Weekend Dec 27 2014
Here is a ranking of major crude exporters, US not included, yet
Goldman and Bloomberg see $85 by end of 2015
David Tepper - does 2015 Resember 1999?
Did we Celebrate the last Christmas in America? As always Of Two Minds states this is unsustainable. Recall our post of Bob Prechter comparing zero interest rates with free jaguars, eventually no one wants jaguars or free credit, same thing here, the diminishing return on zero rates is here now.
Zero Hedge - The Unsustainable Can End Abruptly this article stil believes energy is going to be hard to find and expensive, which is not the case today. I would say the demographic conundrum is the problem here, the world does not have enough people coming up to sustain the retirement plans, buy the stocks and houses owned by those retiring. The markets recently collapsed, twice, but were brought back from the cliff, how long can that go on?
This WSJ Best Photos of 2014 works if you subscribe I made it to March and realized just what a tough time people around the world are having from the imprisoned in Cuba and Venezuela to the Syrian refugees to North Africa to, Hong Kong.
Brett Stephens wrote a great column on American Exceptionalism. the police don't hustle you for bribes and donations in this country, but it is common elsewhere. The automobile,
airplane, and computer all were invented here, not in some socialist nirvana.
We are even re-inventing the typewriter, meet the hmingwrite.
Crude Oil
$70 - 75 on a rebound looks realistic here. Then what? I am guessing another fall to a lower level before this is all done. This market is famous for high and low spikes that Can be caused but not sustained by a few participants.
Let me be clear eamine the ranking of the world exporters in our first link.No one exporter dominates the market in such a way that they can perpetuate lower prices indefinitely. Most of the exporters need higher prices than this to stay in business. So eventual spike lower is liable to be short term. That will be a great buying opportunity when it comes.
NYSE Index and Summation Index
the NYSE summation Index is in black and is lower than earlier this year. Does it matter any more, if the FED is always pumping money in the market, what will it take to knock it down?
We have detailed the 40th anniversary of the 1974 Dow low of 577,now celebrating 18,000The traditional October low came in right on schedule and was reversed. this all has the look of a distribution pattern. The Dow and SPX both hit slight new highs extending their gains to year end.
TLT
Gary Shilling still likes Treasuries. So do I. Here is the chance to add to holdings on a pullbck.
Banks
the anticipation of higher interest rates has the XLF on a tear.
Cullen Frost Bank
Here is another example of an energy play that was sold off. CFR may be the best maanged bank in the state, it is my bank. It pays a 3% dividend. Dick Evans CEO has stated that energy loans are a small, less than 20% segment of the loan portfolio. Worth watching.
US Dollar
The US Dollar continues its bull market proving dollar bears wrong. This is also fueling deflation, the price of things in dollars falls, oil included. YOu have to admire the bravura of Russia, it simply declared the Panic on the Ruble ended, period.
Oil priced in Gold
Do not get too caught up in the hysteria over low oil prices. It is nearly as cheap priced in gold as it was at the very depth of the 2009 recession. Stand by the next three months looking for bargains.
Stock of the Year
The WSJ named UA the stock of the year, what was I thinking, all you had to do was walk thru Academy Sporting goods here in town. But the interesting thing, notice virtually all the progress to the upside was recorded in just two weekly periods, FEbruary and August, If you were not holding then yo missed much of the move.
The Bottom Line
At this point it appears the markets want to move higher. If this is a top we will need to see some quick evidence of deterioration. So far it is just not there, too amny basic ETFs like Staples and Banks are moving to the upside.
The week ahead is once again interrupted by the New Year Holiday. It will be another week before we really have reliable readings.
Social Mood
Social Mood remains positive on the US stock market. Elsewhere it is deteriorating. NY Police turned their backs on the Mayor at the Police funeral this weekend. This is yet another example of how our concept of The New Civil War exists in fractals. Even a heavily One Party City can fracture.
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