Short note on Gold

One more note:
We forgot to mention that we believe Gold and gold stocks hit a near term top over the past 3 days as 2 of those days finished at the lows of the day off of very extended conditions to the upside. Pullbacks are normal from these conditions. Volume was heavy on the drops.

Short notes on markets and stuff!

Why is it when Republicans vote for somebody they are deemed to be angry but when Democrats vote for somebody they are deemed to be intellectual and reasoned? Just saying!
Also, needed to point out the establishment still does not get it. We still have a long way to go but the establishment had better realize it is still the people who do the voting. You can parade out anyone you want to say anything they want but the voting public matters most.
Back to the markets:
We are being bombarded with emails not asking…but telling us the bear market is about to show its ugly face again. Ok…we got you!
Our thoughts remain the same. We are in rally mode but are massively overbought. We are in rally mode but instead of the bears paraded out, the bulls are full of themselves again.  We are in the 4th week of rally mode.
Leave no doubt that commodities are driving the bus right now. Commodities up…markets up. Commodities down…markets down. Leave no doubt that the under-performance over the past 12-18 months of the small and mid-caps were directly because of commodities. It is no coincidence that small and mid-caps have been leading as commodities bottomed. Yesterday, commodities backed off hard…small and mid-caps backed off hard. We are perplexed that so many say oil and commodities are going to go right back to their lows and even more. Do they not think a 70%-plus drop in oil prices could be it for its bear market?
We believe it gets tougher here as major indices are up and into massive overhead resistance. Leadership remains defensive as the new yearly high list is small and is laden with utilities, food, beverages, tobacco and the like. The best of the move has been areas that had been trashed over the past 12-18 months.
Could the bear market, bear trend, bearish phase be over? Could our call on Feb 11-12 of a low be THE low? Anything is possible. Just remember, China is buying up their stock market, Japan is printing and promising more, Europe is printing and promising more, the UK is printing money, negative rates are becoming more common and 0% pervades the globe…and Sweden is even printing money. Easy money continues to slosh around…and when that continues, again, anything is possible. We are just comfortable in knowing our studies of turns in markets picked up on the extreme bearishness and the massively oversold conditions on Feb 11-12 and we now look for the next big clue! The last good rally back in October lasted about 4 weeks, topped out for a few more weeks leading to the next wrecking of the market. This time?
Gary Kaltbaum

The Morning Look

Stock Market Overview: 

Futures are up ahead of Wednesday’s open as stocks try to recover from Tuesday’s sell off.

Gary’s Thoughts: Saw this headline: “Yesterday’s laggards are today’s leaders! Of course, we haven’t even opened yet. Commodities ruling the day!

 

Economic Data: 

  • MBA Mortgage Applications 7 am EST
  • Wholesale Trade Data 10 am EST
  • EIA Petroleum Status Report 10:30 am EST

Highlights Of The Day:

  • China’s Exports Plunge 24.5% year over year
    Gary’s Thoughts: Yup! All’s well!
  • Shares of Solar City (SCTY) spiked after the company announced a deal to install solar panels in Whole Foods Markets ($WFM) across the U.S.
    Gary’s Thoughts: That’s the reason?

The Closing Look

Stocks fell on Tuesday alongside other so-called risk assets after China announced disappointing trade data. China’s decline in exports deepened in February which strengthened the case that more stimulus may be needed. Chinese exports fell -25.4% year over year which illustrates how weak global demand is. This was the largest decline since May 2009. Chinese imports also plunged illustrating weak domestic demand.

Gary’s Thoughts: #@#&%#@

The Morning Look

Stock Market Overview: 

Futures are lower ahead of Tuesday’s open as investors pause to digest the very strong rally we have seen over the past 3.5 weeks.

Gary’s Thoughts: A few important thoughts: Leave no doubt small caps are laden with commodities…Bullishness on commodities is where bearishness was just a couple of weeks ago. That’s what happens when a few $2 names go to $4…of course, after dropping from $100….Markets remain assininely overbought but unlike recent past, we think pullbacks  are bought for now…growth leadership (FANG-types) is actually topping here…if commodities top out, that’s the end of the rally as they have led…if commodities pull back constructively, they are buyable on tbhose pullbacks. …just keep in mind how huge the bear market in commodities has been…

 

Economic Data: 

  • NFIB Small Business Optimism Index 6:00 AM ET
  • Redbook 8:55 AM ET

Highlights Of The Day:

  • Iron Ore Jumped over 19% on Monday to $63.74, Biggest One-Day Gain on Record
    Gary’s Thoughts: Wow!
  • Hong Kong Home Sales Tumble 70% as Slowdown Intensifies
    Gary’s Thoughts: But everything is fine! 

