PRE MARKET

Don’t worry about a nasty, high volume reversal. We’ll just gap it up the next day.

Strong open awaits. I will stay silent about it except to say:

I have been taught and have studied that changes in trend often occur with violent action after a large drop in price or after a large rally in price. So far, yesterday’s action and now another big gap to the upside. I am open to anything as it is earnings season. Already being asked whether they will sell off today’s gap…how the heck do I know? Let’s just say it would not be thrilling if it does get sold off again.

ASML big gap to upside today in the semiconductor space. GS down a couple.

The rest of the week has

Thursday- BK, FAST, JBHT, MS, AMTD, KEY, AXP, IBM, SWKS, CHKP, CP

Friday- STI, SLB, KSU

A ton of earnings next week.

As far as “bitcoin”, the “questionable” stocks are being mauled as they are indeed heading back to where they came from. The price of bitcoin and other “coins” have also been hit hard. As we have stated: we do not know exactly how it plays out. Just do not be the last one in.

 

 

EXHAUSTION GAP!!!

-By Gary Kaltbaum- January 16,2018-
-To be brief, after a strong beginning of the year, on top of what we have seen the past 2-3 months, on top of what we have seen since the election, today’s action looks to be a classic exhaustion gap. After the run, the market gaps open big numbers and then sells off, giving all the gains back. It then heads lower as buyers are exhausted.-

-Typically, this means today’s highs (or around it) will be it for now. After all, Boeing (BA) being up 15% in 7 trading days is a little too much. We can give you many other examples but simply put, too far, too fast.-
-We suspect markets will now retrace a decent amount of this recent move. How much? No clue? How long? No clue. We are just here to identify what is in front of us and will now wait for other cards to come out of the deck.-
-As a reminder, markets do go down. Just a reminder! More to come!-

THE OPEN

Big gap to the upside.

Led by tech and all that stuff as we enter earnings. Only things soft this morning are commodities, transports but minor pullbacks.

All this is happening right before and into earnings.

More later…

and I hear bitcoin squashed but that can change by the end of the day.

LOTS OF MARKET NOTES

In no particular order:

The dollar is breaking to new lows. The euro and pound are breaking to near yearly highs…out of clean bases. We suspect this is part of why commodities keep moving higher.

Major indices are stretched, extended and overbought as much as we have seen in a long, long time. Names like BA and CAT …we do not know how to describe it. It is now feeling somewhat climactic. If that’s the case, there will be a big correction out of it…which is way overdue anyhow. Climactic moves serve to suck in the masses AFTER a big run. We will only deal with this if we see it. So far, nothing doing but we have studied this type of action before.

Earnings estimates are said to be going up almost 5% because of the tax bill.

The only real bearish areas are utilities and real estate.

Areas that could be emerging now are cruise lines, airlines,and defense. A couple of airlines have already moved out.

Since we told you to put commodities and energy on your screens, they are up anywhere between 10-20%. Pullbacks are needed but aint happening just yet. Copper, palladium and all that stuff have been strong.

Look where the GBTC held Thursday. (bitcoin etn). Yes, technicals may be working with even bitcoin.

Many are worried and many are talking about the bond market. Economics 101 does dictate that all this money printing and easy money should cause a big bout of inflation. If that’s the case, bond yields will eventually reflect it. Watch 2.65 on the 10 year. A move above takes you up to 3%…but that’s no big deal.

A massive amount of earnings start coming out this week. So far, we have seen decent reactions even though things are extended.

And lastly, do not worry about a government shutdown. The longest one lasted 3 weeks under Clinton and the world did not end. Essentials will be open and everyone will get paid.

PRE MARKET

NASDAQ futures flat. S&P futures up a wee bit.

Very strong yesterday. COMMODITIES continue to lead in a big way but extended here. BOEING acting like an internet stock from 99.

AIRLINES like AAL and DAL breaking out.

ENERGY strong but extended.

Big report over 3 day weekend. Be well!

WHAT’S WRONG WITH THIS NEWS?

SOURCE: https://www.bloomberg.com/news/articles/2018-01-11/wal-mart-raises-u-s-hourly-wage-to-11-in-wake-of-tax-overhaul