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Random Thoughts: Are Markets Voting Against the Presidential Candidates?


Taking a Look at Monday's Market Action

I took a stroll down Memory Lane last week, sharing some Random Thoughts for the first time in a long while.

Like many things in life, rust tends to form on items or efforts left on the shelf too long and my missive was no exception. So let's try it again, with a little elbow grease.

In no particular order:

•Glencore (GLCNF) is getting absolutely crushed. It's 50% below the equity offering price a few weeks ago. Is this the long-awaited capitulation or the beginning of the "other side" of the commodity unwind in a levered marketplace?

•My sense is the latter; you can hold your breath for one minute in ten feet of water but you'll drown if face-down in one foot of water for ten minutes. The prolonged malaise in metals and energy is catching up with many players across that complex. The price action and jobs impact is well-documented; the structural implications are thus-far unknown.

•Back in 2000, I wrote a column speaking to the benefits of buying energy and metals, selling tech and financials and moving to Costa Rica to open a taco stand; the thought at the time was that energy would ultimately recapture the highest weighting in the S&P (which it did). I don't know if this is the end, or the beginning of the end, of the commodity carnage but I would be a buyer into further weakness paired against other sector exposure vs. net selling at these levels.

•Our recently highlighted S&P chart provides a nice visual on the stair-step levels in play; the probe of SPX 1900 makes sense (this is the second test); if the bulls can't defend this level, and it looks like they haven't, past support will morph into future resistance and the new range will become SPX 1880-1900.

Click to enlarge

•When I saw this chart last week, my first thought was "Housing 2007!" Not so fast; that's a chart of the NASDAQ Biotech ETF (IBB):

Click to enlarge

•I'm not entirely sure the markets haven't been "voting" on the Presidential candidates. While I understand that people are frustrated and anti-politician (we've been talking about this social mood evolution for quite some time), the options leave a lot to be desired.

•Yesterday was the first time the Raiders won in the Eastern Time zone since I've been married with children.

Has the Fed fired the last bullet?  Absent rates stepping through the looking-glass to the negative, which I find difficult to fathom because people would simply hoard cash, we seem to be getting closer. Remember, Ray Dalio's call is that the next move will be to ease, not tighten.

•Meanwhile, Finance Festival 2015 continues to take shape; notable attendees include John Succo, David Kotok, Jeff Saut, John Mauldin, Heidi Moore, Michael Santoli, Josh Brown, Mark Dow, Scott Redler, Barry Ritholtz, Dan Nathan, JC Parets, Charlie Garcia, Ivan Zinn, David Zervos, David Rosenberg, Steve Wasserman, Danielle DiMartino Booth, Nicole Sherrod, and more. This will be an all-inclusive weekend of market intelligence and valuable networking and consistent with events of the past, the fun-quotient will be quite high.

Please email me directly at if you would like to take advantage of the community discount code, and we'll see you there!
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