What We're Reading


Buyers Stay Home; See You Next Fall

(Click image to enlarge)

There's nothing here that even remotely makes me want to make a purchase. These are weekly shots of the main indexes so what do you see?

We rallied up over weeks like crazy madmen, squeezing out weak shorts and even had the heaviest shorted sectors help out with a short covering rally; getting the weekly into 'overbought' levels. We came up right against the long term column trend line resistance, hit overbought levels...........the weekly is rolling over. Another failure. Sorry boys. So much for that.

Certainly day traders and short-term swing traders will make their long plays but who has time for that............and why go against the trend of 'this' market......which is down. That's rhetorical.

  • We know the market is stretched on a valuation basis.
  • Don't even throw out the strange valuation approaches.
  • We know there's no more QE coming out of Washington.
  • We know earnings are a disappointment and guidance has for the most part been completely uninspiring.
  • Things of concern lie ahead: China has data coming out (retail sales, producer price figures, and the consumer sentiment survey) over the weekend which could inspire or deflate the market. Where's the growth we need?
  • Brexit and FOMC loom.
  • Our own bad news has been wide spread: Retail has been completely disappointing with big losses, Shell spilled oil in the Gulf a la BP (here we go again). AAPL wants "into" the auto driving business (say what?), BIDU is under investigation, BABA has been suspended from an anti-counterfeiting group (I have to laugh at that one) and FB swears their unbiased, they think and of course there's politics weighing on biotech and healthcare. Did you see hospitals last week?  Ouch!  If there's good news out there, it doesn't last long.  See how that changed? 
  • If it weren't for the tar sands oil fire in Canada, crude oil wouldn't be helping market hold what we have........and the winners are shrinking; make no doubt about it.

The daily charts show a small head-and-shoulders top formed and we're perched right at the neckline; probably waiting for Yellen's FOMC on Wednesday........but will it matter?

Me, I am short various names such as BIDU, NFLX, CAT, COH, TXT, just to name a few. 

Have any setups or plays to share? Bring 'em on!  I'll play the short side..........unless Janet changes the game.

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