GARY ON FRIDAY’S WICKED ACTION

FRIDAY’S EVENT-DRIVEN WHIPSAW

The market opened well. The market was doing well, led by the Nasdaq and the Nasdaq 100. Now as you know, I am not one that believes in events and event driven things on a daily basis but I am going to have to give it today because, we hit 4481 on the Nasdaq at about 10:30 in the morning because the Nasdaq gapped up. From 10:30 till 10:55 the Nasdaq dropped like 40 points. It went as low as 4427 at noon, before recovering for the rest of the day. Basically what happened, there was something out of Russia. That was the excuse and to try to explain this best, you know we look for patterns of fear and greed here, when I look at all of these other major indices that are lagging badly, if we closed badly today it would have been ominous. But, due to the fact that we closed better it tells me that the money crowd is still out there helping this nascent bounce off of the lows of last Friday.

The S&P looks better than the Dow. The Russell 2000 and Smallcap 600 really are still underperforming. But, the transports are a smidge above the 50 day moving average and I repeat, Nasdaq 100 and the Nasdaq, when you have a chance go look at those charts vs the Russell 2000. There is a stark contrast between these areas. So, we don’t know when that changes. We just know that it is going on now. The place to be is the Nasdaq and the Nasdaq 100 and we will let you know as she goes. Biotechs are really starting to help the Nasdaq again. The market is finding right now a narrow group of names in these areas. Everything else is waffling all over the place or just downright bearish. That is the story, and if I was to title it, I would call it narrower and narrower and you know my thoughts on narrowing markets and what can ultimately happen, but it happened four times this year and four times the market came out of it. In a printing money market, all is possible.