Mkt Constipated?

"When the moon hits your eye like a big pizza pie - That's Amore...."

Well - I am willing to bet that it ain't the moon that's about to hit your eye.......and it sure as heck is not 'Amore'.....

US Futures are getting crushed in overnight and early morning trading....currently down another 16 pts - clearly breaking the next shorter term support line 2055 and headed right towards the longer term - 200 dma at S&P 2000!

Stocks moved sharply lower over the course of the day yesterday - BioTech and Tech getting hammered - as a lead WSJ article discussed the risks to the Biotech sector.....and a host of investment banks decided in unison to downgrade technology (weak desktop demand) .....that was all we needed to provide the catalyst for the algo's to go into overdrive and spit out SELL orders.....dragging prices lower all day. Now - listen - as discussed - once the tone becomes negative like it did - what do you think the buyers are gonna do? Stand there and get banged over the head? Of course not! The buyers see the same news - so they pull away - they test the 'fear'....they 'smell blood in the water'......As the WSJ points out today:

'The Nasdaq BioTech Index lost 4.1% yesterday and 6.1% in the last 3 trading days.....but it is still UP 12% on the year....'

As the mkt approached the 50 DMA (at 3:30 pm) of 2067......traders held their breath and wondered aloud if it would hold........"Was not happening..." ...the mkt sliced thru 2067 like a hot knife thru 'butta' (as Brooklyn's own Barbra Streisand would say)......Taking us below the levels seen before last week’s - Snow White and the 7 Dwarfs - inspired rally.

All the indexes then went into 'freefall state' for the final 30 mins of trade....ending the session at the lows of the day. The Dow falling 293 pts (-1.6%) to 17,719, the Nasdaq plunging g 118 pts (-2.4%) to 4,877, the S&P 500 notching 30 pts (-1.5%) to 2,061 and the small cap Russell 2000 giving back -2.34%.

Is this all just a set up to 'flush it out' before the end of the qtr?

Part of the story for sure is that institutions are getting ready for the end of the quarter and the usual window dressing is in full gear.....as asset managers and traders purge risk going into the April earnings season. And do not discount the need for some investors to raise cash to pay Uncle Sam on April 15th. It's an annual event....

On top of this - we did not get any help at all from the 'gov't manipulated' macro data reports..... Durable goods orders declined 1.4% in February - on top of the decline seen in January.

Economists were just as surprised because these bozo's were expecting Durable Goods to increase by 0.4%....Orders for nondefense capital goods ex aircraft declined 1.4% - That was the largest contraction in business capital goods since declining 1.9% in October 2014.

Immediately following this 'big reveal' the Atlanta Fed’s GDPNow forecast model went into convulsions and lowered its 1st Qtr forecast yet again to just 0.2%. (a 33% cut from the prior estimate of +0.3%).......

Energy was the only beneficiary yesterday as Crude oil prices rallied $1.70 to $49.21 - but why? Not for any good reason at all......it was the fighting in Yemen by rebel Shiites that raised concerns about the security of oil shipments from the Middle East. (All of sudden we are worried about oil shipments from the Mideast when we don't have any place to store what we already have???)

The chatter was all about concerns of a new war that might break out on the Arabian peninsula – if the conflict draws in Saudi Arabia and Iran. Look - we are 'swimming' in oil.....or at least that is what we are told - and that was only further confirmed by the EIA (Energy Information Administration) yesterday when they reported that inventories rose by 8.2 million barrels last week, hitting 80-year highs for an 11th week in a row......so is this a 'manufactured conflict' to support higher oil prices which in turn supports higher gasoline prices going into the spring/summer driving season? Oh - what a tangled web we weave......

No matter what - the US stock market was badly in need of a pullback and would have sold off on any excuse - we got those excuses yesterday....... The mkt is now in 'adjustment mode'.....we are only down 2.5% from the latest highs.....this is far from correction mode.....now individual names - well that's another story....but yesterday's action does NOT mean the bottom is about to fall out of the broader mkt at all.....Even a move to the longer term support at S&P 2000 still only represents a 5.5% move off the highs.....We would need to get to S&P 1905 for this to be a full blown CORRECTION (defined as a 10% decline).....And unless this is a 'House of Cards' - I just don't see that happening at all.....Do you?

Yes - we have dollar concerns, yes we have earnings concerns, yes we have growth concerns.....but the mkt is adjusting for these.....It just so happens it is adjusting in short order.....because up til now - complacency has been the rule of the day.....investors choosing to ignore the clearly 'flashing warning signs'...but no one wanted to be the first one out the door.....it's the HERD mentality......Classic.

As you can imagine - global mkts were and are in the RED overnight.....

Japan - 1.46%, Hong Kong -0.2%, China -1.5% and ASX -1.5%.

This morning in Europe - mkts there are under pressure as they reconcile the US sell off yesterday and the fears over war in Yemen... Saudi Arabia took to the skies and launched airstrikes in Yemen to defend The Yemeni government from Houthi forces who have taken control of several key cities. ...FTSE - 1.2%, CAC 40 - 1.2%, DAX -1.4%, EUROSTOXX -1.2%, SPAIN -0.7% and ITALY -1.4%.....

US futures are now down 13 pts as the mkt looks to stabilize.....They pushed to the lows of early March (2035) in pre-mkt trading....will it find support there or not? Temporarily maybe....but expect Yemen to be the focus today.... we will have another FED speaker - Dennis Lockhart at 9 am. I suspect the range to be 2035/2067....a breach of 2035 would open the door for S&P 2000.

Raisin Bran Muffins

This is the classic "Kellogg's" recipe (with a bit of a tweak) that you can find on the side of Bran Cereal box.....it is also a muffin that my Aunt Margaret used to make for us (kids) every Saturday morning during the summers at the beach...It is such a great memory for me.....

So you will find the recipe on the box - but here it is....

1 1/2 c of flour, 2 tsp of baking powder, 1/4 cup of sugar, 1/4 tsp salt, 2 cups of Kellogg's All Bran, 1 1/4 cup of whole milk, 1 beaten egg, 1/4 cup of veg oil, raisins (you can also mix it up with banana's & walnuts, or even choc chips) .....and I add in one stick of melted butter....(of course I do!).

Preheat oven to 400 degrees.

Combine all of the dry ingredients and set aside.
Add milk to the bran cereal and let it sit for a couple of mins....then add egg and oil.

In the mixer add the cereal and then slowly add the dry ingredients - mixing well. Now add in the melted butter and continue to mix for another min or so.

Now using a tablespoon - fill the muffin pan (that you have greased). Bang on the counter to remove any air pockets and then place in oven and bake for 20 mins or so. Serve these immediately when warm with more butter on the table . Include a large glass of cold milk......

Enjoy!



Buon Appetito.