The tale of two tapes has returned in 2020 as tech stocks (mainly Nasdaq/Nasdaq 100 names) continue to soar as the rest of the market is edging higher. 

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Monday-Wednesday’s Action:

Stocks opened higher on Monday helping the S&P 500 briefly turn positive on the year before sellers showed up in the afternoon and sent a slew of tech stocks lower by the close. The Nasdaq Composite went from being up 2% at its high to close down 2%. The last time that happened was in 2000 when the dot com bubble finally burst. In other news, California announced it was closing indoor businesses, such as bars and restaurants to try and flatten the curve again. Stocks were mostly higher on Tuesday after JP Morgan JPM and Wells Fargo WFC kicked off earnings season, but once again, tech stocks lagged. Stocks rallied on Wednesday after Goldman Sachs GS reported a blow out quarter thanks to its fixed income business. In other news, Moderna MRNA announced some positive news in its fight against Covid-19 and that sent the stock soaring. On Monday the stock opened at 63 and hit a high of 88.37 on Wednesday!

Thursday & Friday Action:

Stocks opened lower on Thursday as the high beta (mostly Nasdaq and Nasdaq 100 type stocks) finally pulled back. After Thursday’s close, Netflix reported earnings and XXXXXX rallied or fell XXXXX as more and more people watched NFLX during the stay and work from home world we now live in. Stocks were XXXXXXXXX on Friday as investors waited for a slew of earnings to come out in the following weeks.

Market Outlook: Flood The System With Liquidity 
Global governments and global central banks stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. So far, it is working as intended. As long as March’s lows hold, the market will likely move sideways to higher. On the other hand, if March’s lows are breached, then look out below. As always, keep your losses small and never argue with the tape.