Market is now indeed breaking the support of the financials. It is early in the day where one can hope for a reversal but as of this second…UGLY!
ENERGY/OIL&GAS smoked again on lower oil prices. AGAIN…AVOID ALL NEW COMMITMENTS TO ANYTHING IN THIS AREA AS ITS BEAR MARKET GAINS TEETH. We have seen nothing to tell is the end ofthe ugly is at hand. Go take a gander at the OIH, XLE, XOP. Polar opposite of thesemis/internet/tech!
NDX futures up decently. S&P not as much.
ADI big mover off of numbers. Another semiconductor name to the upside.
KORS to the downside. Another retail/apparel name to the downside.
Trump leaving Paris climate deal. The dude is going to piss off almost every country on this earth before it is over. Not saying it is a bad thing because so many countries are in so much debt spending assinine amounts of taxpayer dollars on what! Keep in mind, we are bigger environmentalists than all these politicians put together. We think they are doing nothing more than solidifying power base. We are tired of people like Gore and Dicaprio who preach to us what we must do and then board their private planes to take them to their big yachts. In particular, Gore has made tens of millions off of global warming…ooops…we mean climate change.
Greetings. Remains a tale of two cities in this market and it is imperative you pay attention as bull and bear sit side by side.
To be repetitive:
We would continue to avoid new commitments to:
Energy, oil&gas, most commodity names, big retail, many REITs, Transports, small cap vs big cap, big telcom, drug stores, most biotech, almost everything auto-related. AND FINANCIALS.
WE HIGHLIGHT FINANCIALS BECAUSE OF THEIR POTENTIAL BELLWEATHER STATUS. Currently, they continue to trace out bearish action from the highs. A break and then no ability to rally and again, they are on the verge of a second break. You may scan a bunch of names but just look at the KRE, KBE, XLF. Watch these levels: KBE $40.55…KRE $51.17…XLF $22.89. A break below could be meaningful in a narrowing market.
And a note on energy: January 30 is the date we started saying to avoid. We never know outcome when we think something has topped but notice how we have said to avoid ever since and now down 20%. Classic bearish action as it rides down the DECLINING 50 day average.
On the other end, we can add utilities to the positive end as the XLU broke above the yearly range.After that, the story remains big cap tech/internet/semiconductors and “glamour” names. They are still getting money flows like we have not seen in a long time. Again, must be watched as narrow markets usually do not end well. The end comes when the strongest areas get all the money flows until the music stops. So far, we have seen no evidence that it is at hand so enjoy. Other strong areas are cruise lines, fiberoptics, China ADRs (though looks like they are starting to pull back), hotels, a few airlines and housing.
Hope you had a good holiday. We had a wonderful trip to Normandy and the D-DAY beaches and sights for Memorial Day. Advice…PUT IT ON YOUR BUCKET LIST. Was especially moved and in tears at the American Cemetary. My goodness. The inspiration for Saving Private Ryan (NILAND BROTHERS are buried there.) Also, read up abut Billy Harris.
Quiet morning. Futures down just a bit. The usual big-cap tech/internet are up a wee bit as the momo isthere.
Not a lot of earnings this week but here are some we are watching:
Wednesday: ADI, HPE, PANW
Thursday: CIEN, AVGO, VMW, WDAY
And that’s about it.
Have a great week.
Greetings from Paris as we head for Normandy today. Will be touring the D-DAY sights on Memorial Day. Cannot wait for this. Of course, left my cell phone in an Uber and still not recovered.
Not much has changed. The good get gooder…the bad get badder, simple as that. Amazingly, even with major indices at or near their highs, we still count about 40-45% of stocks not participating with many in bear phases, some brutal bear phases. To be repetitive, we would continue to avoid energy, oil&gas, most commodity names, most retail especially the big guys, most auto-related especially auto parts retail, many of the reits, biotech,big telecom, most financials and a few other areas.
As far as financials, keep in mind, they are still holding the next line of support. The point is they are just sitting and under-performing right now.
The good news is that there is still plenty that is working. In fact, we continue to see a lot of tight action in leaders after they made good moves to the upside. This could be setting them up for higher prices. Those areas remain the nasdaq/ndx-types in internet, technology, semiconductors, fiberoptics. On top of that, the megacap favorites continue to show hardly any distribution whatsoever. These are the areas we will be watching most closely. As long as these areas are working, markets are fine. But with the narrowness, if the good starts to get bad, trouble could be straight ahead. But to repeat, these areas still look great, act great and show zero distribution. As always, if things change, you will know it.
Not making this up. A simple flight to get me into NYC at 8 pm last night got me to my hotel in NYC st (drum roll please)… 530 am. Weather in the NE started me on flight to Laguardia…which changed to Newark…which changed to Laguardia and left many hours later. We then sat on the tarmac for about 90 minutes because of more storms at Laguardia. Finally took off where the pilot announced we were diverting to JFK…and an hour later said we were diverting back to Laguardia.
Tired, aches, no sleep! Futures basically flattish with a few movers.
DECK,BIG,ULTA moving up. SPLK, ZOES, GME moving down.
If missed anything, it is because I had no sleep. Have a great day. Radio later today and full report over the 3 day weekend. Travel safe!