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ANOTHER POSITIVE REVERSAL DAY BUT

ByGary Kaltbaum
-First:-

-Macron announces wage hikes and tax cuts. Let’s see, spend more taxpayer money without any productivity gains with wage hikes but take in less taxpayer money by lowering taxes…you know, the taxes that pay all the wages. Sure…that will work! –
-Second:-
-Vote yes on Brexit. Wait 2.5 years. Negotiate something that looks like it has nothing to do with the original vote. The result…nothing!-
-And:-
-We wrote to you this morning just to outline the POTENTIAL positives in this nauseating market. The report included the extreme bearishness built up, the market now sitting again at vital support, the fed now having the market’s back, oil prices continuing to drop and it’s December as we now head into the end of year.-

-The good news news is that for the 2nd time in 3 days, markets had a strong reversal to the upside after early nausea. For today, the goal line stand the market needed showed up. Hopefully, maybe, could be, we are seeing another low. On many occasions, these types of washouts at important support serve to put in near-term lows. After all (ready for these numbers), in just over three days, the recent drop had major indices tank 7.5%-12.5%. Again, those are the numbers for the major indices…not individual stocks, which always fare much worse than an index. Amazingly, from peak to trough, the TRANSPORTS dropped the worst, 12.5% in just over 3 days.-

-Normally, drops and bounces in markets like this last weeks, not days. But we get what we get and deal with it. Normally, we tell you to expect upside testing after another great defense/reversal day like today. But look what happened after Thursday’s reversal. We will just say today helps the cause in the near term…but there is nothing normal in the action we have recently seen. Just keep in mind, further upside would not change the big picture.-

-The one area that is finishing off the lows but is still nicely down is the financials. If they cannot rally, we promise you any rally will be anemic and short lived. The good news is that beta/tech had very good relative strength all day. But…don’t blink!-