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The S&P closed at 2720.94 – So today’s circuit breakers are:

 Level 1. 190.46 pts (7%) or 2530.48

Level 2. 353.72 pts (13% total) or 2367.22

Level 3. 544.18 pts (20% total) or 2176.76

 I clearly recognize that this is useless info today – considering global mkts and US Futures are on FIRE…….


So – Yesterday morning – I said in my note:

 ‘US futures have gone from flat to down 7 pts in early morning trade…more trade war talk remains the topic of the day…and CNBC now reports that Trump says, ‘tariffs will come off if a new and fair NAFTA agreement is signed’ – that headline did little to turn the mkts around – but expect to hear much more about this as the day wears on……’

 That headline did little to turn the mkts around – that was –  until it did at 10:30 am….when the Dow was down by 200 pts and the S&P was 16 pts lower…but then someone or something started to pay attention to the Trump Tweets and Boom….the mkt did a complete 180 – the dow swung 500+ pts from low to high and the S&P swung by 41 pts from low to high….When the final bell rang – stocks closed at or near the highs as all this trade war talk eased.  

 Industrial names – that had gotten beaten up – were the darlings of the day – although all sectors ended the day higher…. ….and the eco data yesterday confirmed that US NON-Manf survey continues to suggest that the US economy is now firing on 6 of 8 cylinders….

 The tweets (because there were more than one of them) showed some level of flexibility sending the BUY algo’s into a tizzy – as they all ran over each other trying to get ‘back in the door’……

 Add in the news that the EU (European Union) has been working on a ‘retaliatory tariff’ plan that is targeted to hit those ‘iconic US brands produced in key Republican states’ and this only raises the temperature on Trump and his tariff plans…. The EU plan would be a ‘tit for tat’ response targeting $3,5 bil of US goods that include – blue jeans, motorcycles, Bourbon whiskey, and agriculture products produced and exported from the US to Europe.  

 This action would try to drive home the ‘real domestic costs’ to the US if Donny continues down this path.   Now Pauly Ryan – man with no backbone – happens to come from Wisconsin where they produce Harley Davidson motorcycles… and Mitchy McConnell hails from Kentucky where they produce Bourbon Whiskey ……. are you beginning to see the picture? They are fighting for American workers to not get hurt…….  

 But Levi Blue Jeans – can’t get any more American than that are manufactured in Thailand for pennies…. but the HQ is in San Francisco – Nancy Pelosi’s stomping ground – and while she may not like the idea of tariffs – she is NOT PROTECTING AMERICAN WORKERS BECAUSE THERE ARE NO AMERICAN WORKERS MAKING LEVI BLUE JEANS.   She is just opposing the tariffs for air time….

 Look – on the one hand – he is trying to level the playing field – trying to force countries to come to the table to negotiate fair trade, not one-sided trade -so the question is will the threat of tariffs cause countries to come to the table or not?  Will they each impose their own tariffs to further complicate an already complex issue? On the other hand – it is not that easy – and it is uncomfortable to have these kinds of negotiations – but someone must do it – we can’t continue down a path where the US is always the underdog……

 So, for a week now – the mkts have been under pressure because of the tariffs and a possible trade war – Talk of Armageddon that had begun to permeate the conversation and when it appears that Donny could consider some flexibility – the tone changed….and traders couldn’t get enough of stocks……Questions like: What was Trump doing exactly?  Did he understand the implications?  Who were his advisors and what were they saying to him? Were suddenly nothing but a distant memory and now as the idea of the tariffs slips onto the back burner – traders – who apparently have a very short attention span – can’t remember what caused them to hit the SELL button in the first-place last week…. And so, it goes…. last week’s despair is this week’s comfort….

 Oil – surged by 2% ending the day at $62.61 as forecasts for ‘robust demand’ hit the tape…..word out of the CERAWeek Conference* – hosted by IHS Markits – in Houston, TX,  is now telling us that ‘bullish’ forecasts coming from a range of oil ministers within OPEC are suggesting that the time is now to get on board with what is sure to be rising oil prices….OPEC ministers all went to dinner on Monday evening – leaving all of the US shale producers to fend for themselves…..clearly a slap across the face – as OPEC is not happy that the US producers continue to ramp up production to ‘fill the gap’ and slow any price increases that may have been created by the OPEC production cuts.  

