MARKET NOTES

—-After telling you late last week that we thought things were changing…some very important thoughts as markets are bouncing this morning after a nice trashing yesterday:—-

—-Let the market be the guide. Let the intensive study every day of how many are working, what is working, how many above the 50 day, how many broke below the 50 day, how strong are the reactionary bounces, how weak are the reactionary bounces…be your guide. —-

—-A TON OF STUFF BROKE BELOW THE 50 DAY YESTERDAY. The DOW sharply through. The S&P less sharply through. The TRANSPORTS through the 200 day and never got going. The RUSSELL through sharply. Foreign ETFs like EEM, EFA, FXI, EWJ, IEMG and others have imploded.  HIGH YIELD (HYG and JNK) broke through. Even the SOX has now dropped below the 50 day…and needs to be watched. Every time it has done this, it holds just underneath and eventually turns back up.The NASDAQ and NASDAQ 100 are still at or just above the 50 day but have come in hard off of the extended conditions that have been around for weeks. The XLK (technology) is the same. This is what had us selling a ton of stuff before the deluge. We knew things were frothy. We knew things were extended. We knew things like MSFT did “EIFFEL TOWER” moves after gliding higher. We just waited for that first ugly day off the highs. —-

—–In the last 50 minutes yesterday…after the markets were trying to bounce, the DOW dropped 277 points and the NASDAQ dropped 87 points. As of this second, we are not even getting that back this morning. BUT do not think for a second that if the market wanted to, it could rally a decent portion of the drop in the days ahead. Anything is possible especially with the president tweeting, saying he liked the market. Yes, the president is trying to prop up the market. AND Powell will not let markets drop so expecting a leak of another rate cut.—-

—-Back to stocks:—–

—–AMZN up $20 this morning but is down $175 in the past 3 days. TTD up $8 this morning but is down $40 in the past 3 days. MSFT up $2 this morning but is down $17 in the past 3 days. YOU GET THE HINT. Be careful about getting too excited about reactionary bounces.—–

——We have a list of everything that has held above the 50 day…all the strongest names. We also have a list of things that have dropped down to the 50 day. There is actually a tiny list of things that were up Monday. Keep in mind, this list is much much much lower than just 3 days ago.——

—–We just want to get the major trend right. We want to get the intermediate trend right. When there is no trend, we want to recognize that also. There is a decent chance the trend has changed…not 100% certainty but a chance and we do not want to fight it. We will get a much better idea in the days ahead.There is not much we take out of what we have seen except that everything sold in the past 2 weeks were great sells.—–

—–Lastly, the Knicks still suck!—–