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…

The Morning Look

Stock Market Overview: 

Futures are down a little ahead of Wednesday’s open as investors digest Tuesday’s very strong rally.

Gary’s Thoughts: 

On Feb. 11-12, we told you we thought another low was being put in for the market. Dang! It has been a darn good low.
We must admit, we really started to worry that the nascent rally was ending this past Friday and Monday. But Tuesday’s gap to the upside and strong action ended all that…so the rally off the lows continues.
The interesting part of Tuesday’s strong move was all the “stuff” off the lows turning the corner. Areas like Brazil, Russia, China, Emerging Markets and financials all have moved above their first line of resistance off the lows. If they can hold the move, nothing but good news in the near term.
We are being asked why. Why is the market rallying in the face of some very suspect numbers? First off, there have been some decent numbers to go along with some suspect numbers but do not forget that massively easy money remains the rule of the day. In case you did not know, Japan’s 10 year is now negative and is still printing, China eased again and is still printing, Europe is still printing and promising to do more and now the IMF is calling for a global coordination of stimulus. The IMF obviously thinks the printing of $15-20 trillion is not enough…0% rates for 7-8 years is not enough…negative rates is not enough…so what’s next?
Markets are now the opposite of Feb 11-12. Back then, they were waaaay oversold. Now they are waaay overbought but the good news is the fact that they have been able to get so overbought tells you the strength of this move. Massive overhead resistance is now straight ahead. If we had the market to do our bidding, we would love to see a few days of pull back/sitting to work off some of the move.

 

 

 

Economic Data: 

  • MBA Mortgage Applications 7:00 AM ET
  • ADP Employment Report 8:15 AM ET
  • Gallup U.S. Job Creation Index 8:30 AM ET
  • John Williams Speaks 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • Beige Book 2:00 PM ET

Highlights Of The Day:

  • Super Tuesday Is Finally Behind Us
    Gary’s Thoughts: Trump vs Clinton. This is going to get good!
  • The Self-Piloting Hobby Drone Has Arrived
    Gary’s Thoughts: Just what we want. Things flying over our head! Yippee!

Guess the gap!

“Gary…markets reverse lower yesterday and just gap up today on bad economic numbers. What gives?

What gives? The same as the past 7 years. Bad news=good news especially when central banks are in full mouthing off. Japan 10 year is now negative. IMF says we need worldwide stimulus! (Not kidding) Europe says more to come. China just eased again. Our fedheads now saying their “data dependant” noise is now skewed to the negative. Markets are still in this drift higher off of the Feb 11-12 lows. We’ll leave it at that for today. After all, it’s SUPER TUESDAY!

 

 

 

The Morning Look

Stock Market Overview: 

Futures are higher ahead of Tuesday’s open. Today is Super Tuesday and the first trading day for the new month.

Gary’s Thoughts: And the gap to reverse all the selling yesterday as more easy money talk pervades the air.

Economic Data: 

  • Motor Vehicle Sales
  • Redbook 8:55 AM ET
  • PMI Manufacturing Index 9:45 AM ET
  • ISM Mfg Index 10:00 AM ET
  • Construction Spending 10:00 AM ET
  • Gallup US ECI 2:00 PM ET

Highlights Of The Day:

  • Argentina Reaches Debt Accord With Holdouts After 15-Year Battle
    Gary’s Thoughts: That crap still going on?
  • Pending Sales of U.S. Existing Homes Fall by Most in Two Years
    Gary’s Thoughts: It’s all good!

The Closing Look

Stocks opened higher but closed lower on Monday after the latest round of tepid economic data was released. Over the weekend, the G-20 meeting disappointed investors while China announced more easy money.  China’s stock market fell again which prompted China’s Central Bank to cut it’s reserve requirements in another attempt to stimulate their market. In the U.S, economic data remained tepid at best. Chicago PMI fell to 47.6, missing estimates for 52.9. Pending home sales slid by -2.5% in January, missing estimates for a gain of +0.5%. The Dallas Fed Mfg Survey fell to negative -8.5. The Dallas Fed’s general activity index was much worse than expected and fell to negative -31.8 in February vs minus 34.6 in January. Monday was also the last trading day of the month.

Gary’s Thoughts: Feels like the opposite of Feb 11-12 when we told you a low is in. Feels like a high is in now. There is just not much we like about this market.

The Morning Look

Stock Market Overview: 

Futures are slightly higher ahead of Monday’s open. Stocks rallied sharply over the past three weeks and are now trading near important areas of resistance (the 50 DMA line).

Gary’s Thoughts: Caerful! Google the words “eye of the hurricane!”

Economic Data: 

  • Chicago PMI 9:45 AM ET
  • Pending Home Sales Index 10:00 AM ET
  • Dallas Fed Mfg Survey 10:30 AM ET
  • Farm Prices 3:00 PM ET

Highlights Of The Day:

  • Spoiler Alert: G-20 Meeting Ends With A Stalemate
    Gary’s Thoughts: We wish they just go away. They are killing us.
  • Oil Crisis Spreads: Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says
  • Gary’s Thoughts: Wait…there will be more!