Weekend March 23 2013
Here is an explanation for the out of season rise in natural gas prices. There are 40% fewer rigs searching for gas, power plants are switching to gas, as are big trucks.
As the Aussie and Canadian Dollars gain ground, here is an article celebratingUS Dollar Strength, doubling down on the buck. It's a little too late as Tanya Tucker would say.
We are still bullish on energy as we show today, so Is Boone Pickens.
Recall that a 2 point rise in SS taxes hit Wal mart sales hard this year, brace for health premium rate shock as Obamacare kicks in.
When I glanced at the gold quote, down $9.10 on the opening friday, I braced for a 50 cent drop in GDXJ, but GDXJ at least initially was actually up two cents. Now there is a clue as to what is happening. A few weeks back GDXJ would have tumbled as investors fled fearing ever lower prices. Now buying is coming in on the pullbacks. This is re enforced with higher oil prices and a firming Canadian and Aussie Dollar, both commodity economies. let's look.
The US Dollar
In the main panel, the US Dollar closed under its 8 and 13 day MAs just as a bullish article appeared in Market Watch. At top the Aussie Dollar rose above its 50 day MA. At bottom MACD sags.
FXC Canadian Dollar FXA Aussie Dollar
As FXC peaked on the two hour chart I put 50 share orders in at 96.91, 96.81, and 96.61, all were filled earlier this week. I am thinking FXC for the time being would be an excellent place to park some serious money. As noted earlier, a four dollar rise in two months, returning to 101 would be
4 x 6 - 24% annualized a four point rise in two month would be a 6x factor ton a year basis.
Art Hill and John Murphy continue their contrary indicator status running an article on how to take advantage of a strong US dollar, what happened to those guys?
Crude Oil and BP'
Crude oil spiked 1.46% Friday. As I noted in my newspaper column last week. the price of oil has a lot more to do with the value of the US Dollar than actual oil demand. MACD curls up. And yes the rally in the Canadian Dollar above and this rally in oil are related.
GDXJ
This is the best performance in On Balance Volume since the decline began last September. It is important to scan all the charts from the FXC at top to crude to GDXJ to get a 'feel' for what is slowly happening in the markets. A shift is taking place.
Gold Priced in Euros
The literal expropriation of fiat money bank accounts in Cyprus may have some thnking of alternatives for a store of wealth. The weekly chart of gold priced in euros suggests that we may be seeing an end in sight to the correction dating from teh peak in fall of 2011.
NYSE Advance Decline Volume Line
One would think that reaching the previous all time high for the A/D Volume would be a cautionary warning to investors. But herd psychology does not work like that, Jim Cramer was shouting why one needs to be in the market now on Friday Morning. We have consistently warned of the forth coming top, and here is it. Oh sure this can go on for several more months, and I suspect SPX 1600 is in the cards for a new all time high. Bullish percents for 150a nd 200 day MAs are at 89%. This means there are not many stocks left to join the party. No doubt quantitative programs are searching for them, all our commodity picks wold fall in that category as out of favor stocks which have yet to participate.
Value Line Geometric
Wave five is still fifteen points short of equalling Wave one. Stocks seasonally run out of steam about tax time which is a mere three weeks away. That would be enough time to tack on another 15 points so five equals one equals 35 points total. Just an observation not a prediction.
For now stocks are still inching up, the shift to commodity stocks appears underway, buoyed by Australian and Canadian currencies slowly rising.
Socionomics
Skyscraper Theory Lives On
A deal is in the works to turn the Empire State Building into the second largest IPO ever for a Real Estate investment Trust. Such a deal would befit the topping of the market at its five year anniversary from the last top in 2008. The skyscraper theory holds that tall buildings are planned amid positive social mood. Often this results as in the case of the Empire State, in the building openning amid a downtrun in real estate. That is precisely what happened when the Empire State openned in the early 1930s. Market tops generate inclusionary feelings. which will help as there are 3,300 shareholders in the present Empire Ownership structure.
Rumor Control here at TMP is also picking up signs of an overheated oil patch. We hear of motels being flipped for higher seven figure numbers in small towns which could never support such fantasies in ordinary times. This would be in keeping with the final rocket launch of oil prices we expect.
Trends
W Motors is moving to Qatar to produce the Lykan Hypersport at $3.4 M a copy. On this go round of higher oil prices the Arab world has at least attempted to diversify its economy though I suspect many Dubai office towers are only partially rented. I would take this as more of a statement, we have arriaved as a country that can produce cars. It also tells us a lot about the mentality of what consitutes a car. This is no entry level Tata for the masses in Bangladesh or China.
Production on Land Rovers will begin there in 2017, at least that is the plan.
Student Debt
Every Boom Town has a Shanty Town
Here is a look at RV Parks springing up in the Eagle Ford Shale area. Other articles continue the drumbeat that expansion is now a permanent feature. This of course is rarely the case but nearly always a top of the market prediction in any boom.
Thanks for reading The Market Perspective
|
The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance ands no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or charts. |
Comments