YESTERDAY’S MARKET WRAP

DOW strong…and into the close. This morning’s futures down about 200 day points.

We would love love love a contraction of volatility as it sets up the charts better. We suspect we will start to get some of that just because.

Still…this move back up has been what we call SOTB…stuff off the bottom. For example…a name that went from $100 to $50 now rallying to $65.

Pay attention to price…especially now. There is so much noise out there on everything. Markets will go where they want to go because or in spite. Most cannot understand a market rallying up when business is shut. We get it. But there are other things going on like the maniacal Powell printing ridiculous amounts while screwing the savors. Do not also forget markets are forward looking.

Have a great 3 day weekend.

RADIO SHOW 4/8 RIPPING THE STUFFINGS OUT OF BERNIE SANDERS

SOURCE: https://archives.warpradio.com/btr/investorsedge/040820_18.mp3

SHORT VERSION OF MARKET WRAP

After last weeks’ pullback which included an ugly gap day to the downside, we get a 900 point gap to the upside on Monday with a “mystery” rip into the close. We gap up 900 on Tuesday and give it all back by the close leaving tail after tail. In normal worlds, that type of action leads to some downside testing. Nope… as we write this, gapping up about 1% this morning. Normally, 1% would be a good sized gap. Not any more. Quite the piker.

We would love some settling down in here. Settling down makes it easier to measure markets. Not sure it is in the offing.

 

RADIO SHOW 4/7 THE NOT SO GOOD REVERSAL SHOW (WE WERE WORRIED AT 1 PM)

SOURCE: https://archives.warpradio.com/btr/investorsedge/040720_18.mp3

OUR THOUGHTS

Yesterday, the market gaps up in the neighborhood of 800-900 points after a few days of pullback and romp into the close. This morning, we gap up again.

We have been asked a lot of questions on how can a market go up when the world is mostly still shut down. Frankly, we only care about price and pattern but here you go.

MAJOR INDICES DROPPED ALMOST 40% WITH SOME MORE THAN 40%.

Don’t you think 40% is enough for a bear market? Other specific areas like cruise lines, airlines oils and others are down 75%+. It may have just been price went too far.

10,993.

We do have to bring this up. As we write this this morning, the U.S. has reported 10,993 deaths. To be clear, every death matters. To be clear, we do not diminish any deaths. But to be clear, we were told about a week ago to expect 100,000-240,000 deaths and in short order. We would be thrilled to find out they overshot by miles.

THE PEAK?

It is being reported that we are seeing a lot of peak numbers on the virus in many areas around the globe. In the U.S., combine the SO FAR, less than expected deaths with reports of the peak and you get optimism. Speaking of optimism:

OPTIMISM

After all, we are an optimistic bunch. “Light at the end of the tunnel” is not just a term. It is the belief of most. Most believe there will be a day soon where we head back to the normal.

S-T-I-M-U-L-U-S

There will be more. This bridge absolutely matters to get through all the down time. Markets know there is going to plenty going forward. Let’s hope the pipes for the stimulus are clear and not clogged.

JAY POWELL

Bernanke’s biggest year of printing money was $1 trillion. Jay Powell printed $1 trillion in the past week or so. This after taking rates quickly down to 0% again screwing Aunt Mary and Uncle Bob on their savings. Yup…screw the savers but save the wealth on Wall Street. And you wonder why over the past 10 years that the wealth gap has only grown? Look no further. Just remember that Powell’s initial moves were ignored. What does Powell normally do when something doesn’t work? Just raise the number. He has now promised $4 trillion in short order but as we told you, expect a lot more. THIS MATTERS! Keep in mind, all this conjured up money is terrible for the long term as it continues to keep markets used to and addicted to the decisions of a few select people around the globe that can conjure up unlimited amounts of money with no accountability. You should all know by now there is only one default setting for these people and you should all know by now that none of them have a clue. But…this matters a lot…because:

THE BIG MONEY LISTENS!

The big money crowd has now seen that Powell just protected/helped/back-stopped with conjured up money many areas of the markets including credit, munis and stuff Einstein couldn’t figure out. We have found out that Wall Street and the Fed lied when they said leverage was under control and not a problem. This back-stopping gives the big money the confidence to jump back in.

JANET YELLEN

Yes…another easy money dolt talks. She just stated that the Fed should be buying stocks. Don’t think for a second Powell is not thinking about it. We think they already are. If you haven’t noticed, have you seen the up to 500 point gains in a minute at some closes of the day in the past couple of weeks? We’ll let you guess who that already is?

BACK TO NORMAL!

We don’t know what you think but we think in time, maybe a decent amount of time, we will get back to a semblance of normality. Regardless of what you are hearing from some maniacs, people love to work, love to create, love to grow, love to lead, love to travel, love to visit, love to see, love to eat out, love to shop, love to love and just love to do. We do not think that will ever change. In time!

FEAR FEEDS ON FEAR. GREED FEEDS ON GREED.

Not sure we have to expound on this.

We called A LOW on March 23. We believe that low just got stronger. Price improved enough that it has finally made the 1st higher low since the crash started. We can now lift levels of support to that higher low. This is good news for now. Many are calling this a bear market rally that is doomed to fail. We are not so sure of that but frankly, we pay no attention to that type of talk. All we have to do on any rally is to gauge if and when sellers show up and see how that plays out. We know that sellers can show up at any time. We know that rallies can abort at any time. For all we know, they can reverse today’s gap to the upside.  But until that occurs, we will be watching for set-ups. We will be watching for leadership. We will be hoping that THE LOW is in.

MARKET WRAP

Crappy finish. Past 3 days may be showing the near-term wall from the recent crash lows rally. Thinking we go into some sort of pull back but don’t think much chance of breaking recent lows. More of a chance that we go range-bound for a bit with past 3 days a high.

BIG PICTURE…REMAINS GROSS AS EVERYTHING TRADES BELOW LONGER-TERM MOVING AVERAGES.

Lastly, be careful of big dividends. Seeing people excited that some names paying double digits. There is usually a reason and already seeing some dividend cuts.