E Market Briefing For Monday, Oct. 28

Triumphant or not, with regard to securing a solid China trade deal; it was pretty obvious President Trump wants to see market sustainability; or at least stability. We've often said that's one reason not to 'press the downside', as we persistently suggested there will be no catastrophic plunge, even while open-minded to shakeouts or corrections.  

 (Relates to offshore loans and involvement of big US banks.) 

This matters, because regardless of the achievement of nominal record S&P highs, the broad market is far more neutral than that, and 'swings' by individual stocks reflect perhaps excessive expectations from those who try following short-term trends. A China deal could broaden small company participation with sighs of relief.  

But meanwhile Friday was an example of not pressing downside(s), when I mentioned a lower open in Amazon would likely see a rebound and hence one cannot (or should not) respond to an earnings miss with a sale or short into weakness. This coming week can be choppier too, with an FOMC meeting and a lot of focused earnings reports on-tap.  

Keep in mind (on AMZN) we saw it as a sale when it hit 2000; we we'd not only deferred celebrating with those trying to rationalize the upside; we urged selling (or even shorting) for a fade. These are not very liquid markets, and that's part of it too. Incidentally, as to antitrust potentially breaking it up down-the-road; those parts (especially AWS) might be worth more than the whole; so yes a time may come that we find it very attractive; but not at these levels.  

Amazon is is just one example of the type of air-pockets you can get with FANG+ (type) misses this year. And it didn't start this month; it was the characteristic in the Spring purge too; and of course a year ago when we also called the Fall crash. By the way Microsoft late Friday won a huge Pentagon contract over Amazon Web Services.  

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