Be Careful What You Wish For

News of Salesforce.com, which reports earnings tonight, replacing Exxon Mobil in the Dow Jones Industrial Average (alongside AMGN HON replacing PFE RTX) seems like an awfully brazen move in light of the multi-quarter explosion in tech we have seen, heretofore. In addition, XOM has been a long-time poster child for the underwhelming action in energy and most energy-related stocks for years now. 

However, if you have been around markets long enough, then you know the additions and subtractions to the Dow tend to have less than desired effects. Did you know, for example, that Bank of America was added to the Dow in early-2008, just as the financial crisis was kicking into gear and BAC was headed towards the penny sheets but-for extraordinary Fed/government backstops? 

In this case, we can view the changes as a potential bottom sign for XOM, topping sign for CRM, or both. At a minimum, we should view these moves with a skeptical eye, if history teaches us anything about kicking mega cap names when they are down versus celebrating high-fliers after they have rapidly appreciated for years on end. 

Elsewhere, the precious metals and miners continue their correction of recent exhilarating gains. I remain bullish long-term on the group but have been resisting the urge to step back into them too quickly on the long side. You can see how the excitement from newfound gold bugs has abated noticeably the last few sessions--That is precisely how a bull market shakeout is supposed to go. Indeed, it is quite healthy to rest and reset sentiment. 

Now, if only we could get that in the Nasdaq...