Sometimes the charts are so darned revelatory that you have to say, wait a second, do I like this market too much? Am I looking for too much for this darned thing?
That's how I felt this weekend. Chart after the chart, except a couple of mineral companies and most oils, just didn't make me feel comfortable going into still one more big week of earnings.
We know that most of the earnings we have seen this quarter have been pretty darned good. In fact, it is saying something when the two biggest large-cap disappointments are the A and G of FANG -- - Action Alerts PLUS holding Facebook (FB) , Trifecta Stocks name Amazon (AMZN) , Netflix (NFLX) and Google parent Alphabet (GOOGL) -- and I don't think either miss was all that dispositive.
But there's something else going on, something that's a little more insidious. The big visible winners last week? Contrary plays: Verizon (VZ) , AT&T (T) and Chevron (CVX) . Do we really want that kind of leadership?
As always, we want a balanced assault higher, preferably led by the financials and transports, followed by the industrials, techs and health cares. We do not have that now. The first two seem totally absent.
This weekend, I was assaulted by the usual assemblage of bears. I never meet a bull anymore. I like that. This weekend, though, I had that ennui that happens after a long run. I said, "you know what, I will agree with you for now. I am tired of fighting."
What I am really tired of, though, has little to do with the companies I follow and much more to do with the amazingly dysfunctional Washington situation. It is really difficult to believe that anything could be worse than the last four years of the Obama administration.
This era, however, is a topper.
I not only no longer believe that we will get anything done on taxes -- can you believe that I was pleading with Mick Mulvaney, director of the Office of Management and Budget, to get us something, anything, perhaps repatriation? It was all so pathetic. Think where we were six months ago versus now.
Mulvaney didn't get it or me, not one bit. He actually initially thought I was against repatriation. I am convinced he has never watched or read a word I have spoken. Hey, no offense taken: neither has my wife.
Still, the idea that they have no idea how on the ropes everything is reminds me of how clueless everyone has become in Washington. I should have been begging for a debt ceiling lift, forget about a bull market goodie bag that includes repatriation.
Meanwhile, we have some total clown show North Korean boasting about the ability to hit our country with nuclear weapons and I am trying to think, other than the Cuban Missile Crisis, when it was more likely that someone would nuke us and I can't come up with it.
I have felt the charts, until this weekend, did not reflect the post-health care reform failure lunacy of Washington. They had been pretty immune. I don't think that's the case anymore. They show a Nasdaq that wants to roll over. They show a group of industrials that, ex Caterpillar (CAT) and Boeing (BA) and Deere (DE) , lack a higher place to go.
The best charts? Anadarko (APC) and Cimarex (XEC) -- thank heavens the latter comes up, because it has been a total bummer to own. Action Alerts PLUS, the charitable trust, has most certainly owned it during one of the most staggering downturns I can recall.
So, what do we do, now that we are about to go into the month before the most difficult period for the market, the month that has seen some moments that are breathtaking?
I think it's time for some repositioning. Raising some cash. Recognizing that there might be some better entry points down the road.
Whenever I write or say this, people ask: "you've turned bearish?" My answer? I have turned very bearish on Washington, and if something doesn't go right there, I will be inclined to be incrementally more negative on the U.S. and look for more defensive names to handle the swirling defeats that Washington brings us.