Market told North Korea to go screw. From the outset, weakness bought up. The 40% or so of the market that has been working but pulling in…settled down, held and moved higher…helping the market along. We are talking the SOX (SEMIS), some big cap growth/glamour names as well as big names that have been hit that bounced…like AMZN, GOOGL and a few others.

Remember, until those vital support levels have broken…they haven’t. Do not jump the gun. Just know this is a very split tape with a good dose of deterioration where more stuff has gone into the not so good side of the column. More to come.


Down open. Blame is on North Korea…BUT…we think this morning is North Korea but we KNOW the overall drop, the overall weakness can only happen in a weaker market. This market has been weakening for weeks. Just remember that. If the market was set up to go higher, most everything gets shrugged off.

We now pay attention to support levels. Do not rationalize why. I am already receiving emails telling me the selling will not last because it is event driven. Maybe they are right…and maybe they are wrong. We will just pay attention to the bouncing ball.


Of course, gold is up on the news. As we reported, gold and gold stocks were edging out of range. WE HAVE NO IDEA HOW THINGS PLAY OUT TODAY. Just remember that is the trees. The forest is that the market is becoming a tougher proposition with a chance for a break to the downside. We will be in touch.

Lastly, we are now watching in full color the greatness of the American people. Just look how average Americans are taking it upon themselves to risk their own lives to save other’s lives. People they don’t know. People they have never met. Magnificent! We wish everyone well that remain in the cross hairs of a devastating event.


By Gary Kaltbaum- August 28, 2017i
——We have taken pains to report to you in recent weeks how the internals of the market were heading south and needed to be watched. After all, we haven’t even seen a 5 percenter since before the election. We were and are simply way overdue. Nothing we have seen changes our stance that the market’s leadership has been getting more narrow with fewer and fewer areas and stocks working while more and more areas and stocks are turning down. This is how markets top.  Markets top when slowly but surely, the underneath-the-surface weakens. Finally, under all the weight of that weakness, the major indices cave in. So far:—-

—–In the past several weeks, we have gone from a 70-30 market to a 40-60 market even though major indices are just off their highs. ——

—–More new lows than more new highs  almost on a daily basis even though major indices are just off their highs. —–

—-Small caps woefully under-performing…trading below longer term averages.—–

—–Transports acting like the Knicks and Mets put together…trading below longer term averages.—–

—-More and more blow-ups on a daily basis.  As we have told you, we don’t think we have ever seen so many blow-ups without being or going into a bearish phase.—-

—-Leading Chinese ADRs topped.—-

—–Too much bullishness as we have seen froth, speculation and a downright thought process that markets will never go down. The one-sided passive investing trade is gargantuan.—–

—–Bitcoin! Really? That’s not a gigantic bubble?—–
—-GOLD and GOLD STOCKS now breaking out.—-

—–Lastly, something not necessarily about the market but maybe about sentiment.  Janet Yellen had the grapefruits to come out and say last week that the financial system was in great shape and much better than what it was before the 08 debacle. What world is this woman living in? Tens of trillions of debt around the globe including $20 trillion here. That’s a financial system in shape? I hate to see what a bad financial system is. On top of that, the printing of tens of trillions just to keep economies having a pulse…0% rates around the globe and in many cases, maniacal negative rates…the screwing of savers…bond yields that have nothing to do with reality…leverage in asset prices at their highest ever…derivatives (you remember that word) at their highest ever…subprime lending making a huge comeback. All of this because of the assinine largesse of central banks. But don’t worry. Janet says the system is just fine.—–

—-So while the internals head south, it is imperative to keep support levels for the major indices. We say this because when internals are weak, it is easier to take markets down. There is a darn good chance we are now getting close. It would not take much to tip things over.—-

S&P – shorter-term 2417 and more important 2405.
DOW – shorter-term 21,600 and more important 21,200.
NASDAQ – shorter-term 6,177 and more important 6,080.
NDX – shorter-term 5,750
XLF – $24.48


We are just going to say futures up this morning as they reversed some ugly overnight. We will have a full report tonight. We just want to take a pass this morning because of everything we are seeing in Texas. Out of respect, screw the market today but we did have one important message:

