To our friends in the path of Florence,
As someone who has been through many weather events, not only hurricanes but also tornadoes (my first week in Florida had a tornado rip through my apartment)…DO NOT SCREW WITH MOTHER NATURE. Err on the side of caution. Hurricanes have no bias. Rich or poor…race, creed, color…does not matter. They will destroy any and all in their path. I have seen it and experienced it first hand. I helped out and toured the devastation of Andrew. It looked like a nuclear bomb went off. I watched 3 hurricanes pass through Central Florida in 2004. I saw the devastation of Irma last year.
If you can, GET OUT. GET AWAY. Go west and go west fast. Go south and go south fast. Go north and go north fast. Maybe it will be less than expected. Maybe not. Life is more important. Everything else pales in comparison.
Just thinking of you!
Yesterday’s pre-market was not so good but the 21 day moving average contained the DOW and S&P with the NDX and NASDAQ contained near the 50 day. The RUSSELL is also holding the 21 day. Add in AAPL and AMZN holding 21 day. Add in the continued strength in a select group of growth names and you still have a “market” that will not buckle.
BUT…and it is a big but…nothing has changed in all the areas that we have been bearish on and are still bearish. The SEMIS again had a bad day yesterday and will open lower again. We are quite surprised that the SEMIS have not influenced things but eventually they will. On top of that, foreign markets are horrid. We have been telling you to avoid them for a long time. Now…newspapers have headlines of the weakness because some areas are now down 20%.
We don’t know if our market becomes a part of the contagion but so far, the U.S. market continues to be a huge port in the storm across the globe. We are not just talking markets but currencies and bonds. Argentina, who we believe has defaulted 8 times throughout the years, were still able to float 100 year bonds. Yes…100 year bonds. They are now trading in the low 70s. Many other countries also have issues.
Asked every day about the marijuana stocks that continue to soar. Answer: just be careful. Extended is extended and they are extended. Froth is froth and they are frothy.
VTL down 90%…the drug did not work.
Check out the insider buying in TIF, TTWO.
I still remember where I was standing, what I saw, how I saw it, what I said. Another plane hit. My exact words yelled out: “IT’S A F—ING TERRORIST ATTACK!” I remember the drive home. I remember the whole day. I remember the next few days as the market was closed. I cannot believe it has been 17 years. This is one of those events that feels like yesterday. The stories of courage of heroes going back into the buildings. We can never forget. I never forget.
Futures down this morning but this morning…really don’t give a crap.
Even with major indices just off highs, there is a ton of weakness. We are seeing HOUSING breaking down from low levels, continued weakess in GAMING, GOLD/SILVER, STEEL, COMMODITIES, SEMI-EQUIPMENT which is being blasted, DISK DRIVES, HOTELS, AUTOS, a few select RETAIL showing some tops, a ton of OILS, all the other countries and areas we have been telling you about. Just go take a gander at EEM, EFA, FXI, RSX, VWO, IEMG. On top of that, saw more new lows than new highs most of last week. On top of that, past leaders like FB, TWTR and even GOOGLE now breaking the 50 day. Less than thrilled that the AMTD, ETFC, SCHW now rolling over, very often market proxies.. Let’s add in the BOND MARKET may have topped. (TLT) And may we say lastly, we are hard pressed to find good chart set-ups except for (ready for this) some big cap DRUG, CONSUMER STAPLES and other defensive areas. Lastly, don’t know how to even start talking about Tesla…glad we laid off.
The good news is that our proprietary list of growth names continue to be a port in a potential oncoming storm but even some of those names like AAPL, AMZN and others came in decently. We can all but guarantee if the market comes after this growth list, then something is up. Other areas that act well are MANAGED CARE, RAILS, select RESTAURANTS, select RETAIL but again, leave no doubt, the herd has been thinning out. More thinning would not be a good thing.
The good news continues to be major indices have hardly budged with any pullback contained. Until that changes, it is folly to get too bearish. Just realize this in no way is a “throw the darts” market.
Lastly, very speculative and ridiculously priced marijuana stocks have been the recent “buy at any price” froth area. One name (TLRY) has a $7 billion market cap with just over $20 million in sales and is even down 15% off highs. We will have no problem probing new technical set-ups as fads can pay off in the short term but word to the wise, if you buy them ridiculously extended, you are in for a world of hurt when they decide to come in so pick your poison correctly.
For no reason, futures gapping up this morning. Again, any pullbacks are contained. Usual growth names up in pre-market.
Very slow earnings week. ADBE and ORCL on Thursday.
Not a good day yesterday for TECH/INTERNET/SOCIAL MEDIA.
Names like FB, GOOGL, TWTR act poorly. They are a tail wind for market for a long time. On top of that, even AMZN and AAPL now pulling back. On top of that, poor action in TSLA and NFLX not helping. TSLA down another $15 this morning as Chief Accounting Officer Dave Morton provides notice of resignation effective immediately. He just joined August 6.
So…beta changing up some here but it is not just that. For a while we have been telling you how almost half the market not participating and every time we get weakness, they just worsen. Yesterday, SEMI EQUIPMENT was smacked even worse. Go look at KLAC, AMAT, MKSI, LRCX. MU also hit. Worry about pricing.
Also and to repeat for the hundredth time, EMERGING MARKETS, RUSSIA, CHINA, BRAZIL, TURKEY, EAFE and many other areas around the globe…from ARGENTINA to GREECE…all acting poorly. The U.S. market is so much stronger than the rest of the world. There has to be the question on whether we get dragged down.
Other areas in poor shape are HOUSING, GAMING (squashed), OILS, GOLD/SILVER, COMMODITIES, AUTOS, HOTELS and can now add bad patterns in BROKERS AMTD, SCHW, ETFC, a few RETAIL names like AEO, FL, ANF, GPS, M, URBN…though there remains a good number of nice RETAIL patterns.
Just know some issues showing up for the market, namely the big megacap narrow leaders in TECH/INTERNET/SOCIAL MEDIA.
Futures down decently even though employment numbers look decent. FIVE, OKTA, MRVL, PANW gapping up.
TSLA gapping down…