Crappy day until Powell pushed buttons into the close. (not sarcasm) He is so obvious. Happens all the time. But when we scan, we ignore all noise.

NASDAQ was trying to hold up but overall weakness took it down. It is bouncing in after hours as dead and buried CSCO is up almost $3. AMAT is up a wee bit. ADSK up nicely on raised numbers. DIS up $4 and change on much less of a loss than expected.

A/D NYSE 961-2883

A/D NASDAQ 1083-2347

Of note:

PDD gaps up on strong numbers.

Chinese electric car stuff really on the move: XPEV, LI, NIO. All lose money.

About the only thing that was green was a bounce in gold/silver. Everything else was in pullback mode.

We want to make note that RH had a beautiful clean breakout…hits $440…closes at $394 as it tucks its head in like a frightened turtle. Not a good thing. We would like to see some successful moves.

The big worry is again the virus as the numbers are spiking not just here but around the globe. Certain areas of the U.S. are putting back restrictions in place. We also heard from a Biden advisor that the country should have another lock down of up to 6 weeks. Not sure the market was thrilled with that. Because of this, all the areas that gapped up hard on Monday, came in today.

We suspect this will continue to be the most news-driven market we have ever seen. While it was a less than thrilling day, we are not taking much away from it.


The people who have enabled/created all the leverage, debt and deficits are at it again.


So just create more money out of thin air. The kitchen sink and the kitchen now thrown in.  Just know we have been highlighting for years that every time markets would get in trouble, these same people gave the world easier money. We doubly highlighted what Powell has done since Christmas 2018 until recently. Our quote that “there would be no amount of printed money too high and no number on yields too low” has come into play. Yes…the problem is still everyone’s solution. The fed created this web that we are all in.

Yes…we know the virus. But we believe there is no way it would have been this bad if central banks stayed out of the way and politicians actually respected the tax payer by not running massive deficits. But we will never know this.

Futures have rallied from down 800 to up 600. As we write this, the DOW is up 300+.

We are now hearing the administration is thinking the cure is worse than the virus. The president just put out this tweet:


Many believe the reaction has gone too far. We do not think them wrong. We do not think them right. We will just leave you with our same thoughts: THE VIRUS IS THE ECONOMY NOW. THE VIRUS IS RUNNING THE ECONOMY NOW, RIGHT OR WRONG!

We can rifle off all kinds of record bearish sentiment numbers. Eventually, there will be a big short-covering rally because of those numbers and because of how stretched markets are to the downside. Expectations that legislation will also come sooner rather than later to backstop industry may move the needle. Maybe that will do the trick.


It’s not the news. It’s how markets react to the news.

Many are saying markets have to go up because economy is strong, earnings are strong, unemployment is low and consumer confidence is through the roof. They are correct on all those accounts except one. The market DOES NOT have to go up on good news. Yes…markets do go down on good news every now and then. This is because markets look forward, not backwards. Markets factor in what is ahead, not before. So careful. Everything was wonderful as markets topped in early 2000. Real estate was strong as banks started to top out in early 07.

We are not saying the end of the world is at hand. We are saying this is a market that has been deteriorating from an already very narrow market. This is a market where foreign markets have woefully under-performed with some markets already in the 20% bear market mode. This is a market that with indices at the highs, there were many more new yearly lows than new highs indicating a masking of trouble. And now, many leading names have topped with some totally broken down. Healthcare, which has led recently, is getting serious distribution. The small and mid caps have already moved below support/50 day moving average.

The good news remains that the DOW and S&P remain above the 50 day. But the NDX now sits on the 50 day and the NASDAQ now hangs below. The good news is that higher rates on the long end stopped the ugly in the financials…for now. In the past, deterioration has led to pixie dust stopping the downside and then leading to a narrow upside. We are open to anything. Just know, the ice has been getting thinner.


Since hardly anyone reports this, we will:

The Treasury (our tax dollars) said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated. Think about it. Those wonderful human beings in DC from Ryan, McConnell to Pelosi, Schumer had to borrow nearly $half trillion IN JUST THE 1ST QUARTER to fund their bull crap. But nothing here to see.

Also, the Trumpster has given extensions to certain countries on trade tariffs. We expect more of this, not less as even the President knows these tariffs are bad.

Two days in a row of negative reversals. Markets opened another Monday in a flurry only to finish at the lows of the day as the boys sold into the close. You know what that means to us. On top of that, good earnings have sold off and good earnings have reversed strong opens.

Major indices remain in the back and forth we told you to expect. You can notice NASDAQ rallied right into the 50 day before selling off.

SEMICONDUCTORS continue to swoon selling off badly throughout the day. This occurring even though they are stretched, extended and oversold to the downside. INTEL (INTC) gapped up on earnings and reversed Friday and continued down yesterday.  MICROSOFT (MSFT) also gapped up Friday, sold off but still finished up…but sold off hard yesterday. AMAZON (AMZN) also reversed its big gap Friday and again reversed good gains yesterday.

