Very notable…the TRANSPORTS trade easily and up through the 50 day. This is important as it gives better odds for the major indices to follow. JBHT doing the trick even though they only beat by 1 cent. It’s not the news, its how things react to the news. Other names in the group soaring. Could be a very important clue for 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:
BAC, JBHT, SCHW and the almighty NFLX after the close.
CMA, GS, JNJ, NTRS, UNH, CSX, IBM, IBKR, ISRG, LRCX, UAL
ABT, ASML, HBAN, USB, AXP, AA, EBAY, SEIC, URI
BBT, BX, BK, DHR, DOV, DHI, GWW, MS, NUE, PM, PPG, DGX, SWK, TSM, ETFC, SKX
GE, GNTX, HON, KSU, STI, WM
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.
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.
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.
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?