We dare speak the truth on budgets and federal spending and deficits and debt.
Futures are up. Europe is up. The UK is up. What? How can that be? We just had another terror attack. This one targeting innocent children and teenagers. All they were guilty of was attending a concert for one of their favorite pop stars.
First off, our prayers go out to all affected. Unfortunately, no matter how good surveillance and security is, these scumbags are in the weeds. These scumbags can just go on the internet to figure out how to make a homemade bomb. Frankly, we are surprised there isn’t more of these incidents.
As far as markets:
The shock value! Through the years of a decent number of these attacks, have worn off. Markets do not sit around thinking an attack is about to happen but markets now know there is a chance of one happening. The more they happen, the less the shock value. Sorry to put it in these terms but it is true.
The F.U. effect! Yup…markets have their way of sticking a certain middle finger in the air at these scumbags. It’s their way of saying F.U. You are not going to stop is. Yes, markets do have a life of their own.
The world will go on! Again, sorry to put it in these terms as many are suffering in the worst way today. But it is true. The world does not stop.
More than half our market is in a bull market and European markets have been strong. That does not change so easily. If markets were bearish worldwide, we think there would be a bigger effect in the near term.
More importantly, we are sick over another incomprehensible attack and our prayers go out to all affected.
There looks like there was a terror attack in Manchester, England at a Arianna Grande concert where it is being reported many dead and injured. This is a concert where teenage girls flock. We are thinking of Manchester and anyone affected. We will back off talking about market until the pre-market report. Say a prayer! Teenagers.
We forgot to mention DEFENSE stocks gapping up on the news that President Trump cut deals with countries in the Middle East to buy a bunch of stuff. This gap will take a few names out of trading ranges.
Futures are up a wee bit this morning. We wanted to add some thoughts to our weekend report.
The Euro is now moving higher as it looks like a big bottom has been put in place. If this continues, expect the recent better action in oils and a little bit better in commodities to continue. Dollar down…commodities up. We are not sure to what extent this works and will let you know as things progress. Keep in mind, all these areas are under-owned so need to watch for changes. We do recognize important names like BHP and RIO could be turning the corner here as they have been, as usual, following the price of copper.
Chinese ADRs all gapping a bit today to the upside as they have been strong. Keep in mind, when playing, there is always country risk but for now, a few names on the move.
Other than that, so far, last Wednesday was a one off. We are reading many that are saying that is the shot across the bow and after the holiday, market will crumble. We will let the market decide.
Bottom line, very split tape right now but continue to see fireworks on the Nasdaq/ndx/ China ADRs- type stuff.
Believe it or not, not much has changed. Even with the 350 point down day, not much has changed.
With a few exceptions, the bad got badder and the good pulled in hard. .A decent bounce then started up but the bounce also did not change much.
So, like a broken record, notwithstanding oversold bounces:
We would continue to avoid energy/oil&gas…though we do believe a near term low looks like it is being put in place. We just think it may be a trade but that’s it. We would avoid most commodity names, transports (a couple of airlines act well), retail of all stripes (we have been avoiding for many months), biotech, just about everything auto-related, financials, big telecom, gross names like IBM, GE and the like, many real estate names and now maybe starting to see insurance get in trouble. We also need to mention Brazil as it is not good that evidence shown that the new Prez, like the old Prex, was and is a crook.
An important note on transports and financials. Both looked ready to break another level to the downside after the recent carnage. Both bounced past couple of days. Just letting you know both continue to act poorly and have to be watch for a break. If it occurs, market worsens. Watch the 20 day average for the transports as well as the week’s lows and for the xlf, watch the $22.90 level. On top of that, watch the KRE support at $51-$51.50.
Home builders remain in good shape, big cap tech/internet BUT and a big BUT…they have come a long way and now may be starting to trade wide and loose. The same goes for the very strong semis. Other areas are aerospace/defense, China ADRs, European markets and ADRs, managed care, home improvement retail and credit card cos (not the lenders).
Greetings from out west where one falls asleep late and wakes up at 4 am. Yippee!
Futures are up as the bounce off of Wednesday’s nausea continues.
Brazil bounces back a bit off of yesterday’s drubbing. We almost was thinking about probing the drop but no thanks.
NASDAQ/NDX/SOX remain the strongest but leave no doubt a crowded trade. That’s how you get a 150+ down day in the Nasdaq. But you can see on any up day, market is back into these areas.
Gaps this morning…
ADSK…big losses, gap up…go figure. DE another gap to upside off of a nice range. Others are MCK and to lesser extent, ROST and GPS.
CPB and FL gapping down.
We will have a complete report on the weekend as well as the vile reaction by some on social media to someone’s death. What is the matter with these people?