THE COMPLEXION CHANGES

-We believe the complexion of the market is changing. The market has had its way since the lows with nary a pullback. The move has been calm and the move has been persistent. The move has occurred even though most data points around the globe have been heading south. (The US. remains the bull of the woods!) The move has been accompanied by more and more easy money and more and more easy money rhetoric. The move has been helped by a constant string of “China trade negotiations are going splendidly” talk out of the White House almost daily.-
-But that’s all noise. As we write this, the leading SOFTWARE group is being pummeled. One of our simple rules is that when the leading group is taken out to the woodshed, markets often follow. But it is not just software. We have been seeing deterioration in RETAIL, AIRLINES, MANAGED CARE, ENERGY, GOLD/SILVER, HOUSING and HOUSING-RELATED before today. And now we get today…some serious distribution and some serious reversals.-
-Do not look for reasons why. Markets do correct. You do know that? Any corrective work would be overdue and frankly, welcome. Markets need to bring doubt and sometimes wipe the smiles off the faces of the bulls.  Sentiment has gone coast to coast. What was quite dire sentiment has turned into quite the bullish sentiment. A ton of money losing IPOs are in the offing, no sales BIOTECHS are being bought and calls for 30,000 by the end of the year are showing up daily, just two months after many calling for a depression.-
-This does not mean the end of the world is at hand. It just means we suspect there is going to be some corrective work of unknown price and time coming up.-