WEEKEND NOTES

A nice little two gapper romp started the week off.  Except for the transports, all major indices are now above the 50 day BUT! We throw in the capitalized BUT because even though we had the move up, not a lot has changed. What was good is gooder…but was bad, stays bad.

To start, we would continue to avoid energy, oil&gas, most commodities, gold/silver, big retail, big telecom, airlines, everything auto including parts, parts retail, manufacturers and dealers. This does not include Tesla (TSLA) as it seems you have to lose a lot of money to act well in the group. We would also continue to not add to new commitments in most financials as they continue to lag after topping out weeks ago.

So you can see, this is no way an A-Z market right now and as we go through earning’s season, there continues to be many blow-ups. But the good news is there continues to be a good amount of great reactions. Just take a gander at these names off their numbers. AAN, ALGN, BJRI, CERN, CAT, GLW, GOOGL, HLS, ISRG, IDXX, MCD, PKG, RCL, SHW, TMO, TSS…and this is just a short list.

All the talk has been the strength in Nasdaq/NDX. The relative strength continues as a few mega-cap names continue to lead. We did want to make note that the advance/decline figures are lagging the indices badly indicating it is becoming very narrow. We are fine with this. Upcoming big name earnings are Facebook, Apple and Priceline. Google had a nicve breakaway gap Friday but Amazon’s gap was distributed.

There has still been no corrections of consequence since the election. Many are worried about valuations. They are not wrong but as technicians, we’ll let the market decide. Until the indices lose support/moving averages, it is folly to get overall bearish. When that occurs, you will know it.