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Market Sloshes Sideways

Daily Rap 05-30-2019

The market was modestly higher through midday, I suppose because the bulls were celebrating the successful test of their magical 200-day moving average. I was a little surprised that Palo Alto Networks' (PANW) loss at beat-the-number, after having to lower its guidance, didn't have an impact on any other cloud/imagination stocks.

Third Time's the Charm We've now had three of these types of companies in a row that have had issues (including Autodesk and Workday), but such is the market that we're in where very little dot-connecting goes on and not much makes any sense. Having said that, it is very clear -- to me, at least -- that the market is laboring and the next big move is going to be lower, however and whenever it decides to commence.


Last year's posts for Ask Fleck

Q: Do you see anything in the technical pattern for future optimism in silver?

Fleck: Yeah, there are reasons to be optimistic. It doesn't have to trade up much to shift momentum, and the commercials are set up to trade pretty positively, but we need more people to care.
(posted: 5/29/2019)

Q: Hello Bill,

During the next financial crisis will assets be safe in a brokerage account such as Fidelity or Schwab, or should they be moved, and if so what type(s) of account do you suggest? In 2008 I moved most of my assets into custodial accounts due to the systemic risks in the banking sector at that time. Do you foresee the same type of risks developing again?

Thank you for helping to keep us safe, and for all you do.

Fleck: No, I don't really, but you may as well be prepared if you are over the SIPC limit, just in case.
(posted: 5/29/2019)

Q: Bill, A month ago, my "squiggles" suggested some "down time" for equities. So far, we are only a few percentage points down but the hysterical reactions from the "snow flake" generation of "players" is spectacular. These idiots would not know a routine bear market. For them, anything off 10% constitutes a "cosmic disaster". By the time a normal bear completed its move, they would have been carried off the floor, sucking their over margined thumbs. Meanwhile, the recession chatter, embraced by a generation of QE traumatized investors, has set off a global chase for any kind of positive yield. With German bunds now deeply into NEGATIVE territory, 10 yr. USTs at barely 2+ % look like a gift from heaven. (they should be closer to 5%, but that won't happen). The fixed income stampede seems a bit premature and the long end of the curve looks extremely "over bought". Of course, in the brave new world of artificial markets, who can really KNOW what newly minted "extremes" might resemble. Snow flakes are deeply rooted in the "Tech Religion". Therefore, cryptos naturally become their focus, rather than something like gold, which has been around a bit longer. Thus, in the chase for recession "plays", bitcoin ramps exponentially while gold muddles along. However, gold remains in basing mode, waiting to accumulate enough amateur shorts to get a rally started. I still think it will continue to be "boring" until it can punch through 1400. By then, a few "snow flakes" might have learned something while the robots start picking up a new toy to chase.

Fleck: That was truly an amazing point you made at the exact top. I was surprised when you said that (but happy to hear it, for sure). Anyway, you were dead right. PS: Great rant as well.
(posted: 5/29/2019)

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