Veterans Day today. Remember why we celebrate.

Futures are down. That’s not supposed to happen. Aren’t markets supposed to go straight up?  Just a few things we have told you in the past week and an update:

Just about all our sentiment indicators have hit bright red bullish. These are contrary indicators so bullish is bearish. Keep in mind, sentiment is a secondary indicator. Price is primary. But when sentiment hits extreme levels on either the bull or bear side, we make note of it. We have seen it in the low VIX. We have seen it in the put/calls with very heavy call buying. We have seen it in the rhetoric. We have seen it in many other things we follow. Also, keep in mind, sentiment is not a pinpoint indicator. There is usually some lag time. This also does not mean markets just go bearish from bullish. In bull markets, it just leads to some corrective work. Today’s open may or may not be that time.

Value in…growth still out. A bunch of lower beta value has broken out in sectors like CONSTRUCTION, CHEMICALS, MATERIALS and plain old “STUFF!” Many have earnings and sales that are down calling into question longevity. Growth still not happening.

Speaking of earnings, we take issue with anyone saying earnings are strong. With about 90% of S&P stocks reporting, earnings are down approximately 3% year over year.

Since the Fed started to specifically target the fed funds rate way back in 1982, it had never cut rates with the unemployment rate below 4%. On top of Powell lowering rates, he is now printing more money on a yearly run rate than Bernanke did when unemployment was at 9% and we were still in meltdown mode. The fed balance sheet is back above $4 trillion with a run rate of over $1.5 trillion. But remember, it’s not QE.  And remember, the recent low coincided with Powell’s MASSIVE, absolutely MASSIVE liquidity injections. The market has not missed a beat since.

BONDS remain below the 50 day average as yields tick up. This has caused most INTEREST-RATE sensitive stuff to also break, namely UTILITIES and REITS. You can also add in HOUSING coming under distribution. Other areas not helping are GOLD/SILVER, many CONSUMER STAPLES and other DEFENSIVE stuff, AEROSPACE/DEFENSE and a few other areas so split tape it remains. The players are just different.