HAPPY THANKSGIVING!

My staff and I want to wish each and every one of you a happy, healthy and safe Thanksgiving. Think about doing something for someone you need absolutely nothing from.

Gary Kaltbaum

Just remember, it is still a ridiculously narrow market.

In this holiday week, consider doing something for someone you need absolutely nothing from.

We just wanted to repeat what we wrote to you this weekend…and that is, in a nutshell, narrow markets are much more easily sold off than markets with strong representation. It is vital during these times that you stay as SECTOR and STOCK SPECIFIC as possible as there are still many bear markets underneath the surface of the stronger big cap indices.

Futures whacked this morning on blah blah blah. We suspect this has to do with all the divergences that are out there.

 

Shortened holiday week for markets!

 “WE HEAD INTO THE HOLIDAYS”

We would like to wish each and every one of you a safe, happy and healthy Thanksgiving holiday.

Tidbits:

Amazon and Google (we cannot call it Alphabet) have added approximately 460 points to the Nasdaq 100 this year. The index itself has gained about 420 points. If not for these two stocks, the index would be down. If you add in #3 and #4, Facebook and Netflix, we are then at a -5% for the index.

EVEN WITH THE RALLY UP IN THE BIG CAP INDICES: Interest rate sensitive areas like utilities, real estate and housing…gold/ silver, steel, aluminum, metals/ores, copper, coal,nickel, tin, fertilizers, rails, truckers, junk bonds, disk drives, drug stores. hospitals, managed care, biotech, media, hotels (even with a big buyout), a ton of retail especially department stores, restaurants, food, drugs, beverages, household products, insurance, construction equipment and machinery, casino and gaming, oils, natural gas AIN’T WORKING and in the case of commodities, just a big wow to the persistent bear market that continues. On top of that, small and mid caps continue to underperform.

We guarantee you Europe raises their amount of money printing in December. Markets are already reacting to Draghi’s telegraphing the move.

We have been telling you forever that Yellen would never raise rates. Up until now, she has not failed us. We are amazed that they have made the measly raising of rates from 0-1/4% to 1/4% into some kind of gargantuan event when it is absolutely meaningless in the scheme of things.  It makes us ill that markets and savers continue to be held hostage.

We know we sound a little bah humbug as we head into the holidays but we are just reporting to you the news. The fact is the rallies remain narrow. The fact is there are still more new yearly lows than new yearly highs on a daily basis. The fact is there still is not a lot of leadership. For sure, there are things working…just not a lot…and when markets are this narrow, if distribution shows up in a meaningful fashion, markets are easier to take down.

On top of those megacap tech/internet names, areas still acting well are:

Home improvement retail, home products, defense (markets like a good war), credit cards, a few airlines, oil refiners, alcoholic beverages…and not finding much more.

Keep in mind, we are told  the shortened Thanksgiving week is supposed to have a positive bias.

It’s Friday!

We are seeing another terror attack in Mali in where  124 guests and 13 staff are being held hostage. The terrorists yelled Allahu Akbar.

Futures are up on ECB’s Draghi announcing more printing of money. (($15-20 trillion not enough!)

On top of that, Nike announces a massive buyback (will account for 40 dow points) though they said they don’t have to do the buyback. Then why announce it?

Great week after a bad week…as the markets continue to run in place. The Russell is where it was Dec of 13…the same for the NYSE. Don’t get us started on the commodities.

We will have our usual award winning weekend report for you on Sunday.

And we forgot:

Don’t forget Defense stocks ripping to the upside off of France and Russia on the attack. Markets love a good war!

Getting dizzy yet?

Getting dizzy yet? Can’t blame you. One week, market acting like it will crash. Next week, acts like this week. Just keep your wits about you.

Many of the major indices remain locked in ranges going back quite a long time. This occurs because more than half the market remains yuck while the rest act fine. Since we have had to report often the bad news in the market, today, here is what continues to work:

While extended, the nifty-fiftyish names like AMZN,GOOG,FB continue to act fine. They certainly jerked them around a bit in the past week.

