So we make a stand? Is that what happens with the futures roaring? Is it the same thing over and over again, where Clorox (CLX) and Johnson & Johnson (JNJ) signal a bottom and we go higher from there?
Probably. That's been the scenario, but each time we lose stocks and unless some companies come to the fore with better numbers, not just consistent numbers -- which is what the JNJ types give you -- there aren't enough stocks to go around that aren't vulnerable.
So here's what I suggest you do. There are a few key stocks to watch that will tell you if the rally is real. First is JP Morgan (JPM). JP Morgan is a long-term winner in what will no doubt be a retreat by arch-competitors Deutsche Bank (DB), Credit Suisse (CS) and Barclays (BCS), all of which have taken share over the years by being aggressive in the U.S.
So consider the market share tables that Deal Logic uses. First, in investment banking JP Morgan is number one, with $2.5 billion in fees. Barclays is number five, with $1.3 billion. Credit Suisse is sixth with $1.2 billion. Deutsche Bank is eighth with $1.1 billion, UBS is 10th with $714 million. I don't want to say that these fees for these firms will go away, but if these companies are under retreat and the bonuses go lower, then the bank may do just fine with low rates.
Or consider M&A: JPM is number two, with about $1.0 billion. Credit Suisse is number five with $464 million. Barclays sixth with $368 million (our own Deal tables show Barclays as number two in this category, by the way). Deutsche is 10th with $284 million. Lots of share to pick up there. Finally, in the equity markets, you see JPM first with $434 million. Credit Suisse is sixth with $237 million, Deutsche Bank is seventh with $214 million and Barclays is ninth with $155 million.
Now, against all of this is no rate hike for the year. That matters. You could say that's all that matters. But will that always be the case? I have seen many a bank pull back from the U.S. and never come back to the tables. This could be that case.
So watch that stock, for certain.
Second stock is Action Alerts PLUS charity portfolio holding Schlumberger (SLB). Last week it gave you a negative outlook for 2016, but a positive one for 2017. It is down five from that look. Yet oil's unchanged. Interesting opportunity.
Third is Micron Technology (MU). Here's a company that, despite the number cut on Microsoft (MSFT), was finally getting better pricing for flash. It still will. It's one of the few tech companies I follow whose numbers are too low.
These are the three keys to this morning's trading. Watch them and they will give you the key to whether the rally's real or whether it is fake, not Pepsico (PEP), Johnson & Johnson, Clorox or Bristol-Myers (BMY), as they bottom first. Always.