Futures are down decently this morning.

Recently, we had been telling you about a bunch of divergences in the market. Namely:

Advance declines not keeping up.

Anemic new highs vs new lows.

Small caps again underperforming badly.

Transports breaking support and the 50 day moving average.

Regional banks rolling over badly with bigger banks now following.

Junk bond proxies breaking support. (THE BIGGEST BUBBLE IN THE WORLD!)

But other major indices have been just fine but it is in the declining internals that give clues. So we start out ugly today. As we have told you, we are waaaaay overdue. Typically, markets back and fill their way higher. Recently, there has been no back. At any given time, it would be normal to knock a few off the scoreboard. Stay tuned!

The reason given is the worry about tax reform getting done. The worry is that the recent elections can take the momentum away. We are not so sure. Markets do go down every now and then. But we do believe the tax bill is suspect at best. We will have our thoughts on the tax bill as well as recent elections in a report tonight.


Futures about as flat as flat can be but:

COHR breakaway gap to the upside.

TTWO strong gap to the upside.

Other gappers are DXC, PLNT, MTCH, SYNA, REGN, HUM.

Not a lot on downside. SNAP whacked even though someone taking a position in company. WIX, WEN, MGM, DVA also down.

Just to recap yesterday:

FINANCIALS yuck day and to be watched. TRANSPORTS edge below the 50 day. RUSSELL 2000, which have lagged forever, may be rolling over…at least headed to the 50 day. DIVERGENCES showing up.

None of this means anything until major indices follow suit…and so far, nothing doing.

On the political front:

SOCIALIST party won a bunch last night. BUT…they won NJ…a blue state big time…and after Christie…blah. VA a blue state also…but message to Donald Trump. You had better get your “presidentialness” in gear. I personally know a ton of people who voted for you…who would NOT vote for you today…and they all say the same thing….”does not act as a President!” They think it is a toss up on policy….some good things, some things they are not thrilled with but this person thinks it is imperative to realize politics and elections are about popularity and momentum. There is no way to get any momentum when your poll numbers are in the 30s, when you call others SOBs, when you call out someone or something every week. I would suggest you read “HOW TO WIN FRIENDS AND INFLUENCE PEOPLE” and understand you get more when you treat better. I am not talking about the sleazy, slimy, corrupt media. They deserve to be ripped on.


With the DOW finishing up:

The TRANSPORTS are moving below the 50 day.

The RUSSELL 2000 is already rolling over and headed towards the 50, if not more.

Smaller and medium banks may be rolling over. (KRE) (KBE)

New highs vs new lows had been pathetic…and needs to be watched.

A/D 9-21 on NASDAQ today with NDX actually up.

Just saying. Of course, market is never going down again.


As we write this, Dow is down a measly 50 points, Nasdaq down 31. But…

We think it imperative to flush out any issues market is showing and even with a non-event of a pullback:

The TRANSPORTS are moving below the 50 day.

The RUSSELL 2000 is already rolling over and headed towards the 50, if not more.

Smaller and medium banks may be rolling over. (KRE) (KBE)

New highs vs new lows had been pathetic…and needs to be watched.

In no way are we saying end of the world is at hand. But…just a minor move down exposing these issues is noteworthy and goes into the file manager.


Lots of jello moving on the plate this morning…while futures are flat:

PCLN down $160…yikes. Others gapping down are CAR, TRIP, SWKS, RRGB, TRUE, MNK, VERI, FN. Some are very big gaps to the downside.

WTW breakway gap to the upside…the same on RCL. Others to the upside are VRX, HAIN, MTW.

Other notes:

Keep energy on the screen. Pullbacks preferable after this recent move.

Commodities again perking up as copper prices rise.

Watching shippers also. They have been destroyed but also seeing them turn up.

Housing also continues strong but need new set-ups.

We would really love to see some correction. This enables one to figure out where the real strength is. But so far, nothing doing.


Futures are back to flattish after being down overnight. The Hang Seng was down 500 points but finished down a measly 6 points. Bear markets last hours right now.

Not a lot in the way of earnings but:

AVGO buying QCOM and AVGO goes up…even though QCOM sales and earnings are down. QCOM does not want to do the deal.

Energy prices ticking up again. Remember, a bunch of names should be showing up on your screens.

We are due to piss off the bulls…overdue…no, way overdue…no, waaaaaay overdue. But so far, any selling has been intraday and bought up. Remember, in spite of 4.1% fake unemployment, 3% GDP and we are told, better economies around the globe…we are still at 1%, Europe and Japan are still negative and the printing of money to bubble up assets is still in hyperdrive. Leave no doubt this is what is juicing markets.

Lots of crap going on in Saudi Arabia. The optimum words are “power grab.” Not sure of the repercussions.

Headline story this morning is again on guns after the tragedy in Texas. We have been saying forever we believe in the right to bear arms but at the same time, some logical legislation is out there. Don’t know if it could stop not only these mass killings but all the killings going on in places like Chicago. I  just hate when political points are being made during times of tragedy.