We expect more of the same…back and forth, driving everyone up a wall. It is at these times you should take a step back and recognize it for what it is. As we have stated several times, after the big move of 2013-2014, the market consolidated those gains for 18 months with two big teases to the downside but both never took us into what is defined by most (20%) as bear market territory. That said, there were some rolling bear markets as the RUSSELL went into the 30s.

We continue to watch the long term support levels we have outlined for you. So far, they hold strong but every down day, every strong open only to reverse…deteriorates the technicals and adds more termites to a market that has been chipped away at.

Patience is your best offense right now.

Futures, for a change, hardly budging.

We posted this last night but did not show up.

We will have more after the close.


By Gary Kaltbaum- February 28, 2018
First thought and message to the president…the #1 rule of people management is when praising, praise loudly and profusely! The #2 rule is when criticizing, criticize quietly and privately. We don’t think the president read the manual on this. If you treat your people badly, why would anyone else want to work for you?
Second thought…who said this about our debt and deficits? “Not a near term risk!” Yup, arguably the #2 money guy in the world, our new head of the Fed thinks everything is just fine. $21 trillion of debt is not a near term risk. $1 trillion deficits each year is not a near term risk. Every day, $3 billion being added to our debt is not a near term risk. In the coming year, the first $400 billion of our tax dollars goes towards interest and that’s not a near term risk. And who said this? “Not a supporter of a balanced budget!” Yup…the same dude. Feel better now!
Third thought. The “ping pong” market is now in force as price now bounces back and forth in a wide range. The problem is that the rally was very narrow and that narrowness is coming back to haunt the market. Except for the NASDAQ and NDX, all major indices are back below the 50 day with some never getting above. In fact, areas like the NYSE, TRANSPORTS and SMALL CAPS look downright horrid. The best areas remain the mega-cap tech/internet that has a major influence on the NASDAQ/NDX. Lose those big names and get the fork. Need to add Europe much worse than us. We had better not play catch-up. At the very least, it is going to remain a tough proposition as the market’s complexion has definitively changed.
Fourth thought. The Knicks stink. The Rangers stink. The Giants stunk. Next up…the Mets. Not feeling better!
Serenity now!


A few thoughts in and out of the market:


Not one person will be deported out of DACA. Not one.

The coins:

Kodak (KODK) announces a coin. Goes from $3.10 to $6.80 yesterday. Trading at $11.50 this morning. But there is no bubble!

Notice many of the other “questionable” blockchain/coin stocks have been slaughtered. Do not be the last one in.


That was one hell of a one hour meeting in front of the cameras yesterday. That was Trump telling all the famed psychiatrists like Dr Mika and Dr Joe that everything is fine. As always, you decide.

Tax bill:

More and more bonuses. More and more wage hikes. More and more investments. While, as we wrote yesterday, a company like Tim Hortons takes away because of mandated higher wages by government. Repercussions!

The markets:

Continue to watch COMMODITIES. Energy, oils, steel, copper, aluminum, palladium…all continue to soar. Gold and silver also getting a bid. Energy prices are at 2 year highs. We have been told the ultimate outcome of all the central bank nonsense of printing of trillions, negative rates and 0% rates for 8 years has to be a good bout of inflation. Has not happened yet but always keeping one eye out as we do not believe economics 101 is dead…regardless of central bank interference.

Watch long rates. On the verge of breaking out of near-term range. If successful, watch 10 year head towards 3%…the highs going back to 2014.

Sentiment and complacency remain at extreme levels while major indices are at extreme extended levels. Just saying! Also, just saying…we will get a correction eventually. No really.


Tons of jello moving on the plate this morning. In no particular order but of course, we start with Apple.

Apple (AAPL) beat estimates in a quarter before a big roll out. At the open, AAPL will be gapping out of a 12 week sloppy base. This is the 2nd strong gap in 6 months. The one in January worked well. We have been told a second big gap to the upside within a year is a “be careful” sign. We’ll let the market decide.

Because of Apple, NDX futures up over .5%. Interestingly, S&P futures basically flat. DOW futures up but that’s on Apple. Apple suppliers like CRUS, QRVO, SWKS and others are up.

ILMN gaps up to a high…up $19.

Other gaps to the upside:


On the downside…WOW!

COHR down $35 off the highs…ULTI down $29 off the highs. MTSI down $13…leading SEMI off the highs…PXD down $14…

Smaller but decent sized gaps to the downside: BGFV, HLF, FISV, AN, RIO, SSTK, FARO, RMD, MRCY, VMC, RACE, CAH, DLPH.

Enjoy! Earnings roulette continues.