60-40 Market feeling a little tired!

 

After a darn good move, this 60-40 market is now feeling a little tired. A 60-40 market simply means about 6 out of 10 stocks remain in shape while 4 out of 10 just ain’t happening. Looking farther out, these numbers do not thrill but as long as the major indices stay above their respective 50 day average and as long as the 60% keeps working, no sweat.

So to be repetitive, we remain bearish on a long list of areas…some we have been bearish for quite a long time:

ENERGY/OIL & GAS…except for REFINERS.

STEEL, COPPER, ALUMINUM, COAL and all that stuff.

GAMING

METALS/MINING

UTILITIES, REITS as BONDS have topped. Near term , bonds may have put in a low.

RAILS

MACHINERY

We are also starting to see tops in AIRLINES which with the RAILS have held back the TRANSPORTS recently.

Our favorites:

Remains a long list of MEDICAL,MEDICAL PRODUCTS, BIOTECH, MANAGED CARE and GENERICS.

RETAIL-(DISCOUNT,HOME IMPROVEMENT, DEPARTMENT STORES, DRUG STORES, SUPERMARKETS , APPAREL)

SEMICONDUCTORS

RESTAURANTS

A few other notes:

FINANCIALS are mostly mixed. Not much there.

GOLD had been emerging but is now still in pullback mode.

HOUSING is the latest group that has emerged on the upside. This group had been dormant for a while.

What not to be in!

As usual, we will have a comprehensive market report over the weekend…but…with the market hanging tight, lots of stuff working underneath but the areas we have pointed out to you to avoid have not really changed. Here are a few.

We would continue to avoid anything energy (except for refiners). We believe the recent rally/bounce is just that. The same goes for natural gas which seems to be breaking down here.

On top of that, most all commodity areas seem to have also hit the wall after bouncing in their downtrend. Again, no leadership here.

Recently, we told you on Feb 6 that we thought the bond market and many interest rate sensitive areas had topped for now. That stance has not changed as reits and utilities coninue to act poorly here.

We would not continue to avoid most gaming…especially the ones with exposure to Macau.

We will have a few other areas over the weekend as it is easier to isolate weakness when the market is strong.

 

Stunning statistics!

We are optimists here. Ok…optimists on us…but not on the miscreants in DC. But we do worry as the fed makes the rich richer and leave the middle class dead by their maniacal 0% policy. But the real worry is in some of the statistics that have recently come out…and they are stunning! These numbers must get better!

#1 According to a survey that was just released, 24 percent of all Americans have more credit card debt than emergency savings.

#2 That same survey discovered that an additional 13 percent of all Americans do not have any credit card debt, but they do not have a single penny of emergency savings either.

#3 At this point, approximately 62 percent of all Americans are living paycheck to paycheck.

#4 Adults under the age of 35 in the United States currently have a savings rate of negative 2 percent.

#5 More than half of all students in U.S. public schools come from families that are poor enough to qualify for school lunch subsidies.

#6 A study that was conducted last year found that more than one out of every three adults in the United States has an unpaid debt that is “in collections“.

#7 One survey discovered that 52 percent of all Americans really cannot even financially afford the homes that they are living in right now.

#8 According to research conducted by Atif Mian of Princeton University and Amir Sufi of the University of Chicago Booth School of Business, 40 percent of Americans could not come up with $2000 right now without borrowing it.

#9 That same study found that 60 percent of Americans could not say yes to the following question…

“Do you have 3 months emergency funds to cover expenses in case of sickness, job loss, economic downturn?”

#10 A different study discovered that less than one out of every four Americans has enough money stored away to cover six months of expenses.

#11 Today, the average American household is carrying a grand total of 203,163 dollars of debt.

#12 It is estimated that less than 10 percent of the entire U.S. population owns any gold or silver for investment purposes.

#13 48 percent of all Americans do not have any emergency supplies in their homes whatsoever.

#14 53 percent of all Americans do not even have a minimum three day supply of nonperishable food and water in their homes.

Not much to add!

There are times where there is just not much to add. This is one of those times. Markets continue to inch higher with decent action underneath. We love quieter markets but this one is a little overdue for a little shake. Doesn’t mean it has to happen but paying attention.

Less is more today. We are sure we will see something emerging or submerging soon but not today.

The Knicks are 10-45….that’s 10-45. Next up, our frustrating Mets…though we really like their pitching staff this year.

 

Major indices continue to break out!

First off, the NASDAQ,NDX and the mid-caps have cleanly broke above range. With Friday’s late move, the S&P and DOW have edged above range and even the small caps have edged above. The only major index to stay in range is the TRANSPORTS as higher oil has impacted a few names. These moves simply bring a good amount of names either breaking out or setting up to break out.We suspect a pullback could happen at any time but the improvement we are seeing should contain any downside.

For us, the most important part of the equation is the great action in growthland as many names have come to the fore in sectors like RETAIL, RESTAURANTS, TECH, MEDICAL and BIOTECH. We absolutely love markets when growth is leading.

Unless recent breakouts fail, we have very little to complain about.

But  to cover the negative side:

Our thoughts on the interest-rate sensitive areas of the markets has not changed as we believe a decent top was put in place on Friday the 6th in bonds, utilities and reits.

We suspected there was a further move to the upside in the commodity complex…namely the down and out energy. This continued throughout the week but now it gets a little trickier as the moves start to get more random…and remains longer term bearish.

