PRE MARKET
Futures up…areas that were crushed yesterday with a bounce and areas that broke out in past 2 days, continue up.
FINANCIALS, for the obvious, break out…bid up again this morning. The “tax reform” bill is really pro-FINANCIALS.
TRANSPORTS, been lagging but that changed yesterday with a large 300+ point gain. Didn’t see any news.
MANAGED CARE led by DOW name UNH…obviously no matter what is in any bill, they win.
Will know a lot more on growth on how they bounce. Yesterday was wicked. Last time we saw something like this on the SOX, it took 3 months of back and forth to repair.
SNPS gapping up. SMTC, BOX, JACK gapping down. JNPR was up 25% in aftermarket on supposed buyout by NOK. NOK says not true…stock is now down 8% in pre-market.
Market Notes
This is what I wrote pre market this morning:
Yesterday, FINANCIALS led the way as incoming Fedhead going to keep things easy but also said magic words…bye bye to Volcker rule which has prevented FINANCIALS from trading their own money. On top of that, the CFPB will be “taken apart” as many believe it was just an unaccountable, politically one-sided nightmare for the financial industry. So…big 3%-plus move in financials yesterday. As we have told you forever, markets never get in trouble when financials are working. The XLF held the 50 day and popped off of it. FINANCIALS re again up pre-market.
There was some under-performance in beta yesterday. Very extended names would be normal to rest/pull back.
As Lloyd Bentsen once said: ” I know pullbacks. Pullbacks are a friend of mine. That was no pullback in beta!”
Beta was scorched. Rest? Pull back? No…scorched. All this while:
TRANSPORTS went nuts to the upside. Even down and out AIRLINES may be turning corner.
FINANCIALS of all stripes continued to move higher, though got a little overheated early. Everything administration is doing is pro-financials! Goldman boys get their way again.
HOUSING stays nice.
RETAIL (we mentioned last week) were very strong. Discount retailers breaking out and the dead and buried auto parts retailers actually turning the corner.
MANAGED care en fuego. No harm from tax reform?
On the other end, the over-heated, over-extended, over-owned, overbought SEMICONDUCTORS pulled another June 9th day. After that day, the semis went into a 3 month consolidation before breaking out again for this latest strong move up.
My whole beta/growth screen was sliced and diced. At the very least, going to need time to repair. At the very worst….
And BITCOIN…I don’t own any so I am jealous.
Lastly, have we ever seen vicious rotation like this before? Sure! Don’t take too much away from it just yet. Already hearing boo birds out saying it augurs something bad. As of this second, it is just what it is, vicious out and vicious in rotation. It is still early in the week.
PRE MARKET
Dow futures up…S&P flat…NDX down.
Yesterday, FINANCIALS led the way as incoming Fedhead going to keep things easy but also said magic words…bye bye to Volcker rule which has prevented FINANCIALS from trading their own money. On top of that, the CFPB will be “taken apart” as many believe it was just an unaccountable, politically one-sided nightmare for the financial industry. So…big 3%-plus move in financials yesterday. As we have told you forever, markets never get in trouble when financials are working. The XLF held the 50 day and popped off of it. FINANCIALS re again up pre-market.
There was some under-performance in beta yesterday. Very extended names would be normal to rest/pull back.
PRE MARKET
Remember, it is end of month window dressing. Market will not go down. Seriously!
Futures up…with a few mega-caps like AMZN, GOOGL up early. Not much in the way of earnings. TECD and THO are gapping up. MOMO gapping down.
Just a word on something we said yesterday. When it comes to Bitcoin and Blockchain, just know what you are doing. Yesterday, a few supposed “blockchain” names were bid up but with a few finishing 25-35% below the early highs. That is a lot of cake to lose quickly. Of course, they can go back up but as we have always said “pick your poison!” Know what you are dealing with. Know where a stock came from. Know that some of this is just puke. Quite often, these names that have nothing will go back right where they came from…so careful.
As far as bitcoin, anything is possible. We can read charts on it. GBTC is one we watch and that was a massive break to the upside yesterday on volume. It is extended beyond beyond but that doesn’t mean it just doesn’t keep going. We do believe this is just a monstrous bubble but with charts, we can evaluate it daily and weekly. Notice that since April, the 50 day average has contained price about 95% of the time. Again, know where things came from and what you are getting into.
PRE MARKET
Remember, we are into end of month window dressing. But of course, window dressing is illegal so it does not happen.
Futures flattish. Not a lot in the way of earnings this week.
AMZN up $13 off of Cyber Monday…but very extended here.
And lastly, not at $100, not at $500, not at $1000, not at $2500, not at $5000, not at $6000, not at $7000, not at $8000 but NOW getting inquiries about Bitcoin and Blockchain and all that stuff…and seeing massive amounts of reports/articles on them. Just saying!
WEEKEND REPORT
Not much to add from last week. We now head into month end and a race to year end. Normally, we are now into seasonal strength but we have already had a good move this year. That doesn’t mean it doesn’t just keep going.
The negatives:
OUR sentiment numbers remain off the charts bullish. This includes some froth and speculation. Bitcoin anyone? In fact, bitcoin now getting noisy along with blockchain.
Only 60% of the market is working. This number should be higher for a market at new highs. The good news: we have seen this before. Just stay in gear with what’s working.
New highs versus lows remains anemic.
TRANSPORTS remain crappy. Just ignore.
REGIONAL BANKS act poorly. Bigger banks better but poor action near term in Citi and Goldman.
The positives:
Just about everything else…and now watching COMMODITY stocks as the DOLLAR continues bearish action.
