Gary on today’s early wild action!

January 14,2016

First and most important, do not miss the Fox Business Network Presidential debates tonight…on the Fox Business Network.

We came into this week thinking we were close to another decent low in this bearish market. We were not so sure after yesterday’s nausea as well as the early action today. With all the wild swings, this bad boy is very tough to gauge in the short term. But…we think today’s action just may be doing the trick. After yesterday’s gross and this morning’s early morning gross, there is a good chance things are in the midst of getting washed out. MARKETS DON’T JUST GO STRAIGHT DOWN FOREVER …WE THINK…and after 1600 Dow points in less than 2 weeks, a rally that sticks FOR NOW may be at hand. We have no clue about  length of time or price of any rally but stay tuned. We just know it is a rare occasion that markets get this stretched, extended and oversold to the downside without some sort of snap-back rally.

We must repeat, any potential rally/bounce will not change the big picture.  Keep in mind, rallies in bearish phases tend to be sharp, quick, make people feel good, suck people in and then bury them soon after so step lightly.

Gary Kaltbaum

The Morning Look

Stock Market Overview:

U.S. stock futures were lower but turned higher before Thursday’s open as investors try to recover from Wednesday’s strong sell off. Keep in mind, the market is very oversold and way overdue to bounce at some point.  The fact that it refuses to bounce illustrates how weak the market is right now. Gary has expressed caution and has been telling you about how the market has been getting weaker not stronger over much of 2015 and has nailed it again for you in 2016.

Gary’s Thoughts:  Earning’s season is at hand. One has to think that maybe reactions would be better than usual after a 1600 point Dow drop in last than 2 weeks of trading. Markets are now overdue for some good bounces but could have said that 3 days ago. 

Economic Data:

  • James Bullard Speaks 8:15 AM ET
  • Jobless Claims  8:30 AM ET
  • Import and Export Prices 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 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:

    • Stocks Plunge On New Round of Selling On Wednesday
      Gary’s Thoughts: That was gross yet too complacent. Need some panic to end this deluge for now.
    • Sean Penn lied about ‘El Chapo’ trafficking claim: lawyer
      Gary’s Thoughts: Go back to bad movies!
    • Al Jazeera to cease U.S. operations by April end
      Gary’s Thoughts:  Who?

The Closing Look

Stock Market Commentary:
Stocks plunged on Wednesday as a new round of selling hit Wall Street. This time they went after almost all areas of the market including the big glamour names such as Amazon ($AMZN) and Netflix ($NFLX) that had been holding up rather well in late 2015. The fact that Wall Street can not bounce from deeply oversold levels clearly illustrates how weak the market is right now.

Gary’s Thoughts:  WOW! The bounce lasted a little over 1 day, was anemic and then slammed.

The Morning Look

Stock Market Overview:

U.S. stock futures are up on Wednesday as the market tries to bounce from deeply oversold levels. Keep in mind, the market is very oversold and way overdue to bounce at some point. Gary has expressed caution and has been telling you about how the market has been getting weaker not stronger over much of 2015 and has nailed it again for you in 2016.

Gary’s Thoughts:  We are not just watchers of the markets but we are watchers of the masses. We watch how Wall Street reacts  to the markets. We watch how the average investor reacts to markets, especially the bad markets!

After 1,600 down points in 8 days, after a commodities crash, after retail, transports, small caps, mid caps, NYSE and so many other areas continue to get bludgeoned,  after world markets get blasted, NOW one firm sends out an analyst calling for a global crisis because of China. NOW another big firm comes out and advises clients to sell stocks on any bounce. NOW many other firms are coming out talking about $10 oil after missing the 60% drop. NOW another major company calls for a big bear market. HMMMMM! Must be time for a good rally.

As we told you, we thought we were a day or two away from a decent low. After all, don’t you think 1600 Dow points in 8 days should do the trick near-term? We think there is a good chance a near term low is now at hand. We have no clue about price or duration. The last rally/bounce had a duration of 10 weeks but kept getting narrower on the way up, leading us to tell you another top of importance was imminent. Rallies in bearish phases are supposed to wipe the smiles off the bear’s faces and embolden the bulls into believing the worst is over.  As of this second, the big picture has not changed. The near-term possibly has. As always, we will keep you informed. We will know a lot more based on how strong any rally/bounce is from here.

