And the weekend report!
On top of that, we told you many weeks back that everything that led the market down since mid 2014 was turning the corner. That has continued as energy, commodities, industrials, materials, and all that stuff continue to lead on the upside as they continue to recover a portion of the massive drop. For a long time, we had told you that the advance/declines were horrid. It is now the exact opposite. The fundamentalists are pulling their hair out of their head as economies around the globe soften and earnings stink. This is why we are technicians first. We believe in market action first, everything else second. We continue to believe this is a central-bank induced rally as central banks have ramped things up over the past two months. Leave no doubt, it has been a coordinated effort of negative interest rates, the printing of extraordinary amounts of conjured up money, the unbelievable buying up of markets and the backing away of raising rates by the United States. But that’s just noise right now as the markets continue to act fine.
We do have a few changes in mind as we believe many defensive areas topped out in the last week. This includes real estate, food, tobacco, utilities, beverages, household products and stuff like that. On top of that we think gold and gold stocks probably petered out in the past few days. Keep in mind, gold stocks are very strong and pullbacks here would be normal. On the good front, money flows continue to roll into “energy, commodities, industrials, materials, and all that stuff” and financials also off those fabulous numbers.
Markets put in a near-term high on Wednesday but notice what happened on Friday. Important names like Google Starbucks Microsoft and Visa all gapped down. What happened? The bigger indices reversed with the small caps and mid-cap having a strong day.