It’s a long day but this BROADCOM (AVGO) news is important. As you know, the SEMIS are the most important group to our work as they continue to lead markets up and down. It used to be the FINANCIALS were first and SEMIS second. No longer. So…we will watch closely. Fundamentally, we have been saying the numbers out of the SEMIS have been suspect but the hope was “the second half!” Well, the second half rebound does not look at hand. Seeing some horrible chart patterns in the group. The group will need to stand up and be defended soon.

As far as the rest of the market, continue to think narrow…but GOLD and GOLD STOCKS opening at or around new yearly highs.

Other stuff:

China industrial production came in under expectations and 17 year lows.

The ECB saying they are very worried about bad loans. Really…hey ECB and Draghi, it’s your easy money and negative rates that do just that…promote bad loans.

German 10 year bund…new record low yielding 0.27%. That’s not a typo. Spain is at an all-time low at 0.50%.




SEMIS and FINANCIALS took brunt yesterday but major indices not going anywhere…and after weak overnight, we walk into an up morning as CHINA reversed early big losses.

Regardless, the Fed is next week. We expect them to lower rates or telegraph the lowering of rates in the next meeting…and that is usually what matters most.

FAANG stocks remain relatively weak but can get going in a nanosecond.

OIL prices spike this morning as a couple ships hit. OIL and OIL STOCKS have been weak.


LULU and RH big gaps to the upside.


Strong day yesterday with some give-back as the Mexico tariff thingy ended. We walk into another gap to the upside this morning as yields back up and money is deployed.

An amazing more than a “V” shaped move back up off of one thing…OUR FED once again crapping in their pants about a correction in the markets and changing their stance from “patience” to “lowering rates.” This after going from “raising rates a few times in 2019” to “having patience.”

Tech…which was a wreck into last Monday…straight up…and we mean straight up.

For those asking. BEYOND MEAT (BYND) got the valuation downgrade from their underwriter this morning. The stock is currently down $18 but valuation was a joke $100 points ago. Remember, price is what someone is willing to pay but eventually…eventually, valuation will matter.

The SEMIS led down and now leading back up. Remember, they have been leading markets up and down forever.

We could say markets are near-term beyond overbought but with the fed next week…


CRM buying DATA…software names that were breaking down last Monday…that ramped on the 2nd Powell, up strong on the news. Fake meat companies soaring on losses…but strong sales. UTX buying RTN. No Mexico tariffs…duh…we told you it would not happen.

Bearish markets used to take time turning…no longer as again, the Fed could not even stand a 7-10% correction before changing their tune. And…the market’s default setting is to just buy it all. It happened in December…and it is happening now.

There is a reason India just lowered rates. There is a reason Australia just lowered rates. There is a reason China just added another $70 billion after adding almost a $trillion to its system. There is a reason Europe just announced they may lower rates even though rates are negative…and also said they could print more money. AND NOW…there is a reason why our Fed cannot even stand a 7-10% correction. The answer: debt and leverage. There is so much debt and leverage in the system that they know what happens if they lose markets. Keep in mind, it is these central banks that enabled all of it and Wall Street that forgot everything about 07-08.

So enjoy. Markets are beyond overbought and frothy in just days off a low.