WEEKEND NOTES

Random thoughts on everything:

Tomorrow is end of month…and then the sell in May and go away period. This is supposedly not a good period, especially in a mid-term year…but as always, we will let the market decide on that one. From 1950 to around 2013, DOW has had an average return of only 0.3% during the May to October period compared with an average gain of 7.5% during the November to April period, according to Forbes. Since 13, 14 and 17 did fine, especially 17.

This week we get things like Mnuchin in China, the Fed and Apple earnings. Of course, there is a ton more earnings to deal with.

We remain with our mantra of ping-pong back and forth action with the highs late January and the lows of Feb and the past couple of weeks. The 200 day continues to hold. It had better. We continue to believe it does not get broken at this juncture…but…

OILS remain best but thinking they look extended and tired here.

DEFENSE went from the penthouse to the outhouse in the past week off of earnings. No longer leading.

With BONDS having a near-term rally, UTILITIES and REITS better and trying to turn corner.

SEMIS remain the big worry as they continue to act horrid. INTC gapped up Friday and finished down.

FOREIGN MARKETS no great shakes but watching CHINA closely has it drifts down to the 200 day. Strength from this area will be a big help. We do believe China may hold the key.

AMZN up $140 in pre-market Friday and finishes in the 50s. Not sure what to make of it yet.

Got a few REGIONAL BANKS popping to new highs but bigger banks aint happening yet.

Seeing good action in a bunch of RETAIL. In fact, a few new highs. RESTAURANTS also better as CMG gaps to the upside.

After the run from the election to late January, what you are seeing is normal. Long consolidations serve to work off how extended and overbought market had become after such a move. After 2013-2014, major indices went into the doldrums for a good 18 months. We are not saying the same happens here but it is not out of the question. And of course, if the longer term support gets taken out, we will be talking about mid-high teens downside from the highs…but again, not there yet.