WEEKEND NOTES

On June 9th, we told you “beta” had topped for now. A week ago Friday, we thought a low for “beta” was being put in. BUT that was one hell of a low. Instead of bouncing back up, SEMIS/TECH/INTERNET and all that stuff pulled a “U”!

During the time “beta” was being hit, we alerted you that other areas were not budging. The DOW, S&P, NYSE just sat tight. Now that “beta”
is getting the bid again, those other areas simply broke out.

Just about all the areas we have been bearish on…remain bearish…notwithstanding commodities, with a few names turning the corner. Commodities work better with a weak dollar. And for a change, the dollar is very weak.

Other than that, we find little to complain about entering earnings season. Notice the poor reactions to some financials on Friday but all reversed up a decent amount of the downside.

JUST KEEP IN MIND, things will change during earnings season. A keen market player needs to sit back and pay attention to the reactions. Remember, it’s not the news, it’s how things react to the news. Expect some wicked moves both up and down.

Other thoughts:

EEM, FXI, IEMG and other foreign stuff are all breaking out to new highs. The best markets are the ones where good action can be seen worldwide.

We keep being asked about if the Trump agenda does not get through.  We think it matters but only to a certain extent. We say this because trillions are still being printed on a yearly basis by central banks. On top of that, many still have negative rates…yes, negative rates. If there is anything we have learned as we look back, never fight the fed…and these “feds” have taken monetary easing to place that even the softest of doves would have never believed.  Of course, we will always pay attention to price first but since QE1,  you know what has happened.