MA and V act fine with V having the better numbers and the stronger of the two.

Auto parts retail in AZO and ORLY still hanging in there though AAP went bye-bye.

A few AIRLINE names still acting fine.

Good reaction to HD numbers.

MSFT and their blah numbers were bought and still holding.

NFLX and its 50% drop in earnings actually sets up well.

MCD and its drop in sales is loved.

COST acts great while most of retail croaks.

GE…wow!

There are a few more things…just not a lot…and even the “big leaders” are not making much hay. We are in hopes the “seasonal” strength and holidays come into play so markets could have a good end of year move. Of course, the markets will decide this.

GOING AGAINST OBAMA: Top Dem breaks with president on ISIS being ‘contained’ @FoxNews

http://www.foxnews.com/politics/2015/11/17/top-dem-breaks-with-obama-on-isis-being-contained/?intcmp=hpbt2

Our Thanksgiving dinner tonight!

Today is the 13th annual (maybe 14th) Kaltbaum Family Blessings Banquet. Every year, we sponsor a Thanksgiving dinner in where over 400 youngsters from Central Florida who otherwise would not have a Thanksgiving  dinner, get served by us. There will be lots of food, lots more food, magicians, characters from Universal and other surprises. If you would like to volunteer, email me at gkaltbaum@kaltbaum.net and we will get back to you.

Apple added to a “conviction list!”

Futures up.

Not a lot of leadership.

And oh yeah, Fed minutes today where we get to find out what they thought a few weeks ago. Yippee!

Oversold gets bought!

The near-term oversold condition we wrote about yesterday has started to play itself out as just about everything rallies up after last week’s yonking.

The good news is that into the holiday season, there is a chance a higher low gets put in. The bad news is that there remains the clear lack of leadership that has haunted this market for a very long time.

We did like that some of the glamour growth names, after a few ugly, reversed up on volume yesterday. We did like that important areas like energy pulled right back into support and for now, held.

Hopefully, we can see a broadening out but hope does not work with markets. In time?

Chart Of The Day & The Biotech Bubble Continues Its Popping!

“MORE “NO SALES” BIOTECH CARNAGE”

By Gary Kaltbaum
@GaryKaltbaum
garyk.com
Fox News Business Contributor
We have written to you on several occasions about the impending disaster in the biotech space. It was a simple thought process. The wonderful human beings at the investment banks had done it again. Back in 99, they brought anything public that had .com attached. All you needed to do was have a website to be brought public. You know what the outcome was. Valuation ALWAYS EVENTUALLY matters.

Fast forward to the last 2 to 3 years. The same geniuses at the investment banks have brought over 200 biotech companies public that have no sales. We repeat NO SALES! When you have no sales and billions of market cap, there will be only one ultimate outcome. DISASTER! We have already seen dozens of names busted wide open. To be fair, we have actually seen a couple of names bought out for ridiculous prices but for the most part, we have seen nothing but downside.

And this morning:

Clovis Oncology (CLVS) closed at $99.43 on Friday. It is opening at $29.25. The story: approval of its rociletinib to treat non-small cell lung cancer will be delayed after the U.S. Food and Drug Administration requested more information…or something like that!

But the real story was before the open today, this stock, this company’s market cap was $3.8 billion WITH NO SALES! We repeat…WITH NO SALES! Not only were they able to do an IPO in 2011 at $13 but the bubble took the NO SALES company up over $100. On top of that, they had been able to do four secondary offerings. Our studies of bull and bear markets and our study of bubbles always finds areas that end up in “ridiculous valuation” territory. In 99, it was a lot noisier because internet names were glamorous. The biotech bubble is not as noisy but is and will be just as bad.

Word to the wise. There are many,many more names out there just like this. When bubbles pop, disaster occurs. We think this is just the start.