Weekend March 19, 2017
We have a link to Chapter One of Bob Prechter's Socionomic Theory of Finance in what we made the current lead post for the blog.
We urge you to read it and post a comment. We are not looking for opinions about any one person but your reaction to
Bob's take on causality and the markets.
Dow Jones Global Index
Global Indices like this are recording new highs increasing optimism.
Transports put in one new high since December and have corrected again. Fresh highs need to be seen here to
re enforce the buy signal via Dow Theory.
Ten Year Yield
The media made a big deal about the drop in yields on the Wednesday FED announcement. But Yields remain in an uptrend. And even the FED
is looking to raise twice more this year.
Energy Shares Bullish Percent
Energy shares have worked off much of their over bought status as oil prices have fallen.
Crude Oil and XLE Energy Shares
XLE the ETF for Energy shares is in purple. The red black lines are the price of crude oil.
XLE was telling us to expect a drop in the oil price, and sure enough, oil prices finally fell in a catch up motion.
Is this the bottom? We probably need more evidence this week before pronouncing this done.
RSI at top land CCI at bottom both look to be bottoming. An upturn in the 13 week EMA in blue would be encouraging.
Silver and the US Dollar
The inverse correlation between silver, red and black, and the US Dollar, is clear. It appears silver has made a higher low, and is rising
against a falling dollar.
The Stock Market is still on a tear with world markets at new highs. Again let's watch the Transports which need to break out again.
The weaker dollar may help oil and the precious metals. Both seem to be groping for a bottom now.
Unhinged Outrage Over Trump
I happened to pick up a a Vanity Fair magazine in a waiting room yesterday. The Editor, as in most magazines, has a lead column. He was completely unhinged by Trump.
Here is the image from heir website, Trump and Advisors are all adorned in clown make-up. In the by line these folks are not just dangerous, but are going to literally destroy the Republic.
And there is more from diplomatic disaster to literal knife fights.
Michael Gerson proclaims "Republicans Appear to be Defining Down Lunacy.'
Henry McLeish, a former first minister of Scotland, opines that "there is an explosion of anger in that British PM Theresa May has invited Trump to visit England. The quess will be embarrassed.(How does Henry know this, did he ask the Queen?) The Speaker of the House is unwilling to see teh president address both Houses of Parliament. Over a million people have signed a petition urging Trump not to come. And then he tips us off to his total lack of understanding as to what the EU really is . The EU is a safe, supportive, secure, and prosperous place for Britain. Uhm, isn't the EU home to the PIGS, Portugal, Italy, Greece, Spain, all economic train wrecks that refused to abide by the debt to GDP ratios established for each. Weren't all four in need of bailouts just a while back?
And then there is Chuck Schumer saying the Democrats are united on offense while the Republicans are awry on defense; he vows to oppose everything the Republicans put forth.
Our point is that social mood is on a tear, and in the negative direction. With stock markets in vertical up position, how long before such negative mood infects financial markets as it did in 1973-74?
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