PRE MARKET

Another gap up this morning…so with the late rally Friday and today’s gap, all losses have been recovered from Friday’s open…or something like that.

Earnings of note this week:

Monday

BAC, JBHT, SCHW and the almighty NFLX after the close.

Tuesday

CMA, GS, JNJ, NTRS, UNH, CSX, IBM, IBKR, ISRG, LRCX, UAL

Wednesday

ABT, ASML, HBAN, USB, AXP, AA, EBAY, SEIC, URI

Thursday

BBT, BX, BK, DHR, DOV, DHI, GWW, MS, NUE, PM, PPG, DGX, SWK, TSM, ETFC, SKX

Friday

GE, GNTX, HON, KSU, STI, WM

 

WEEKEND NOTES

Our job is to report on the big picture and the major trend. Right now, there isn’t any major trend. The market is in the soup trapped between the highs and the recent lows. The major trend to the upside ended January 29 and in time, we will find out if this is just an intermediate term correction or something worse. It is simple to lay down the markers. The recent lows are vital. Not only are they support areas but longer-term support areas in and around the all-important 200 day average. So far, they hold. But as we have stated, we are doubtful as to how far markets can get going because there are just too many names and too many areas not bullish.

On the upside, major indices have rallied up and into the 50 day average but just when you think they can go topside, we get another big gap Friday only to sell down hard…until a decent move in the final few minutes.

We are now into earnings season. If we see more of what we saw Friday with some important financials selling down after strong opens, then get out the worry stick. JPM reversed on big volume. WFC is dead. PNC falls off a bearish flag and C reverses also. More of that will be a serious problem.

As we have stated, the only area really emerging is OILS/ENERGY as oil prices have gone topside. OPEC has been lowering production. Venezuelan production is back to where it was 70 years ago (not kidding). And lastly, geopolitical crap does not help. We would also make note that a few GOLD names are now hitting the screen as GOLD prices hover near yearly highs. Other than that, stay tuned as a few thousand names report. We suspect markets will show their hand in the next few weeks…if not sooner…and also expect many more gaps and reversals as markets are somewhat insane not only during the day but overnight.

YESTERDAY/PREMARKET

More proof that the recent lows at long term support were a good low as yesterday, we moved away from support and this morning, futures getting better as we move towards the open. Major indices are going to attack the declining 50 day average. A break above would be huge. Keep in mind, lots of overhead resistance just ahead. This is all happening in the face of Syria, trade issues, higher oil prices, a daily Trump soap opera, more politicians retiring from their nauseating debt explosion and all that crap. Remember, we read price action and drown out everything else. We live by the motto: “It’s not the news. It’s how markets react to the news!”

It has not been easy. In fact, we have seen serious high volume drops down to support, gaps to the upside, reversals of those gaps but recently, it “feels” better. A bunch of growth names have turned back from the 50 day average or moved back above. Bad news is not being sold any more. Good news is bought. Can this last? Will it last? Beats the heck out of us. Just know as we enter the meat of earning’s season next week, the tone is better and beta is picking up. Of course, with a couple thousand names reporting soon, anything is possible but again, better.

And the Mets are now 10-1.

 

PRE MARKET

Big gap yesterday…TO THE UPSIDE. Big gap this morning…TO THE DOWNSIDE. Yippeeee!

OILS/ENERGY moved above resistance (OIH,XLE,XOP). A few names actually into new yearly high ground. OIL PRICES back on the move. USO looks to break out again. Lots of world news doing the trick.

LONGER-TERM SUPPORT continues to hold. Yesterday’s move got price a little farther away from the ledge.

Our thought pricess has not changed yet. While we believe longer-term support continues to hold in the near-term, as we scan 2000 names, 200 sectors and a bunch of countries, not seeing nearly enough bullish patterns that give confidence markets can get going to the upside. If lows continue to hold, we think real upside can happen in time. Of course, if at any time major indices break the lows, get out the big fork.

Other notes:

Haven’t mentioned RUSSIA (RSX) which has been bludgeoned on geopolitical news.

GOLD (GLD) up this morning…close to new yearly highs. GOLD STOCKS continue to labor but may be turning the corner.

Hearing many people say this is the most volatility ever. I guess they did not experience 99-00 which makes these swings look like pikers.

The Mets…9-1…my goodness. Am i dreaming?

 

PRE MARKET

After another ugly reversal, this time because of a raid on the Trumpster’s lawyer’s everything, we sarcastically tweeted to not worry, the market will just gap back up 300 points. It was sarcasm. It was a joke….but that’s what the market is doing right now. You cannot blink. You cannot go home being bullish or bearish as it will change in the morning. And then as reported:

“This morning’s bullish bias has been attributed to comments made by China’s President Xi Jinping, who spoke at the Boao Forum overnight. Mr. Xi discussed plans to further open the Chinese economy, including “significantly” reducing import tariffs for automobiles, reducing tariffs for other goods, improving market access for foreign investors, and better enforcing the intellectual property rights of foreign firms — which has been a major point of contention for the Trump administration. While Mr. Xi never outright mentioned heightened trade tensions between the U.S. and China, his comments certainly soothed markets around the world, which have been jittery in recent weeks due to the prospect of a trade war between the world’s two largest economies. The major stock indices in Asia finished Tuesday on a higher note, with China’s Shanghai Composite (+1.7%) and Hong Kong’s Hang Seng (+1.7%) leading the charge, while the major indices in Europe are also in the green, sporting gains between 0.5% and 0.9%.

So another big gap to the upside this morning. We have been asked what we now think will happen. Sorry…we are not the Amazing Kreskin but we do have some thoughts. This action has been insane the past 10 trading days after an ugly drop. Reality is in spite of whatever news we are pounded with, those longer-term support levels we have outlined for you in recent days continue to hold…and today’s open gives the market a chance to move away a bit from that ledge. We have also told you we are doubtful of what kind of move we can get if the lows do indeed hold but the longer markets back and fill, the better chance for a better move. SO…not putting the cart before the horse but if we DO NOT reverse today, it would be very good news. We suspect this holds but we promise you that the market doesn’t give a #%#@ what we think. We’ll just let the market do its bidding here. Most areas, most indices and most everything have done an almost perfect revisit to the Feb 9 lows. Let’s hope all of this turns out to be THE lows.

TONIGHT’S NOISE FROM CHINA

That was a crappy reversal today. Many blaming the news out of the Mueller investigation. But don’t fret it. We were waiting on the head of China’s speech tonight. Many believed he would make nice-nice on the “trade war” and walk things back. We have told all that at the end of the day, we thought cooler heads would prevail and there would be no war. Looks like China is playing nice-nice as they say they will open things up. The DOW went from up 440 to only up 40 but Dow futures are up 250…and it is early. The moves, the gaps, the reversals are assinine. Hopefully, those long term support levels hold and we can get out of here to the upside. More tomorrow.