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Afternoon Note

Second Best Scenario

By Charles Payne, CEO & Principal Analyst
7/21/2020 1:36 PM

Well this is the second-best scenario at this stage of the rally – the board market up as cash comes out of tech into other sectors.

Energy the biggest winner as West Texas Intermediate is breaking through a big resistance point.  The sector is by far the biggest loser for 2020 -36% on a combination of factors including global demand impacted from coronavirus.   I’d like to see crude get through $45 over the next month.

An important development is stocks are moving on good news which is a great foundation and necessary before those same stocks can move on anticipation of good news.

S&P 500 Index

+0.56%

 

Communication Services XLC

+0.19%

 

Consumer Discretionary XLY

+0.05%

 

Consumer Staples XLP

+1.87%

 

Energy XLE

+5.93%

 

Financials XLF

+1.49%

 

Health Care XLV

+0.40%

 

Industrials XLI

+1.55%

 

Materials XLB

+0.96%

 

Real Estate XLRE

+0.78%

 

Technology XLK

 

-0.29%

Utilities XLU

+1.40%

 

The final hour of trading could get tricky.  Bulls running out of ways to seduce more cash off the sidelines.  Once the early rally stalls getting it reignited is hard.  Lately when there have been spurts higher into the close its been very impressive and tends to spill over into the next session.  

The dilemma remains getting growth and value to rally at the same time.


 

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