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!

 

And closer!

What do you know? Sweden’s Riksbank is now delving into the negative interest rates world and also announcing their own printing of money to…you guessed it…buy bonds. The question is why would anyone buy their own bonds that have negative yields? Simple. They are following the template of Bernanke and the rest thinking it will help. But all this does is inflate the bubble even more.

But enjoy the bubble. Embrace it…as now it looks like major indices will open at the tips of recent highs. As you know, a breakout above the 11 week trading range should not be fought with. We had all kinds of other thoughts this morning but they pale in comparison to more easy money and a market hopefully ready to move out.

Getting closer!

Major averages are now on the verge of going topside. We never jump the gun but with yesterday’s action, we are getting closer. There is nothing bad about a move above the range…as long as the move holds. Aren’t we geniuses?

The important part of yesterday’s action was the SEMIS. As you know, they are vital to our work along with the FINANCIALS. These areas simply have been great leaders of the market, both up and down. The SEMIS ramped well yesterday as they also now set up for potentially higher prices.

There is still a very short list of new highs but many names looking like the major indices. A break above for the indices should show many new names breaking out. Stay tuned!

 

They still cannot sell the indices down!

Just a short note this morning:

Despite the 50-50 market. Despite the many areas that are not working. Despite not having a bear market since the big flood of 42. Despite nary a good correction…despite all of this, major indices continue to be range-bound. There is an old motto…if they can’t sell them off, they are eventually going higher. As always, we will let the market decide but so far, support levels get tested and support levels hold. A couple of good days will take major indices out of the range. A couple of bad days will do the opposite. That’s how tight the range is.

This morning, indices are again in gap city as Greece this and Greece that. Just keep in mind, nothing has changed with central banks. Rates continue to be at 0% and in some places are negative. The printing of trillions continues and since the lows, the over-the-top, never-been-seen, easy monetary policy has been the best friend of markets.

Still in that nauseating trading rage but a couple of important changes!

Support held Monday morning at the lower end of the trading range leading to another jack to the upper end of the trading range. The swiftness tells you how paper thin the trading is…both ways. But we think the market hit a near term high at resistance on Friday…which probably leads to some more pulling in here. Yippee. Simply put, a break out of this range by the major indices, either up or down, will have consequences. To the upside…good…to the downside…bad. Duh!

Underneath the surface, it remains a 50-50 market where half the market is blah while half the market works…thus the reason for the trading range. But…seeing a few things changing you need to be aware of.

While bonds remain in a long-term bull market, the recent high looks to us as a good short-intermediate term high. Bonds have been on a tear.

Off the move in bonds, we think the interest-rate sensitive areas of utilities and reits have also put in short-intermediate term tops as many names are breaking below support areas.

While gold and gold stocks have had a good relative bid, we think the short term has turned down. We will now watch to see where support comes in.

Watch housing stocks as a few look poised to break out of long trading ranges. This group has been dormant for a while.

While our thoughts of a rally in oil-related issues came to fruition, we think they are close to petering out as they have come into resistance areas.

To put it mildly, trading ranges are your friend and your enemy at the same time. They are your friend because the time allows bases to form over a longer period of time in order to potentially break out. They are your enemy if you are impatient as the markets bounce around giving nothing but headaches.

Lastly, our two cents on Brian Williams! There is little doubt in most eyes that this man played with the truth…and maybe that is being too nice. But to us, the bigger problem remains what we have been telling you for a very long time. That is the utter corruption of the national mainstream media as they pick and choose winners and losers based on ideology by mis-reporting, under-reporting and not reporting whenever it suits their cause. We can give you a laundry list of all this nonsense but gather you know the list by now. There is no longer holding people in power accountable…that’s unless they do not like you. That’s when the attack dogs come out with teeth gnashing. When you are liked, you get away with anything.

GARY ON THE MARKETS CHURNING UP HERE!

A lot to digest this week as underneath the surface, a lot of jello moving on the plate…and it is not in a good way.

While the major indices are at or near recent highs:

The small caps continue to woefully underperform. This theme has been going on for months.

Bearish action can be found in:

AUTOS,CONSTRUCTION MACHINERY,COAL,ENERGY,GAMING,GOLD/SILVER,HOUSING,INDUSTRIALS,
METALS/ORES,RESTAURANTS,REITS.

Toppy action can be found in BIOTECH and SEMICONDUCTORS. These two areas have led…so they will be important to watch. There is potentially a classic double top in the SEMIS. This is a pattern that shows up AFTER a big move in where a high is made, a drop takes it down…and a secondary high is hit at or near the first high.

While the major indices at or near recent highs, amazingly, new yearly lows outnumber yearly highs.

Our proprietary survey of stocks in good shape versus bad shape continues to woefully lag major indices.

We would like to add a few other things to ponder.

The bond market looks to have topped as yields are now heading north. This move topped out the REITS badly in the past week and probably the UTILITIES. This should be watched as the Fed has had its way with rates by printing trillions. To her credit, Yellen has been rolling it back…with more to come this week. The question is whether she will blink if we get a decent correction and just start printing again.

Sentiment remains a joke…meaning no bears. As we have stated numerous times, the numbers we follow are at multi-decade lows. One has to go all the way back to 1987 to find them…not kidding.

Do not get us wrong. There is still plenty working. In fact, big FINANCIALS have been starting to move out of range. As short rates stay down and long rates move up, margins expand…thus the reason for this move higher. We shall see if it lasts. On top of FINANCIALS… AIRLINES,CHEMICALS,HEALTHCARE,HOTELS/TRAVEL,INVESTMENT BANKS,RAILROADS,RETAIL and TRUCKING continue to act well.

We just believe the market may have been churning in the past week or so. Churning usually changes a trend. One good down day will start sending the major indices back down to the 50 day average where there will be a big test. That said, one good day could take us out of range for another leg up but with a lot of warts. We suspect it is the former.