WEEKEND NOTES

In no particular order:

Watching gold stocks for first time in a while. 2 names sticking out as strength are low priced IAG and higher priced RGLD. A move above $23.06 would be important. Other commodity names like BHP and RIO still act well as the price of copper (JJC) broke out.

OIL prices doing better but oil stocks not so much as they reversed Friday to the downside. Not really much to think about yet.

Quite the interesting reversal for NASDAQ/NDX Thursday. This is to be watched. We suspect at the very least, a near term high…but so far, just near term. Can’t go further than that. Also watching for the potential for a big double top in the semis (SOX). Watching 1083…the 50 day average.

Amazingly, still finding about 40% of the market in bad shape. Not normal for indices that have done well and tells you the moves remain concentrated in certain areas. Those areas had better continue to hold up. Also, on any drop, new lows outstrip new highs telling you that there is some ugly underneath the surface.

Speaking of ugly, we remain in earnings season. What do we mean? For a good market, there have been lots of blow-ups.  MSTR, ELLI, WIX, WDC, OZRK, SBUX, KLAC, BWLD come to mind but there are many others.

Do not get us wrong. So far, major indices act fine. Corrections remain short-lived and shallow. All major indices remain above the 50 day average.  A decent amount of growth remains in fine shape with only a few cracking. Just want to point out the continued divergences. If they do not get resolved, when a correction ultimately occurs, it will more than likely be worse than normal. Too many are complacent and too many are passive. We understand why. Markets condition people based on market action and when you have had no corrections in 8 months, one forgets about them. We don’t. But until major averages get taken out…no sweat. Just realize all the bad areas like retail and the rest…remain bad.

Lots more earnings this week  as well as more nonsense out of Washington. Stay tuned.