Market Notes

This is what I wrote pre market this morning:

Yesterday, FINANCIALS led the way as incoming Fedhead going to keep things easy but also said magic words…bye bye to Volcker rule which has prevented FINANCIALS from trading their own money. On top of that, the CFPB will be “taken apart” as many believe it was just an unaccountable, politically one-sided nightmare for the financial industry. So…big 3%-plus move in financials yesterday. As we have told you forever, markets never get in trouble when financials are working. The XLF held the 50 day and popped off of it. FINANCIALS re again up pre-market.

There was some under-performance in beta yesterday. Very extended names would be normal to rest/pull back.

As Lloyd Bentsen once said: ” I know pullbacks. Pullbacks are a friend of mine. That was no pullback in beta!”

Beta was scorched. Rest? Pull back? No…scorched. All this while:

TRANSPORTS went nuts to the upside. Even down and out AIRLINES may be turning corner.

FINANCIALS of all stripes continued to move higher, though got a little overheated early. Everything administration is doing is pro-financials! Goldman boys get their way again.

HOUSING stays nice.

RETAIL (we mentioned last week) were very strong. Discount retailers breaking out and the dead and buried auto parts retailers actually turning the corner.

MANAGED care en fuego. No harm from tax reform?

On the other end, the over-heated, over-extended, over-owned, overbought SEMICONDUCTORS pulled another June 9th day. After that day, the semis went into a 3 month consolidation before breaking out again for this latest strong move up.

My whole beta/growth screen was sliced and diced. At the very least, going to need time to repair. At the very worst….

And BITCOIN…I don’t own any so I am jealous.

Lastly, have we ever seen vicious rotation like this before? Sure! Don’t take too much away from it just yet. Already hearing boo birds out saying it augurs something bad. As of this second, it is just what it is, vicious out and vicious in rotation. It is still early in the week.

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