No bill yesterday, but we're on the five-yard line today. Let's hope it's the opposing team's five-yard line and not our own.
That statement certainly makes it sound like we'll get a bill passage today adding to the multiple stimulus moves we've already seen from the Central Bank over the past few weeks. There appears to be no end to the amount of money we'll throw to get the economy moving again.
Don't get me wrong, a bill that actually helps individuals and small businesses is needed. I just hope it is done right and not aimed at merely helping big corporations along with the stock market.
Are we anticipating bill passage with this rally or a return to business as usual by the end of the month? The first seems reasonable. The second seems overly optimistic. My concern is we're rushing a return to economic normalcy as a political move. Recessions don't do much for incumbent candidates up for reelection.
We're willing to throw trillions at the corporate level of the economy and banking system, buy billions in equities each day, but we're also seeing a push for a return to business normalcy with an exception for those at risk or above a certain age. I'm not sure if that's more about reality or rolling the dice to win reelection. I honestly don't know, but it doesn't seem like the medical professionals support the idea. We're being driven by politicians, and to a lesser extent, economists.
I believe that is what has led to continued volatility. The complete breakdown in oil prices sent us over the edge, but we're stuck here because we don't have a clear path. Every few days, the story changes.
We've been overdue for a bounce. I mentioned yesterday how a few things were setting up for such a thing. We didn't get the hammer on the index charts, but several individual stocks did showcase what momentum traders want to see. The big gap opening this morning induced some chasing in the most beaten down of names while we see some of the COVID-19 work-from-home winner taken down a notch. My best guess is rotation from a few winners into the myriad of losers out there.
If we do get a return to normalcy, I'll keep an eye on some of the lesser known beaten down names. Healthcare REITs have been destroyed, so watching for continued bounces in Omega Healthcare Investors, Welltower (WELL) and Ventas (VTR) are on my radar. Even if they do cut their yield, I expect it to remain in the mid-single digits at least. In a zero interest environment, this should hold a lot of appeal. Also, if the sports world has a hint at resumption, expect Sysco (SYY) to fly and names like MSG Networks (MSGN) , ViacomCBS (VIAC) , and Madison Square Garden (MSG) to come back along with Disney (DIS) and Six Flags (SIX) .
I imagine all of those will begin to move as the return to normalcy picks up more support. I doubt we'll even need to see it in play, but keep in mind, the best bounces occur in bear markets. Don't get caught thinking volatility is in the past and we're all clear. The trading opportunities are getting better by the day as are the long-term opportunities, but the middle ground is still too murky, so keep time frame in mind when doing EVERYTHING right now.
(ViacomCBS and Disney are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
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March 24, 2020 at 11:26PM
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The Best Bounces Occur in Bear Markets - TheStreet
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