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There has been a bull market in rationalizing.  Rationalizing is defined as "an attempt to explain or justify (one's own or another's behavior or attitude) with logical, plausible reasons, even if these are not true or appropriate."   The recent comments by newly installed (4 days) Director of National Economic Counsel Larry Kudlow remind me of the Iraqi Minister of Information during the US invasion in Iraq.  The Minister  was mocked  as he claimed American soldiers were committing suicide "by the hundreds" outside the city, and denied that there were any American tanks in Baghdad, when in fact they were within view from where he was speaking.  Larry Kudlow has been a CNBC commentator for many years, leans as conservative on economic policies and has always been a free trade proponent.  He was in front of the camera the other day with the markets on the lows and he softened the tariff talk and the markets reversed massively, and then today back on Bloomberg TV trying to defend or soften the latest Trump talk of increased $100b more in tariffs in response to China's response.  Some of these quotes from Larry are right out of the Iraqi Information Minister's playbook "We've had a tremendous run in the stock market... there is no trade war... moderate, temperate, and proportional approach... China is the problem and Trump is the solution... and we are still in a bull market."  What's the over/under on him surviving at the Trump White House?  

A few more rationalizations in lightening round fashion.   

• Tesla - Missed deliveries by 6,000 cars in Q1, does not need to raise capital, says it will be profitable in 2018, autopilot is safe. CEO makes April fools joke about bankruptcy.   Stock goes higher.  
  
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• Facebook - "We don't sell your data" Sheryl Sandberg on Today Show.  OK sure.
  
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• "Earnings will be great and lift the market" - S&P 500 earnings estimates were raised by $12 which is the largest increase I've ever seen.  What if earnings expectations are now too high?
  
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• "Repatriation will feed back into the economy" OK I'm for this but show me the money?  So far I haven't seen one large special dividend, massive increase in buyback, or reinvestment into capex
  
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• Job Report - Today's Non Farm Payroll number missed estimates badly.  Yet people were out saying you have to average the last few months and some used my favorite rationalization the weather was to blame.  

SPX bullish sentiment is at 35%
Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, commodities, and commodities updated each day.   

SPY did make a new low below February's low and SPX cash Index did not (by .88)   262.75 is the VWAP from the low on April 4th

Nasdaq bullish sentiment is at 37% a small increase from the previous day of 34%

QQQ Nasdaq 100 still is in Wave 1 down and has a downside red Countdown on day 2 of 13.  Breaking the recent lows would be very tough on the entire market.  

IMW Russell 2000 did not break February lows to get Wave 3 locked in.  The recent downside exhaustion was followed up by some gains however today's action isn't very encouraging.  I'd lean towards IWM vs other index ETF's for a relative trade

PPO monitor shows how the defensive sectors have drifted up to the upper range and the aggressive ones to the bottom.  It's weak day with most sectors down and below the intraday VWAP too

Hedge Fund Telemetry Trade Ideas.  Only one add VNQ Real Estate as a long. (chart and reasoning below)  Holding everything else.  I could be bailed out on the 4 index shorts from the other day.  

DAX Index still in neutral mode.  

SXXP Euro Stoxx 600 is also neutral mode despite the recent improvement.  

UK FTSE 100 is important as it's been a leading index for around the world.  It peaked ahead of the other markets (I mentioned at the time that Tom DeMark used to watch this index as a leading indicator)  It recently made a Wave 3 low (low in March) and has bounced and has triggered the Wave 4.  If this moves above the February closing high then it reverts back to Wave 2 up.  I'll explain more as this develops.  Just know this will offer a lot of good lessons with DeMark and Wave studies

Gold bullish sentiment is at 61%.  Watch 50% as support

Gold Futures now is on day 10 of 13 with its downside Countdown

Copper bullish sentiment is at 35% and improved off the recent lows of 21%

Copper Futures was recommended as a lot at 300 and started to improve however I said a couple days ago I didn't like the new red Countdown on day 1 and to use 297.90 as a stop.  I'm now neutral

Nikkei Index has bounced off the recent downside Countdown exhaustion 13 and I expect the Wave 4 to trigger very soon.

EEM Emerging Markets did have a downside red Countdown 13 however it didn't get under the February lows and that can be seen as a positive as well a negative since it didn't fully get oversold and the follow thought up hasn't happened

Bloomberg World Index did get the Wave 3 as it closed under the February low and now there is a new downside red Countdown on day 1 of 13.  Remember last year when we saw so many secondary upside Countdowns on the daily time frame reload with another Countdown?  It's possibly happening on the downside now.  

VNQ Real Estate has been one I liked back in February on the long side with the downside red Countdown 13.  I added it to the Trade Ideas list today as I still see upside and could use a long to add some balance.  

IBB Biotech had a downside exhaustion in Wave 3 and can't follow through.  Watch 100 for a break

IYT Transports did not get into Wave 3 and also had downside exhaustion.  

KRE Regional Banks has red Countdown on day 2 of 13 and has a downside Wave 3 target of 55.12

SMH Semiconductors is still on the first wave down and has a downside red Countdown on day 2 of 13.  98.62 then 95 are support levels

XLV Healthcare had a downside red Countdown 13 and still acts poor

XLK Technology remains in the first wave down and has support at 64.  There is a downside Countdown on day 1 of 13 and if this breaks down it will have big market implications with tech being 25% of the S&P weight.

XHB Homebuilders had a downside red Countdown 13 exhaustion in Wave 3 and now has bounced enough to trigger Wave 4 and thus a new Wave 5 downside price objective os 37.37 is set

XLI Industrials still has a downside Countdown on day 10 of 13.  

XLB Materials is in Wave 3 and has a downside red Countdown on day 1 of 13.  Just doesn't look as its bottomed

XLP Consumer Staples was one of the first to bounce with the downside red Countdown exhaustion 13 and it came super close the the downside Wave 3 price objective.  XLP has been very good with DeMark indicators.  There is a downside red Countdown on day 2 of 13 and that tempers my hope for a long term bottom or further strength

XLU Utilities has been holding in above the 50 day and is on day 8 of 9 with an upside Setup.  This is significant because if Monday it can close above 4 previous closes the green 9 will stick and the downside red Countdown in progress will be cancelled. (see the DeMark Primer)

XLY Consumer Discretionary has a downside red Countdown on day 2 of 13.  There is a mixed Wave pattern with this being either down nearly on wave 4 (this is the corrective wave up where it will make a lower low under the Wave 2) or the last move down finished the 4th up Wave and Wave 5 would be higher.  Stay tuned.  This is dominated by Amazon

XRT Retail also has mixed Wave picture with the 4th of 5 Waves down now triggered with a downside Wave 5 price objective of 40.80.  Or there was just the 4th wave of 5 on the upside.  

Bond bullish sentiment is at 38% and slipped a little.  Today's action will probably see a small lift in sentiment

TLT Bond ETF held the 50 day moving average and there still is a downside red Countdown on day 12 of 13.  Keep in mind for the 13th bar to trigger it has to be under the 8th red bar near 118.  I'm neutral again on bonds

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