It is pretty simple here. The DOW breaks out of a cup and handle. The SOX holds the 50 day and ramps right back up. FINANCIALS are breaking out all over. And away we go again.
Just keep in mind, small caps still refuse to budge. ENERGY,REITS,GOLD,SILVER,METALS,ORES,CONSTRUCTION MACHINERY and a few other areas are still in bear mode. So no throwing darts. But we never argue with breakouts in major indices with the SEMIS and FINANCIALS leading. Thank you Bernanke,Europe,China,Japan for printing trillions and now Yellen for telegraphing what we already knew. The Mets and Cubs will win a World Series before they even consider raising rates and be rest assured that any hiccup will result in a new round of QE.
State of the Markets
with Gary K
To see the recorded webinar, all you have to do it call us at 888-422-5559 for a unique password and you’ll have access to Gary K’s full State of the Markets webinar below.
Previously recorded, September 9TH, 2014
We typically do not write in the middle of the day but things are getting noisy. And we are not talking about the market. We are talking central banks. While all the divergences are still out there, China announces 500 billion of printing and at the same time, Yellen leaks 0% for a long long long time. As usual, a stumbling market gets juiced and life is good again. So we now have Europe and China printing oodles and oodles…as Bernanke University is open for business. Short sellers may have to put their life jackets back on because there continues to be a direct correlation with the trillions printed and equity markets. Call it manipulation, rigging…doesn’t matter. We call it the reality of the situation and thinking they will never stop unless and until markets stop them. None believe there will be any repercussions of all this interference because so far, there have been no repercussions. Psychology and human nature dictate people will repeat and repeat behavior as long as it provides pleasure and no pain. The spigot opens even more than it already is.
Monday’s action was a yonking of growth and the average stock while the DOW was up.
While the DOW was up, the a/d was over 2-1 to the negative.
While the DOW was up, new lows outpaced new highs…which is amazing.
While the DOW was up, the Russell 2000 was down the equivalent of 200 DOW points.
Leading growth names were simply blasted. Social media, tech, biotech and the like were shown no mercy. Volume was heavy on many of the moves.
Add Monday to the already weak areas mentioned over the weekend and….NORMALLY…we would tell you something is up…and to be cautious. But in a Fed-induced money printing market, we have seen this before. Not as bad…but we have seen this before. There will be a time where all the weakness does lead to a double-digit correction. Time will tell. Just realize that underneath-the-surface, the market looks more like the Russell than the Dow. If you are invested, it remains a large cap land as small caps are still in a coma.