disappointing..

Okay..only mildly disappointing…

You’re probably looking at the title and saying what was so disappointing about today, SPX up 3 pts day after the recent  ~10+% rise.    Well,  we’re not even disappointed that market was not up greater, we’re disappointed because we can’t get a decent red pullback to relieve the overbought conditions and let others come into the Bull playground.    You see,  we didn’t  have sellers today and we didnt have buyers even like us already on board the bull train to press higher or/ new buyers step up.   Nothing changed from Friday and the trading conditions noted in DJIM weekend report continued,  notably any weakness getting a light bid.    If you’re on a Level2 platform, you can clearly see a lack of any meaningful size bids or asks to make any stock move in either direction.    If something did move today, it basically reversed back due to lack of conviction.    A few DJIM stocks making intraday new highs are prime examples of all this, (excluding HITK )… ININ TBI SWI  gave back the new intraday highs and others with the real strong earnings like JDAS, ATHR AAPL  are just stuck in the Nazzy/ Tech oxygen tank after it's trip to the moon.  It's unfortunate as far as timing that the latter 3 gapped into the middle of the rally giving them little room to roam higher at this point.  All this just made for a flat boring day, but digestion is still better than indigestion! 

So..until one group gets aggressive, we’re stuck in what looks like June trading all over again.   It will probably involve a surprise catalyst to initiate a move.   Today,  some were saying it was a negative that we sold into the Home sales number,  but this wasn’t a surprise catalyst as in recent weeks the numbers, sector options action had pointed to this data.   It wasn’t enough of a catalyst for the Bulls to run through the streets and it wasn't really a sell on the news in our view
 
Positives to take away, include,  Financials strong in all sub groups  and TRANS  keeps rolling and a big part of this recent rally (recall July 16th we said FDX exploding over 200MA was a positive) and allowing rest of market to digest,  while showing this market is probably capable of rotation to keep on going forward.  In this case as NAZZY tech takes a much needed breather.  Bulls have time on their side!. Also, some M&A activity today maybe a start to some more good noise in this area.

More disappointment...

Yes, don't be fooled by our journal title again!    On the contrary, this market has been anything but a disappointment.     We had a "mild" pullback early on into the middle of our 972-966 intraday note for a bid support.    It's considered mild because we really haven't even seen this mkt down more than 7 or 8 pts on SPX intraday in quite a while.  Believe it or not, today’s -2.5 pts SPX decline was the biggest in over 2 weeks!!.  So when this mkt was pulling back early on, we were excited and hoping that we may be able to get some stock cheap for once.  But…

Here comes the disappointment.   Things just don't seem to stay "low" for long these days and you only had a chance for a handful of light dips.  We had plenty of reason to dip (notably CC #), but long demand came in the form of an underlying bid.    Again, this is becoming a normal phenomenon with this market these days.     Little rants aside, this market has once again exhibited the kind of strength that is typical of a strong bull market.    Dip buying will be the game!   Plays like HITK SWI  don’t even give us a chance pause before they inch higher,  these names actually were climbing to 5-10% gains and new highs while market dipped.   HITK, for some reason, turned out to be the best runner among the ones we've covered, so far.     At this point, we do feel it may needs to settle down a bit.    We still have many reports left in the earning season and we won't be surprised to see some exciting reports/reaction surface as a result.   Currently, plays like JDAS  ATHR  ININ  are all developing nicely.  If Nazzy/ Techs come out of their oxygen tanks for some follow through this week these names should benefit.  If there's strength that accompanies a breakout among those plays, we won't be hesitating to chase higher aggressively by adding to positions.

Bottom line, we are pretty choosy as far as plays are concerned.  We do have plenty of earning plays to work with and we'd imagine there's more good ones coming out within the next couple of weeks.   For now, lets just enjoy what this market is offering us.

Here's some Honey...

Are there really Bears who don‘t like honey?.   Well,  it seems the ones in the stocks market these days just don’t, even when it’s handed to them on a plate overnight at SPX ES 1030.   Yes.. that's about 20 points from lows to highs the Bears got teased and than dragged by an underlying bid of swarming Bees!.   What had the makings of a 1+% down day due to world markets feeling the US-China trade wars,  turned out to be just a regular ordinary day in this Bull rally.....Bears not pressuring new positions….Bulls coming in with an underlying bid..new cycle high being made.    The Bears just can`t conquer their fear of upside risks and really who could blame them after the 2 recent slides that ended up disappearing by short covering with new highs being made both times.   Today`s upside risk is not really the Retail report, this report tomorrow has been a time shorts position themselves prior to this summer, which led to sell offs on day of.  

In our view, today`s upside risk is something you probably didn't hear much about in the media.  It is the Barclay`s conference tomorrow/ Wednesday, where banks will start updating the markets on Q3!.  We discussed the positive tone coming out of the conferences last week, notably the Tech`s sending a positive tone that helped the market make new highs.  Well, this week, this financial conference is fear for Bears!.  We all remember what the Bank- Broker tone did for the market to start this rally!.  Simply, the shorts were reluctant and covered in case things are upbeat leading to SP financials ending up 1.4% on the day.    Early in the summer, we said eventually after this initial rally, we anticipate the Banks- Brokers to lead the market higher in Q3-4.    Is this the beginning of this or are they going to be the reason we pullback and correct.    Simply,  this conference is important to the Bull cause and we'll monitor closely…(sell off on good tone or will market run higher?). Still, there is other data points to watch for, inc retail sales and earning from some notable names this week.

As far as individual earnings linked stocks, we had a few more hovering around and/ or making new highs like SWI,  which has had consecutive up days.   FIRE  alerted again last week is capable of duplicating such a move.   UTA  continues to find a bid, but after being alerted in $9.30`s recently, a run to 12.60 is not a bad excuse to take some profits as it just clears 50ma (even though today it had its best bid day).   A stock like this is one we'd be buying prior to its next earnings report due to its China and business factor.    VVUS,  showed it's capable of moving fast on any given day, we have no hesitation holding it long term as we originally said.