Economic Data:

  • MBA Mortgage Applications 7:00 AM ET
  • Eric Rosengren Speaks 7:45 AM ET
  • Atlanta Fed Business Inflation Expectations 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • Charles Evans Speaks 1:00 PM ET
  • 10-Yr Note Auction 1:00 PM ET
  • Beige Book 2:00 PM ET
  • Treasury Budget 2:00 PM ET

Highlights Of The Day:

    • VW CEO Flubs Interview With Apology Tour Off To Rocky Start
      Gary’s Thoughts: How not to handle a crisis!
    • GM Faulty-Switch Trial Begins With Claim of Deadly Cover-Up
      Gary’s Thoughts: If true, send someone to a 6 by 9 cell.
    • It’s obvious Apple is working on a car: Elon Musk
      Gary’s Thoughts: Duh!

GaryK’s Thoughts On The State Of The Union

You can correct us if we are wrong but we decided to do something crazy and watch back the State of the Union address just to make sure we heard what we heard. We do keep in mind that we are all fair weather fans when it comes to our favorite sports teams or our favorite sports heroes. We do keep in mind we all have our favorite politicians and we will hear what we want to hear but pretty much we hate them all. Just remember, in order to get to $19 trillion of debt, it takes them all.

We heard the president tell us we need to do better. We heard the president tell us we are not living up to who we need to be. We heard our president tell us there is still too much racism, divisiveness and all that crap. And lastly, we heard our president tell us he believes in us and eventually we will get better. Mr. President, the only reason why this country is where it is and not in the biggest hellhole in history is because of us. Without us, our hard work, our sweat, our toil, our ingenuity, our smarts, our tenacity, our wanting to to better for our families…WITHOUT US, you and the rest in DC are nothing. We fund you…we vote for you…we back you but you and the rest have done nothing more than hamstring us with $19 trillion of debt, massive amounts of regulations, mandates, fees, taxes and rules. All you have done is put massive and major headwinds in front of us and the abilty of us to flourish. You actually think you are smarter than us and in order to get by, we need you to oversee and need your oversight. Mr. President, it is the other way around. After $19 trillion of debt, highest food stamps ever, tons of poverty and homelessness even with the trillions of our hard earned dollars thrown at it, we need to oversee you and you need our oversight. We are not out of hand, you are. We are not the failures, you and Washington DC are. It is all of you that refuse to get your house in order. It is all of you that refuse to balance your books. It is because of you we have a central bank that had to keep rates at 0% for years and print trillions just to keep things running. Don’t worry about us Mr. President. Get your own house in order…and that includes both parties.

The Closing Look

Stock Market Commentary:
Stocks ended higher after vacillating between positive and negative territory on Tuesday as oil prices traded all over the map. In the morning, oil prices up nicely but turned negative and actually fell below $30 a barrel for the first time in 12 years! Stocks turned higher after oil prices stopped falling. Stocks are trying to bounce from deeply oversold levels.The inability for stocks to bounce speaks volumes at how weak the market is right now.

Gary’s Thoughts: A long day of back and forth…big gap sold…market goes negative…ramps in last hour. We call it a huge, extreme oversold condition and expect more upside. How it gets there…how long it goes for? No clue. We also expect major action out of China to suppress selling…which may or may not help. 

The Morning Look

Stock Market Overview:

U.S. stock futures are up on Tuesday as investors digest Monday’s wild up, down and then up again session. Keep in mind, the market is deeply oversold and way overdue to bounce at some point. Gary has expressed caution and has been telling you about how the market has been getting weaker not stronger over much of 2015.