The Closing Look

Stocks opened lower but closed mixed on Monday as the beaten down areas of the market continue to march higher. Oil prices surged over 5% on Monday and have vaulted over 42% since the Feb 11th, low! That is a massive rally over a short period of time. All the areas that have not been working for years are trying to bottom. It began with Gold ($GLD) a few months ago, now other areas are catching a strong bid. These areas include: emerging markets ($EEM), oil ($XLE $OIH), steel ($SLX), transports ($IYT), materials ($XLB), junk bonds ($JNK), just to name a few.

Gary’s Thoughts: Did anyone see (FANG) today? Hmmm! We know what has been working for the past few days but as we wrote over the weekend, was not thrilled with big tech coming into the week.

What was best is now worst and what was worst is now best!

The rally we called for on Feb 11-12 continues but we now believe that overall, markets are due to rest. Very simply, markets are beyond overbought. But the good news is that overbought will cause pullbacks but the fact things got so overbought is a good thing. But what interests us more is what is happening underneath the surface. Our motto  is now “what was best is now worst and what was worst is now best! 
In our last report, we told you that just about everything that wasn’t working is now getting the biggest bid. Keep in mind, many names from these areas were down 50-90%. Yes…there were 90% drops in many commodity names.
The areas with the biggest moves were steel, copper, aluminum, energy, commodity countries and the like. Late Friday, it looked like they tired out as some names ramped up 50% in just days. Keep in mind,  a stock that drops from $50 to $5 and rallies to $7.50 is not thrilling.
We do want to make you aware that while we saw some serious fireworks in the worst areas, the best areas of 2015 hardly budged. This needs to be watched as biotech and a bunch of big-cap internet/tech just aint happening.
Bullishness has now picked up as the bear’s smiles have turned into frowns. Things have improved as the floor has picked up. Just realize all that has happened is the worst areas have recovered some while the markets have now rallied back into resistance.

The Morning Look

Stock Market Overview: 

Futures are relatively quiet ahead of Friday’s open as investors wait for the fake  jobs report.

Gary’s Thoughts: We have a continued rally in “everything that did not work” for 18 months. Brazil, China, Russia, commodities, emerging markets and all that crap are making big moves off their depressing lows. Keep in mind, some of these areas were destroyed. Will know in time whether this is a real bottom in these areas or just another rally. As of this second, we will get another gap to the upside in these areas. Also…gold and gold stocks on verge of breaking out of flag patterns.

Economic Data: 

  • Employment Situation 8:30 AM ET
  • International Trade 8:30 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • Rob Kaplan Speaks 1:00 PM ET

Highlights Of The Day:

  • Romney Bashes Trump, No One Cares
    Gary’s Thoughts: Does anyone care that Romney is the same old same old. He kissed Trump’s arse when Trump endorsed him…now he hates him. Love love love politicians.
  • Is There a Market for Supersonic Airlines? NASA Thinks So
    Gary’s Thoughts:  We will take Virgin Atlantic 747s and be happy!

The Morning Look

Stock Market Overview: 

Futures are relatively quiet ahead of Thursday’s open as investors digest Tuesday’s very strong rally and wait for Friday’s fake jobs report.

Gary’s Thoughts: We are paying a lot of attention to the worst areas as they try to turn the corner. Forgot to mention that the financials also look like they are turning the corner…a huge occurrence. Keep in mind, there is nothing written in stone that these areas wont just turn back down but for now…Also, had to mention markets are about as overbought on a near term basis as we have seen in ages. This is good and not so good. Good because the fact we are that ovebought tells you how strong this move has been…bad because we are waaaay overdue to pull in…which may not be so bad.

 

Economic Data: 

  • Chain Store Sales
  • Challenger Job-Cut Report 7:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Productivity and Costs 8:30 AM ET
  • Gallup Good Jobs Rate 8:30 AM ET
  • PMI Services Index 9:45 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Factory Orders 10:00 AM ET
  • ISM Non-Mfg Index 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Rob Kaplan Speaks 10:45 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights Of The Day:

  • Shale Pioneer McClendon, Accused of Bid Rigging, Dies in Crash
    Gary’s Thoughts:
     WOW!
  • Apple Digs In for Long Fight: ‘There Is No Middle Ground’
    Gary’s Thoughts: We don’t understand any of this.

The Closing Look

Stocks finished well but nominally on Wednesday. Overnight, Moody’s Investors Service cut the outlook on China’s credit rating from stable to negative which bodes poorly for the global market. In the U.S. MBA Mortgage applications fell -4.8%, lower than the last reading of -4.3%. ADP, the country’s largest private payrolls company, said private employers added 214,000 new jobs last month, beating estimates for 185,000. The Fed’s Beige Book showed economic activity increased in most districts. In other news, Sports Authority filed for Chapter 11. Sports Authority became the first major U.S. retailer to file for bankruptcy in 2016, as they scramble to fight fierce competition from Wal-Mart (WMT) Amazon (AMZN) and others.

Gary’s Thoughts: Good close. More areas that have been left for dead, coming off their lows. The aforementioned steel stocks rumbled on tariffs imposed on China. Also, oils look like they have also turned the corner. If the worst areas turn the corner…