UH OH!
-Listen up peeps. Serious talk today. In our weekend report we told you we did not think the market would break the lows right now but in order to break the lows, they would have to break the financials and the tech. The lows have not been broken yet but we are headed there and unfortunately, it’s during earnings season. We say unfortunately because as we always say: “it’s not the news, it’s how things react to the news!” The reactions are becoming horrid.-
-Already, the SEMIS have broken. One down! And we are now seeing a ton of other tech breaking badly. Two down! Financials are still holding but by the hair of their chinny-chin-chin. Other stuff:-
-Major indices are failing at resistance/moving averages.-
-CATERPILLAR gaps up and then cracks badly…it’s not the news, it’s…-
-The SOX at relative lows…very poor reactions in a few names. It’s not the news, it’s…-
-As we write this, MMM down $19. That’s not a typo. MMM is down $19 and all they did was guide down a wee bit. It’s not the news, it’s…-
-LOCKHEED MARTIN down $26 on numbers …say what? Taking the rest of DEFENSE down. It’s not the news, it’s…-
-Leader NETFLIX gaps up on strong numbers…drops 10% in days. It’s not the news, it’s…-
-GOOGLE down $50 as we write this and they beat. It’s not the news, it’s…-
-APPLE breaks longer term support…and that’s before earnings…as guidance has been coming down.-
-We then went on to say:-
-“Just letting you know that if it (a break of long term support and recent lows) does happen…since the major support areas have held twice right at definable long term support, we think a break would lead to waterfall-type action as the big money would be yelling that they gave in. Also, while we are not big on the “sell in May and go away” mantra, we recognize it is out there.”-
-What is “waterfall” action? This is when the big money no longer is able to hold vital support. Once support is broke, it is recognized…which leads to an onslaught of selling. No…not kidding! Wish we were. We doubt the 3rd time down will hold but will keep fingers crossed.-
-Somebody better call Bernanke. Markets may need another round of printing. (sarcasm…maybe)-
-And lastly, we say this “not politically” because as you know, we hate them all. We are in serious hopes the president takes a page from others if the market continues down…and just say, “markets go up and sometimes they go down! Longer term the markets have done quite well.” AND THAT’S ALL!-