger zone”.

Must-Read of the Summer?

We just ordered a few copies of what might be the must-read book of the Summer.

Maria Konnikova’s The Biggest Bluff dropped yesterday.

Konnikova tells the story of how she became a professional poker player while exploring the fine line between skill and luck.

She published a piece in the NYT yesterday about poker, life, and fate and here’s one of  multiple money quotes:

Poker is a game of incomplete information. There are the cards I hold, known only to me. There are the cards you hold, known only to you. There are the community cards we all see, coming out in a set rhythm. I need to make the best decision I can based on what I know for certain and what I infer from your actions — all the while knowing that not only will I never have all the puzzle pieces, but regardless of how skilled my decision, the cards can break against me. I can make the best decision possible and still lose. And I can make a horrible mistake and luck out. The process and the outcome are not equivalent.

In life, we can often get away with conflating the two. Things go well, and we take credit. Things go poorly, and we blame the world. Poker forces you to confront the difference — if, that is, you want to be successful. If you blame the cards when you lose and think yourself a genius when you win, you will eventually go broke: In the immediate term, you can get lucky; in the long term, variance evens out, and if your decision process is flawed you will start losing.

Here’s a good interview with the author on NPR.

Here’s a link to the NYT piece.

And here’s a link to the book on Amazon.

Links That Don’t Suck

🤝 Bayer Agrees to $10.9 Billion Plan to Settle U.S. Roundup Claims

🤑 Profiting From Market Chaos w/ Jim Roppel

🌴 Hunting for Particles of Gold in the Jungles of Southeast Asia 

🏌 PGA TOUR Statement on COVID-19 Testing at Travelers Championship 

🙅 The Ultimate Human Bias 

📈📉 Does Technical Analysis Work?  

🚀 Mars Mission Is Next Step in Intensifying Middle East Space Race