Weekend Feb 27 2016
Of Two Minds Explains a Teachable Moment
NYSE A/D Weekly
This is probably enough of a relief rally to allow stocks to resume a downtrend in the near future. Clearly the trend is down with the 13 EMA under the 34.
Industrials
Year 2015 looks like topping distribution. With all the indexes turning over the new trend is down, just a matter of how fast it all happens.
Daily Dow
CCI in the lower panel is over done, there is resistance at the 16750 area where the Dow sod off in December, and the market turned down Friday afternoon after several attempts to
move higher. The relief rally has re traced about half of the decline and if it is going to fail, it should do so just as the 13 day EMA attempts to cross the 34 which is where the EMAs are now.
DOG An inverse fund to the DJIA
DOG is testing the December breakout level of 23 and found some support there Friday. The EMAs are reversed from the DOW and Monday Tuesday
will tell if they bounce here to the upside.
Crude Oil
I have maintained crude oil was making a bottom here and it appears the low is finally in. WTIC is testing the 50 day MA and the weekly MACD is slowly turning up.
Oil and stocks have been linked, Oil and stocks have moved down together. Will they now decouple?
Transports
The Transports have hit the target area of 7450. Certainly the MACD looks toppy.
Our conclusion is that stocks will roll over this week led by the Transports. It will be interesting to see if oil can rally while stocks decline but that looks to be the case.
Then again oil and stocks cold both rally a bit more this week and then pull back into April.
CHK, CLF, MSB are all starting to look better. Natural Gas needs a rally and close over 2.05.
Gold looks to be in a fourth wave and perhaps a fifth will follow to the upside.As such it has been the first commodity to reverse and head up kicking off 2016 as a year of lows in commodity prices.
Cullen Frost CFR A Teachable Moment in Socionomics
CFR has been sold due to 16% of the loan portfolio being energy related. And so CFR raised its loan loss reserve from $6 M to $34 M on for the 16% energy loans in the $11 B loan file.
Dick Evans CEO has stated they do not lend to energy novices their clients have been in the ups and down of the energy business for decades. But ignoring all that Wall Street literally drove CFR to book value. Did I mention the bank is quite profitable and pays a 5.4&% dividend? We know that the masses engage in herding and that the most intense mood is displayed near the end of a move whether up or down. Crude oil bottomed in January and February. And so on February 10 S & P downgraded CFR from A to A-. Both the common and preferred stock have been climbing ever since.CFR common jumped about $4 in the last two days. A warning from S & P at $70+ might have been helpful. Instead it was more a buy than sell signal.
Yours truly is featured in a best of repeat podcast. This week Pop Trends examines the Apple FBI controversy, Cuba, and fractal research.
Alan Hall discusses the rise of authority in the US and world.
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