This is not to throw cold water on yesterday’s gap…and the fact is it could have been worse as the Dow almost got close to break even…just letting you know to cool your jets.

GOLD and GOLD stocks are indeed pulling back but rather harshly yesterday. Unsure right here. Thought the breakout was meaningful and will stick with that thought until it fails.

That’s two straight gaps in big FINANCIALS…first because of fake stress tests Friday and then yesterday. Let them pull back.

Lots of tails the wrong way yesterday…up big early and either down or hardly up by the end of the day.

Don’t get us started on the “nothing” over-hyped meeting with China where nothing was done.


Pre Market

We told the brilliant Stuart Varney last week that we thought if the major indices can move out, it would be a big breakout and should lead to another leg up. But the only index that edged out was the S&P…so not yet. But now, with the tariffs off the table, with Powell going full Bernanke at the end of the month, with Australia, India and China easing and with the ECB and JAPAN now telegraphing even lower rates and more printing despite having negative rates…markets will open strong this morning giving them the impetus to finally move out of range…at least the larger cap indices.

But the better news is the lagging RUSSELL 2000 really started to get in gear in the past two days. This means the potential for a broadening out of the market…and that is good news. So…we now watch even more closely. If the range is successfully broken out, this will surely invite more cash off the sidelines…which indeed feeds on itself…BUT THE BREAKOUT MUST HOLD INITIALLY.

Keep in mind, this is all occurring as economies around the globe are decelerating. We expect the U.S. to be in the mid 1s GDP for the quarter. The bottom line is that the ridiculous easy money trumps (no pun intended) the economy for now. If things change, we will gladly let you know.

Enjoy the July 4th week. We will be back in the states later in the week and will have our pointed thoughts on those debates. We know…a few days late. A glimpse :someone tell Swalwell it is ok to move his neck.