Wednesday March 26. 2014
Pages two and three of the WSJ regularly feature numerous ads for expensive mechanical watches, ie, they are the old gear driven design that dates back two hundred years. The WSJ has successfully exploited the surge in luxury purchases with watch ads, a multi-page re invention of Distinctive Properties now re labeled Mansions on Friday, luxury car ads on Wednesday, and a full blown Town and Country type format Monthly Magazine that spans the world rather than just the Hamptons.
Like APPL, SBUX, IBM and SBUX,such stocks are early warning indicators. Let's start with RL.
Ralph Lauren
RL is an amazing company started by a fellow from Brooklyn. It has certainly profited from the post 2009 recovery. But the weekly chart is breaking down. Longer term support is just above 150. A challenge is coming up for that level. The 13 EMA has crossed the 34 week EMA, a reliable sign of weakness. Contrast that with the action at the end of 2012 when RL was gathering strength.
BID Sootheby's
Just as stocks are bid, collectibles are also bid and Sootheby's is a prime example of auction strength. It has been out performing RL but now looks to be at least correcting. A weekly close below 40 will turn the trend down.
Dow Industrials
But the DOW remains in an uptrend. Can OBV at bottom do any more than this?
Dow Daily
A tthis point all we can do is wait. Will OBV turn up, will the Dow challenge the December high? The Dow looks like it wants to at least challenge the downtrend line from the December high.
Thirty Year Yield
While the five year yield is increasing, the long end looks to be decreasing. Here yields are falling on the thirty year bond. This suggests the stock market may be weakening. If the market moves back to bonds, the money will empty from the stock market. Too soon to say yet as we enter the typical end of November to May rally, after May go away time, with top timing due around tax time April 15.
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