The Donald decided to ramp up the “trade war” tonight. Futures down 250 with NAS down 75. NAS has continued to lead. It is a long night…and most of these “trade war” issues have been bought up. But this is now getting serious. More in the morning.
Yuck…yuck and more yuck. Start with some money losing IPOs romping and stomping to the upside. Add in over 50% of the market bearish while some indices go to new highs. Add in very extended leaders. Add in put/call numbers off the charts bullish…and start the week with yuck. That 2800 area may be a sticking point for this second. A break above would be very bullish but may need some time and price in here as well as working off some of the froth.
Just for today, will not discuss what IS working. We do that in just about every report as well as on our radio show. What amazes us is how many things are still not working. Those areas are not necessarily bearish but are certainly not bullish. Most are in different levels of not working.
UTILITIES remain gross. Interest-rate sensitive though 10 year remains below 3%.
REITS were part of this trifecta but acting a little better.
GOLD and SILVER breaking badly.
OILS/ENERGY…we have told you recently that we thought they had topped but now things getting ugly. OIL PRICES look topped with many names breaking down.
SEMICONDUCTOR EQUIPMENT (AMAT, LRCX, MKSI, TSM, TER)
BIG FINANCIALS with JPM and BAC just holding 200 day average.
EMERGING MARKETS…have you seen EEM, EFA, FXI, RSX, EWZ, TUR?
BIG BIOTECH (still a bunch of spec names working)
AIRLINES and CRUISE LINES were part of the ugly but with oil prices coming down, we are seeing counter-trend rallies.
FOOD, DRUG, BEVERAGE, TOBACCO, HOUSEHOLD PRODUCTS, ALCOHOL…though we think a decent near-term low has been put in…but overall, still gross.
The good news is the other half of the market still working…and now seeing a bunch of recent money losing IPOs go topside. Not sure that kind of froth is good news but so far, indices looking fine. Just amazed how much is not working.
The divergences widen. The good get gooder. The bad get badder.
Leadership remains with tech, internet, software, cloud and a slew of recent IPOs (most money losers) going en fuego. While there is half the market in bad shape, the worry is the charts of the big financials. So far, it is just vicious rotation. Go check charts of C, JPM, PNC, MS, BAC and others.
Quite interesting the bond market looks like it has bottomed as the fed raised rates on the short end.
Fed raises rates….still at a measly 2%. Last time unemployment was 3.8%. rates were 6%. This morning ECB says they will slow down money printing but still keep rates negative into 2019. Amazingly, long bond rallies strong this morning taking long rates down. 10 year still under 3%.
Futures up. Normal to do opposite of fed day…which was down.
Was going through scans. In spite of big financials, utilities, reits, housing, housing-related. insurance, defense, consumer staples, chemicals, machinery, emerging markets, russia, china, brazil, turkey, argentina and others, big telecom, solar, semi-equipment and a few other things acting poorly…major indices acting fine. NASDAQ/NDX/TECH/INTERNET and all that stuff still has the r/s and also a bunch of recent money losing IPOs strong regardless of reporting losses. The latest name PVTL.
So very very split tape…but beta be working.