-The markets rallied off of some of the most stretched, extended and oversold conditions we have seen in a long but:--Every major index except the DOW, almost every sector and most countries still trade UNDER the LONGER-TERM 200 DAY MOVING AVERAGE.--Leadership remains almost nil with mostly defensive names showing the best relative strength. CONSUMER STAPLES (not all), a few UTILITY names, some DISCOUNT RETAIL and not much else.--As we scan past leaders in growth, many trade in between the 50 and 200 day with wedging moves back towards the 50 day. There are others that are much worse. They broke below everything.--The SOX, even with this week’s rally remains way below the 200 day with nary a name in shape. The FINANCALS also.-=Friday’s market reversed to the downside until the prez inserted another timely “announcement” on China. The market rallied into the close but in no way changed the big picture…that A low, probably a decent low for now has been put in place but we are doubtful of how far this rally can go…and for all we know, Friday’s high may be it. If that is the case, one cannot be thrilled. The weeklies look better as markets could have had a gigantic defense week…but too early to tell._-And now onto the election. We are quite tired of all the bs. We approve this message.-
Greetings from our offices in Amsterdam. (sarcasm)
On Wednesday morning, we called A low based on excessive pessimism, excessively stretched and extended to the downside combined with the strong close on Tuesday.
But dang! Way way better than we would have thought but then again, this happened in February also. Right after A low was put in, the market moved up in a v-shaped fashion before it hit a wall and retested for a few months.
We gap up strong again this morning off of a big move in Asia. The president once again, seems like the 20th time, came out to tell us things are going smoothly with China and lift China did. Technically, looks like a decent chance China and other world markets may have turned the corner after months and months of nausea. We must say the jury is still out but so far, so good.
The only issue this morning is that the almighty APPLE (AAPL) will not be of any help to things like the NDX.
We think we may just see what we saw in February…so expect once this initial rally peters out, to get some serious retesting. It just aint going to be that easy. The good news is that we have entered a period of seasonal strength. The good news is that A low may just be A darn good low.
Full report on Sunday.
Another up day. Just be careful. As we screened 1500 stocks, 200 sectors, many countries and commodities, it seems to us we just have a “beyond oversold” rally of unknown price and time. The MAJOR TREND does not change on two days up.
Just about everything still trade BELOW the 200 day average with the DOW sitting on it. The DOW always holds up best in bearish phases. Most growth stocks we follow are in between the 50 and 200 day, what we call no man’s land. The names that hold up best are the ones we isolate for when the market decides to stop the ugly. But many have broke below the 200 day.
APPLE (AAPL) up next for earnings. Many are in hope it turns the market up. We do not believe any one stock can do that, even the almighty APPLE. But always open to anything.
Futures off their highs today but still up a wee bit. Random whipsaw will continue in here as market(s) remain very stretched and extended to the downside.
Futures were strong earlier but now down…down much more on the NASDAQ/NDX. Big TECH continues to be yonked.
We were even surprised how weak the market was yesterday. When a market is stretched. extended and oversold, bounces usually occur. So far, they haven’t lasted a day. Continue to sit back and be patient.
Our thesis on MARIJUANA stocks is now being played out. We expect this frothed up, ridiculously valued area to be slaughtered, akin to the “coin mania.” You just cannot have $15 billion market caps with very little sales. The comeuppance seems to be at hand.
If this is indeed a real bear, anything losing money will have the curtains come down. Think clearly.