What did Stanley Druckenmiller do?

First, our short but concise thoughts:

Wednesday was an important day as the market was once again defended at the important support levels we have outlined for you. Most levels were breached intraday but the boys recognized and stood firm. Use Wednesday as your major league support level going forward….and we mean major.

A few areas continue to show up on our radar. We have previously mentioned the Utilities and the Reits  as rates have come back down. Many are starting to show up on our screens as the groups now come up their right side. Rates have plunged once again.

On top of the interest-rate sensitive areas of Utilities and Reits, everything Housing is showing up on our screens. We are talking the Homebuilders, the things that go into the homes like Masco, Mohawk, Fortune Brands Home and others and the Home Improvement as Home Depot broke out and Lowes now getting a good bid. Both report earnings this week though.

We continue to like:

Auto Parts Retail as AAP,AZO and ORLY all into new high ground.
Drug Stores
Cruise Lines
Food
Tobacco
Mastercard and Visa (their own little group)
Some Biotech (not all) as many have been breaking down
Some Restaurants

As far as the Banks, we have liked their overall relative strength for quite a while but now seeing some cracks. It will be very important the market does not lose this area.

There remains a ton of “what’s wrong” with the market but major indices continue to remain in the nauseating trading range that we have been telling you about for many a week. The good news is that despite all the underneath-the-surface yuck, major indices are still only down low to mid-single digits from their highs.

There are not many people we follow intently when it comes to markets. Stanley Druckenmiller is one of them. We just want to let you know that Mr. Druckenmiller has just piled into the ETF that represents the price of Gold. This in itself does not mean Gold goes up. This does not mean he doesn’t sell it next week. We just wanted to alert you to what one of the great minds of the market is doing. He has been one of the biggest critics of the Fed’s maniacal monetary policy and now looks like he is putting his money where his mouth is…at least as of his June 30th filing.

 

 

THE WEEKEND COMETH!

We will have our award winning, over-the-top, in-depth report for you over the weekend.

In a few short few words….even with the mid-week reversal, we are less than thrilled with the overall market but a few areas continue to emerge:

Utilities coming up the right side off of lower rates, the same for Reits.

On that lower rate note, a slew of Housing names are actually breaking into new high ground. Along with that, the Home improvement retailers are showing up.

And finally, a slew (but not all) of Airlines are acting well. Since we believe 1+1=2, lower rates help the interest-rate sensitive names and lower oil helps the airlines…thus the moves.

Have a great weekend!

5 Words to Describe the Major Indices

5 words to describe the major indices:

BEND BUT DOES NOT BREAK!

Simple as that. Read carefully.

The major indices had another chance to break badly (no meth jokes please) on Wednesday…AND DIDN’T! Not only that, major indices experienced what we call a massive reversal day indicating the big money defended the lows again. As bad as the news is and as bad as the news is interpreted, pay attention to price first and everything else second.

Keep in mind, all this did was help the indices back up into the range-bound nausea we have been telling you about for what now seems forever. Underneath the surface, more deterioration has occurred. But for the major indices, defense! Do not argue with it.

A few underneath the surface notes:

Energy stocks are coming off their lows while energy prices have not. This is decent near-term relative strength in this down and out area. After a gargantuan drop, any bounce is welcome for energy bulls.

We continue to see a turning of the corner on Utilities as rates have come down markedly but overall remain range-bound. Can almost say the same for the Reits.

Financials may have lost some of that leadership quality as many names broke near term support in the past couple of days.

The almighty Apple went right into the 105-110 support area and reversed…helping the market. Remember, Apple very important psychologically to the market.

Suspect there could be some upside testing here but doubt it will be better than “C” move. But when Janet telegraphs no rate hike, anything possible.

