PRE MARKET AND GARY C
The big news is that the Knicks are having another terrible year…ooops….that’s our sport’s report. The big news is that a guy named Gary is out at the White House. Futures are down but what’s 1% between friends.
Firstly, in a bull market, bad news is ignored. Right now, the bull market has been interrupted so perceived bad news is sold. Does not mean in time it doesn’t get going again but to repeat, we had 15 months without even a 3% correction. What you are seeing is normal as normal can be. Very often after big runs, markets will consolidate those gains for months, correcting in the teens before resolving itself to the upside. Of course, this can also resolve itself to the downside. Time will tell. How will we know? Simple…watch financials…watch AMZN…watch BA…watch NFLX….3 biggest leaders right now. Watch the NASDAQ and watch the NDX. Lastly, watch the SEMIS. These are the big leading areas. If they break, the market breaks. So far, nothing doing. If they break, do not think for a second that other areas will come to the rescue. If they break, party over. But again, nothing doing. In fact, these areas continue to show amazing strength.
Do realize that according to our rusty abacus, only about 37% of stocks are now in good shape with only a handful of sectors in uptrends. On top of that, there has been serious damage done to many foreign markets.
As far as Gary C, (not Gary K…I have hair) why is everyone so worried? He is just one person. So don’t sweat it. On top of that, in case you did not know, we have had tariffs before. The world did not end but tariffs do not work. Bush tried. Swing and a miss. Other presidents have tried. Didn’t change much. The worry about this administration is “overboard!” Will the Trumpster go overboard and do too much. The fact is every country is going to act in their own best interest, not ours. Already we are hearing about jeans, motorcycles and BOURBON? Bourbon? They are going after bourbon. The fact is no country likes the perception they are being bullied, true or not. We are not so sure this administration understands this. The hard liners on trade have won. Let’s hope they know what the hell they are doing.
Markets…every time markets come down, the internals go south. Bearish markets occur when more and more names and more and more areas break support/moving averages. We repeat. Watch those areas we previously mentioned. The market will not hold up if they go south. Watch the recent lows of March 2. A break below and we are headed towards the low of February 9. Those levels are NASDAQ 7084, NDX 6645, S&P 2647, DOW 24217.