 (*CERAWeek – Cambridge Energy Research Associates Week – was founded in 1983 in Cambridge, MA.  It grew quickly into one of the most respected energy research and consulting firms in the world and hosts an annual conference in Houston, Tx now of the year – every year.  It is attended by anyone who is anyone is the energy space….and we see energy mkts react every year……)

 GLOBAL MKTS EXPLODING HIGHER OVERNIGHT……. Japan + 1.8%., Hong Kong + 2.09%, China +1.2%, ASX + 1.14%, FTSE + 0.93%, CAC 40 + 0.73%, DAX + 1%, EUROSTOXX + 0.83%, SPAIN + 0.7% and ITALY + 1.5%

 This morning we are waking up to the fact that Chubby (Kim Jung On) of North Korea is now telling South Korea that maybe he is willing to discuss his nuclear ambitions……and that speaks directly to another kind of ‘war’ that Trump has been fighting as well.  Maybe all the tough talk and severe sanctions on North Korea are really influencing how Chubby views the world.   Talks are tentatively scheduled to take place in late April….and the key takeaway is that North Korea is NOW saying that

 ‘there is no need to keep its nuclear program as long as there was no military threat against it and the safety of its regime was secured.’

 Hmmmmmm?  Do we credit Nancy Pelosi or Chucky Schumer for that?  Or is anyone going to recognize the fact that Donny did not back down from the ongoing threats thrust upon the world by Chubby?  How will the media tell this story?  We are about to find out….

 US futures are once again SCREAMING HIGHER – currently up 12 more points on the back of the most recent developments.  – Both North Korea and a softening of tariff and trade war talks.  Expect North Korea to be the focus of the day… the media continues to dissect this story…..Either way – both of these developments are bullish for global mkts….Resistance for the S&P is at 2736 – a level that will be challenged on the opening bell…..a successful push up and thru this level on the back of all this news will set us up to challenge the highs set in January……This was the catalyst that no one was predicting……so the story can change dramatically if North Korea is serious about icing their nuclear program.    

 The VIX index (fear index) is falling – and is now down 1 pt or 5% as these developments unfold…and this is fuel for the fire…. Watch to see if the VIX weakens more…. Support is at 15.98…. or another 10% from here.  

 The dollar index – DXY – down 40 cts at 89.68……helping the commodity complex rally. Oil is up 52 cts/barrel and gold is higher by $8/oz. –  we have now pierced resistance at $1,327/oz setting us up for a swift move higher.

 Eco data today includes Factory Orders – exp of -1.4% and Durable Goods Orders of -3.6% – both of those would be bearish – but by the sounds of it – no one is even going to think twice about the eco data today.  

 Take good care –  


 Steak Florentine

 This is one of those great classic dishes that never disappoints

 Start with a nice cut T-Bone or Rib Eye – always on the bone as the bone provides so much more flavor and makes a nicer presentation for your dinner guests.

 You will need:  The steaks, Garlic cloves, Pork fatback, dried rosemary, coarse salt (kosher salt works nicely) and pepper. Remove steaks from fridge – rinse under cold water and pat dry with a paper towel.  Leave on a platter for about 20 mins so that they get to room temp.

 In a food processor blend the pork fatback, garlic, rosemary to a paste like consistency. Next – wash your hands and massage this mixture into the steaks – taking time to make sure that you have worked the meat and the mixture well. Now season with S&P.  Set aside.

 Light the grill and turn the heat to high and allow the grill time heat up – it must be nice and hot.   Place the steaks on the grill and cook for about 5 min/side – depending on thickness – This will result in a med rare steak…so if you add a couple more mins on each side you will get a more cooked center.

 Remember though – when you remove the steaks from the grill – you will cover and let them rest for 4 mins allowing them time to continue cooking and allowing for the juice to flow.    Once ready serve immediately on warmed plates.   Mashed potatoes and peas always works well with this dish along with a mixed green salad with red wine vinaigrette dressing.

 This meal deserves a robust red wine – my favorite is Brunello di Montalcino – like velvet

 Buon Appetito

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