WEEKEND REPORT

Greetings from Paris as we head for Normandy today. Will be touring the D-DAY sights on Memorial Day. Cannot wait for this. Of course, left my cell phone in an Uber and still not recovered.

Not much has changed. The good get gooder…the bad get badder, simple as that. Amazingly, even with major indices at or near their highs, we still count about 40-45% of stocks not participating with many in bear phases, some brutal bear phases. To be repetitive, we would continue to avoid energy, oil&gas, most commodity names, most retail especially the big guys, most auto-related especially auto parts retail, many of the reits, biotech,big telecom, most financials and a few other areas.

As far as financials, keep in mind, they are still holding the next line of support. The point is they are just sitting and under-performing right now.

The good news is that there is still plenty that is working. In fact, we continue to see a lot of tight action in leaders after they made good moves to the upside. This could be setting them up for higher prices. Those areas remain the nasdaq/ndx-types in internet, technology, semiconductors,  fiberoptics. On top of that, the megacap favorites continue to show hardly any distribution whatsoever. These are the areas we will be watching most closely. As long as these areas are working, markets are fine. But with the narrowness, if the good starts to get bad, trouble could be straight ahead. But to repeat, these areas still look great, act great and show zero distribution. As always, if things change, you will know it.

TRAVEL HELL

Not making this up. A simple flight to get me into NYC at 8 pm last night got me to my hotel in NYC st (drum roll please)… 530 am. Weather in the NE started me on flight to Laguardia…which changed to Newark…which changed to Laguardia and left many hours later. We then sat on the tarmac for about 90 minutes because of more storms at Laguardia. Finally took off where the pilot announced we were diverting to JFK…and an hour later said we were diverting back to Laguardia.

Tired, aches, no sleep! Futures basically flattish with a few movers.

DECK,BIG,ULTA moving up. SPLK, ZOES, GME moving down.

If missed anything, it is because I had no sleep. Have a great day. Radio later today and full report over the 3 day weekend. Travel safe!

THE CLOSE

A few things stay the same and a few things show up.

Staying the same: Continue to avoid energy, oil &gas, most commodities, big retail, most auto anything, most financials and a smattering of other stuff.

Best areas remain big cap over small cap…by a lot. Big tech/internet/semiconductors, the FANG, China ADRs, managed care, housing, and now emerging, rails, a few airlines, defense, a few restaurants and insurance stocks now breaking out . So…some new stuff.

Dow almost out of range and S&P out of range. Nasdaq/ndx still lead.

FXI moves into highs, emerging still good. Brazil yonked. (Too many crooks running the joint!)

And the Mets are still injured!

 

PRE MARKET

Dow and more importantly, S&P are on the verge of breaking out of a 3 month trading range. The pullback at its low was only about 3%. Last week looks like it was nothing more than a scare day off of the naming of a special counselor to investigate the Russia stuff.

Keep in mind, this is a very narrow move as even now, we can count about 45% of the market not participating. We don’t mind. Just pay attention to the bouncing ball. A high volume move above range will go a long way in thinking another leg up is at hand. And yes, we know we are in end-of-month, pre-holiday trading but we do not rationalize.

PRE MARKET

NDX futures up decently…S&P futures just above flat. NASDAQ/NDX continue to get the money flows.

Gaps to downside: LOW, TIF, AAP, DY, BG, UHS.

To the upside: INTU.

BG was rumored to be bought yesterday…says no rumor today…gives it back. Be careful!

AAP adds to the auto parts retailing misery after AZO being smoked yesterday.

Watching to see if commodity areas sold out for now. Seems like bounce has started but need some more cards come out of the deck. Seeing insider buying in X and CLF.

Otherwise, last Wednesday’s yonking almost a distant memory.

Tonight…I will be writing about one of my favorite movies THE STING and how it equates to the reporting on Trump’s budget, government spending, the size of government and all that crap. There is a great con game going on.

 

THE CLOSE

Not a lot to take out of market today.

Yes, the housing stocks reversed down on good earning’s news.

Yes, the financials were strong as long rates backed up.

Yes, leading growth names as well as the semis pulled in.

And yes, Autozone (AZO) was smoked. We had been telling you to avoid almost anything auto-related.

Other than that…after what happened in Manchester last night, make sure you hug your children!