April 29, 2020

Boosted by Gilead's coronavirus drug approval, Google's (GOOGL) earnings report, and a nation ready to open after more than a month of lockdown, stocks rolled higher Wednesday.

After the close, a bevy of senior technology issues rose on the release of earnings, including Facebook (FB), Tesla (TSLA), Qualcomm (QCOM), and Microsoft (MSFT). This added a substantial bump higher to ETFs which trade in the after-hours.

The following chart shows this as being a volume-backed move, with major accumulation days dominating this month's action. Note the difference in volume during this bull move vs. the prior one.

Our 3x QQQ (TQQQ) position entered Thursday is meeting expectations. Today, it gained 10.4% during the regular session and was up another 4.7% in the after-hours for a daily advance of 15.1%. Similar to how we handled it in the October-February period, we want to do everything we can to play this out for a larger gain. This means allowing plenty of room to move without violating any sell covenants.

If possible, our goal would be to hold it until it takes out the prior bull market high. This would be about a double from our entry above 63.66 last Thursday.

Because TQQQ is not a stock as much as it is a big chunk of the entire market (albeit concentrated in several liquid glamour techs), it is a 25% position in one of my accounts. The risk to TQQQ would occur amid any rotation out of tech. Presently, that is not a concern due to the unprecedented ability of the Nasdaq Composite and QQQ to dramatically outperform during the bear market.

Yet this outperformance did not carry over to the five-week bull market: Since the Mar. 23 bottom, both QQQ and Nasdaq Composite have been slight laggards, as well as biotech.

For those who may have missed Thursday's TQQQ entry or are looking to add to their starter position, the service will be stalking other entry opps down the line.

Meanwhile, the semis are beginning to fare better and may be primed for leadership.

The following charts may be expanded by clicking on them.

Advanced Micro Devices (AMD)

Coupa Software (COUP)

Etsy (ETSY)

Insulet (PODD)

Paypal (PYPL)

Synopsys (SNPS)

In sum, the bull market has now retraced about 72% of the bear market decline. Growth stocks are not especially in favor at the moment, as more beaten-down value stocks attract large-investor attention. This is not uncommon, and was seen for the opening seven months of the bull market that began in late '02. At the moment, this is not a target-rich environment, though a number of stocks continue their base-building and can be expected to offer opportunity in the weeks ahead.

Kevin Marder

For intraday ideas and analysis: https://twitter.com/mardermarket

All stock charts created using MarketSmith unless otherwise noted. ©2020 MarketSmith, Incorporated. All other charts created using TradeStation. ©2001-2020 TradeStation Technologies. All rights reserved.

The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held positions in TQQQ and TSLA, though positions are subject to change at any time and without notice. Estimate data provided by FactSet. Expected earnings release dates provided by EarningsWhispers.