The Internals

While the major indices go back and forth, here are some things we are seeing inside the market. Remember, this is an end-of-month (almost) week as well as pre-holiday trading where the bias is usually positive.

SEMIS- Great move last week off lows. Very important to market. Headed into massive resistance yesterday and sold down a wee bit. Not much bad happens if semis are working.

FINANCIALS- Actually like the set-up here to potentially go higher. Keep in mind, a lagging area. Has had very little in the way of leadership but did react well to what were putrid numbers.

RETAIL- Holy hell. But very very very stretched to the downside and oversold…we think! At least it better be. For lack of a better word, many big names have crashed.

OILS- Pretty much range-bound with many names now trading below support.

COMMODITIES- Rangebound again with a few names being strong and trading above 50 day average.

GOLD- Gold topped here for now. Trading below 50 day average. GOLD STOCKS remain much stronger but are now in pullback mode.

BIOTECH- The good news is this area is not an anchor right now as it is not going down. The lows were close to revisited the third time where it held. It is now curling up a wee bit but nothing near leadership quality action.

APPLE- Since everyone asks.  The good news is the undercut at yearly lows was just that as APPLE has now rallied above it. And now, we get some rumored news that next order is going to be better than expected.  Trying to recover but remains pretty much a bearish chart pattern. Resistance on every dime that it rallies. Do not forget Buffett’s purchase also helped.

The Morning Look

Market Update:

Stock futures are higher ahead of Tuesday’s open as the whip saw action continues on Wall Street. In the near term, the S&P 500’s next level of resistance is the 50 day moving average.

Gary’s Thoughts:

Economic Data:

  • Redbook 8:55 AM ET
  • New Home Sales 10:00 AM ET
  • Richmond Fed Manufacturing Index 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 52-Week Bill Auction 11:30 AM ET
  • 2-Yr Note Auction 1:00 PM ET

Highlights:

  • Shari Redstone Vaults Past Nemesis Dauman in Viacom Battle
    Gary’s Thoughts: There will be a few movies made on this.
  • Corporate Defaults Are Spreading Outside Commodities
    Gary’s Thoughts: Don’t worry. All is well!

The Closing Look

Stocks were quiet on Monday as investors piled into Apple (AAPL) and several semiconductor stocks.  Apple rallied after a report was released that suggested the tech giant asked its suppliers to prepare 72-78 million units, above the market’s expectation of 65 million units for the iPhone. In other news, two Fed officials spoke on Monday and both were mildly hawkish, hinting at more than one rate hike later this year. Meanwhile, economic data failed to impress. The PMI Manufacturing index came in at 50.5, missing estimates for 51.0.  Yet the Fed is trying to tell us that they are raising rates later this year. The fun continues because Janet Yellen is going to speak on Friday.

Gary’s Thoughts: Remember, it is end of month and a pre-holiday week. Otherwise, indices remain raaaaaaaange-bound!

Continued Whipsaw

“CONTINUED WHIPSAW”

By Gary Kaltbaum
May 23,2016

First off, this week is end of month (almost) and into a holiday weekend. Typically, typically, the bias is positive.

Secondly, the loudest Fedhead who last week was teasing rate hikes in June and farther out…is now saying they can always wait! What happened to “June is a live meeting?” We are sorry to say this but they are egomaniacal nutjobs who continue to inject themselves into the markets…and one day? They just never shut up!

Our definition of the word “whipsaw” is when things are “all over the map,” “going back and forth with little progress,” acting well on Monday, poorly on Tuesday, acting well on Wednesday and so on…need we say more? This is exactly what we are getting right now and it is no fun. Give us a bull market, we are happy. Give us a bear market, we are happy. Don’t give us a whipsaw.

We would love to give you some major thoughts but except for the move in the Semis Friday, not a lot going on. We are just seeing a continuance of a nauseating trading range marked with major bear markets (retail) and hardly any bull markets. Recently, there was a relative bid in defensive areas…but they seem to be hitting a wall. (reits, consumer staples, utilities). Even the commodity areas, for the most part, continue to drip,drip,drip. We highlighted this for you right near the highs. Even gold looks done for this second.

New yearly highs? What yearly highs? Leadership? What leadership? Ok…aerospace/defense is strong, off of last week, semis look higher from last week’s move. Maybe biotechs are finding some traction off the lows. We are just not getting any real ooomph! Markets need oooomph. But right now, confusion reins as central bankers continue to twist and turn with the wind…and yes, they are running the markets right now.

The good news is that eventually markets will break one way. We don’t know when  but will be ready as markets will either set up for topside or for downside. Just keep in mind, the Russell and Nyse are trading  right where they were in late 2013, the Dow and S&P from late 2014…and that’s after this latest recovery move.

The Morning Look

Market Update:

Stock futures are lower ahead of Monday’s open as investors digest last week’s sloppy action. In the near term, the S&P 500’s next level of resistance is the 50 day moving average.

