Weekend notes

We will make a bigger point in a second but first:

For the most part, major indices remain in the 8th week of tight action…in the neighborhood of 2% up or down. There was a failed break to the upside and a failed break to the downside. But overall, there is not a lot to complain about as sellers have not shown up in a way that causes trouble. The good news is that the tease is now to the upside.

Even with Google and Amazon coughing it up on earnings, the Nasdaq remains in shape as the Semis remain strong, biotechs get some life and the almighty Apple gapped to the upside on earnings.

But the real story is the financials. When Trump won, the financials broke out on monstrous volume…leading the market higher. When the financials sat in the last couple weeks of November, the market sat. When the financials took another leg up in the 2nd week of December, the market took another leg up. When the financials rested for a few weeks, the market rested. When the financials started pulling back, the market pulled back. We actually saw a few names like Citi and Bank New York break down. The pullback was blamed from the lack of words from Trump on taxes and Dodd Frank. This takes us to Friday where President Trump announced executive action on financials…and…the financials popped to the upside. AND…the market followed. MORAL OF THE STORY…you had better keep watching financials. They are (as Reggie Jackson once said) the straw that stirs the drink in this market. Of course, there are other groups like the semis that are acting well but you can overlay financials with the indices since the election.

Other areas:

Retail remains dead. Many names crushed.

Watch them commods as they may have put in a near term top in the past few days.

Gold/silver still drifting higher.  Not a lot of ooomph but getting there.

Airlines topped for the most part.

Bonds still not happening but better action in the interest-rate sensitive areas.