| | |

MARKET WRAP/PRE MARKET

ByGary Kaltbaum

We hardly ever say one day’s action does not matter. We’ll now just say does not usually matter as yesterday was a big one.

Coming into yesterday, we were less than thrilled with the ridiculous froth and speculation that had been showing up.

DUO…the stock hardly trades but rallied from $10 to $129 before crashing back to $47 the same day. Why? The name of the company is FANGDD NETWORK. Get it…FANG…FANG STOCKS MOVING HIGHER. We are not making this up. A low trading, dead stock rallies like this because it was mistaken as something to do with FANG stocks. We are not making this up.

Bankrupt companies where odds favor that equity holders will get wiped out…rally up from pennies. Chesapeake Energy rallies from $12 to $77 is less than 2 days. Ooops. Once the realization sets in, it is already back to $18. By the way, that stock price is off a 1-100 reverse split. A bunch of other names either in bankruptcy or about to were on the move. Hertz is another name who may be getting away with an issuance of stock because of the speculation.

A ton of secondary offerings. We mean a ton of secondary offerings have been issued.

Put/call figures continuing to stay at huge levels of bullishness and complacency. Everyone and we mean everyone betting on higher prices in the options market.

But just because there is froth and speculation, it does not mean the market must drop. It is just very often a precursor.

We gap back up this morning…a portion of yesterday’s drop. The big part of the damage yesterday was all the areas off the bottom that rallied strongly, gave the whole breakout back. This morning, those areas like airlines, cruise lines, oils and financials are bouncing nicely.

The blame is being put on the virus accelerating. All we know is that was one ugly day. W ewill know a lot more on how this bounces, how far it bounces, how strong it bounces.

While there was damage in growth names, after scanning last night, just some nasty pulling in with only a few breaking the 50 day. But same names gave back 3 weeks of gains in 1 day.