THE UGLY CLOSE

Before today:

It was a 60-40 market with 60% of the market in good shape while 40% (retail, energy,autos…) was in bad shape. This is a piss poor number for indices that keep going higher but indices have been acting well nevertheless.

In the past 3 weeks, we have seen a ton of earnings blow-ups. In fact, it got us to say recently that these type and number of blow-ups usually happen in bear markets, not bull markets.

Complacency has been off the charts with some measurements at 30 year highs. Everyone on their comfy couch passively investing thinking bearish markets never happen.

New highs vs new lows have been pitiful with indices working so well.

Small caps continue to under-perform large caps.

Transports acting like the Mets…just holding on to the long term 200 day average.

Growth has been working well. Notwithstanding the recent gaps to the dowsnide in AMZN, GOOGL, PCLN and a few others, growth has been working.

Real good action in a bunch of DOW names led by the moonshot in BA.

Semiconductors had a monstrous run but lately trading in a wide and loose range…which is not a bad thing unless….

Strong emerging markets.

Strong action in China. Weak action in Germany but world markets remaining if darn good shape.

But the past couple days and particularly today:

Junk bonds cracking badly. (We have been yelling the biggest bubble is here! Tesla able to do a junk bond at 5.25%!)

BIOTECH tops.

SEMIS break the 50 day.

INDUSTRIALS break the 50 day.

The TRANSPORTS finish below the long term 200 day.

HEALTHCARE breaks the 50 day.

REGIONAL BANKS roll over and break the 200 day.

The S&P, NASDAQ, NDX finish below the 50 day.

EMERGING MARKETS look like they are topping.

RUSSELL 2000 all the way down to the 200 day.

A bunch more blow-ups.

Growth/beta was smoked today. For the most part, it was acting just fine.

The VIX skyrocketed. Of course it did.

Just a smidge off of highs, new highs in the market…70…new lows…273. That rates a big wow.

Oh…and GOLD popped up a bit.

We are just reporting the news. What was a leaky market that had termites even though major indices were at highs, weakened a lot today. Many saying this is all because of North Korea. We think the termites were already eating away. North Korea was just the catalyst. Stay tuned.

PRE MARKET

Futures are down again as all the talk moves to North Korea. The media continues to put out the mantra that it is Trump who is the threat and not Kim Jung Un. I do not know what happened here. I know they don’t like him. I know he has antagonized them but that goes both ways. They have excused the last 3 president’s ineptitude to get us to this point but it is all about Trump’s rhetoric. Why do I think if Obama came out with harsh rhetoric, he would be praised for his toughness. The hypocrisy is over the top.

Here is the potential good news about this little blip (so far) to the downside. I am already seeing a large amount of bears coming out of the woods exclaiming this is it. This is the big drop. Look out. Our motto: we will let the market decide. We still see a 60-40 tape where 60% remains in good stead with 40% in their own private bear market. If that changes, we will let you know.

We would continue to avoid transports as they remain weak. Only thing going for them is they continue to hold the longer term 200 day average. Small caps continue to under-perform large caps as the RUSSELL is below the 50 day average again.

GOLD/SILVER getting a bid off of the saber-rattling. Also, DEFENSE stocks for obvious reasons.

Gaps to downside today: NTES, DDS and a few smaller gaps.

Gaps to upside are PRGO, YY and a few smaller ones.

Apple goes ex-dividend today…so 63 cents come off the top. Hey…you asked.

And lastly, we have been telling you that THIS Republican leadership are ineffective, inept and should not be running the show. They are unfortunately, proving me right.

 

NORTH KOREA AND THE GENIUS PUNDITS

“NORTH KOREA AND THE GENIUSES!”

By Gary Kaltbaum- August 9, 2017

Disclaimer: Expect a couple of expletives. Could not help it. Serenity now!

Disclaimer: I continue to give Donald Trump about a 3-4 out of 10. I do not like his lack of presidential acumen. I do not like the many “untruths!” I do not like that the big stuff has not got done. (Though we give lots of that blame on the house and senate) I do like his full-throated backing of men and women in uniform. I do like his business-friendly actions. I do like his rolling back of onerous regulations. I am hopeful that he grows into the job. Time will tell. But:

What in blue hell is going on here? I woke up early to get the lay of the land on all this North Korea noise. I actually was expecting, for a change, a conversation on how we got here. A conversation on how Clinton’s deal did not work…a conversation on Bush’s 8 years paying attention to Iraq while North Korea continued its nuclear program…a conversation on Obama’s “hear no evil, see no evil, speak no evil” foreign policy. NO! We are getting none of that. Would you like to know what we are getting?

We are getting THE SAME PUNDITS AND THE SAME POLITICIANS WHO HAVE WATCHED, WHO DID NOTHING, WHO SAID NOTHING, WHO ACCOMPLISHED NOTHING with North Korea over the past 20 years leading us to this point where we now maybe, possibly, could be, we really actually have to worry about North Korea. And what are they saying? “How dare Donald Trump talk tough?” All morning long, a parade of people who have been mute on North Korea, who have been wrong on North Korea, who have sat on the sidelines on North Korea now having loud voices on North Korea and not on what a dick Kim Jung Un is, not on how bad a human Kim Jong Un is, not on how we got here, not on how the North Korean people are inches smaller than the norm because they are starved, not on the murders of his own family, the hostage taking, the kidnapping, the depressive, repressive state of North Korea…BUT RIPPING DONALD TRUMP FOR HIS TOUGH TALK! All morning long…”look what he said,” “terrible thing to say,” “will only fan the fires,”…BLAH BLAH BLAH!