A GOOD OLD FASHIONED CURRENCY WAR

  “A GOOD OLD FASHIONED CURRENCY WAR?”
By Gary Kaltbaum 8/11/2015
@GaryKaltbaum
garyk.com
Don’t worry. We’ll just gap up 200 tomorrow. Bazinga!
What’s all this complaining and whining about China? Did you just realize they were in dire straits and needed to do something? Haven’t you not seen the videos of their ghost cities? Of course, a move like ripping on your currency could be good in the near term but not so sure longer term. Haven’t we seen enough of that already? The bottom line is we have been telling you that China’s numbers are about as good as our unemployment number…just made up. But let’s not put this all on China. We, us, the U.S. of A is the biggest manipulator and the biggest rigger of everything. This country started it all up with 0% rates for over 7 years, the printing of almost $5 trillion in order to rig interest rates down and asset prices up and the pounding away at other countries to do the same as we did. This led to Japan printing a few trillion, Europe printing a few trillion, U.K. printing a few and who knows who else. Have you seen the yen and euro lately? The globe has printed anywhere between $15-20 trillion depending on whose abacus you are using and it started with Mr. Bubble Bernanke himself.
We knew something was up Monday when the leading areas of the day were the worst areas. We were asked on tv on whether we thought it meant anything. Our only answer was that it was one day. Today’s action is just the continuance of the nausea. Remember, it is not the news. It is how the market reacts to the news. How many times in past years did the market get hit with some bad news but still went up? This tells you markets have changed and right now, it’s not for the good.
As we have stated, the market’s deterioration continues. We are not sure what day or at what point the major indices break but it is a lock for it to happen if more and more stocks and sectors go to the negative side of the page. It is not good that the market has lost names like Apple and Disney and now, the financials need to be watched as we are not so sure currency issues are good for banks. And by the way, did you notice how easily the almighty Apple sold off after a one day, low volume bounce?
Lastly, we have told you on many occasions that the central-bank induced markets have turned into what we call “the one-sided trade!” It is the trade where everyone is all in. It is the trade where nothing can ever go wrong. It is the trade where everyone is comfy. It is the over-leveraged trade. It is the over-owned and over-loved trade. We mention this now because we do not like anyone that predicts meltdowns and crashes. Wall street is littered with people who call for crashes and big bear markets on a daily basis. They will miss 10,000 Dow points to the upside and when a bear finally hits, they tell you how right they have been. Thus, we will not call for one. But…we felt it necessary to let you know we are worried that everyone is on one side…and worry about what happens if that changes quickly. Good old currency wars could have repercussions. Watch that 2.040 S&P. If it holds, terrific. If it breaks…

Audibled report!

We had a nice report for you this morning based on yesterday’s action. Then, China did something with their currency. So the “guess the gap” game is down this morning.

The bigger question is why does a country even have to control its own currency like China does? The answer is: they are communists. They like control. They know their economic numbers come straight out of Fantasy land and they know they are an accident waiting to happen. But don’t worry, governments have you covered.

More tomorrow as yesterday’s big move was led by the worst areas. Hmm!

 

Great business model…lose $4,000 on every car sold!

SOURCE: http://www.cnbc.com/2015/08/10/tesla-burns-cash-loses-more-than-4000-on-every-car-sold.html

Kerplunk Goes the Market

 “Kerplunk Goes the Market”

By Gary Kaltbaum-August 10,2015
@
GaryKaltbaum
garyk.com

Kerplunk:

The object: try not to lose your marbles. Ker-Plunk takes a steady hand, as you skillfully remove the sticks from a marble-filled tube. A clear plastic tube is filled with marbles, which are supported by crisscrossing sticks inserted through the tube. Each player takes a turn removing a stick from the tube, trying to dislodge as few marbles as possible. As the game progresses and fewer sticks remain, it gets harder to keep the marbles from going ker-plunk! Play continues until all the marbles have fallen. The player with the fewest marbles in his compartment wins!

Kerplunk, the stock market…it’s all the same. Well, almost. Kerplunk is a game, The stock market is about your hard earned dollars.

In the stock market, think of the marbles as the major indices. Think of the sticks as all the sectors and all the stocks that make up the market. As more and more sticks are pulled, the less marbles (leadership) are left until it all (the indices) come down.

This is the exact process we have been telling you about for weeks and months. To be blunt, more sticks are being pulled and more marbles are falling. Just in the past week or so, the market has lost the almighty Apple, lost Disney (both stocks in the Dow), lost the whole media complex on the Disney cable news and now we are starting to lose the biotechs and the glamour leadership that has held up so well. And to be clear, Biotech has been the glamour leader for some time. So just add this to the transports,semis, commodities,high yield and all the other areas of nausea…

It is also instructive that money has been flowing into the recession-resistant, defensive areas like utilities, food, drugs, beverage, tobacco and household products. WHEN THE MARKET GETS DEFENSIVE, IT GOES DEFENSIVE. It is not a thrilling sign when these areas start to lead the market and it is even less thrilling for the economy as they usually telegraph a good slowdown.

We have recently outlined important support levels for the major indices. Some have been taken out like the Dow…which is now working on another support area. We are getting to the point where you had better be watching closely as the topping part of the process may be getting late in the game. After the topping comes the downtrend. So…S&P 2044, Nasdaq 4974 then 4901, Dow 17038. The Dow remains the weakest at this point. As long as these areas hold…well, they had better hold. Shorter-term, maybe we saw a near-term low late Friday but would not make a big bet on it.

