Weekend April 16, 2016
Tax Day April 15is as far as possible from election Day November 2, there is a reason for this
Stocks to watch while sentiment grows wildly bullish
Just last night I heard the CEO of Valero speak, Joe Gorder. Needless to say he thought VLO stock was under valued.That is not the conclusion the market reached today.
VLO dropped 3.36%, which is below its 50 day moving average.Joe said the common has a $2.40 dividend for a 3.4% yield, that was last night higher today, and VLO was going to buy shares back.
I understand that buying shares back means one is decreasing the denominator of E/S so E/S rises.But if you sold the shares to begin with, why are you diverting your cash for dividends and then buying the shares you sold back? This makes no sense to me.
Patterson Energy Service
Patterson Energy is the premier energy service firm for Texas projects. So its price is usually a DEW Distant
Early Warning Indicator of something about to change. Five waves up and then a 3% drop, A DEW to be sure.
USO The Oil ETF
A double bottom and then a double top and a 2% drop today. Oh and just below the 125 day MA. Is there a pattern here?
WTIC
Crude Oil is pulling back to test the break out at the 20 day MA. This happens to be at the 40-41 level. This is normal in any market.
AMLP
The ETF for MLPs has also risen above its downtrend line.We have been saying the low in oil would occur in this time period and that appears to have been the case.
Still the overall market has risen about 14% from the February Low, John Murphy has been right, and suggests these two charts to prove it.
NY Advance Decline Daily
We have often remarked that if we only had one chart to rely on this is it. Well, the indicator has broken above
the downtrend line. In addition all three MAs are moving up. It might be that the high is now in place but it would certainly take a violent reversal this next week for that
to be the case. Our stance that the market would turn down in this time period looks to be in question if no outright wrong.
All World Index
The all world index has also turned up. This too suggests that the correction which began in May
of last year has ended.
Transports
Transports which have been the canary in the coal mine since Nov 2014 did not close at a new high and closed
down for the week.
The Bottom Line
I have just finished reading Eric Hadik's report at Insiide Track on the significance of April 19 and it is simply amazing how many events occurred on this date or in this time frame.
The Bottom Line
I have been thinking we are nearing the top of a 20/40 year cycle that would see a top and then lower prices. i have been thinking this would take the form of alternating highs and lows, each breathtaking in speed and range.That has happened the last year and a half. I did not think the markets would re bounce this high. As John Murphy points out most indexes have now broken through resistance and recovered their losses for the Year. We now approach typical seasonal weakness, After May Go Away. Japan was hit b a major earth quake but I we do not seem to have experienced any other major negatives in this time frame thus far.
Crude oil looks to be testing the break out as are energy related stocks. Gold I suspect needs a pullback. That is McClellan's mesage in this update.
Iron ore has soared taking CLF up and holding MSB at current levels.
The downturn in the weekly NYSE Advance Decline Line did herald the big correction to Dow 15,500 or so. But now the market has recovered. It appears to be back on track.
So I will give this another week to see if any signs of a top begin to develop. We are over bought and could easily stil have a pull back or correction into early summer.
Social Mood
Gary Kasparov on Trump's vile New York values.
The amazing thing is that the two leading candidates, HIillary and Donald each have such high negative ratings HIllary would be in trouble but for the astoundingly high negatives for Trump.
Iowa Electronic Markets Have Hillary winning the Presidency
This same market correctly predicted Obama's two wins.
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