Fool me once…
Futures pretty much flat with a few beta names getting the usual target raises whenever they are not acting as well as the analysts want. Yes…shenanigans.
Other than that:
Earnings this week:
Tuesday- FAST, OMC, PEP
Thursday- DAL, TSM…airlines act well. Lower oil not hurting.
Friday- Financials start up with C, JPM, PNC, WFC. Financials have a decent bid since the fake stress tests.
The tape remains split. We have taken pains to tell you what to avoid. You know the areas and you know the names. For a change, we will ignore the bad today and just write about what’s still working, what’s looking to work and anything else in shape.
The new high list is laden with airlines and housing. Yes…airlines and housing. We guess it is about low oil prices and continued low rates. We have seen nothing that tells us this won’t continue.
With airlines strong, the TRANSPORTS act well. You can add the rails to what is helping the transports out as well as strong FEDEX.
The DOW, S&P and the NYSE look just fine. All pullbacks have been contained by the 50 day average. The same goes for the RUSSELL 2000 which has basically been range-bound since November. These areas have been outperforming the NASDAQ/NDX as of June 9th when we told you there may be a changing of the guard.
FINANCIALS still act well off the fake stress tests. Our two favorite names in C and BK remain in shape. Others acting well are BLK, BX, CMA and a few others. A quick glance at the XLF shows a long trading range where one good day breaks you out of it to the upside.
DEFENSE stocks are breaking out. Who doesn’t like a good war?
A bunch of INDUSTRIAL names keep edging higher. XLI showing the way.
BIOTECH remains in shape off the recent index breakout.
And lastly, we have been telling you a near term top was put in on June 9th for the SEMIS/TECH and all that beta stuff. We have been giving you out important support levels as these areas worked lower. The good news is that on Friday, the SOX held the 1120 area, the NASDAQ held the 6100 area and the NDX held the 5600 area. Keep those levels in mind. We still suspect these areas need time and price. If those levels give way, it will then be a lot more time and price.
And it is now earning’s time.
At this juncture, the SEMIS are the most important group to watch. As they go, beta goes. SEMIS are very strong today. You can see the 1020 breakout and support has held for now. If it continues to hold, we give very little chance for the “market” to further break down. That does not mean we are off to the races. It may just mean we stay in range. For bulls, very important action in the SEMIS here. The SOX is still below the 50 day but is now trying to rally up into it. Beta having a good day early on.
It is only 840 am but futures have bumped up nicely off of the fake job’s number which came in better than expected. Enjoy!
Will have a report on the most important sentence out of Trump’s Poland speech. As usual, no one talking about the most important part of the speech!
Will have a complete report on the state of the markets.
We are writing this before the fake job’s number.
Futures flat. More damage done but keep in mind, major indices are only down a smidge. Not even close to real damage being done. We just think that at best, things get tougher and at worst, the next level of support will break…which means more to go.
Bounces can happen at any time. Our overall thought is that there is more time and price to go. For sure, there are issues:
More new lows than new highs on NYSE and NASDAQ yesterday…wow!
Leading growth names remain under pressure.
SEMIS still under pressure…but the good news the 1020 breakout area holding.
Could be just the summer doldrums. Could be just a point in time where market has to rest. We will continue to advise based on sector as about 50% of the market remains in bearish phases of differing price and time. And if you want to know what a classic bear looks like, check out the XOP (Oil Exploration). Notice a break of the 50 day average on Jan 30 with every visit to a now-declining 50 day average sold off.
If futures move off a lot off of the fake job’s report, we will send out another missive. We think we are near-term oversold here…which doesn’t mean a lot.