AJB Capital

Solid, quiet support right now - coming out of the overbought that we hadn't seen on the S&P 500 since October 27. So, still some caution...

It's not an issue with valuations that are the problem. It's any hiccups in liquidity that are directly tied to Treasury Auctions and Fed repo activity.

Eventually these valuations will compress... but that seems to be something well into summer... For now, start looking at the consumer defensives and the commodity producers that you want to own. We're moving into a speculative phase in these markets.

Chart of the Day

This is Michael Howell and Global Liquidity Index...

What do you notice? The U.S. is at the top... China is just... getting... started...

In typical cycles, after these tops, U.S. investors would typically shift to defensives (XLP), while speculation builds in metals and materials...

Meanwhile, China pumps and benefits... Metals. That copper chart since August is stunning. There is a lot of volatility ahead. But there's good reason to keep with momentum on SCCO and MLI moving forward with hard stops at key moving averages.

RIG has pulled back and stopped out...

As I had warned at Capital Wave and over at Money Printer... there was ample reason to expect a "sell the news" event. Instead of trying to chase markets... It's important to understand that the purpose of a market is to sell. I have said it's not a great time for upstream producers linked explicitly to prices.

New traders need to set key stops and recognize that premarket behavior can become a fast setup for profit-taking. It sucks you in and can spit you out.

OPEC did provide support to markets by NOT increasing output. Energy signals are still positive, but largely fueled by a big rally on the back of DOWNSTREAM refining names.