But clearly there has been improvement with the only thought here is maybe markets are due for some pulling in. A pullback here would be normal and just fine. And lastly, as we thought, Greece would get an extension of the extension as Europe cannot afford the massive writedowns and capital raise that would occur if Greece went bye bye. Longer term, the massive debt that is building across the globe will eventually come home to roost. It always does. But the massive printing of money and extensions just put off the inevitable.

No complaints!

No complaints just yet. Market is due for a little stall or pullback but no biggie as of yet. In fact, we love quieter markets after a move up and that is exactly what we are getting so far.

Our only other words are STAY WARM! We will have big market report over the weekend.

A three day conference on terrorism that does nothing to stop terrorism!

So the Prez is having a three day meeting on terrorism. But it has turned into nothing more than “why would they do such things?” We are sure we do not know of the meetings behind closed doors on what to do about the ever-growing Isis and their ever-growing list of death. We are somewhat happy that authorization for something has been asked for. But the perception is that they are more interested in figuring out what’s in these murderous bastard’s heads, in other words, while Isis expands, we are soft on terror. These animals do not discriminate. They kill everyone who do not agree. If you are a Jew, you are tortured, shot or beheaded. If you are gay, you get thrown off a roof. If you are a Coptic Christian, you get taken to the beach…and not for a swim but to be beheaded. If you are a journalist, you get beheaded or shot. If you are an American, Japanese, Jordanian…it does not matter. They kill their own on the spot for disagreeing.

We have heard the question posed before. If the Nazis were in power now and murdering millions of Jews, what would we do? Back then, there was no internet and no social media. Most did not know what was going on. Fast forward to today. These animals would want nothing more than another Holocaust. They would like nothing more than to eradicate not only Jews but also Christians…which gets you close to just about everyone. They would eradicate Muslims who disagree with that they do…and they flaunt it in plain sight. In plain sight, they are doing all this…yet we, the United States of America, the shining light, the country that stands for justice…does a few strikes and has a conference. Do you think Isis is trembling in their boots? Do you think they are trembling in their boots when a State Department spokeswomen states that getting them jobs would help? Hey…let’s just get them a Linkedin page.

Clint Eastwood was once asked in a Dirty Harry movie why he thought a certain criminal murdered others. He had a simple answer…”because he likes it!” Look no further than that. These murderous scumbags like murder, like executions and like that they are flaunting it while most sit back and relax. Instead of a three day conference on WHY…there should be a five minute minute phone call with many heads of state on HOW. And HOW means HOW we are going to rid the face of the earth of evil. Rid the face of the earth of people who wake up in the morning to kill or recruit others to kill. If not us…WHO?

We’ll be back to the markets tomorrow.

These areas should continue to be avoided!

2 Fridays ago, we told you we thought that bonds and the interest rate sensitive areas as well as gold and gold stocks should be avoided for now. We simply saw high volume drops from the highs or near the highs. Since, we have seen nothing but downside. At this juncture, bonds, utilities, reits and the gold complex are now oversold so a bounce is due…but the trend, at least for now, looks to be down.

Of course, those monies have moved into the major indices…which are now overbought near term. But the technicals have improved. As long as pullbacks remain controlled and rotational, the majors should be ok.

Greece is the word!

Full market report tonight but first Greece!

We love Greece. We have visited a few times. Some of the most beautiful places on the globe can be found there. Santorini, Mykonos, Corfu are bucket list places to visit but there is a lot of crap going on there and it is all about the bucks.

We remember the old line that if someone owes a little money to a bank, it is their problem but if someone owed a ton of money to a bank, it is the bank’s problem and that’s where things stand. The bank is the Eurozone and the number is over $300 billion. This is a gargantuan number considering the size of Greece. If Greece decides to shoot a certain finger back at the Eurozone, you would see massive write-downs as well as quick raises of capital. It would also open the potential for other debt-laden countries like Italy and Spain to do the same. Thus we think it is long odds for a default right now as no one wins. The problem is that all we will get is an extension of an extension and nothing more than more kicking the can down the road…which is ULTIMATELY not good. We capitalize the word ULTIMATELY because massive long run debts always end badly. Keep that in mind. And just remember, the great old U.S. of A is sitting on an $18 trillion debt time bomb that is being glossed over because of a rigged bond market, the printing of money and a media that hears no evil, sees no evil and speaks no evil as long as the great corrupt socialist is in power.

The bigger laugh is to hear the new head of Greece complaining there has been too much austerity. Yup…and the Knicks are going to win the NBA championship.

Breaking out!

Major indices have either edged above breakout levels or are about to from 11 week trading ranges. If successful and all evidence so far looks good, do not argue.

Remember, if the S&P 500 breaks out, that represents 500 names. If the NASDAQ 100 breaks out, that represents 100 names and so on.

As we have told you for ages, anything is possible. Breakouts do fail but breakouts for indices out of constructive patterns usually do not. And with other countries announcing negative interest rates and the printing of money to buy those bonds even though rates are negative, the easy money just gets easier. We still don’t understand why this is being done.

Just one more note in that oil prices are going to open above the first stairstep off the lows.

Weekend report is next.

Knicks are a horror show and now Carmelo is sitting for rest of the year. Way to go Phil Jackson!