WEEKEND NOTES- LOTS OF SLOP!

-Our main theme continues. January 29th will be the highs for a  while while the recent lows/Feb lows provide a floor. So far, back and forth we go.-

-Still a ton of earnings to come out in next 3 weeks so be patient. There have been a few decent reactions like NFLX, CSX, TXT, ETFC and a few others but less than thrilled with so many blow-ups.-

-We scan approximately 1500-2000 stocks each weekend. Counting only about 35% in decent shape…which means 65% of the market is not.-

-OILS/ENERGY are easily the strongest area now. We saw them emerging but they are tough to play. Technically, they seem to be tired, extended and overbought here so will watch on pullbacks. A ton of that 35% is this area. Keep in mind, the RUSSELL is outperforming right now because it is laden with small OILS.-

-Seeing a few COMMODITY names emerge…FCX, MT, SCCO, VALE sticking out.-

-TRANSPORTS better after a couple strong days but not much better.-

-All important AAPL not helping…all the way down to the 200 day. Don’t have to tell you the influence it has. Guidance continues to come down as a slew of analysts lowered on weak stuff out of Taiwan Semi.-

-SEMIS are toast right now.  Wide and loose trading has lead to  SOX back at recent lows. A break of 1260 and then the 1200 gargantuan support is in play. Along with FINANCIALS, the most important area of the market as it has led up and down for ages.-

-The CONSUMER STAPLES (XLP) have basically crashed. We have been saying avoid for quite a while. Food, beverage, tobacco, household products, drugs. Tobacco was blasted this week.-

-HOUSING own private bear…as well as a slew of housing -related names.-

-REITS and UTILITIES have been drifting higher in their bearish phase but with BONDS looking in trouble again, they will most likely roll over again. 10 year yields very close to 3%.-

-Not thrilled that a bunch of IPOs coming out while market is under pressure. Would rather see lots of worry.-

-There are more new yearly lows than new yearly highs on all three indices.-

-Major indices pushed above the 50 day and immediately came back below. Does not mean the end of the world but nothing good can happen if it stays below.-

-FINANCIALS are blah…and mostly sitting below 50 day. Do make note ETFC, AMTD, SCHW act well.-

-While there are bases forming in some growth names, not trusting much right now and would cast a wary eye until a few things start working.-

-Other areas still in shape are DEFENSE, some RETAIL, some TECH.-

-And lastly, we do not think lows will break right now. In order for that to happen, we would need to see the financials XLF/KRE break support. TECH (XLK) would have to break. Just letting you know we think we will have a good idea if it decides to happen and our best guess that if it does happen…since the major support areas have held twice right at definable long term support, a break would lead to waterfall-type action as the big money would be yelling that they gave in. SO PAY ATTENTION IN THE COMING WEEKS. While we are not big on the “sell in May and go away” mantra, we recognize it is out there.-

-Will have a lot more as the reactions to earnings come out.-