How many hard hats does it take to remove a sapling?

Apparently five. One to control the forklift and four to stand around and watch. Ok, derivation of an old joke. However, applicable to last week’s market action. First off, while one guy does all the work, the others fold their arms and inspect. Secondly, the forklift appears like overkill considering the size of the sapling. Thirdly, the observers stand far enough away to avoid I imagine, getting hit not by the tree but by the machinery.

In the market, Technology and the FANG stocks did all the work. Many other sectors stood around with arms folded inspecting the move. The Nasdaq forklift looks like overkill considering the increasing uncertainty on both economic and geopolitical fronts. Why would the observing sectors stand far enough away from Nasdaq? What might they be protecting themselves from? Each of the current market concerns alone could be as small as a sapling.

However combined, one can easily understand why the market indices, all trading close enough to their highs, cannot see the forest from the trees.

This weekend the French elections take place. Sentiment perceives a LaPen win as a negative. Russian interference still looms. North Korea has not gone away. Domestically, the Health Care deal or no deal, reemerged. Tax Reforms remain vague. Threats of a government shutdown surfaced.

Trump has completed 92 of the first 100 days. The Warning Phases in all of the Modern Family sectors (besides Semiconductors) illustrates a market losing its patience waiting for economic expansion policies.

Billionaires like Paul Tudor Jones say, “U.S. Stocks Should Terrify Yellen.” Why? The value of the stock market relative to the size of the economy is bloated, making current stock levels unsustainable.

See what I mean? Although the market has fired off defense missiles at each annoying sapling, a full-on attack and the market could go nuclear.

Last week I wrote about the different timeframes. While the short-term trend appears heavy, the longer-term trends in the most salient sectors are well intact.

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