LOTS OF MARKET NOTES
In no particular order:
The dollar is breaking to new lows. The euro and pound are breaking to near yearly highs…out of clean bases. We suspect this is part of why commodities keep moving higher.
Major indices are stretched, extended and overbought as much as we have seen in a long, long time. Names like BA and CAT …we do not know how to describe it. It is now feeling somewhat climactic. If that’s the case, there will be a big correction out of it…which is way overdue anyhow. Climactic moves serve to suck in the masses AFTER a big run. We will only deal with this if we see it. So far, nothing doing but we have studied this type of action before.
Earnings estimates are said to be going up almost 5% because of the tax bill.
The only real bearish areas are utilities and real estate.
Areas that could be emerging now are cruise lines, airlines,and defense. A couple of airlines have already moved out.
Since we told you to put commodities and energy on your screens, they are up anywhere between 10-20%. Pullbacks are needed but aint happening just yet. Copper, palladium and all that stuff have been strong.
Look where the GBTC held Thursday. (bitcoin etn). Yes, technicals may be working with even bitcoin.
Many are worried and many are talking about the bond market. Economics 101 does dictate that all this money printing and easy money should cause a big bout of inflation. If that’s the case, bond yields will eventually reflect it. Watch 2.65 on the 10 year. A move above takes you up to 3%…but that’s no big deal.
A massive amount of earnings start coming out this week. So far, we have seen decent reactions even though things are extended.
And lastly, do not worry about a government shutdown. The longest one lasted 3 weeks under Clinton and the world did not end. Essentials will be open and everyone will get paid.