So, we get politicians like  Schumer, Feinstein, McCain. We get the spectators from the NY Times and the Washington Post with last names like Ignatius.  We get people from the past 3 administrations. We get all the geniuses, all the usual suspects  who were in position to get in front of North Korea, do something about North Korea, who have sat on their ass for 20 years saying nothing, reporting nothing and missing everything on North Korea…are ripping Trump…for his words.  And as usual, outlets (they are not media outlets any more) like CNN and MSNBC drive the bus. One is worse than the other.

We continue to be amazed how these media-types have one agenda every minute of every day. “Donald Trump sucks!” We can only imagine the production meetings every morning:

“So…what can we say bad about Trump today?”

“Well, yesterday he ate his pasta the wrong way! That should make Italian/Americans mad at him!”

“Hmm! Not sure that will fly. Do you have anything better?”

” He said he was a Mets fan but we have video from 1997 saying he was a Yankees fan?”

” Hmmm…too concentrated. We won’t piss off enough people!”

” Russia, Russia, Russia!”

“Forgot about that! It’s only been 1 hour! It’s a winner!”

We repeat…the same politicians and pundits that have been a party to and brought us $20 trillion of debt, massive deficits, a gargantuan welfare state, a lied about failing healthcare system, infrastructure issues, an out of control central bank  and now North Korea…are now whining and complaining about words and are now telling us what to do and what needs to be done. Do these people even know how stupid and hypocritical they look? Doubt it! Feel better now!

 

 

PRE MARKET

NDX futures down a big 50…S&P down much less percentage-wise…50…

North Korea front and center…more on that in another report. Markets moved down on North Korea yesterday. We think that’s part of today but also…lots more blow-ups.

DIS on blah numbers…and ESPN issues. And personally, tired of turning on ESPN  and not seeing highlights but instead seeing wall to wall defending of Kaepernick. I couldn’t give a crap about Kaepernick. Give me highlights. Bring back Chris Berman. ESPN is making sports unfun! And that’s hard to do.

NFLX down almost $7 because DIS says bye bye.

PCLN down $134…gapped down last earnings and turned back up. We shall see this time. This really hurting NDX. Other gaps to the downside:

MXL, TRUE, FOSL, MYL, WB, SINA, Z, NUAN, JAZZ, LITE…not much happening on the upside.

PRE MARKET

Good semis day yesterday. Good beta day yesterday. Semis are meaningful to our work as they lead up and lead down. You can see the SOX/SMH holding the 50 day. Now we can see if it breaks out again.

China ADRs en fuego yesterday. Many report this week. Not thrilled that they ran in front of the number.

Futures actually down this morning…the horror!

KORS, RL gapping up. Both stocks down and out beat lowered estimates. Numbers still not thrilling for either.

THE SEMIS AND CHINESE ADRs.

Those that follow our psychopathic ways know how important the semiconductors are to our work as they really do lead markets. Just go take a gander going back a couple of decades.

In recent weeks, the semis had been weak. The June 9th ugly topped them out. The July 5th action started a low. Just notice that this latest pullback has it hovering around the 50 day with the SMH moving off the 50 day. On top of that, leading names that had been acting iffy are up strong today…namely LRCX. As we scan all the names, we still don’t find much constructive but leave no doubt, if the semis do indeed turn up from here forming the right side of this range…and then move out, that’s it for the minor correction in the NASDAQ/NDX/SOX.

And for those that are asking… China ADRs are up big today…many moving into new high ground. Most held the 50 day recently. The problem is that many report in the next couple of days. yes…they are running them into earnings. Go figure. We are not that brave.

PRE MARKET

Quiet morning with a little bump to the upside in NDX as names like AAPL, AMAZN with a small move.

Since you asked:

AAPL gapped up. So far, just sitting. It is sitting right near the old highs from May. This is the 2nd decent sized gap in this name in the past 6 months.

AMZN had a poor reaction to the number off of a big miss. We are asked about this one every day. For us, we want it back above the 50 day…which just happens to be right at $1,000…before we look at again.

GOOGL just seems to be in a range from $920-$1000. Not much more to say here.

FB good reaction to the number and so far, so good. Actually holding the 10 day moving average…indicating how strong it has been. Probably needs some time and price in here as it is very extended.

TSLA…good reaction to another big loss. Bull phases mask a lot of crap. This morning, they are doing a $1.5 billion bond raise because they are leaking cash and need to build more cars. Ford does $155 billion in sales with a market cap of $44 billion. Tesla does less than $10 billion in sales but has a $59 billion market cap…and of course, they lose a ton on every car they build and sell.

FINANCIALS…big financials act well…just very slow. C, MS act best. BAC, JPM need to break out. Regional’s best names are PNC, CMA. Others in big bases.

OILS aint happening yet. Yes…off the lows but except for a couple names like a RDSA or REFINERS, too many names gross.

The BLOW UPS…Normally, would tell you gigantic warning sign. There have  been a ton. But there continues to be nothing normal about a market that is still receiving negative rates, 0% rates and the continued printing of trillions.

BEAR MARKETS- Never happening again!

Earnings this week:

Monday- MAR

Tuesday- EXPD, NCLH, RL, SINA, W, WB, VRX, GDDY, PCLN, DIS

Wednesday- CTRP, NTES

Thursday- JD, KSS, M, JWN, NVDA, SNAP, TTD