Keep in mind, if markets cave, there will be no chance of a “ceremonial” rate hike by the maniacs at the fed and if things get real icky, expect some noise out of one or two fedheads about QE4. Not kidding! That may or may not help things.

What’s all the whining and complaining about?

I am utterly amazed at the whining and complaining about the questions asked during the debate last night…especially about the questions to Donald Trump. What should have Megyn Kelly asked? Mr. Trump, boxers or briefs? Chocolate of vanilla ice cream? Mets or Yankees? The fact is Donald Trump has said some of those things about women and if he wasn’t asked last night, he would have certainly been asked down the road. The socialist party has been effective with their  mantra of “the Republican war on women” so the question would have eventually come up. The fact is Megyn Kelly did Donald Trump a favor. Megyn Kelly gave Donald Trump a lay up. Just answer the question!

This is not an election for homecoming king and queen. It is an election for the leader of the free world, arguably, the most important presidential election ever. After watching Bush create $5 trillion of debt and after watching Obama create $7 trillion with more time to go, we need some serious people in the White House going forward. After watching Bush mishandle the Iraq war and when finally righted, watch Obama destroy all the gains leading to Isis,  this is no time for the meek and mild. This country needs toughness. It is no place for wussies. If someone does not want to answer the toughest of questions, take a powder. This country cannot afford another socialist and corruptionist (just made up that word) in the White House and unfortunately, the Republican opponent will most likely be just that in Hillary Clinton. It is a must that the Republican candidate is ready as the national media will surely lie on its back, put their paws in the air, wag their tongues and bow down to Hillary regardless of lack of talent, lies, corruption and everything else she represents. Wake up you wussies. The Fox News moderators get an A+ for doing what they were paid to do…hold the candidates feet to the fire.

 

Moving up sharply in rank:

Carly Fiorina-smoooothe and serious.

Marco Rubio-shows he will be around to the end.

John Kasich-To the point!

 

Moving up in rank:

Ben Carson- Best close!

Chris Christie- Ain’t going away.

Scott Walker- Do not under-rate him.

 

Staying put:

Jeb Bush- But needed to do better.

Rick Perry- Something still missing!

Mike Huckabee- About what was expected.

Bobby Jindal- Where’s the ooomph?

 

Did not stand out:

George Pataki- Could play center for the Knicks!

Ric Santorum- Likeable but…

 

Heading lower:

Rand Paul…get rid of the smirking! Not impressed at all with demeanor!

 

Pleasantly surprised but doesn’t matter:

Jim Gilmore

 

Sounded like he was talking from a freezer:

Lindsey Graham

 

Oh yeah…the Donald…he continues to touch nerves the most which means he will continue to be front and center. He took the most fire and still breathes.

 

 

 

 

Kerplunk Goes the Market!

Kerplunk:

The object: try not to lose your marbles. A long-time favorite, Ker-Plunk takes a steady hand, as you skillfully remove the sticks from the marble-filled tube. A clear plastic tube is filled with marbles, which are supported by crisscrossing sticks inserted through the tube. Each player takes a turn removing a stick from the tube, trying to dislodge as few marbles as possible. As the game progresses and fewer sticks remain, it gets harder to keep the marbles from going ker-plunk! Play continues until all the marbles have fallen. The player with the fewest marbles in his compartment wins! For two to four players.

Kerplunk, the stock market…it’s all the same. Well, almost. Kerplunk is a game, The stock market is about your hard earned dollars.

In the stock market, think of the marbles as the major indices. Think of the sticks as all the sectors and all the stocks that make up the market. As more and more sticks are pulled, the less marbles (leadership) are left until it all (the indices) come down.

This is the exact process we have been telling you about for weeks and months. To be blunt, more sticks are being pulled and more marbles are falling. Just in the past week or so, the market has lost the almighty Apple, lost Disney (both stocks in the Dow), lost the whole media complex on the Disney cable news and now we are starting to lose the biotechs and the glamour leadership that has held up so well. All that is left is the financials and they are close.

It is also instructive that money has been flowing into the recession-resistant, defensive areas like food, drugs, beverage, tobacco and household products. WHEN THE MARKET GETS DEFENSIVE, IT GOES DEFENSIVE.

We have outlined vital and important support levels for the major indices. We are getting to the point where you had better be watching closely as the topping part of the process is getting late in the game. After the topping comes the downtrend.

Keep in mind, if markets cave, there will be no chance of a “ceremonial” rate hike by the maniacs at the fed and if things get real icky, expect some noise out of one or two fedheads about QE4. Not kidding! That may or may not help things.

We will have our usual award winning, over-the-top weekend market report for you on Sunday.