Another grim day for just about everything tech/internet/growth/semis and all that stuff. We make note that it is now way stretched and oversold on a near term basis but that doesn’t mean they bounce. Amazing what can happen when an area is over-owned, over-loved and over-leveraged. Many are coming out defending all these names. We will not quibble with them but we would rather let the market decide.
What is more important is what we mentioned yesterday and that is most major indices are sitting on either long-term support or double bottom support. Again, double bottoms simply mean price went down to a level, rallied over a period of time and then revisited. Just take a gander at the Dow or the financials (XLF) which revisited to the penny.
Today is end of quarter. We are seeing another one of those gaps to the upside and suspect this occurs because of how oversold things are combined with end of quarter combined with sitting at vital support. LET US BE AS CLEAR AS CAN BE! A BREAK BELOW WILL INVITE MORE NASTY SELLING BY THE INSTITUTIONAL CROWD AS THEY WILL REALIZE IT’S PARTY.
Yesterday, Sarah Sanders stated that while the president cares about level playing fields, they had no plans to go after Amazon right now. Of course, with this administration, Wednesday has nothing to do with Thursday as this morning, the president tweets:
“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
We have a couple of messages for the president.
Not arguable, the two most important stocks to the stock market in the 15 month romp since the election were Boeing and Amazon, both with amazing gains. Boeing is potentially in the cross hairs of retaliatory measures because of tariffs and now Amazon is potentially in the cross hairs of the president. Mr. President…if the big leaders in the market go by the wayside, there is a chance the market goes by the wayside. If the market goes by the wayside, there is potential for the “wealth effect” to go by the wayside. If the wealth effect goes by the wayside, the economy goes by the wayside, if the economy goes by the wayside…you get the hint.
If you think Amazon has hurt the mom and pops, then Mr President, why not just go after Home Depot, Lowes, Wal Mart, Best Buy, Bed Bath and Beyond? How about going after Publix because in the southeast, they have put a lot of supermarkets out to pasture or just go after Wawa as they are taking over in Florida and shutting down smaller gas stations? Shouldn’t Costco be a target? Do you know how many businesses they have shut down? Hey…why not go after the New England Patriots? Look how many teams they have defeated throughout the years. Mr. President, do you know what all these businesses have in common? They do things right. They are what makes this country great. They have created wealth. They have created jobs. They have turned many a cashier into managers. They have changed the face of the economy for the better…just like Amazon. What else do they all have in common? They have hurt the competition because they are just better than the competition…just like you beat your competition because you obviously did better than your competition. Mr. President, do not castigate success stories like Amazon. Praise success stories like Amazon. The US Postal Service does not lose money because of Amazon. Amazon is one of their saviors. They have done so well for the service that they actually deliver for Amazon on Sundays.
We, for 8 years, complained about Barack Obama targeting many industries…and it was not just the coal industry. We complained that all the targeting would put uncertainty into the economy.
Mr. President, if you want to do the same, keep targeting the great success stories like Amazon. Nothing good will come from it.