Gary’s Thoughts:  

We forgot to mention one thing yesterday. We do not think we have ever seen big down days on the day of the State of the Union speech but will have to look it up.
We told you yersterday we thought a good low is being carved out at Monday’s low…and today, we walk into a nice gap to the upside…yippee!
Yesterday’s reversal and today’s big gap insures a breather. After 1600 points down in 8 days, YOU HAVE TO GET A RALLY EVENTUALLY  and as we told you, it usually starts on a big gap. A strong Europe this morning leads the way.
We suspect a good low has been put in a for a while to make the bulls feel better and wipe the smiles off of the bear’s faces. Again, WE IN NO WAY THINK THIS CHANGES THE BIG PICTURE. Big rallies occur in bearish markets.
Lastly, earnings are straight away. For a change, ON A POSITIVE NOTE, earnings guidance has come down markedly so the game of “beat the number” could come easily. Whether or not that lights a fire under stocks, we shall see. Keep in mind, earnings growth stinks and as well as sales growth. For example, Apple’s growth last 4 quarters were +48, +40, +45 and +38. Estimates are now to be a whopping +5…a major deceleration. Even when accounting for the usual Apple sandbagging, it will still be a big drop in the growth rate.
Stay tuned. We suspect a lot of whippiness. (We are not sure what whippiness means but you get the picture). We will know a lot more as this rally/bounce plays out. 

Economic Data:

  • Stanley Fischer Speaks 5:30 AM ET
  • NFIB Small Business Optimism Index 6:00 AM ET
  • Redbook 8:55 AM ET
  • JOLTS 10:00 AM ET
  • Jeffrey Lacker Speaks 3:15 PM ET

Highlights Of The Day:

    • Oil prices fell 6% on Monday and plunged to the lowest level since 2003!
      Gary’s Thoughts: Unreal…just unreal!
    • Hillary Clinton seeks surcharge tax on wealthiest tier of Americans
      Gary’s Thoughts: We have a lot of 4-letter words we can use when describing this person but will remain a gentlemen. There is never enough OF YOUR MONEY for people like this. We will leave it at that.

The Closing Look

Stock Market Commentary:
Stocks traded all over the map on Monday. Overnight, Chinese stocks plunged another 5% which was not idea. US stocks opened higher but quickly turned negative after new sellers showed up and distributed stock. Towards the close, a big rip enabled the Dow to finish positive but the Nasdaq still finished down. Crude oil plunged over 6% and hit the lowest level since 2003! Copper prices plunged to a fresh 6 year low which illustrates the market’s concern about weaker global demand. Biotech stocks ($IBB) fell over 4% and took out September’s 2015’s low which is not ideal for the bulls. In M&A news, Shire ($SHPG) said it will acquire drug maker Baxalta ($BXLT) for $32 billion in cash and stock.

Gary’s Thoughts: 

Put a crayon in your 3 year old’s hand. Let him scribble on a piece of paper. That’s what today’s intraday action looks like…but:
Since we received dozens of emails and phone calls, we wanted to give you some short term thoughts after Monday’s wild action. In fact at 3:18pm the NASDAQ was down at whopping 57 points by the close it was barely down!
In our long missive to you last night, we told you we would not be surprised by a vicious rally/bounce and that it would be normal to have one to wring out such an oversold condition. The hardest thing to do is to gauge and game the short-term movements but here we go.
We think a decent near-term low could be forming in and around the lows of Monday. This simply means after about 1600 DOW points in eight days, after the NASDAQ dropped from 5116 to 4573 in that same amount of time, sellers are washed out and buyers get a little bit of the upper hand. We suspect this is akin to what happened  on August 24 of 2015 when the markets experienced the fake open and the big washout.  Keep in mind, this in no way changes the overall big picture and you know what that is. Markets do not go straight down though after the past 8 days, one wonders if that is true. We will be smart and leave it at that.

We were asked if this has anything to do with Fed’s Lockhart’s flip-flop as he was quoted as saying there may not be enough fresh data on inflation to support an interest rate hike by March! We don’t know but just realize IT NEVER ENDS! THEY REF– USE TO LEAVE MARKETS ALONE!

 

HEY FEDHEAD LOCKHART…DO YOU WANT TO MAKE A BET ON THIS?

SOURCE: http://www.marketwatch.com/story/feds-lockhart-nothing-fundamentally-wrong-with-broad-us-economy-despite-bearish-stock-market-2016-01-11?mod=mw_share_twitter