As we finish up this weekend’s piece, we read that President Trump is saying that the US and Iran have come to an agreement to reopen the Strait of Hormuz. We had heard rumblings of this all day, but since we’ve heard them before, we went forward under the assumption that it probably wouldn’t take place immediately…..Since it does look like some sort of an agreement has been reached, some of what we’ve written in the following piece might sound odd by the time you read it (especially point #’s 2 and 2a)…because we wrote it before the news became public…….However, most of what we discuss in this piece still rings true…so we’re going to go ahead and send out our thoughts this afternoon…….We’ll likely send out some thoughts on Monday (Memorial Day)…when we have more details…….…..Thank you and enjoy the rest of your long weekend!
Table of Contents:
1) Earnings growth and excess liquidity continue to be reasons to think this rally can continue for quite some time.
2 and 2a) The situation in the Strait of Hormuz will HAVE to change very soon…one way or the other.
3) It may not matter, but it IS a fact that there are A LOT of signals today that are normally seen at important tops.
4) Long-term yields fell slightly late last week, but the yield on the 2yr note made another higher-high.
5) The charts on the major indices are quite simple right now, but that doesn’t mean they’re not compelling.
6) A few important divergences are starting to show up in the chip group.
8) We’ve had some great calls in the tech group recently. Let’s look at two more stocks.
9) The industrial stocks are taking a breather. Can they regain their upside momentum?
10) Summary of our current stance…..What is the euphoria in South Korea telling us?
