Mr. Market continues to act constructively as the pullback has been controlled and rotational. We came into the week thinking we had a near-term high for now but have seen nothing to indicate any trouble. On top of that, what is and has been presumed to be bad news has not only been not sold off but has indeed been bought up. Leave no doubt, the continuation as well as the renewed talk of easy money everywhere is still working. China’s latest $83 billion of funny money has so far, worked wonders. The ECB announced just yesterday potentially more easing. It just never ends but for 10 years, it has worked.
The most important part of the equation is that the SOX had a monster move yesterday even though the news was not that good. Even with INTEL’s news this morning, semis are hardly down. As we have told you, this area has led markets up and down for ages. Many fundamental people are scratching their heads off of this move. We are being inundated with how “the fundamentals are terrible”. We care but in the end, we could care less as price first and everything else second. The market looks forward, NOT BACKWARDS. Maybe it is seeing some light at the end of the tunnel as the semis have been hit hard over the past year.
On top of this:
Europe acts better. The all-important German Dax looks like our market, trading above the 50 day again and looking to have another leg up. The same goes for other parts of Europe. The same goes for most ASIAN markets. Again, that $83 billion worked wonders.
On top of this:
Do not forget the move the important FINANCIALS just had. Even bad news have been bought in this space The FINANCIALS have also turned the corner and are coming up the right side. We have never seen bear markets when the FINANCIALS and the SEMIS have the bid.
If sellers rear their ugly head again, we will let you know but so far, in spite of shutdowns, slowdowns, tariffs, socialists, wealth taxes, investigations, 70% tax proposals, tweets, the Knicks and all that crap…markets continue to act much better here and around the globe as the repairing of the damage continues.


3 replies
  1. Avatar
    Richard Miller says:

    Yes, it is as you state but you also state all the time that you like to see markets sit and set up – there has been none of that.

    This seems like more of Irrational Exuberance – before another down leg. How is Chipotle -CMG
    a stock that is well over 500? How does the SOX an Index fund Tork out a 10 point gain – on really nothing
    but hope on the cloud? Intel and FedEx with poor outlooks – Major players in their respective markets – Housing market is not participating at all in this market – yet the last cycle housing is what drove the
    entire CLO debacle. Now it will be something else.

    It is always conveniently stated that the market is forward looking but then it reverts backward on strong earnings whenever it
    sees fit to fill its narrative. So basically in essence, Trump was absolutely correct when he advised everyone to buy
    on the dip and that this drop a month ago was merely a “blip” on the radar and a total Anomaly! This means that he must be
    a wise and strong leader. The market certainly seems to agree! Also, the tariffs are indeed working so again he was correct.
    So much double talk and manipulation of markets happening to even look at Logic anymore – Gary.

    Davos talk is not so optimistic as some have sited major Corporate Debt to be a dark cloud looming as if indeed the
    market gets irrationally hot – interest rates will have to go up again. This will subsequently lead to a break on one side
    or the other.

    So this activity is the hype of rising markets, stock buybacks and continued M&A activity ( with no layoffs BTW) – seems
    that no one is speaking to this anomaly either. IBM buys RedHat and there are no announced layoffs – that is one merger
    of 100’s but have not seen the standard and usual factors like that occurring.

    Nothing is making any sense anymore – and you see good in these markets and this recent activity – I see
    increasing danger and total market manipulation.

    • Avatar
      anti semite says:

      This market went straight up off the bottom,,,, zoom !

      Now it’s extended, getting more extended.

      Most likely, we are holding up here to EOM ( end of month ),
      the big NEWS, will be the fed.

      Bloomberg radio just said the fed will meet next week;
      Interest rates up, ….market down.
      Interest rates steady or down, ….market up.

      The big money should wait here, so,,,despite this rally, Yoda will wait here.
      Lets hope for a market pull back to a higher low, then a break up.

    • Avatar
      Carleen Vinum says:

      Miller, Your a brother from another mother. I feel the same way. We do have inflation. Everything is way more expensive from a year ago more than 2%. I think the market should dictate the fed funds rate, like using the 10 year. Get rid of the fed.Central banks are propping this bubble and it is not going to pop on anyone’s watch, it needs to so we can reset. Let it rip get it over with.

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