Economic Data: Our award winning weekend market report will be out tonight. Just still a lot of range-bound nausea with rolling bear markets and very little in the way of bull markets. New yearly highs? Try finding any!

  • James Bullard Speaks
    5:30 AM ET
  • John C. Williams Speaks
    8:00 AM ET
  • PMI Manufacturing Index Flash
    9:45 AM ET
  • Patrick Harker Speaks
    6:30 PM ET

Highlights:

  • G-7 Warns of Weak Global Growth Outlook
    Gary’s Thoughts: Gee…didn’t we hear things were accelerating last week? Make up your mind!
  • Clock Ticks on Bull Market With No New High for Stocks in a Year
    Gary’s Thoughts: Russell and NYSE trading where they were in 2013.

The Closing Look

On Thursday, stocks opened lower after the latest round of economic and earnings data was released. Before the open, Wal-Mart ($WMT) beat by 10 cents but that came after the retail giant lowered guidance several times in the past year. Economic data was mixed,  jobless claims fell by 16k, to 278, missing estimates for 275k. The Philly Fed Survey fell to negative -1.8, missing estimates for a reading of positive 3. The reading was deeper into negative territory and a big miss.

Gary’s Thoughts: After another nauseating day, late action has the market getting back a decent amount of the day with some notable technical stuff…namely S&P undercutting and finishing at support…namely commodities “feeling” the worst is over…for this second. Revisit us in the next second. We suggest a bounce comes off of this as certain areas already not believing what the Fed had to say. Unfortunately, we continue to be held hostage by a select few ex-tenured professors running the world and its conjured up money!

The Closing Look

On Wednesday, stocks were higher but fell after the Fed released the minutes of its latest meeting. The minutes showed the Fed would entertain a potential June rate hike if economic conditions improved. The USD rallied hard on the news and a slew of commodities fell. Financial stocks were bid higher all day after the bulls showed up and defended the 50 day moving average.

Gary’s Thoughts: The fed is changing with the wind! No comment! Not thrilled!

“RATE HIKES? AND THE KNICKS WILL WIN THE NBA TITLE!”

“RATE HIKES? AND THE KNICKS WILL WIN THE NBA TITLE!”
By Gary Kaltbaum
May 19,2016
Headline: “In a clear message to the market, the Fed says rates may rise again in June.” Say what? Clear message? What clear message? Wasn’t it just a few weeks ago these same people said they were worried about international issues and had to stand pat for now? Didn’t Mrs. Bubble just state that they could print more money if need be? Wasn’t everybody saying they’ll be no more rate hikes this year? So we are now to believe that while around the time they were telling everybody they need to sit on rate hikes, they were also stating the opposite in meetings. Kids…we suggest to you these people would fall over in a 3 MPH wind. They change their tune on every data point, every market move and every change in the wind. They change their words based on what day it is. Clear message? We guarantee you by the time the next meeting comes around, we will hear 50 different thoughts from 10 different Fedheads all contradicting each other and all changing their tune at least once. These are people that are flying by the seat of their pants. These are people that wake up every morning and see the market go down and say one thing and then see the market go up the next day and say another thing. They get one report that looks good and it’s time to hike. They get another report that looks bad and it’s time to sit. Unfortunately, we continue to deal with a bunch of ex-tenured professors that have no understanding of markets or the economy…yet, they have their finger on trillions to try and move markets and the economy. $20 trillion of printed money, 0% rates for 8 years, negative rates and the outright buying of markets….and what have we got…nothing but a massive increase in debt and leverage built up around the globe, enabled by these same people. It is this debt that continues to undermine economies going forward. It is this debt that eventually leads to the comeuppance! Clear message? Who are they trying to kid?

 

We were going to report on this but this covers it all! Wither Venezuela!

SOURCE: http://www.zerohedge.com/news/2016-05-18/venezuelan-police-unleash-tear-gas-rubber-bullets-amid-violent-anti-government-prote

The Morning Look

Market Update:
Futures are lower ahead of Thursday’s open as investors digest another volatile week on Wall Street. Stocks were up big on Monday, down big on Tuesday, then were up most of Wednesday before turning lower after the Fed minutes were released. Lots of areas of the market are beginning to roll over and any further selling will signal real trouble for the market. And airplane crash (most likely terrorism) does not help.

Gary’s Thoughts:

  • Jobless Claims 8:30 AM ET
  • Philadelphia Fed Business Outlook Survey 8:30 AM ET
  • Chicago Fed National Activity Index 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Leading Indicators 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • William Dudley Speaks 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • The US dollar rallied after the Fed minutes left the door open for a June hike
    Gary’s Thoughts: Enough on the Fed this morning.
  • Wells Fargo Cuts Target on Valeant Citing Potentially ‘Brazen’ Executive Pay Packages
    Gary’s Thoughts: Valeant a criminal operation.