I wonder…has Michael Moore ever put his life on the line for this country?
“The sea was angry that day my friends – like an old man trying to send back soup in a deli.”
Thus the markets.
We have told you for years that at the end of the road of central bank maniacal money printing and constant interference would be distorted price and yield all over the place…which eventually would have to be unwound because very simply, markets in the long run, want to be unfettered…not rigged and controlled by a few ex-tenured professors that press buttons and print trillions. Maybe…maybe not but we are seeing outlier moves in currencies, commodities and yields. …a bib hmmmm!
Today, finally, someone fought back as the Swiss National Bank shot the middle finger up at the ECB and said have a nice life. As you now, the ECB is now going to follow Mr. Bubble Bernanke into the abyss of printing…damn the repercussions. The euro is being murdered and looks headed towards parity with the dollar.
We gave you out support levels yesterday and looks like there is a real chance they get taken out. We were hoping it would not happen just yet. The nasdaq and nasdaq 100 are already there. Any leadership and any breakouts are starting to fail…and that’s not good news. On top of that, strength can be found in food, utilities, reits, gold and some other defensive areas. Yippee.
As we told you, financials continue to be klonked…and that’s also bad news. We told you coming into this week the group was in trouble.
As far as oils, we thought there was a chance of a needed bounce and with the big bounce this morning, it had a chance but when the euro cracked again, party!
We now suspect the next fed move will not be a raising of rates but believe it or not, watch for the rumblings of QE4 as they have put themselves in on big giant box with no real way out.
We suspect the next few days will be muy importante as the two-way trade has been held back by central banks. Be alert!
Knicks are now 5-36 as they could not even win on the other side of the pond.
We really didn’t know how to title today’s report after the action we saw so we decided to just use Sheldon Cooper’s line when he tries to make a joke. And today was a joke. Just another example of the GRM as markets gapped up on supposed ECB money printing but reversed on volume when it came out German banks do not want the money printing. Nevertheless, taking away all the noise, a lot happened.
Discalimer time: No matter what we write, if more announcements of QE come out, the tide can turn in a nanosecond. Time and time again we have seen V -shaped moves back up as the GRM continues to hold sway.
It is usually not a good thing when you have vicious reversals to the downside. It indicates big money selling above these levels. But that’s not all. As we told you coming into their earning’s week, financials are acting poorly and today’s action did not help. Maybe the earnings will change things. It is also less than thrilling that the Nasdaq, Ndx and the S&P sold hard as they were trying to get back above the all-important 50 day average.
To add just a little more ugly, the semis broke back below the 50 day making a series of lower lows. Housing stocks, which were emerging, sold off hard on some bad earnings news.
So….bazinga. There is little way to game a spastic market like this except to take your time, lower position size, close your eyes, hold your nose and pray.
To be blunt, any more deterioration at this important juncture will only make matters worse.
Yesterday I sarcastically tweeted : Every time market looks ready to break down, close your eyes, hold your nose and buy. NY fed will back you up.
Well..after a decent amount of deteroration, the GRM is at work again with a sharp gap to the upside this morning. I will just leave it at that and discuss sectors.
Of course, all of energy,oil&gas, steel, copper, coal and all that stuff remain bearish. Just keep in mind…sharp rallies can occur any time. Just do’t know when.
We do believe gold and gold stocks are emerging…same for silver. Lots of resistance to get through.
Financials continue to act poorly yesterday but earnings this week…to watch. Regionals included.
Speculative biotechs working as news and buyouts continue. Mainstream biotechs somewhat mixed with a few working and a few not.
The Qs need to be watched as they are having some trouble at the 50 day but a timely upgrade of AAPL this morning may help. Also, watch the SOX right here at the 50 day. This will be very important to the market to hold.
Market reamins in range with the most split tape we have seen in ages. This is no throwing of darts time. If you have been in the “wrong” areas the past 6 months, you have been crushed.
This coming week, many of the big banks as well as other financials are reporting earnings. We bring this up because they are not acting well coming into the week. High volume down days and low volume bounces can be seen as support is being tested for some and breaking for others. For example, go take a gander at Citi. (C) The poor action can be seen in regionals as well. We bring this up because this is happening while the market is acting like the Hulk roller coaster this past week…recovering when the maniacal fed continued to prove our thesis and that is they are loathe to raise raites even a measly quarter point from 0%. In fact, a fedhead came out and said raising rates would be a catastrophe…and that’s with a supposed 5% GDP number. Stay tuned.
We saw very good action in other areas though. Good breakouts could be found in a bunch of restaurants, semiconductors and a bunch of very speculative biotechs. In fact, our biotech thesis may also be playing out as a host of names that have NO SALES are skyrocketing on any announcement. Does this remind you of anything?
The same areas we have been bearish on remain that way except for gold and gold stocks. They have finally jumped back above the 50 day moving average and looks like it is sticking. We actually found one low priced name, (GFI) moving out of range but most still need a lot of work.
Earning’s season time. Stay tuned. We expect a lot of jello moving on the plate.
Knicks are now 5-35. Unreal!
Will have a full report on the ridiculous action this week…over the weekend. Great recovery!
Nancy Pelosi wants to raise your gas taxes. This is expected from someone who has never seen a tax she didn’t like. But a few Republicans are chiming in also saying it is something to think about. What is the matter with these money grubbing, power hungry people. Just when the middle class as well as the not so middle class get a break because of a drop in gas prices, they come in with their greasy, grimy hands wanting more. It is not enough that they have doubled spending over the past 15 years. It is not enough they have grown government into a gigantic blob. They just want more out of your hide.
And the Knicks are now 5-34!