PRE MARKET

Since hardly anyone reports this, we will:

The Treasury (our tax dollars) said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated. Think about it. Those wonderful human beings in DC from Ryan, McConnell to Pelosi, Schumer had to borrow nearly $half trillion IN JUST THE 1ST QUARTER to fund their bull crap. But nothing here to see.

Also, the Trumpster has given extensions to certain countries on trade tariffs. We expect more of this, not less as even the President knows these tariffs are bad.

Two days in a row of negative reversals. Markets opened another Monday in a flurry only to finish at the lows of the day as the boys sold into the close. You know what that means to us. On top of that, good earnings have sold off and good earnings have reversed strong opens.

Major indices remain in the back and forth we told you to expect. You can notice NASDAQ rallied right into the 50 day before selling off.

SEMICONDUCTORS continue to swoon selling off badly throughout the day. This occurring even though they are stretched, extended and oversold to the downside. INTEL (INTC) gapped up on earnings and reversed Friday and continued down yesterday.  MICROSOFT (MSFT) also gapped up Friday, sold off but still finished up…but sold off hard yesterday. AMAZON (AMZN) also reversed its big gap Friday and again reversed good gains yesterday.

We expect more of the same…back and forth, driving everyone up a wall. It is at these times you should take a step back and recognize it for what it is. As we have stated several times, after the big move of 2013-2014, the market consolidated those gains for 18 months with two big teases to the downside but both never took us into what is defined by most (20%) as bear market territory. That said, there were some rolling bear markets as the RUSSELL went into the 30s.

We continue to watch the long term support levels we have outlined for you. So far, they hold strong but every down day, every strong open only to reverse…deteriorates the technicals and adds more termites to a market that has been chipped away at.

Patience is your best offense right now.

Futures, for a change, hardly budging.

We posted this last night but did not show up.

We will have more after the close.

 

By Gary Kaltbaum- February 28, 2018
First thought and message to the president…the #1 rule of people management is when praising, praise loudly and profusely! The #2 rule is when criticizing, criticize quietly and privately. We don’t think the president read the manual on this. If you treat your people badly, why would anyone else want to work for you?
Second thought…who said this about our debt and deficits? “Not a near term risk!” Yup, arguably the #2 money guy in the world, our new head of the Fed thinks everything is just fine. $21 trillion of debt is not a near term risk. $1 trillion deficits each year is not a near term risk. Every day, $3 billion being added to our debt is not a near term risk. In the coming year, the first $400 billion of our tax dollars goes towards interest and that’s not a near term risk. And who said this? “Not a supporter of a balanced budget!” Yup…the same dude. Feel better now!
Third thought. The “ping pong” market is now in force as price now bounces back and forth in a wide range. The problem is that the rally was very narrow and that narrowness is coming back to haunt the market. Except for the NASDAQ and NDX, all major indices are back below the 50 day with some never getting above. In fact, areas like the NYSE, TRANSPORTS and SMALL CAPS look downright horrid. The best areas remain the mega-cap tech/internet that has a major influence on the NASDAQ/NDX. Lose those big names and get the fork. Need to add Europe much worse than us. We had better not play catch-up. At the very least, it is going to remain a tough proposition as the market’s complexion has definitively changed.
Fourth thought. The Knicks stink. The Rangers stink. The Giants stunk. Next up…the Mets. Not feeling better!
Serenity now!

PRE MARKET AND SOME NOTES

A few thoughts in and out of the market:

Immigration:

Not one person will be deported out of DACA. Not one.

The coins:

Kodak (KODK) announces a coin. Goes from $3.10 to $6.80 yesterday. Trading at $11.50 this morning. But there is no bubble!

Notice many of the other “questionable” blockchain/coin stocks have been slaughtered. Do not be the last one in.

Trump:

That was one hell of a one hour meeting in front of the cameras yesterday. That was Trump telling all the famed psychiatrists like Dr Mika and Dr Joe that everything is fine. As always, you decide.

Tax bill:

More and more bonuses. More and more wage hikes. More and more investments. While, as we wrote yesterday, a company like Tim Hortons takes away because of mandated higher wages by government. Repercussions!

The markets:

Continue to watch COMMODITIES. Energy, oils, steel, copper, aluminum, palladium…all continue to soar. Gold and silver also getting a bid. Energy prices are at 2 year highs. We have been told the ultimate outcome of all the central bank nonsense of printing of trillions, negative rates and 0% rates for 8 years has to be a good bout of inflation. Has not happened yet but always keeping one eye out as we do not believe economics 101 is dead…regardless of central bank interference.

Watch long rates. On the verge of breaking out of near-term range. If successful, watch 10 year head towards 3%…the highs going back to 2014.

Sentiment and complacency remain at extreme levels while major indices are at extreme extended levels. Just saying! Also, just saying…we will get a correction eventually. No really.

PRE MARKET-EARNINGS ROULETTE

Tons of jello moving on the plate this morning. In no particular order but of course, we start with Apple.

Apple (AAPL) beat estimates in a quarter before a big roll out. At the open, AAPL will be gapping out of a 12 week sloppy base. This is the 2nd strong gap in 6 months. The one in January worked well. We have been told a second big gap to the upside within a year is a “be careful” sign. We’ll let the market decide.

Because of Apple, NDX futures up over .5%. Interestingly, S&P futures basically flat. DOW futures up but that’s on Apple. Apple suppliers like CRUS, QRVO, SWKS and others are up.

ILMN gaps up to a high…up $19.

Other gaps to the upside:

ALL, GRMN, CRTO, HUM, PZZA.

On the downside…WOW!

COHR down $35 off the highs…ULTI down $29 off the highs. MTSI down $13…leading SEMI off the highs…PXD down $14…

Smaller but decent sized gaps to the downside: BGFV, HLF, FISV, AN, RIO, SSTK, FARO, RMD, MRCY, VMC, RACE, CAH, DLPH.

Enjoy! Earnings roulette continues.