Weekend April 2, 2016
DJIA versus Transports
The black line is the Transports. Transports closed lower a non confirmation of the DJIA going to a new high.
The DJIA is like a tightrope walker or trapeze act without a net. The stocks I have been following all tanked today but the DJIA made a new high.
This is classic divergence.
the OHLC bars are the Dow Industirals, the black line is the inverse DOG fund. both should be completing patterns now.
Last weekend we noted that prices of collectible autos are finally falling. We also noted the bad bets the casino industry has made ongoing long Macau.
This is an international ETF for luxury goods. Notice the dome shaped topping formation.
Soothebys BIG
We have long noted the relationship between BID and the overall market. Here BID topped about the same time
as the Dow Transports in late 2014. It has already collapsed 50%. Indeed its counter trend rally is likely ending now.
This collapse reflects the lack of interest in all things deemed collectible that BID deals in. And that extends to stock prices evidenced by
the decline of the BID brand value.
Nike A convergence of Moving Averages
We often note that Moving Averages MAs converge prior to t trend change. That is occurring now in Nike. Nike
is all about sports and enthusiasm for sports appears to be waning.
NYSE A/D Line
The New York Stock Exchange Index is in purple. THe NYSE A/D line has returned to its highs on this counter trend bounce.
Again this should be ending now.
DJIA
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The rallies and declines take about 2.5 months from peak to trough or vice versa. Counting from the January 20 low we are at the 2.5 month extreme this next week. Time for a downturn.
Junk bonds JNK
JNK topped before the Dow Transports. JNK is likely ending a its own counter trend rally.
Energy
Crude Oil has bounced into a fourth wave correction. This is liable to continue for some time. Look for crude to make a higher low in coming weeks, above the sub $27 level.
The counter trend rally is Exxon has ended as well. XES the Energy Service ETF rallied form 13 to 18 and it too is now falling.
Central Fund CEF Gold and Silver
Gold had its best first quarter in many years. Look for a pull back into mid to the end of April.
Bottom Line
Stocks should be completing counter trend rallies now. Look for lower prices ahead. Again a few large stocks have
created a mirage of a broad rally when in fact the broad market is in decline with only a counter trend rally to show for all this.
Once the selling takes hold, the big indexes will likely play catch up with a hard fall.
We are entering a seasonally weak period for the market with mid April being especially dangerous.
Energy has resumed its downtrend with some service stocks really hard hit.
Banks are in terrible shape, see the last weekend update which portends bad news all around.
Social Mood
Donald Trump appears to be finally hitting some resistance. The Tuesday Wisconsin primary may mean neither he nor Cruz
can win a first ballot in Cleveland. Such negative sentiment is typical of bear markets.
Here in San Antonio the move is on to
-replace the 2A minor league baseball team with Austin's 3A team or demand a major league team
and minor league soccer does not cut it we need a major league soccer team
and of course both would require brand new large stadiums. This is typical top of the market skyscraper themed thinking.We can only hope
it does not happen.
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