While everyone is reporting, yapping or talking about Omarosa, secret tapes, Charlottesville, Turkey, Turkish Lira, Turkish Taffy, kneeling, Elon Musk and his clear lack of ethics if not more, Tesla, socialism, socialist dolts, Chicago shootings, hijacked planes, Kanye, Russian economic wars, asinine tweets and the crappy Mets…not that any and all is important… we just wanted to remind you in the last week (because no one else will)…another $21 billion was added to tax payer debt, spending on interest payments on the federal debt hit another record high, budget deficits continue to soar into the $1 trillion+ category and global debt hit another record high at a measly $247 trillion. But do not worry. They have us covered. They are making things great again. Of course you know who they are. They are the ones who are screwing the American public solidifying their power with OUR debt! And unfortunately…it is all of them on both sides of the aisle, yet we keep electing them.
But as long as markets are acting fine, everything is well. Shorter term, we reported the churning on Thursday, thinking a pullback was close at hand. Friday’s gap to the downside ensured it. We have been of the mind that any pullback will be controlled and rotational but with such a news-driven market, anything is possible. But for now:
On the good side:
All major indices remain above the 50 day average. Nothing bad can happen above.
RETAIL acts very well.
A slew of growth names, especially some bigger names with big index influence continue to work very well. Amazon, Apple and Google come to mind first. We cannot begin to tell you how much influence they have.
FINANCIALS, while in pullback mode here, have been a big help recently.
While we are not the biggest fans of advance/decline figures, most were at all-time highs this past week before pulling back.
10 year yields continue to stay under 3%.
China easing like Bernanke is running the joint.
Europe and Japan continue with negative rates and continue to print money.
On the neutral to negative side:
This remains (and has been that way for quite a while) a very split tape. We still cannot count more than 50% of the market working. In a broad-based market, this number goes into the 70s and higher.
Foreign markets overall…quite neutral but it is clear negative that emerging markets, Russia, China, Brazil and a bunch others act horrid.
SEMICONDUCTORS as a whole…neutral but many names have broken down. Something to watch closely.
The fact that it is still less than a 50-50 market while indices are near highs indicates just how narrow things are. Narrow markets are easier to sell off when the overall weakens.
There were more new lows than new highs on all indices late in the week. This again is an amazing number indicating how narrow things are but also how, underneath the surface, how much weakness there still is.
Lastly, a question asked of us: “Gary…if you were the regulators, what would you have done about Elon Musk and how he handled Tesla?” Our simple answer is that we would have stopped trading and kept trading halted until we received a straight up answer. We are amazed how the screws have not been put to a man who went against all Wall Street protocol, all Wall Street ethics and we don’t think arguable, a damn good case for a serious securities violations. We are happy that they are investigating but this all smells real bad. And yes, we think the man brilliant but that has nothing to do with right and wrong.