To all our friends in Florida, there is a chance Irma could hit and be a big one. Do not mess with it. Best place to watch: http://www.nhc.noaa.gov/
Early last week, we had North Korea sending missiles over Japan. We had Harvey. We had massive floods. What did the market do? It reversed a big down open on Tuesday as all the support levels we gave out held. And then, the market did not look back. As we have told you for years, it is not the news. It is how the market reacts to the news. When a market shrugs off bad news, reverses and heads higher, that tells you everything you need to know. Markets did not want to go lower.
So what do we get over the 3 day weekend? North Korea tests an underground big one. Futures were down as much as 100 yesterday but as of this writing, are down a measly 40 points. Of course, all that can change overnight.
So…nothing but improvement but it remains narrow. Even with the move up, it is about a 50-50 market with half the market not working. With indices near highs, it should be much better. The amount of new highs should be much better also. But again, improvement.
BIOTECHS…monster move last week as the $11 billion, all cash purchase for a company with no drugs on the market juiced the whole group. That was a big part of the NASDAQ move. Most are extended and will watch how they pull back.
SEMIS…back in mode last week but many names no longer working. The group is also getting narrow. Something to watch as this has been the leading group.
FINANCIALS…just remains range-bound with regionals acting poorly. Support held last week for the big guys.
TRANSPORTS rallied off of long term support but remain a lagging area…especially the AIRLINES.
SMALL CAPS continue to under-perform large caps. This has been going on for many months.
The DOLLAR continues to act like the Knicks, thus metals are strong. COPPER continues into new high ground lifting a bunch of underlying names. Oil remains pretty much comatose except for refiners, for obvious reasons.
Much better action in GOLD and GOLD STOCKS. GOLD broke above important resistance early last week. A couple of names actually into new high ground.
Major indices are back into their ranges, with some very long ranges. The RUSSELL 2000 and TRANSPORTS have been in range since early last December.