Short notes from our day off!

February 15, 2016
Greetings from our Monday day off. Frankly, how about every other Monday being a day off?
We can be brief with our weekend report today because of what we said to you last Thursday afternoon and Friday morning.

Simply put, we think Thursdays late bounce combined with Friday’s action gave us another near-term low akin to what we saw and what we told you about on October 2, 2015 and on January 20, 2016. The rally that came out of the early October low lasted for almost 5 weeks before the market started to top out again. It then took several weeks of topping out to slam the markets again. The low of January 20 only lasted about 10 trading days before the dark side showed up again. Normal bear market rallies last anywhere from 4-10 weeks. So far, rallies have been anemic but suggest to you that one of these rallies will be stronger.

As usual, we will let everybody else tell you what this means. Frankly, we have no idea how long this lasts or how far it goes. We will just be ready when distribution shows up again. Just remember the rules of bear markets that we have mentioned to you. Mainly, the masses will believe the bear market is over and let out a big sigh of relief just because the market is rallying. And yes we do see this as another bear market rally. If anything changes, we will let you know. Expect everything that wasn’t working to rally and everything that was (Gold) to pull back.
We also wanted to touch upon one other thought. We read a WSJ blurb that said that there is a debate over whether there is trouble with the global economy or whether the financial markets are just sickly.
May we suggest it is never as bad as the bears will tell you and never as good as the bulls will proclaim. Just know there is a lot of serious issues out there including massive debt and deficits, waning economic growth, downright recessions (check out numbers out of Japan) and a clear lack of control and knowledge from the central bank geniuses! (Just go watch Ms. Janet and some of her answers!)

The Morning Look

Stock Market Overview: 

Stock futures are up after Thursday’s steep decline. The market remains deeply oversold in the short term. Oil prices hit the mid 20’s this week and that does not help investor confidence. Gary called the top perfectly for you in the latter half of 2015 for stocks, helping you sidestep this year’s brutal sell off.

Gary’s Thoughts: And the counter-trend rally/bounce begins. We told you yesterday afternoon that markets felt sold out and were ready…and as usual, we now get a gap to the upside. Expect counter trend moves in the worst areas including oil. We have no clue how far it carries or how long it lasts. The last near term low we called was January 20th. That move lasted less than 3 weeks and was quite anemic. This time? We shall see!

 

Economic Data:

  • Retail Sales 8:30 AM ET
  • Import and Export Prices 8:30 AM ET
  • Rob Kaplan Speaks 9:45 AM ET
  • Business Inventories 10:00 AM ET
  • Consumer Sentiment 10:00 AM ET
  • William Dudley Speaks 10:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET

Highlights Of The Day:

    • Oil Plunges To Lowest Level in Over 12 Years
      Gary’s Thoughts: That was yesterday. Rally time! 
    • Einstein Was Right: Gravity Ripples Across the Universe as Waves
      Gary’s Thoughts: Say what! 
    • Stocks Trying To Bounce From Deeply Oversold Levels
      Gary’s Thoughts: Stocks do go up!

The Closing Look

Stock Market Commentary:

Before Thursday’s open, futures and most global markets, were down big as another wave of selling hit stocks. Overnight, Sweden’s Central Bank surprised markets and cut its main repo rate further into negative territory. Sweden lowered its rate to negative -0.5%, from -0.35%. Crude oil fell to $26/barrel and gold soared to a fresh 1 year high. At one point, the Dow Fell over 400 Points and the S&P 500 briefly undercut Jan 20, 2016’s low of 1812 before buyers showed up and defended stocks. In the afternoon, news spread from OPEC that they may be near a deal to cut production which helped oil prices spike higher. Needless to say, stocks are deeply oversold and way overdue to bounce at this point.

Gary’s Thoughts: Our serious over-the-top, imbecilic guess…probably got another decent divergence today that leads to the upside. How much? Don’t know! How far? Don’t know! But any bounce/rally will not change the big picture. It would just give the markets and investors some relief!

The Morning Look

Stock Market Overview: 

Stock futures are down sharply as the market remains deeply oversold in the short term. Oil prices are down -4% and are trading in the mid 20’s. Gary called the top perfectly for you in the latter half of 2015 for stocks, helping you sidestep this year’s brutal sell off.

