Goodbye, Bernie Sanders. See you later, Elizabeth Warren.
Bid the left’s more progressive candidates adieu.
Because today, investors are saying “hello to Joe.”
Joe Biden, that is, who enjoyed a surprise Super Tuesday victory last night. With the leading socialist (Sanders) and anti-bank firebrand (Warren) out of the game, bulls returned to the market. The indexes roared today, rising over 4% each. The S&P, Dow, and Nasdaq Composite are all at or near their highs from yesterday.
“Investors fear Bernie because he wants to cut off the head of capitalism by raising taxes significantly on the rich and using the funds to provide free everything to everybody else,” Ed Yardeni, president of Yardeni Research, said in a note.
“Getting everything for free trumps freedom, according to Bernie. No wonder investors are reacting to him as though he is going to infect us all with the virus of socialism.”
Ritholtz Wealth Management CEO Josh Brown remarked that institutional investors were particularly worried about Warren, a former law school professor who specialized in bankruptcy law.
“Stocks will be even more relieved at Warren’s coming concession as they are at Biden’s big showing,” Brown tweeted.
“Wall Streeters have always secretly been more afraid of her than anyone else given her domain expertise.”
In other words, the recovery is back on. Wall Street seems safe regardless of who wins the presidency if Biden is nominated. And for investors, that’s reason to celebrate.
Especially after Moody’s released a glowing early jobs report this morning. The analytics firm estimated that 189,000 private payrolls were added in February, blowing away analyst estimates of 155,000.
The coronavirus, scary as it may be, didn’t seem to stop American corporations from hiring.
And so, with stocks rising, many long positions have become highly attractive to short-term traders. If a short to moderate term recovery is on the horizon, it might be the perfect time to buy back in on specific, high-potential stocks.
Stocks like AbbVie Inc. (NYSE: ABBV), which continues to show upward momentum.
In the daily candlestick chart above, you can see that ABBV, like every other stock, got scorched during the coronavirus-driven downturn. But since bottoming, ABBV’s been rising. It almost made contact with the lower Bollinger Band before rocketing back to the top.
And despite all the recent buying, the stochastics indicator is still below 80, suggesting that the stock isn’t overbought quite yet.
Coupled with the setting of a higher low (a bullish indicator) and ABBV’s breakout above its minor bearish trend (represented with the yellow trendline), it might make sense to go long on the stock with a trade trigger slightly above today’s high at $92.32.
From there, ABBV looks like it could certainly set another higher high in a move not too different from the one it made in early February.
Because with two of the market’s major stressors – Sanders and Warren – mostly defeated, investors can finally breathe a sigh of relief.
Meaning that a wicked recovery could be waiting in the wings.