I came in the door, I said it before

I never let the mic magnetize me no more

But it's biting me, fighting me, inviting me to rhyme

I can't hold it back; I'm looking for the line

Taking off my coat, clearing my throat

The rhyme will be kicking until I hit my last note

“Eric B. Is President”

-Eric B. & Rakim

Each week, there is speculation that the rally will stop or at least stall. However, those concerns are quickly swept away - not by sentiment, but by actual results. In fact, one of the best things going for this rally is a large number of non-believers, which come in many different camps:

• Valuation is slight above historical norms
• The Fed is too accommodative
• Companies buying back stock distort the picture
• Earnings slowing
• Economy slowing
• Geopolitical issues, including tariff and trade battles
• Trump is president 

I don’t know how all these bears stay in business after being wrong for a decade. I admit being overly optimistic. I call this a trait of a grateful American, but I see this market with a lot of potential to move higher based on improved fundamentals. Still, Wall Street has blown it again Big Time, and it has to find a way to trip up the rally or to hop on board.

I think if legendary rapper Eric B. was president, the market would still be higher if he lowered taxes, cut mounds of regulation, and went to war with China over an unfair trade relationship that other administrations only whined about. And knowing the World Trade Organization (WTO) and its toothless decisions were a cop-out. Be that as it may, the market is due for a breather - and yet, each tick higher generates its own momentum, as it will draw money off the sidelines.

It’s sort of like a perpetual motion machine.

Earnings Season is coming up quickly, and it should be quite eventful. Until then, the market will take its cue from momentum, and perhaps trade news. On that front, it looks as if the Democrats want to derail the United States-Mexico-Canada Agreement (USMCA), which boggles my mind. The deal helps the American workers they claim to want to help. 

When the party is angling for trillions of dollars to fight climate change, there should be embarrassment over scuttling a plan that would bring high-paying manufacturing jobs to the heartland. It would be heartless.

Monster Market Breadth

The distribution winners in this rally are also boggling the mind. 

NYSE

• 2,099 winners
• 826 losers

• 116 new highs
• 8 new lows

• 2.3 billion up volume
• 745.1 million down volume

 It’s a horse race, but the S&P 500 has the best momentum, and it could be the first major index to create a fresh all-time high. 

Portfolio Approach

There are no changes; however, we got aggressive on Constellation Brands (STZ) after management dumped a lot of its lagging wine business.

Today’s Session

Friday afternoon Boeing admitted culpability in the crashes of 737 Max airplanes and that opens a whole new can of legal worms and regulator issues.  Perhaps gone forever are the days of self-certifying the airworthiness of their planes. The news is also something of a comeuppance for the FAA which has already signaled a willingness to work closer with oversees regulators.

When Boeing initially pulled back from its all-time high it created a massive gap on the upside that will be filled one day.  The downside gap however, filled in the initial news of the Ethiopian Air crash and since tested several times, underscores $360 as a key support point.

I continue to see Boeing a hold and once the dust settles, I think it will be an aggressive buy.

With Boeing as an anchor, the Dow will struggle, and other indices seem to be under different pressure – mostly profit-taking.