YESTERDAY AND PRE-MARKET

After two wild days, the S&P is up a whopping 2 points this week. The DOW is down 85 points but the RUSSELL is up 1% and the NASDAQ is up 28 points…the SOX is flat and guess what, nothing has changed from our weekend report.

From that report:

The RUSSELL is the strongest…and remains so. Just behind it is the NASDAQ and NDX. After that is the S&P and then the weakest being the DOW. So again, nothing changed.

We also went on to note in recent days how well the relative strength of growth names are holding up. In fact, Tuesday’s 390 point drop did not budge them…and when the market ramped on Wednesday, most growth names led…with a few breaking out.

AND we have continued to tell you the big banks aint happening. They were smoked on Tuesday with an anemic bounce yesterday. They are still an avoid with some names like GS and C downright horrid.  The good news is markets are still ignoring this important area as often, markets will follow financials down.

We do want to make note that the oils had a very strong bounce yesterday after its recent drop from extended conditions. The strongest names bounced back hardest with many names lagging. We suspect this area is now going to trade wide and loose between yesterday’s lows and last week’s highs.

Futures are up but just a wee bit.

MARKET NOTES

Outcome is what matters to us. Some are blaming Trump tariffs for today. Others are blaming the Italy situation. Neither explain what we are seeing in the financials. Coming into the week, one of our peeves was the lagging financials and now they are downright breaking down. Don’t take our word for it. Check out:

Biggies like JPM, C, BAC, BK, GS, WFC, MS. Look at XLF.

AXP, COF, DFS.

REGIONALS like PNC, CMA, RF, KEY, USB.

How about Europe…BCS, DB, CS, LYG

INSURERS…CB, BRKB, PRU, MET

Head on over to other markets…EEM, EFA,FXI, RSX, EWZ, VEA, EWJ

Get the hint. The good news is a slew of leading growth names acted great again today even with the DOW down 400. The good news is that small caps hardly budged. Jut know if financials and these other areas continue the ugly, the narrowing market will get more narrow. That XLF and the underlying names should be front and center. They usually, eventually matter.

WEEKEND NOTES

A big salute to all those who have fought for our freedoms. We should not just think of these brave men and women on holidays but every day.

Greetings from Lake Como, Italy. Haven’t seen the Clooneys yet. Beautiful, beautiful area. Bucket list stuff!

Very tight closes in the market over the past couple of weeks AFTER a move back up off the lows. Normally, when markets go tight after a move up, they continue up but:

We hate the word bifurcated but this market is the definition of bifurcated as bull and bear markets trade side by side. It is not just sectors but countries and market cap. We count only about 40% of the market in uptrends. In order for the market to really get going, need to see this number in the 70s.

Countries like Brazil, Argentina continue to implode. Other countries continue to under-perform while over here, small caps are at new highs while the DOW and S&P continue to lag.

Last week, we told you OILS/ENERGY were still the strongest area but were now stretched and extended to the upside. We now think there is a decent chance oil prices finally topped for now with an ugly Friday. Many oil names look topped with some already breaking down. Areas that weakened on higher oil look to be bottoming with the chance that oil has topped. (cruise lines/airlines)

Remember the 10 year above 3%. Already back below. This is helping utilities and other interest-rate sensitive areas. Nothing bad happens if rates and oil prices come down.

GOLD still aint happening.

BIG FINANCIALS still aint happening with names like CITI breaking down.

Still seeing very good bullish basing patterns in many important growth names. This is very important to the market. We love that we are seeing constructive action here.

The important SEMIS continue to improve and TRANSPORTS now edging above near term resistance.

RUSSELL remains the strongest with NASDAQ/NDX just behind with DOW/S&P still lagging.

And BITCOIN…you know our stance. While many were going nuts when bitcoin was going parabolic, we were yelling to avoid. What amazes us is that after an almost 70% drop from the highs, after a bunch of “questionable” companies stopped trading, after coin after coin was foisted upon an unwary public, after a decent amount of fraud was found and after a ton of money has been lost, the bitcoiners are still out in droves trying to sell us on the gargantuan future gains to come even though they did not see the 70% drop coming. A couple of well-knowns have been out calling for 100,000, even 1,000,000 price. That means someone would have to pay 999,999.99. Again, we do not know exactly how this plays out. Maybe it rallies back up or maybe it just keeps heading lower. Hint…a break of the Feb 5th and March 29 double bottom lows and double good night…and it is getting close. We are still waiting to hear what economic value any of these coins have.

PRE MARKET

OIL/ENERGY big story. Our theme that it was putting in a near term top is playing out. Just got very stretched and extended.

Futures flat to down as we head into holiday weekend. Do remember why we have this holiday.

FL, DECK gapping up…Going to watch NTNX, SPLK, ADSK, VEEV as all down on numbers to a certain extent. Other gaps in HIBB, GPS and ZOES yonked.

Have a great holiday weekend.h

KNEELING!

Just who is making the decisions at the NFL? Are they insane? Do they not have a shred of a pulse on what is happening and what has happened out there?

First off, let me be clear. I do not like Colin Kaepernick and do not understand anyone backing him up. The man depicted police as pigs on his socks and wore shirts kissing the rear end of the Castros. I believe that 99.9999999999% of men and women in uniform do their job well. They risk their lives every minute of every day on the job. Of course there are some bad ones. Of course, they should be fired, prosecuted and all that crap. But I believe many have used the actions of a few to paint the others with the broad brush. The fact is the men and women in uniform spend millions of hours every year protecting those same people who are pissed at them and do it gladly. They do it in crime-infested cities. Their families lose sleep during the long nights wondering whether they will make it through the night. They are heroes. They are not what some make them out to be.

I also vehemently disagree with those who kneel to the anthem and then say there is no disrespect. You mean you can’t think of one other thing to do to show your ire and anger? Of course there is but nothing like making yourself the story. That said, while I disagree, I respect 1st amendment rights  but also respect the rights of people to not show up for games and not watch the NFL any more. (Have you seen the empty seats? Have you seen the ratings?) I also respect the rights of business owners to not hire someone who tries to make themselves the story in a business that is defined by teams. Kaepernick would not play for my team.

But the NFL doesn’t have a clue. They had it all wrong. They have it all wrong and looks like they will continue to have it wrong. Hey NFL…it was over. At the end of last year, it had died down. By the end of the year, there was maybe a handful of players continuing to kneel. So what do you do? You tell these adult men to go into their caves (locker rooms) if they wanted to kneel. You tell them that if they act out, stiff penalties will be paid. Sure, this will end well. What do you think the outcome of telling grown men what to do or not do or else? Regardless of what side you are on, we are now already seeing owners defying the NFL by telling the teams they will pay any fines. We are already seeing the normal reaction of “oh yeah, take that!” We are already seeing the NFLPA fighting back. This move by the NFL will ensure the story will again be front and center, will again get louder, will again get many to react and will ensure more kneeling, more protests and more headaches for the NFL which has been mismanaged for quite a few years. (steroids, brain injuries, domestic violence and my Giants suck!) Instead of the story being football, we are now assured we are going back to square one on an issue that was going away.