PREMARKET

Futures down a wee bit after a strong day yesterday.

By the book:

Wednesday’s action was a clear, high volume, follow through day. Some say it was because of the election. We could care less. We have been wary of this rally though we called A LOW last Wednesday. There has been no bases. There has been hardly any leadership except for some defensive areas and then today, beta, tech,software and all that uff popped. A lot of  growth put their feet in the ground and turned up though still off the highs with most still below the 50 day average.
The good news is that if this is real,we are in the November/December seasonality window. There are no guarantees on this and to be blunt, any further rally will remain narrow as many areas and indices are STILL below the longer term 200 day…and many names and areas have done nothing more than bounce.
Lastly, make note of managed care and hospitals which showed up on our screens. The election outcome makes sure Obamacare stays…which is a huge help to these areas. Mre to come…will know more on how they pull this back but we stay with A DARN GOOD LOW WAS PUT IN LAST WEDNESDAY!

 

MARKETS AND ELECTIONS

By Gary Kaltbaum-The day after the election!    
-Well, the world has not ended…yet. In spite of the president pulling a Krugman to say your 401Ks are going to be slammed because of an election, so far…nothing doing. In fact, markets are set to open up quite nicely. Of course, we know that could change but we like to deal with the evidence at hand. Of course, if any of these big gaps get reversed, it could be the end of any rally. To repeat again, we told you last Wednesday morning that we thought A LOW had been put in for now. Since, a quiet move higher continued and now we get another strong gap to the upside,akin to what we saw last Wednesday.  Maybe the move back up gets not so quiet. Let’s just say if today holds, we can say A LOW is looking like A DAMN GOD LOW. Whether it is THE LOW is another story but the farther you get away, the better.-
-A few of our early thoughts on the election:-
-The pollsters for my state of Florida…suck! Seriously…6 points up, 7 points up…we saw one over 10 points up. Who were they polling? Gillum and Nelson’s family over and over. In our opinion, my state dodged one as Gillum is left of left. Not only was he looking to raise corporate taxes but would have gone for the income tax. Whew! As far as Nelson…not kidding when we say we don’t think we had even seen him in months leading up to the election.-
-Don’t want to ever hear any New Jersey voter for Menendez ever complain to anyone about someone else’s sleaze and ethics.-
-Don’t want to hear either from voters who voted for the two Reps that were elected while indicted. Yes, we know… innocent before guilty but sorry, these people are not running to be dog catcher.-
-A passed away brothel owner from Nevada won whatever he was running for.Yup! Voters!-
-Start counting. Start counting how many times we will be hearing the word “subpoena” over the next two years.-
-Start counting. Start counting the days until Hillary announces she must run again because Trump must go. She will run. She believes it is her destiny.- 
-We are now getting some yapping from both sides’ leadership that they will come together. Sure! Right! Who they trying to kid? The 2020 elections start today.- 
-Former Navy Seal Dan Crenshaw won his race. Memo to Pete Davidson and SNL…GO SCREW! Where is NBC and where is Lorne Michaels? It wasn’t cutesy. It wasn’t nuanced. It wasn’t funny. Do better!-
-Celebrities? Even Oprah lost. Even Oprah. We love Oprah! Do these candidates ever learn a lesson? How did that Taylor Swift do in Tennessee? How did Beto do thanking Beyonce in a tweet? Memo to candidates…hardly anyone gives a crap what these people think.-   
-We love stories of persistence. We love stories of those that are down and out and never give up. Politically, we are no fans of Nancy Pelosi but we must and you should also give her kudos. More than likely, against not only odds from the other party but from her own party, this women looks like she will be again Speaker of the House again.-
-Lastly, no matter who won or lost…approximately $3 billion will be added to our debt today and every day going forward. Nothing has changed.-

