Goal-line stand needed!

You know our thoughts on central banks…that every time the bubbles they have created burst, they expand the next bubble with even more of the nonsense that created the first bubbles. This time though, we have never seen and cannot even fathom what lies ahead when central banks keep rates at 0% for 7 years and print trillions of dollars. And now we are just seeing others follow Mr. Bubble…thinking he is a hero.

You know our thoughts on the economic numbers…that if not for the asset bubble created, the numbers would be much less…and you know our thoughts on the fake unemployment headline number as the people in power conjured up a crash in the participation rate to make things better than they are.

You have known our thoughts on markets in that for many months, we have seen a 50-50 tape where half the market is bullish and half the market is bearish. You knew our thoughts into September when we told you the market was deteriorating enough to break down…but also noted the continued disclaimer that if Central Banks conjured up more funny money, the move could stave off the downside. We got that when in a coordinated effort, Japan and Europe both announced another trillion or two and China lowered rates even though China is doing so well. These moves stopped a deteriorating market to the second in mid-October.

Lastly, you know we have been using the dreaded words “trading range” in recent weeks to describe the major indices. We hate the words “trading range” but we call em as we see em.

The trading range is now buckling as the 50-50 market is now skewing towards 40-60 and even worse…as more and more sectors break down. Needless to say, Mr. Market needs a goal line stand…and soon. We think notwithstanding Yellen changing her tune and announcing QE4, odds favor a break which will invite technical selling.  Here are the must-watch levels:

DOW 17067
S&P 1988 and then 1972
NASDAQ 4563 and then 4547
NDX 4078
TRANSPORTS 8580

The long list of sectors we have been bearish on has a couple of changes.

We think there is a chance oil prices put in a near-term low on Friday…which means we should continue with a counter-trend rally in the underlying stocks. This is only near term in thought as oil prices have done nothing but persistently gone done for months. And to be clear, there is enough noise and geopolitical crap going on to try and game oil prices…so careful out there. It could just turn tail and head lower if it wanted to. Oil is about as oversold we have seen in an asset in a very long time. Any potential move does not change the major trend.

We think gold and the underlying gold stocks will continue to emerge…especially if the major indices break down as gold seems to be the anti-market play.

Other areas that are now toppy, topping or recently topped are cruise lines,disk drives, hotels, medical products, semiconductors and hospitals. This is just in addition to our long list of yuck.

And lastly, the big financials continue to act like the Knicks…though they have been playing better as of late. It is never a good thing when financials are acting poorly.