Gary’s Thoughts: Futures yonked again. Need we say more!

Economic Data:

  • Jobless Claims 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Janet Yellen Speaks 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights Of The Day:

    • Republicans Have Already Tripled 2012 South Carolina Ad Spending
      Gary’s Thoughts: Just the beginning.
    • Driverless Cars Also Struggle in the Snow
      Gary’s Thoughts: There is no way I will ever go into a driverless car. Don’t even trust the drivers.

The Closing Look

Stock Market Commentary:

The market ended mixed on Wednesday with weakness showing up in the Dow Industrials. The Dow fell on Wednesday as investors digested the latest round of lackluster earnings data and Janet Yellen spent most of the day testifying on Capitol Hill. Disney ($DIS) and Solar City ($SCTY) both fell hard after reporting disappointing results. Janet Yellen spent the day on Capitol Hill and basically said nothing. She said she understands there are threats to the global economy but she did not take more rate hikes off the table. The market remains deeply oversold and the inability to bounce speaks volumes to how weak the intermediate and longer term trend is right now.

Gary’s Thoughts: When the NASDAQ is up 100 points and only finishes up 14…you fill in the blank!

The Realization Phase Continues

   “The Realization Phase Continues!” 
February 11,2016
By Gary Kaltbaum
@GaryKaltbaum
garyk.com    
Fox News Business Contributor

 

We are reading that even though Bernie won big over Hillary, because of super delegates, Hillary will get more total delegates than Bernie. How’s that socialism working for you now Bernie?

Bernie meets with Sharpton. A man who wants a ton more of your taxes and a man that doesn’t want to pay his taxes. Socialism makes strange bedfellows.

And:

We expect the coming recession (we are probably already in one) will be the front and center story of the election in the coming weeks and months. It is going to (no pun intended) trump everything else as Americans will be more worried about their wealth and their jobs before anything else.

As we wrote to you this past weekend, the “realization” phase of the bear market continues. This is the phase where all the permabears are paraded out as genius while the permabull strategists slyly make the turn to the dark side as price is giving them no choice. On top of that, the masses start to realize that something is really wrong.

Which leads us to this morning as yesterday was instructive. To be clear, when the Nasdaq is up a whopping 100 points during the day and finishes up only 14, that tells you that even though price has come down so far, the big money continues to sell into any nascent rally. That is simply not good and is simply anther characteristic of a bear market.

Throw in that abomination of Yellen testimony yesterday and one has to recognize that central banks that have had their way for so long every time they waved their magic wand…no longer have a magic wand as markets no longer care and no longer respond well to anything they do or anything they say.  Do recall that in the bull market, it did not matter what they said or what they did. Markets would go up in reaction
if they smiled, if they smirked, if they frowned. And frankly, we are not sure who we are worried about more, the questioners or the respondent. It amazes the hell out of us that MIss Yellen cannot figure out what is sitting right in front of her.We AGAIN remain very worried that this is not a garden variety bear market but another disaster in the making as another central bank-induced bubble has again morphed into a central-bank induced meltdown. As of this second, nothing we have seen in the action gives us confidence it is not. And now, financials are telegraphing something is very very wrong. Ignore at your own risk.

Feel the Bern!

Since “the Bern” won last night, we felt it important to repeat some facts about the Bern!

The scam and the con called Bernie Sanders!

By Gary Kaltbaum
February 10, 2016

Bernie Sanders…Bernie Sanders is not funny. He is not to be applauded. He is not to be called uncle. Bernie Sanders is selling you a scam. He is selling you a call a con. He is selling you a lie. The scam, the con, the lie is that everything is rigged, everything is being stolen from you, that all wealth is being re-distributed to the wealthy and nobody can get ahead because of all this.

