Memorial Day Weekend May 25, 2018
The Weekend WSJ notes mood is turning negative for Italy, Spain, Japan, and Venezuela is already a complete loss.
Mood wise we now that de regulation happens at market tops. And so this past week Congress rolled back Dodd Frank regulations.
That is hardly an exact indicator but it is indicative of the loosening of regs that happens at market tops.
Meanwhile my I noted that the cash market for oil in Midland, TX hovered around $60 while the futures were over $70. My conclusion was that oil prices were, well
Sure enough price declined 4% yesterday.
The Dollar remains strong also pressuring oil, copper, gold, and silver.
While the Russell 2000 is strong hitting new highs, and Transpo9rts showed some strength this past week.
NYSE A/D Line
I noticed the last four months we had lows recorded early in the month. This A/D chart suggests stocks may be more due for a setback in line with a corrective low.
Note the throw over at top. the MAs are stretched, and PMO looks toppy in the lower pane.
A 4% drop in one day is significant. Next support is at $62.
I have noticed lots of tv news reports on the high cost of summer driving. Well, gasoline is about to go on sale prices. GASO dropped 2.5%.
And an article in the WSJ suggests Russia and Saudi are no longer curtailing supply. Coupled with more oil than the Permian Basin can export to the coast, lower prices are ahead.
Bottom Line US Stock Market probably headed lower into early June. See following warning.
Mary O'Grady on WSJ Editorial Report noted the Trump steel tariffs could go into effect June 1. If that happens Mexico has retaliation privileges. As she observed, Trump acts as though his opposition cannot do anything. Already mid west farm product exports are being hurt. This is a big issue on the radar screen.
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