The Market Perspective

Banks Are an Early Warning Indicator

12/5/2023

The trouble always starts with the banks, every single bank on this list is down for the day, notice the dros are about  2% +,  I suspect the market has topped.

HEdge vx SPX

Monday Dec 4 2023

Hedge is an bear fund which advances as SPX falls and falls as SPX advances. The arrows show a nea r perfect inverse  correlation. With the SPX making another two year high

2023 -2021-2019 we need to be on the alert for a reversal in Hedge.

464 NASD Stocks below $1

Monday  12/4/2023

See article on  last  page of today's WSJ. There are 3,501 stocks on the NASD. 464 have fallen below  $1, another sentence cites 557. In early 2021 there were only a dozen.

 

First this demonstrates the kind of blow off  speculation which occurs at a top. Our previous  post  addressed the over weighting of seven stocks across multiple idexes.  It  speaks volumes that the average could be this high with hundreds of  stocks in the index worth nothing, more or less.

Second this is evidence the  bear market does exist but it is progressing across different sectors.

 

Stocks trading for less than $1 are de-listed. So the solution is a reverse split. If you own ten shares worth $1, after the reverse you own one share worth ten dollars. GE had to do this after being kicked out of the INDU. It does nothing to solve the real problem, lack of value but keeps the shares on the NASD.

The Mag Seven

12/3/23

Apple, MSFT, Alphabet / Google, Amazon, Meta / FB,Tesla, Nvidia

 

S & P is up 19% this year but those seven accounted for  165 points of that the other  493 only  contributed 3 points, this is a heavily weighted rally and will end

when they turn down

 

 

Two Year Anniversary

12/2/2023

We are at another two year anniversary of market highs. This should last until  Jan 2024 just at 1972-73 did, then a powerful third wave down begins

All You Can Eat Backfires

Weekend 12/2/2023

Whoops

 

Its generosity backfired because the chain underestimated the number of diners hunting for dining deals amid a spate of rising menu prices.

They anticipated the promotion would give them a 20% boost in traffic. Instead, they got a 40% boost.

best Rally Since 2022

12/1/2023

Best Rally Since 2022

 

China has a difficult economic problem. I don’t think it will cause China to invade Taiwan.

President Joe Biden after meeting with President Xi

 

As a matter of fact, just the opposite is far more likely.  This column has detailed the difficulties of Chinese property developers. Sales continue to slow and debt payments have been missed. World economies were never worse than in the 1930s. Still, Japan  invaded China in  1931. Hitler came to power at the dead low of the Depression in 1932 but launched a successful offensive in 1936. When times are bad (think Putin’s foray into Ukraine) nothing diverts attention like a war.  The Chinese government \is no doubt reading the President’s mindset.

The SPX has almost matched the July high of 4,584.  It now stands just below that at 4,554.  The big rally from late October has carried momentum indicators like Relative Strength to match  its same high from July. This is to say the major averages are quite overbought on the daily charts. But recall the SPX is weighted for what is now termed the Magnificent Seven, the tech favorites which have carried the SPX to match the July high. The Equal Weight SPC where all stocks count the same is much lower than its July high.  July saw 6,300 and now we have  6,047. This is more in keeping with our idea that this second wave from October of 2022 is over done

This rising tide has lifted many boats and broadened the advance. Real estate XLRE and Financial XLF have easily cleared their 200 day moving averages.  Industrials XLI and Materials XLB have also joined the parade posting solid rallies.

Cuts by the Saudis and Russia one million barrels per day have been met with a yawn in the crude oil market.   The October high of  90 is now trading at  $76.02.  Gasoline futures peaked in  September over  $2.50. Now it trades at $2.17.  I noticed pollster Daniel Schoen  reporting the public is not taken with Bidenomics. If you have dined out for lunch lately you can see why.  The ten-dollar lunch is disappearing.

The three moth Treasury bill has fallen to 5.45% and still represents great value. The ten-year note trades a full point lower at 4.265%.  This represents a great value and can be rolled every ninety days.

For now the stock market looks extended.  Park you funds  in Treasury Bills.

TLT still Topping

11/2/2023

TLT is stil topping and I still expect a pullback, note PMO and RSI both extended.

Two Years of No Progress

11/28/2023

 

We are coming into the 2yuear anniverwary of the all time INDU high, and the market is bumpingup against that trendline

 

It appears the ABC form of wave two of five is at or near complete

December is usually an up month for the markets but this chart does not make that argument. It argues for upside  pattern completion

TLT Long dated bonds

the five waves up are clear, my guess is that TLT corrects to 86-87 before resuming an advance

Turning Point

1/25/2023