PRE MARKET
Strong futures today off of FB sandbagging earnings but nevertheless, earnings very strong…in the 60s with sales almost up 50%.
Yesterday, another hold of the 200 day and longer-term support. BA helped big time…arguably the most important stock in the DOW and the NYSE.
Our theme remains. Major indices still in ping pong, back and forth mode. We continue to doubt lots of upside from these long term holds but will be open to anything.
ENERGY/OIL&GAS remain strongest area as oil prices remain strong.
And we are not even close to worried like others that the 10 year yield is over 3%.
Gary, I do worry about that 10 year yield. Don’t you think that the problem is not the absolute level of that rate – which is still very low historically – but rather about the direction it’s heading? Businesses, as well as governments and households, tend to borrow as much as they can when they don’t think there is any cost – all data concerning debt loads in the economy point to the fact that ZIRP has motivated a ridiculous amount of leveraging. So I expect there are many businesses out there with very marginal operations that are completely maxed out. ANY rise in borrowing costs – no matter what the nominal rate – will push their operations into the red.
Yoda says; in the short term, this market is;,,,
rally, ….up through layers of resistance.
.
DCB …. ( dead, cat, bounce, ).
.
We will see the real market, after the first week in May,
and the real market will be,
down.
.
Yoda, ( Yoda the great ), ..not … reading the force, ….not !
Yoda; simply reading his special indicator on the weekly charts.
.
That special indicator, is screaming…..pull back.
So much so, that one could actually wait for this rally to top, and put in a short on SPY.
.
.
The mind of Yoda, ….tirelessly thinking;
even when Yoda is asleep.
agree the 10yr over 3% isn’t a big deal. eventually with rates rising, the interest on all that national debt is going to cause problems. shorter term, signs still point to a very good chance of some ‘ugly’ in the markets over the next couple weeks.