As we continue trading in the final two weeks of February, today UBS  legend, Art Cashin, put out a note warning that the stock market may be showing signs of a topping pattern.

Stock Market Topping
February 20 (
King World News
) – Here is today’s note from legend Art Cashin:
On this day in 1872, “society” in America took a great leap forward. It was natural, of course. This year was the fulcrum of America’s “Gilded Age”. Ward McAllister was in the process of inventing “the 400”, a crème de la crème of American society. (The number was 400 because that was the capacity of the Grand Ballroom at the mansion of Mrs. Astor, McAllister’s patron.) 

Now, if you’re going to be looking down your Lorgnette at the Irish serving girl between courses and you suddenly find something stuck in your teeth – – what shall you do. Fear Not! Necessity is truly the mother of invention. Ballrooms filled with the delicate but dentally challenged would soon get help. 

Enter Messrs. Silas Nobel and James P. Cooley. These paragons of good taste arrived at the patent office on this day and got a patent on – – the toothpick. 

To celebrate, stop by the “Hoi Polloi Lounge” and try to think of something common that you could standardize; patent; and make a fortune on. But try not to gum things up. 

The bulls didn’t gum things up Tuesday but a final hour fade almost changed that. 

The trading session began cautiously. European markets were mostly lower and U.S. stocks looked like they might need to take a break after their stunning eight week winning streak. 

The Dow and the S&P opened lower led by the financials and the energy group. The opening dip induced little to no follow-up selling so a few minutes into trading, we basically stalled. 

That stall induced some bargain hunters to start nibbling away. Due to that, the Dow and S&P edged into mild plus territory. The move to the plus side had a shelf-life measured in minutes and stocks went negative for the next hour, or so. 

As European markets began to close, the bulls returned to New York and stocks returned to plus territory before noon. 

For much of the afternoon, stocks drifted sideways, holding on to their mild gains. 

Late in the session, stocks rallied on comments from President Trump that the March 1st tariff target was not a “magical” date. 

That rally faded in the final thirty minutes partly in response to about a half billion dollars to sell on balance for the close. Ordinarily that would not be a large enough imbalance to move markets much but Tuesday’s markets were exceptionally thin (school closings?). 

At the bell, the bulls managed to hold plus territory – but just barely. 

A Mild Note Of Caution From A Respected Guru – My good friend and fellow market veteran, Jeff Saut, the star trading guru at Raymond James has cautioned clients that the market may be showing some signs of a topping pattern. 

Given Jeff’s amazing record over the decades, even a mild caution should get our attention. More recently, Jeff called the Dow Theory sell signal in early October and the selling climax bottom of Christmas Eve as well as the current rebound. So, we’ll hoist a mild caution flag and watch intently for any other signals. 

Overnight And Overseas – Equity markets in Asia are generally firmer. Tokyo closed with a moderate rally. Markets in Hong Kong, Shanghai and India all closed with solid rallies. 

European markets are rather quiet with lighter than normal trading volumes. As dawn approached Manhattan, London, Paris and Frankfurt are trading fractionally higher. 

Among other assets, Bitcoin has extended its rally, trading back above $4000. Gold is fractionally higher, while the crude rally may be stalling with WTI trading around $56. The euro is flat against the dollar and yield looks unchanged. 

Consensus – The presumed focus should be the FOMC Minutes at 2:00. They will be scoured to look for any hints about what specifically caused the Fed to take that u-turn to “patient”. My guess is that any specificity will have been laundered out. 

The wild card remains any comments on the trade talks and tariffs. Yesterday’s action was a bit beclouded by rumors of impending tariffs on European autos. 

Stick with the drill – stay wary, alert and very, very nimble.

***KWN has now released the powerful audio interview with Andrew Maguire CLICK HERE OR ON THE IMAGE BELOW.

***Also just released: Bill Fleckenstein – Right Now Is The Best Chance To See Gold Break Above $1,350-$1,400 CLICK HERE TO READ.

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