Futures up a wee bit.

Markets felt a little popped yesterday but let’s call it no biggie. Markets are overbought while call buying has skyrocketed. So maybe a rest…maybe.

Seeing distribution in utilities, reits and defensive areas while best moves continue to be in lower beta stuff that was dead for a long time. With rates backing up, financials have had their way. We would suggest they are overbought. Also seeing bids in a bunch of lower beta, earnings and sales down economically sensitive names. And there there are the SEMIS, which have been relentless on, for the most part, crummy numbers.

Money continues to flow out of most growth names with many SOFTWARE names continuing to act horrid.

Since you are asking, BA had a good day yesterday. It seems every time the CEO is on the tube, the stock gets a bid. Still a decent amount of uncertainty remains but every day gets closer to getting the planes back in the air.




Markets continue to stick after edging out of long ranges. Foreign countries that are in recession are at new highs. (EASY MONEY AND PRINTING OF MONEY MATTERS.

The move is being led by everything that was dead for a long time. FINANCIALS, VALUE, CONSTRUCTION, INDUSTRIALS, CHEMICALS…while most growth remain dead or bearish. OILS are even waking up.

On the other end, seeing near term tops in defensive areas like UTILITIES, STAPLES, some REITS, some HOUSING…so the jello still moving on the plate.

NEAR TERM, by most measures, things quite overbought here. Pullback potential.

As we thought, the president has finally listened to advice as you can see the rhetoric on China is much more friendlier with our expectations of a deal getting done. Elections matter.


Since the Fed launched “NOT QE” on October 11, everything has changed. We alerted you that all the comatose areas of the market had woken up. Small and mid caps. Transports. Foreign markets. Low beta. Cyclicals. Companies with down earnings and poor guidance are moving into new high ground. All got their cue and all are on the move. To the day, again, things got going. Wall Street’s default setting of just buying the easier money lit up again. But not being reported is just how much Powell is printing. The Fed is now on a run rate of over $1.5 trillion on an annual basis. This makes Ben Bernanke look like Paul Volcker. Think about this. Jay Powell is now printing more money than Bernanke but when Bernanke went easy as all heck, the unemployment rate was north of 9% and the world was experiencing a financial meltdown.
Think about this:
1) Major indices have been strong all year.
2) Unemployment rate in the mid 3s…not in the 9s.
3) 123 months of economic expansion, longest in history.
4) 108 months of job growth, longest in history.
Yet the Fed cuts rates 3 times and is now breaking Bernanke’s records, providing liquidity in unprecedented numbers.So when you hear pundits tell you the market is moving higher because of fundamentals, read this report to them. You can thank one man with his “NOT QE” nonsense. Actually, more than one. Along with the ECB, who started up their QE again after promising not to and just 10 months after the last QE program ended, who knows where this market could go. Just realize that if earnings stay flat to down, it will all be on valuation expansion. And oh…don’t worry about the $250 trillion of global debt that all of this easy money has enabled. DC isn’t worried about it and they know better. (cough)
Cash is high and with all the impeachment talk, trade talk and recession talk, sentiment is very bearish. Major indices have either broken out of range or are a stone’s throw away. Areas of the market that had been comatose have now woken up. Foreign countries that are in recession are actually near new high ground. (not kidding) The new yearly high list is now expanding with a bunch of low beta, cyclical-types where both earnings and sales are down year over year. (not kidding and amazingly, most growth names remain bearish) November and December are usually months of seasonal strength. The president finally took advice from a few smart people that he had to end the China nonsense as he heads into the election year. (Expect a truce sold as the greatest deal ever!) As always, we will let price dictate but leave no doubt, our theme from a few weeks back about the potential for the market to get going because of the new round of QE is at hand and is on the move. As always, if things change, we will let you know. We are just amazed that after more than 10 years, markets are still reacting to the moves of these few select people running central banks into the ground.


Heading into the weekend…a reminder:

The big 4 indices are entering new high ground.

We now enter the usually seasonally strong November and December.

Our economy, while having some issues, continues to show strength, especially with the consumer and employment figures.

With all this, one would think central banks would be looking out for some tightening. Instead:

The European Central Bank starts more money printing today. They had promised to stop. The following countries are all easing. Some are lowering rates even though their rates are already negative.

Hong Kong
South Africa
On top of all this, Jay Powell lied to the American public as he started a massive round of QE on top of lowering rates for the 3rd time. You know, “QE BUT DON’T CALL IT QE!” President Trump, instead of ripping him, should be kissing him where the sun doesn’t shine as markets have loved easier money, especially the printing of money since the lows of 09. Do recall Bernanke started all his QE because the economy was in a financial meltdown. Jay Powell has no excuse except he is showing exactly who he is…another in a long list of easy money dolts.
Just letting you know this is all one hell of a combination as we head into the end of the year. With tons of cash on the sideline and tons of doubt, we leave nothing out of the question if the market wants again to take flight. But of course, we measure price first and everything else second.
And, stand-up comedian and self-proclaimed capitalist Elizabeth Warren  just released a $52 trillion “medicare for all” plan. On top of that, in a video that will be played several million times if she wins the primary, she stated flippantly that 2 million+ people will lose their jobs because of her plan. We will have our response in an op-ed over the weekend. We cannot help ourselves.