Thursday Sept 26 2013
Peter Schiff says not to debt ceiling raise, US is going broke. He has even written a book on this theme. Apparenty Wall St sees some sort of deal. The wSJ suggests this morning that we are closer to running out of cash than Treasury thought.
Central Fund is still trading at an over 4% discount to NAV, so much for that physical demand story on gold.
J C Penny dropped 15% yesterday to its lowest price about ten bucks in ten years. With Sears and JCP both on the ropes, it appears lot of shopping malls may be on the verge of losing two imporant anchor tenants.
Advance Decline NYSE
The A/D line for the NYSE is one of the most reliable indcators of market direction. Once it turned down in fall 2007, note the 13 EMA crossover to the 34, the markets headed down. Let's zoom in on the daily chart for a closer look.
NYSE A/D Daily
This looks like a distribution pattern in the advance decline at top. . A triple top is in the making after five years of advance. We have been looking for a November top in stocks. This gives considerable credence to that prediction.
I then aligned the summation index below the advance decline. Notice how it is making lower highs in conjunction with the triple top of the Advance Decline. Taken together this again suggests some kind of forthcoming top.
Ten Year Note Yield
The ten year note yield is likely just correcting its recent sharp advance. It is hard to see how the uncertainty of the debt ceiling will lower rates. Note the MACD looks to be approaching a bottom.
US and Aussie Dollars
The confusion over FED intentions drove the US dollar down in green. The Aussie dollar rallied. This may be a short term situation. While the debt ceiling debate might suggest a move away from the Dollar, in fact rising debt levels everywhere cause a demand for more dollars to pay on that debt. I note Ukraine dollar denominated bonds have bumbled
On Tuesday, a 10-year dollar-denominated government bond hit a yield of about 10.5%, according to Tradeweb, up from 9.64% on Monday. That bond yielded around 7.5% when it was issued in April. Yields rise when prices fall. Yields on Ukrainian debt have moved even higher on short-term bonds—a warning signal that investors are deeply concerned.
WSJ Yesterday
That is a 40% increase in yield from April to now. The world debt crisis is heating up again. Most world debt like this example is denominated in dollars.
Today Dan Henninger suggests Obamacare, with not a single Republican vote, will collaps of its own inefficiency. Below that Karl Rove notes Obama has turned just plain mean. We have predicted increasing negative social mood would mark a coming top in stocks. Such observations confirm that negative mood is growing.
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