When I was on tv Friday morning, we were all told by a guest there was only mandatory evacuations for low lying areas for Hurricane Harvey. I questioned on air why only low lying areas. The answer was that the last time, storms were not as bad as expected. I went on to say these events have no bias and that we were going to hear the words “storm surge” and “water damage” as we moved forward.  As a veteran of the hurricane wars, I could not believe the utter stupidity of people like the Mayor of Houston that not only told people the wrong thing but basically prepared for nothing. And now…he says he did the right thing…huh? I have learned through the years of experiencing many hurricanes that YOU ALWAYS ERR ON THE SIDE OF CAUTION. Things are things…but lives are lives. There will be times where you are accused of overdoing it…but that’s ok. You should just not ever be accused of not doing enough. The mayor of Houston did not do the one thing that matters most…protect the citizenry and now look! His excuse? How do you move so many millions of people? The answer was to at least give them the opportunity by making them know how bad the potential of  a storm could be. We were told as early as Thursday night/Friday morning that this could be a big water event. We don’t doubt the Mayor thought he was doing the right thing. We just doubt competence. Now we get to see the best of people. (I wonder how the media will spin this as they love highlighting the worst in people.) Have you seen the many in their boats risking their lives? Have you watched people putting their lives asides to look after other lives? What we are seeing in real time is the best of America with no thoughts of race, creed or color. This is the best of America. This is the America I know…not the America some are doing their best to portray. Unfortunately, it looks like it may get worse before getting better.


Briefly….good open this morning…but notice things getting a little choppy in it. Play to much and get carved up too much.Will have much more on the weekend as continued bull and bear markets sitting side by side in stocks and in sectors. The good news is that major indices have not broken anything resembling long term support. Russelll is an issue. Transports an issue. But we just avoid.


Futures up after yesterday last minute dump. Lots of talk about Trump/Congress and the inability to get the big stuff done. Time will tell.

For a change, gaps to the upside in some RETAIL that has been smoked…DLTR,GES,PVH,SIG,WSM.

And let me throw some cold water on something you are reading today. There is a story that world growth doing better with some places accelerating. To be clear…after 8 years of 0% rates….negative rates…THE PRINTING OF OVER $20 TRILLION in order to raise asset prices…we should be at 10% growth. The problem going out longer term is that all this easy money has taken debt around the globe to unimaginable numbers. The $20 trillion of debt is not even talked about in this country. No one cares. Raising the debt ceiling is the norm…and the threat of not raising the debt is supposed to be a bad thing. Sorry…it’s supposed to be the other way. Continued expansion of debt is a bad thing. It is a headwind. It is a sin. Why do you think they all had to print over $20 trillion? We do not know from what point and what day the day of reckoning does come. We just know we cannot continue this trajectory. $435 billion of our taxpayer dollars went into the toilet last year just to pay the interest on the debt all the Morlocks created.


By Gary Kaltbaum- August 22, 2017
—We wrote about your first missed opportunity. You swung at a big fat pitch right down the middle of the plate and whiffed. You couldn’t even stick a knife into the black heart of anything KKK, anything Nazi or anything of the like. You gave them some cover. We do not think you are a racist. We have no right to call you a racist as we don’t know you. Hear that corrupt media! Nevertheless a swing and a miss. Baseball games do have 9 innings though. And you swung and missed again.  —————–
—And now this! Mr. President, how in blue hell is any legislation going to get passed when you do everything in your power to piss off those you need to curry favor with and get their votes? We think it just fine to rip the corrupt media who played defense attorney for 8 years and now play pit bull prosecutors. (We told you that was going to happen!) We think it is fine to rip the socialist party as they continue into the depths of economic policy straight out of Maduro and Chavez land. BUT…and it is a big but…you rip McCain. You rip Flake. You rip McConnell. You rip anyone who disagrees with you and you do it, live and in color…in public and on the team you are supposedly playing for…or are you?————-
—President Trump…a lesson for you. Your poll numbers are a little bit better than Phil Jackson’s poll numbers to a Knick’s fan. Yet you do nothing to change the trajectory. In fact, last night in Arizona, you doubled down. You tripled down. You quadrupled down. And you expect people to come to your table and make nice-nice? Ain’t going to happen my friend. It is time to recognize that you still have the White House. You still have the house. You still have the senate. You still have governorships. You still have state legislatures. And again, baseball games have 9 innings. It should be one freaking easy lay up to get things done. Mr. President. You have a problem with Republicans? Fine! Just have problems with them behind closed doors. We saw an assclown yell “McCain should just die now!” Do you know why that assclown said that? Just something to think about.————
—Since the socialist party has no game, no ideas, no leadership, nothing to do but spend their time wondering if you have the onset of dementia and are posing the question of your mental capacity, it is time to call every Republican to the White House. Order some pizza. Talk about the upcoming football season. Have a laugh. And then, write a f—-ing bill that slows the growth of the government blob. Write a bill that lowers taxes for all…not just for some. Write a bill that does not hike taxes to pay for tax cuts. As you stated, it is time to unleash the potential of the economy by setting the conditions for it to flourish…meaning get the hell out of the way.———
—It’s time. It’s late August. Time is a fleeting. You were supposed to be the art of the deal. Now let’s see your art and let’s see a deal. Enough is enough. We are all getting tired. You do not want to get to the point where the market gets tired.———-