RANDOM THOUGHTS
—–Futures were down last night until Biden won Virginia. They kept moving higher as North Carolina came in. They kept going higher throughout the night. We do believe this morning’s gap to the upside has an anti-Sanders component to it. At least, the action said so last night. But also know, it is just insane out there right now as moves to the downside we just saw will have markets trading all over the map. Eventually, things will tighten up but not just yet.—–
—–We have been stating on and on and on that there was no way that, when all was said and done, that Sanders could win a general. There was no way he could win independents. There was no way he could win the center. Maybe he could get some of the center left but 1000% no way he could win the center right. Looks like it didn’t even take the general to find out. And now Florida soon where we should find out how pissed off people are about Sanders’ comments praising the Castro-types while at the same time, ripping Israel and Netanyahu.—–
—–We expect Bloomberg to not wait and be gone sooner rather than later..and probably today. We have no information for that reasoning. Just that he seems to be someone who doesn’t wait around to make a decision that should be made. Even though she should get out immediately as she could not win her own state, we expect Warren to stay in. Beats the heck out of us why.—–
—–A big gap to the upside this morning. As we write this, futures are getting a huge chunk back from yesterday’s nausea. Often but not all the time, markets will do the opposite of whatever occurred the day after a Fed move. More importantly, our A low call from last Friday remains in effect as Friday was a gargantuan price and gargantuan volume reversal day which reminded us of every great washout we have seen through the years. A washout serves to take out all the late sellers at the most inopportune time leading to upside testing. We have zero clue how this finishes today.—–
—–How to play this? Don’t blink! There is simply no way to game the swings we are seeing but again, the A low remains in effect but we also know the news is fluid. The A low had better stay in effect. Thus, we will pay much more attention to price than the news. When all is said and done, it is not the news but how markets react to the news. In the past, all these central bank moves have the A low turn into THE low.—–
—–Watch the 10 year yield. If it heads lower…bad. If it heads higher…good.—–
—–Do not forget. Markets have been loving easier and easier money forever but we are again nearing 0%. There will come a day of diminishing returns but not sure we are there yet. Powell’s moves are to shore up the markets. He cannot do anything for the economy. We really do expect that we will be at 0% eventually.——
—–Lastly, we expect more and more companies to lower numbers in the days ahead. If it turns into a one time charge, all should be fine. If it worsens, not so sure. We can tell you that here in Orlando, Fla, several big corporations have pulled out of a massive conference at the Orange County Convention Center (HIMSS GLOBAL HEALTH CONFERENCE) next week where over 45,000 people were expected. Huge names like Cisco, Intel, Salesforce and Amazon have backed out though the conference is still a go. In April, another big conference was cancelled in its entirety. You continue to read about other companies around the globe stopping all business travel in its tracks. This is not good news and must change for the better.—–