How does a market that closes so bad just gap up in a big way in the morning?
We always cast a wary eye when they can’t rally markets during the trading day but get the “mystery” gaps overnight. Let’s just leave it at that because no matter what, price always counts.
How bad is the technical condition?
As bad as can be on a short term basis…which means markets are beyond oversold. Of course, the market decides to piss off everyone who wanted to get in by gapping up this morning. Just keep in mind, repairing will take time. Just keep in mind, while some major indices just recently topped, foreign markets topped long ago as well as the average stock. The S&P just broke below the 200 day average, the 1st time since June 2016, the longest run above in history. The VIX doubled in 6 days. 10% of the stocks in the S&P 500 are above the 50 day moving average. In other words, a lot of damage and again, beyond oversold.
Why is the new low list so important?
It tells you how much real weakness there has been…and to be kind, it has been brutal represented by just about every major industry.
How does earnings look that are coming up?
We expect strong numbers. We worry about a potential for a peak in earnings as well as guidance as the cost of everything has gone up.
Many are saying this will end just fine and that the year after mid-terms are always a good year…and just buy…?
We are not sure what we are having for lunch today let alone next year…and that is not sarcasm.
Why do you disagree with Trump calling out the Fed?
You cannot have the president with “out loud” opposing views of the man who moves short term interest rates. It certainly does not help calling the arguably, the most important money man on earth, crazy! Let us not forget we are at a whopping 2% on the short end…which is still ridiculous easy money and memo to the prez, it is the 10 year that is attached to mortgages. So all you Trumpster whiners are wrong.
Could Trump fire Powell?
In a nanosecond. I have an idea…just fire Powell. Hire Bernanke. Bernanke comes in and immediately takes fed funds back to 0% and announces QE4. YIPPEEEE!
Best guess on markets?
More time and price. Anyone who tells you they know how this plays out…well, they probably had the Giants against Philly last night. What I can tell you is there is a ton of technical damage which normally takes time. The good news is that SO FAR, this is acting like the top in late January…a steep drop…a low and then a few months of repairing as the market slowly drifted back up. We will gladly take that outcome. That is our best case scenario. Not sure you want to hear our worst case scenario. Let’s not forget, we just dropped 1400 DOW points in 2 days. The average stock is much much worse. Leader AMAZON is up $63 as we write this…but is till down $250 in less than 10 days. Again, a very oversold bounce.
Gold/gold stocks look like its forming a darn good bottom. Volume was heavy on yesterday’s move. Watching on pullbacks but think something’s up here.
We will have some thoughts on Kanye and the abysmal reaction a little bit later.