Weekend notes!

By Gary Kaltbaum

Most major indices have gone nowhere in the past 13 weeks but did you know:

On 4/4/14, the NYSE was 10,669.43. Friday’s close 10,626.92.
On 12/26/14, the DOW was 18,103.45. Friday’s close 18,240.49.
On 3/7/14, the RUSSELL 2000 was 1212.82. Friday’s close 1236.56.
On 7/24/15, the NASDAQ was 5231.94. Friday’s close 5292.41.
On 11/28/14, the TRANSPORTS hit a high of 9310.22. Friday’s close 8056.86.

Our point is not just the numbers. It is that these are the numbers even though central banks continue to keep rates at 0%, go deeper into negative rates, continue to print trillions and maniacally buy up markets. These are the numbers even though Yellen just telegraphed that if things head south, more printing of money and yes, the possibility of just outright buying up equities is not off the table. The question: does all this mean we are getting close to diminishing returns regardless of massive central bank intervention? Time will tell! Things worsen on a break of 18,000 DOW and 2119 S&P.

Even though indices have sat, deterioration has taken place while rotation continues. Just a few weeks ago, this was a 70-30 market. At this juncture, we would not call it better than a 50-50 market. We would continue to avoid a slew of areas previously mentioned. This includes: Gold/silver, real estate, utilities,restaurants, retail- (drug stores, apparel,autos,home improvement, supermarkets, discounters, auto parts), tobacco, beverages, food,biotech,housing, most healthcare, aerospace/defense, steel, insurance. So you can see, a slew of not so good. There are plenty of other areas that are not in great shape but are hanging out.

On the good side, semiconductors continue to be the big strength…but beware of the one sided trade. The group is very extended. Oils have received a shot in the arm off of OPEC finally getting act together as oil prices may have turned the corner. A bunch of oil names have shown up on our screens. You can also add the financials as they have also shown up. Good, long bases in a bunch of these names should be reviewed.

We are now heading into earnings season and of course, this nightmarish election. Pay attention.