CONTINUED UH OH
On Thursday, we alerted you to an “uh oh” moment that was a possible change of complexion on our readings of the market. On Friday, we confirmed the change of complexion. We thought the massive move in the growth/high beta area was more than likely done. As we write this, DOW futures are down a juicy 740 points while the NDX futures are down a whopping 245. Of course, the numbers can change overnight.
We are hearing the blame is on the virus. We are hearing the blame is on Sanders’ performance in Nevada. We are hearing the blame is on Dolan’s handling of the Knicks. We will let others decide why. Our job is to interpret the tape and interpret we have. As always,we have no idea how long or how far. But we do know a few things that give us pause. Froth, straight up moves, outlandish predictions/targets and the one-sided trade as the big money pored into a select few names giving them their “Eiffel Tower” look. Sentiment just went off the charts. But it is not until price gives us clues that the party is possibly over do we react. So we reacted.
On another note:
It is good to see even the left of left has come around to recognize what we have been telling you about Sanders for years. It is good to see that Mr. Sanders is finally getting the full colonoscopy as all his words and videos throughout the years will be coming out. We are even seeing some serious Trump haters rooting against Sanders. A big wow! The consistent praise of Castro will not augur well in Florida, only 29 electoral votes. The consistent talk of shutting down fracking and energy…see ya rust belt states. Independents? Don’t think so. The big worry for the left is the down ballot as the two words “Speaker Pelosi” are at risk. And may we state Republicans running the committees with a continued presidency for Trump must scare the —- out of the left. We will update all our op-eds on Sanders we put out to you in recent years and send them out soon. The man is an economic nightmare of epic proportions. We have absolutely no clue how anyone cannot take out a rusty abacus and see nothing out of his mouth adds up. We have absolutely no clue how anyone cannot see that all of his proposals are the exact actions taken in those havens of democracy in places like Venezuela. We are in hopes the central bank-induced worldwide bubble does not pop before November 3. (an eventuality) That $250 trillion of debt worldwide is still out there.
On another note:
As always, if the market continues to drop, you will once again see the Fed leak the possibility of more rate cuts. We know someone was out saying the opposite last week but that falls under the heading of “who was he trying to kid?” We know Powell’s modus operandi.
On another note:
We know the numbers continue to go up with the coronavirus but as we write this, more than 97% of “confirmed” cases remain in mainland China. Most other cases are limited to Asia with a small smattering in other areas. This is not to marginalize the seriousness of this. Just making sure the facts are out there. Leave no doubt, this is going to put a dent into economic growth. When we read that Adidas business is down 85% in China…when we read housing sales are down 90%…and that’s just a start, it matters. A continued escalation is nothing but bad news.