The fact is money is not being re- distributed to the wealthy. Most of the wealthy earn their money. It’s called planning! It’s called thinking! It’s called educating! It’s called time! It’s called sweat! It’s called toil! It’s called risk taking! It’s called failure! It’s called success! It’s called long days and long nights! It’s called growing! It’s called hiring! It’s called creating jobs! It’s called creating wealth. Bernie Sanders knows nothing of this because Bernie Sanders has never created $1 of wealth. Bernie Sanders has never created one job. Bernie Sanders has been living off the largesse of the taxpayer since the day he started whining, complaining and pissing all over those who have created all the wealth and jobs.

It’s the person who came up with the restaurant concept named Chipotle and started with one and turned it into over 1800 restaurants creating billions of wealth and thousands of jobs. It is Mark Zuckerberg who had an idea to get dates in college which started Facebook, creating billions of wealth and thousands of jobs. It’s Bernie Marcus and Arthur Blank who thought there was a better way to sell home improvement goods and started Home Depot, creating billions of wealth and thousands of jobs. It’s Michael Dell who started selling computers in a garage and then created billions of wealth and thousands of jobs. It’s Charles Schwab who saw prices could get lower on Wall Street and created billions of wealth and thousands of jobs. It’s Bill Gates…WELL, WE CAN GO ON AND ON! None of these people had anything re-distributed to them. THEY EARNED EVERY DIME! Bernie Sanders does not want you to know any of this.

Bernie Sanders could not tell you any of this because he will never be able to sell his lie. He cannot ever mention these people because it does not fit his template. The amazing part of all this is that the only re-distribution that is really going on is not to the wealthy but from the wealthy to the Bernie Sanders-types as government spending has doubled since Bill Clinton’s last budget. Yes…doubled. And for what? What are we getting for the money? Yet Bernie Sanders says it isn’t enough. It isn’t enough that our government cannot even balance their budget even though they will take in over $3 trillion of our money this year.

And how about Wall Street? According to Bernie, it is the land of evil, land of devils, land of crooks who are out to just rip you off. Well…when Bernie Sanders was born, the Dow was at 127. Yes…127! Wall Street and the markets have created trillions of wealth and millions of jobs. Wall Street has turned secretaries into millionaires…millionaires into billionaires and so on. Wall Street and the markets have spawned companies like Microsoft, Amgen, Facebook and all the amazing companies that have improved our lives through modern technology, through new medicines and great inventions. HOW TERRIBLE!
So memo to Bernie and more important to those young people that think he is the end-all, be-all:

Just wait to see what happens if Bernie Sanders ends up running this country. Try working your tail off. Try to become wealthy. Try to be a success. We know you want to. All of us want to be bigger, better, wealthier, healthier. At every step along the way, Bernie will be there. When you work your ass off for a few years to get the promotion, the raise or whether you grow your own company, watch what happens when you get that first big paycheck. It will not be there. The $10,000 check will be $4,000. The $20,000 paycheck will be $6,000. Try being a gargantuan success and get a $100,000 check…something you should be applauded for. Bernie will want to take $90,000 of that $100,000. Don’t believe us. Just check out any number of videos of where Bernie wants to go with your money…because you did not earn it. It was re-distributed to you.

Bernie Sanders will not harm the already wealthy. Well…maybe he will. What he will do is prevent all the millennials from becoming wealthy as he will strip away all incentive to be bigger, be better, be wealthier…because Bernie Sanders believes in one thing…his power and not yours. Millennials do not know it yet but it is them who Bernie Sanders will affect most negatively. To the millennials..Bernie Sanders is your worst enemy!

When socialism overtakes capitalism, you get Venezuela. When capitalism is gone, you get Cuba. Go vote for Bernie now!

Bear Market Rallies…

Just in case you have forgotten!
Bear market rallies:
Are sharp, quick, make you feel good, get everyone calling a bottom, wipe the smiles off the bear’s faces, suck you in…and then bury you soon after.
Bear market rallies are typically stronger than bull market rallies because of the vicious short covering.
Bear market rallies, very often, occur with a series of gaps to the upside trapping shorts and preventing those who want to get long from getting long.
Bear market rallies typically end when things are calmer, things are quieter and a big sigh of relief falls over Wall Street.
Bear market rallies usually peter out in and around declining moving averages, mainly the 50 day and if not, the 200 day moving average.
Good luck!