First…the Trumpster. We will say it again…and will report why in a future report…but unless it is found out Donald Trump is a member of Isis, like it or not, get used to “President Trump” for the next few years. And every time another celebrity says they are moving out of the U.S. is Trump wins, he gets more votes.
And the market:
On April 21, we started thinking and reported to you that the markets were hitting their highs for now. Since, nothing has happened to change that stance. In fact, everything that has happened has confirmed that stance as more and more areas and more and more stocks are breaking down.
For starters, retail, which we have been bearish on even during the rally…is crashing. We do not use a word like that lightly. Retail stocks are simply crashing.
On top of that, the all important semiconductors topped on April 28th and broke down badly the next day.
Biotechs, which never got going, are crumbling with many close to new yearly lows.
Small caps continue to under-perform large caps. This seems to have been going on forever.
The transports have rolled over badly and broke badly below the 50 day average.
The strongest groups remain the most defensive of areas in utilities, reits and consumer staples.
Foreign markets have completely under-performed with many breaking down.
New yearly highs never got going. In fact, there have been more yearly lows than yearly highs on the Nasdaq the past few days.
Financials, which also have lagged, have been rolling over a bit the past few days. If they head lower, markets will head lower.
The Dow and S&P just broke a midge below the 50 day. A goal-line stand is quite needed here.
All this and the same Dow and S&P are just off their highs telling you that again, underneath the surface, the internals have been deteriorating rapidly.
Have we thrilled you yet? Stay tuned! Markets are shorter-term oversold with bearishness picking up, so bounces are due…but this second, that’s all the market has going for it right now. Of course, QE4 can be announced at any time. No…not kidding!