The Market Perspective

Wave Progression

Weekend Sept 26, 2021

The top in mid August should be the end of the entire move up from March 2009. The first move down since bottoming Aug 20 is Wave One, and the move up to Sept is Wave Two. The move down is Wave One of the larger Third Wave now developing. teh move up would be Two of Three. So we should be setting up for the start of the ghird of the Third Wave down the largest in the sequence.

S & P Small Cap

A head and shoulders pattern is developing, left shoulder mid August, head early Sept, right shoulder forming now, Again this is a precursor to lower prices.

Karl Rove noted support for Biden among independents is down to 37% and still falling. That groups will decide the outcome of the mid terms.

That low approval rating is consistent with the developing negative mood.

whole Lotta Shakin Goin On

Friday Sept 24, 2021

The best the Transports could do was to rally to the downtrend line form the previous high,ote PMO is peaking.

NYSE

NYSE did a little better but again right at the 200 bar MA.

Looks like the MAs are converging, this happens prior to a change in trend.

Bullish Percent NYSE

Despite the 550 point rally, the BP did not budge. This means a large percentage of stocks are not drawing any new ownership at all.

The High Tech NASD is usually the last to fall and the presence of those stocks in other indexes makes it looks like the damage is minor.

 

Not So Fast

Thursday Sept 23, 2021

All Electric Cars by 2030

Not So Fast

Columnists are speculating we are now witnessing the Last Oil and Gas Rally (think of the movie, The Last Picture Show). To that I would say, not so fast.

The big event of this past week in the Permian Basin was the sale by Shell to Conoco. Conoco COP bought Shell’s mineral property for a tidy $9.5 Billion.   That would be some 225,000 acres producing 200,000 bpd. Check the COP website for a Mission Statement we can actually understand, succinct and to the point.

We are challenged with an important job to safely find and deliver energy to the world.

 

And I would remind that COP is the merger of Texas based Conoco and Oklahoma based Phillips 66, gee oil companies located in oil country. Shell plans to a shareholder distribution and I gather COP plans to produce energy, see above. Wall Street seems to like the ide as COP rose from $56 to $63.81.  The point here is that Houston based COP sees a continued future for fossil fuels.

Electric cars compromise less than 3% of all US vehicle sales. And walk through any parking lot and you see hulking 2.5 ton pickups, yes I know Ford already has an electric F 150 prototype.

But here are my concerns.

1. Toyota told the Japanese government their electric grid will not sustain all electric cars by 2030. The government ignored the advice. Here in Texas a mere four inches of snow shut down our power grid. I doubt we will be up and running grid wise for all electric cars by 2030, unless you can do without home air conditioning.
2. Hurricane Ida made it clear that driving an electric vehicle in a storm-ravaged state would be near impossible. Electrics would be pressed to ford deep water. And with the power grid still down, there is no way to re-charge the vehicle.
3. And electric vehicles are expensive to purchase. Great to talk about them but another thing to find your next vehicle will cost $50,000.
4. And there was another big energy saver this past 1.5 years that had nothing to do with electric cars-what was it? And it is still working to reduce the carbon footprint judging by the vehicle traffic. And that would be on-line meetings, no gasoline required. Covid finally made on-line visits a reality. Most small meetings now take place on-line. This saves travel time and gasoline. Yet I have ye to hear Team Biden acknowledge this simple fact of life.
5. The Dutch shut down their only natural gas field and are now importing from Texas and their good buddies in Russia. Ditto for Asia. Natural gas is still a very clean and plentiful fuel which works when the sun does not shine.

Stocks have staged a strong rally back but the tops of the last few months remain in place.   Caution is advised as Xi and the Democrats attempt to turn back to massive central control.

Divergence continues Transports not Cofirming

Thursday Sept 23, 2021

The black line is the Transport Index. While Industrials made a new high yesterday, Transports did not, closing negative on the day. This continues the Dow Theory non confirmation.

At bottom the PMO is topping on the  30 minute chart. Snap back rallies in a bear market can be impressive, let's see what happens next.

Fourth Wave Fally?

Thursday Sept 22 2021

I am suggesting another leg down to end this larger wave one.  It relieves the over sold condition.

Incredibly Weak Follow Thru From Monday

Tuesday Sept  21, 2021

I used the Roadrunner and Coyote analogy to describe the market a few days ag. The broad market was selling off as shown by the bullish percent indicator.

I suggested the lack of breadth indicated a handful of stocks were holding the market up and when they dropped, the coyote would be off the cliff headed for a real fall. That is beginning to happen now, look

 

Here is a perfect example.  The SPX is at top, still quite high and over extended. The bullish percent is falling thru 50% the last few days, a true bear market indicator. And PMO is headed down hard. The potential for much lower prices is far greater than the majority imagines.

After

 

the deaths of 13 service men and women

the hasty exit in Afghanistan without informing our allies

15,000 illegals under a  bridge in Del Rio

rejection by CDC of his booster plan

France recalls US and Aussie ambassadors but leaves one in the UK, forget being rational  this is France

Biden announces America is back at the UN, he is totally delusional

Triple bottoms rarely hold, and this one will fall in coming days.

Monday Was a 90% Down Day

Tuesday Sept 21 2021

 

Monday saw over 2,000 stocks close down for the day. that makes it a  90% down day where 90% of stocks closed down. Akin to Elliott Wave

Richard Russell observed that such a day is usually followed by a brief one to to day bounce which is just what we are seeing today.

A theme of this weblog is that we are in a New Civil War. This week Ken Burns agreed.

While murders are up significantly in big inner cities it is nothing like the carnage of the  600,000 + who died in the actual Civil War or WW II.

I would agree that there is less and  less middle ground.

Wave Three is Underway

Tuesday Sept 21, 2021

this is an updated chart, we identified the five down in Wave One, then we added Wave Two Up.

The big drop yesterday is the start of Wave three.. The move up that started late Monday is probably wave 2 of 3 so much larger drops lie ahead.

We have noted that negative social mood around the world did not support all time high stock prices. We are seeing that now.

Big picture is that this move down has not ended short term.It will be followed by a move up into early October. Then the greatest decline will occur into the end of October. Expect a brief rally and then a final low that could last into early December.

VIX

we recently mentioned following the VIX, notice it has taken off, expect much higher values by the end of the year.

Reversal Late in the Day

Monday Sept  20 2021

Stocks finally fell near  1,000 points on the DJIA but rallied late in the day.

I am guessing a bounce tomorrow, this is the hourly chart. But I do think THE TOP is now in place for the rally from March 2009.

Evergrande

Monday Sept 20 2021

 

 

This stock has lost 80% of its value this year.