Detroit Vs. The Virus

  • Dow Surges on Promising Vaccine Results
  • Detroit’s Big Three Return to Work
  • Space Force Launches Secret Space Mission
  • Developing A Strategic Trading Plan

 MARKETS 

Dow Surges on Promising Vaccine Results

The Dow surged 700 points this morning on the hope that all the crappy things that are happening right now won’t be so crappy in the near future.

A closely watched coronavirus vaccine trial conducted by Moderna reported positive results this morning, bringing us one step closer to all–you–can–eat buffets and 24–hour kissing parties.

The test, which is still in its early stages, successfully produced COVID–19 anti–bodies in all 45 study participants and successfully didn’t explode any of their heads. (That second part is important. When things return to normal, we’ll need our heads intact for eating from the big communal trough.)

Participants were given two doses of the vaccine, roughly 28 days apart (or about the time it takes for a population trapped in doors to descend into madness).

Two weeks after the second dose (also known as the pants–on–the–head stage of quarantine), the level of antibodies in blood samples from participants matched or “significantly exceeded” levels in recovered patients, said the company in a statement.

“These interim Phase 1 data, while early, demonstrate that vaccination with mRNA–1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 [micrograms],” Moderna Chief Medical Officer Dr. Tal Zaks said in a statement.

“When combined with the success in preventing viral replication in the lungs of a pre–clinical challenge model at a dose that elicited similar levels of neutralizing antibodies, these data substantiate our belief that mRNA-1273 has the potential to prevent COVID-19 disease and advance our ability to select a dose for pivotal trials.”

For those of you who don’t speak impenetrable medical jargon, Moderna thinks this vaccine, mRNA–1273, could prevent transmission of the virus and allow us to go outside and blow in each others’ faces and stuff.

It’s worth noting that while antibodies can stop the spread of a virus, this is not always the case. Viruses are unique little snowflakes that wreak havoc on our bodies in lots of fun different ways.

Some early reports of patients getting the virus twice does not bode well for… the general survival of the human race I guess. But to date, none of those reports have been verified, leaving the door open for a really chill vaccine to turn up the not–dying to the MAX. (Just spit–balling slogans for the inevitable ad campaign.)

The biotech company says it expects to begin a Phase 3 trial by July and, head explosions permitting, could be ready for market early 2021.

Shares of Moderna (MRNA) rallied 26% after the company reported its promising results, driving a broader rally in the markets. When the markets opened this morning, the Dow Jones Industrial Average leapt 732 points (3.1%), the S&P 500 added 2.7%, and the Nasdaq Composite rose 2%.

 ECONOMY 

Detroit’s Big Three Return to Work

Detroit’s automakers and their suppliers are reopening this week, becoming the first major industry to stop watching Spongebob reruns and get back to work.

More than 133,000 workers, representing half the industry’s pre–pandemic workforce, are expected to return to work this week, according to estimates by The Associated Press. (Alternatively, TheDissociated Press estimates the figure to be closer to “love isn’t real, nothing matters, why are you asking me these questions?”)

Parts–making companies will add thousands of more workers to that count as they start cranking out the much–needed parts needed to restart the assembly line. (Wheels, go–boxes, sunroofs, that sort of thing.)

The Detroit Three return to work with dozens of new safety limitations in place, including social distancing guidelines, masks, hand–sanitizing stations, and limiting the number of technicians working on the interior of a car to one at a time.

Fiat Chrysler even went so far as to install plastic dividers at its break tables, so it can feel like your having lunch at the DMV.

Table with split screen

Pictured: the worst game of Dungeons & Dragons.

If demand for automobiles doesn’t recover soon, automakers say they will likely close the plants again.

Global demand for vroom–vroom, beep–beep, plummeted during the inside–terrible times. And even as states start to slowly reopen businesses, tens of millions of Americans remain unemployed.

Now, I ain’t no fancy pants city economist with a weekly food column in the New York Times, but it’s safe to assume that unemployed people do not typically buy shiny new automobiles.

However, automakers say they’re confident there’s enough pent–up demand from the months of sitting around not buying cars to kickstart the industry.

The other plant–closing elephant in the room is the ever–looming presence of our old friend Mr. Virus.

Cindy Estrada, United Auto Workers vice president for Fiat Chrysler, told TheAssociated Press that she has been impressed by the company’s commitment to safety, but the union will be monitoring its members closely.

“If something looks like it’s becoming a hot spot, then we need to act quickly and make adjustments,” Estrada told TheAP. “No one wants to see that happen.”

 SPACE STUFF 

Space Force Launches Secret Space Mission

The US Space Force, which is a thing now and that’s fine, launched a robotic space plane into orbit as part of secret space mission.

