PRE MARKET

Earnings this week:

Tuesday…after the close- FEDEX, NIKE…both important names. NIKE in the dow.

Wednesday…before open…LENNAR…homebuilders been strong

Thursday…after the close…MICRON…goes without saying important semiconductor name.

Futures flat…not much happening…small downside opening in financials off of weakness Friday. Watching the all-important 50 day average for this group.

 

WEEKEND REPORT- WATCH THE FINANCIALS

Recently, we told you to watch the financials as they were starting to show slight distribution. This is a no biggie until it becomes more than slight. On Friday, it started to get more than slight. We tell you to watch the financials because along with the semis, they have led the market upwards since the election. If they start to break down, one has to pay attention. Specifically:

KRE below $56                                                                                                                                                                 KBE below $44ish                                                                                                                                                             XLF below $24.30 and then $24.                                                                                                                                 On top of that, start watching the 50 day moving average for names like Goldman, Morgan Stanley, Citigroup and others. A break below and a stay below changes the complexion for now.

The good news is that major indices still have not had a 2% correction since the election. Good because of it but bad because one would think when a correction occurs, the one-sided trade could cause a bigger than normal correction…but until that time…

There continues to be bull and bear markets side by side as it is imperative you stay in tune with “what’s working!”

From our recent notes, HOUSING continues to be strong but BIOTECH was roughed up off of some drug news on Friday. AMGN and REGN were smoked. We still think the group is in shape. We would now add CASINO/GAMING to the emerging file as a few names are on the cusp of moving out. One more group that is now showing up on our screens in the SHIPPERS. We also like recent action in many of the CONSUMER STAPLES.

Areas we would continue to avoid are just about everything RETAIL/APPAREL, ENERGY and as we have said, most commodity names as they have turned down and broke support recently. We are also less than thrilled with the TRANSPORTS now trading below the 50 day with AIRLINES being sold down.

PRE MARKET ACTION

Futures down a wee bit…but no biggie.

Amgen (AMGN) down $13 on negative cholesterol drug news. Biotechs have been acting well. Not this morning. Other “cholesterol” names hit hard.

Tesla (TSLA) prices condary at $262.

Adobe (ADBE) the big gap to the upside on strong earnings.

 

THE CLOSE

Quiet day…just what one would want to see. Not much to take away.

ORACLE with the big gap to the upside on boring numbers. Notice that the gap was distributed so nothing to do just yet.

Housing continues…and should be looked at on pullbacks. A few names report next week.

Biotechs finally coming in. Again, on pullbacks.

We will have quite the opinionated report on the Trump budget this weekend. Alot to talk about.

PRE MARKET NOTES

Futures up off of yesterday’s move.

It actually looked like the Fed lowered rates yesterday as the dollar tanked lifting commodities and the like.

Big picture…market continues to not be able to drop even 2% on corrections. Major indices do not even want to visit the 50 day moving average…as they hold the shorter term 21 day indicating great strength. The good news yesterday is that the worst areas got bid up. When the worst areas put in a low, it is good news for markets. That includes all the commodity areas we have been telling you to avoid recently as they went lower. Even oils rallied but to our eye, nothing to do there just yet.

As we stated on radio yesterday…yes, valuations are out there…but more important you pay attention to the action…which is speaking loudly and clearly.

Recent emerging areas in housing and biotech continue to do well with biotech about to break above big range.

Only are really under-performing yesterday was the financials as rates came down…but not seeing any issues just yet in the area.

THE CLOSE

Good day Wednesday!

 

EEM/EFA break out.

Down and out commodities find a low as the dollar gets rapped even though one would think the dollar would strengthen off of a rate hike. Go figure.

NASDAQ 100 into new highs. NASDAQ just about. DOW and S&P cannot even hit a 2% correction.

SEMIS remain strong.

BIOTECH on the cusp of breaking above big range.

Lots of chart set-ups with a decent amount moving above range today.

Junk bonds, which had been getting smoked, big rally today…important.

Yes…financials lagged as yields came down but did not affect much else. Just a good day.