MARKETS/ELECTION

We continue to stick with our call from last Wednesday morning that A LOW was finally put in after  nauseating drop. It is at that point we let the cards come out of the deck feeling that sellers were finally washed out. Since, markets have edged up but we must tell you, the rally so far is maybe a B- to a C+…just not that great. We are less than thrilled that our favorite growth/high beta names continue to act just a wee bit better than the Knicks and Giants offense…and that is definitely not saying much. TECH/GROWTH/BETA and all that stuff must lead if the market is to get going again. Always has, always will.
On top of that, except for the DOW, most everything continues to trade below longer term moving averages. Every day below is a bad day. If selling rears its ugly head again, it will be easier to shred the market again being below these vital levels.
We are writing this at 330 am et…looks like the Dems got the house, while the Reps added in the Senate. We expected both. We did not think this would change markets. Trump was telling all that if the Dems win, all hell will break loose. We are not so sure as gridlock ain’t the worst thing with a bunch of dolts on both sides who have brought us to near $22 trillion of debt. We will do the smart thing and just stick with the big picture at hand. We do not think the big picture changes much regardless. Markets are still in yuck mode regardless of this rally off of deeply stretched, extended and oversold conditions. Leadership remains fleeting and what leads is very defensive. But, we have no problem with higher prices for now to continue to work off the drop in a period of seasonal strength. Just know this ain’t going to be easy street. Just not enough in the way of leadership.
As we write this, futures are up nicely but of course can change overnight.

THE CLOSE

It is 715 am here in Brussels, Belgium. Happy voting day today.

Our prediction is that the Reps keep the senate but the Dems take the house with the Dems doing better in the house than expected. We think Trump and the Reps missed a tremendous opportunity in past weeks highlighting the economy but instead decided to go immigration. We think Trump should have gone on a “nice” tour instead of continuing on his “fake news” and all that crap tour. We talked about the national media fake news before Trump was even political Trump…but there are times to slow the roll.

O course, we can be wrong…and hope we are. These Dems are left of left, void of any “people” ideas. Instead it is all about what government will do for you…but this government is nothing more than an out of control, debt and deficit blob. Trillions have been inefficiently and ineffectively spent, taken out of the hands of tax payers in the name of poverty and the poor. Instead, maybe 25 cents on the dollar goes to work. How do we still have poverty with so many trillions spent?

Anyway, no matter what, the sun will come out the next day. The people are still bigger than any damage the government can do (we think) and if Dems win, they will just F up the next 2 years…ensuring Trump wins in 2020. They are that bad. They will spend two years on impeachment and investigation after investigation because they have no other ammo. The masses will get pissed and then 2020 comes along.

THE MARKET

All Monday, we were saying the DOW had better keep rallying because again, growth was hit. You see the final numbers. We do not think the DOW leading and NASDAQ lagging is a good thing. Heading to Vienna now. Will report back to you tomorrow.

 

 

MARKET NOTES

-The markets rallied off of some of the most stretched, extended and oversold conditions we have seen in a long but:-
-Every major index except the DOW, almost every sector and most countries still trade UNDER the LONGER-TERM 200 DAY MOVING AVERAGE.-
-Leadership remains almost nil with mostly defensive names showing the best relative strength. CONSUMER STAPLES (not all), a few UTILITY names, some DISCOUNT RETAIL and not much else.-
-As we scan past leaders in growth, many trade in between the 50 and 200 day with wedging moves back towards the 50 day. There are others that are much worse. They broke below everything.-
-The SOX, even with this week’s rally remains way below the 200 day with nary a name in shape. The FINANCALS also.-
=Friday’s market reversed to the downside until the prez inserted another timely “announcement” on China. The market rallied into the close but in no way changed the big picture…that A low, probably a decent low for now has been put in place but we are doubtful of how far this rally can go…and for all we know, Friday’s high may be it. If that is the case, one cannot be thrilled. The weeklies look better as markets could have had a gigantic defense week…but too early to tell._
-And now onto the election. We are quite tired of all the bs. We approve this message.-