PRE MARKET

Uh…NASDAQ/NASDAQ 100. Uh…NASDAQ/NASDAQ 100. Uh…NASDAQ/NASDAQ 100. We shall leave it at that.

Fast and amazing fact:

Total return since the Amazon IPO in May 1997

Barnes & Noble: -13%

Amazon: +91,644%

Full report on the weekend.

PRE MARKET

I hold off from writing at night about markets because markets do not seem to have memory from day to day. This morning, we get the opposite of yesterday. Simple as that. A gap to the upside to negate yesterday’s gap to the downside. Thrilled yet.

Even the moves in commodities are amazing based on overnight moves in currencies. But the bog picture has not change. Over half the market still not working but the half that is working, works well. It is just very narrow.

Yesterday, oil prices mauled…today, they gap back up. Commodities mauled. Today, they gap back up.

But we can continue to list a bunch of areas and a bunch of countries that just aint working.

NASDAQ/NDX/TECH/INTERNET/SOFTWARE continues to lead the way. There is still good action in some RETAIL, RESTAURANTS and a decent amount of growth names.

Earnings start up Friday with a few financials and ramps up next week.

 

OH YEAH! TAKE THAT!

Those that have watched my hits on Fox News and Fox Business or listened to my longer form radio show, know I am vehemently against tariffs. I have stated that the worry was not the tariffs currently in place but what happens when they go up to $100 billion, $200 billion and more? I don’t like tariffs on us and don’t like tariffs on anyone else. But the fact is WE HAVE BEEN UNEQUALLY treated by others forever. Past presidents have had a policy of hear no evil, see no evil, speak no evil on trade. They cut byzantine deals that Einstein could not figure out what is in the deals. BUT…that does not change the fact that bigger and bigger tariffs will do nothing more than taunt markets, business and economies, both here and around the globe. It is ultimately a tax on us as it is always, we the people that pay the piper. We pay the piper in higher costs, slower business, fewer jobs and most importantly, uncertainty. For example, soybean farmers cannot currently plan. They cannot plan on crops. They cannot plan on renting or buying equipment. They cannot plan on futures contracts. Multiply this by every business affected and again, business is being taunted.

The administration upped the ante last night, now poised to raise tariffs on China to the tune of $200 billion. The new tariffs would not take place for a couple of months which gives business the chance to yell and scream about how their respective business will be affected. Hearings will be scheduled for late August. China has already reacted with another certain finger shot back at the administration saying they will act in kind.  We now start to worry that the next move will be on autos in a big way. Mr. President, that would be one gigantic food chain that gets affected. Careful!

The problem is all evidence in is no one is blinking. Yes, we have heard rumors that Germany wants to talk but they are only rumors. The fact is again, all evidence in is that no one is backing down.

The good news is that for the most part, markets have not been affected. And yes, markets do matter. Futures are down nicely this morning but so far, no big deal. But that’s the short run. In the long run, the longer uncertainty pervades, the tougher it will get for business. Uncertainty for business pervaded the air for 8 years under Obama which led to subpar numbers even though they used the central bank’s 0% rates and the printing of $5 trillion to keep things afloat. We are in hopes these “tactics” bear fruit. We are in hopes this works out to all benefit. As of now, it is starting to escalate and that is bad news.

PRE MARKET

All the areas that have been under-performing, put in lows yesterday. These areas were said to be affected by tariffs but once the tariffs were put in place, the world did not end.

So:

DOW held 200 day.

S&P held 50 day.

TRANSPORTS held 200 day.

BIG FINANCIALS (XLF) held big big support.

INDUSTRIALS, COMMODITIES, MACHINERY, DEFENSE all moved off support levels. The question now into earnings is whether they can really get going. Good question. Good start yesterday.

 

WEEKEND NOTES

Maybe if the trade war escalates, the market will really start rallying. (sarcasm)

The most important part of the equation is that all major indices HELD THEIR RESPECTIVE SUPPORT LEVELS:

The strongest NASDAQ/NDX/RUSSELL all held 50 day with NASDAQ/NDX really popping off of it Th and Fri. The NDX held to the penny.

The S&P held the 50 day but not nearly as strong. The DOW is just holding the 200 day along with the NYSE…so there is definitely strong and weak.

Add in the SOX holding the 200 day just like it held in late April and the TRANSPORTS just holding onto the 200 day…again, lots of weakness underneath the strength. BIG FINANCIALS are a part of the weaker areas as the XLF just holding support under the 200 day.

The worst remains other markets like EEM,EFA,FXI,EWZ and others but feels like they may be sold out for this second…but still very bearish.

And they say moving averages do not matter. Leave no doubt, if at any time we get a break of these areas, I think all hell breaks loose but for now…they hold.

BIOTECH wakes up off of BIIB news. Look at the IBB, BIB and some proxies doing better like an AMGN and even weaker GILD, REGN coming off the ugly.

A bunch of OIL names at the tips as oil prices remain strong. Very mixed bag in the group though.

MOST IMPORTANTLY, growth again reasserts itself heading into earnings season. A slew of names held the 50 day this past week with a decent amount of names stronger. Keep in mind, most are just in new bases formed during the corrective work in the markets. The hope is and odds favor a bunch break out again but earning’s reports will have a big say.