(If I had to guess, the plane will intercept an incoming alien invasion to tell them earth is closed for 2020 and to try again next year.)

The X–37b plane (potential name for Musk’s next child) was launched from Cape Canaveral yesterday, after a 24–hour delay due to weather conditions.

Space Force officials, which are a thing now and that’s cool, said the launch was dedicated to the nation’s first responders and medical personnel fighting the coronavirus pandemic.

“Our invincible American spirit drives us to motivate, collaborate, and innovate together to overcome adversity,” said Secretary of the Air Force Barbara Barrett in a statement.

“In dedicating this mission to the nation’s healthcare workers, first responders, and essential personnel, the Department celebrates those who are keeping America Strong.

In memory of COVID-19 victims and tribute to all first responders and front-line workers

A touching sentiment penned by Space Force’s new PR officer, the Incredible Hulk. AMERICA STRONG.

While the core mission of the robot space ship remains a secret, the very real Space Force says the ship will undertake a series of experiments while in orbit, including the study of radiation and other “space effects” on seeds used to grow food. (My favorite space effect is when you shoot a guy in zero–G and you see globules of his blood floating around the place.)


In Other News

Llamas are hte real unicorns: why they could be our secret weapon against coronavirus


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ONE LAST THING

Developing A Strategic Trading Plan

Today we continue our series on becoming a better trader with Graham Summers and a quick and dirty lesson on trendlines.

This isn’t all theoretical by the way. As Graham will show you in today’s one last thing, you can see these market forces in action just last week.

Another Arrow to our Arsenal

By Graham Summers

In the last few issues of One Last Thing, we’ve covered the trading terms “resistance” and “support.”

By way of review:

  1. Resistance is a particular price level that stocks struggle to break above. From a supply and demand perspective, resistance represents a level at which buying demand struggles to overcome selling pressure. As a result, this level acts as “resistance” to a rally.
  2. Support represents a line at which stocks refuse to break lower. From a supply and demand perspective, support is where buyers come into the market to absorb selling pressure. This is what stops the markets from breaking down further.

Our timing on these topics could not have been better. The market showed us the significance of both resistance (red line below) and support (green line) several times last week.

Just look at how the market was rejected at resistance before dropping to bounce off support!

Chart

Now that we’ve covered resistance and support, I want to introduce you to a new concept: trendlines.

Searching for a Bullish Breakout

While resistance and support are represented by horizontal lines, trendlines are typically diagonal, formed by a series of moves that end at lower or higher levels.

Let’s use a real–world example to see this in action.

The chart below shows the recent price action in gold. As you can see, we have a clear level of support at $1,680 (green line). Note how gold bounced hard off of this level multiple times.

tracking support in gold

However, you’ll also note that gold was also forming a series of lower highs — price points at which the precious metal reversed downward after rallying. Note too that this series of lower highs resulted in a clear downward sloping line (blue line). THAT is a trendline.

tracking treadlines

As you can see in the above chart, gold recently broke out above this downward trendline.

This is VERY bullish, as it shows gold now has enough buying power to break above a clearly defined trend. This is what traders refer to as a “bullish breakout.” It usually signals that the asset is ready to make its next major move higher.

Now let’s add resistance (red lines) to this chart. Because gold has been trading in a relatively tight range over the last two months, we’ve got three of them.

Tracking resistance

Last Thursday’s breakout saw gold breaking above the first and attempting to break above the second before ending the day just below it. If gold can break above this second line, we should see a move to test its third line at $1,730 (top red line). That would be my first target if I was trading this chart.

And if gold can break above that final top line of resistance, it will begin a major bull run.

To review, we now we have three trading tools in our tool belt:

  1. Support
  2. Resistance
  3. And trendlines.

Armed with these three tools alone, a chaotic chart can suddenly make a great deal of sense. And even better, it can provide you with a trading plan with defined targets.

 

Computer icon

MARKET MOVEMENTS

Closing Data for Today

DJIA24,597.37↑ 3.85%
S&P Index 5002,944.88↑ 3.46%
NASDAQ9,319.50↑ 2.45%
Gold1,734.90↓ 1.22%
Silver17.328↑ 1.51%
Bitcoin9,698.6↓ 0.65%

  • Japan, the world’s third–largest economy, has officially entered a recession for the first time since 2015.
  • Warren Buffett’s Berkshire Hathaway sold 84% of its stake in Goldman Sachs in Q1.
  • U.S. industrial production fell a record 11.2% in April.

Cheers,

Shane Ormond
Editor, One Last Thing

Shane Ormond

Written By Shane Ormond

Shane Ormond is the managing editor for One Last Thing. In a previous life, he wrote and edited copy for International Living in Waterford, Ireland.