Weekend April 30, 2016
Economic situtation will end in tears say GS former President
Of Two Minds on the Coming Banquet of Consequences
He makes the point that Central Banks have only done more of the same that led to 2008-09
Ten Week or 2.5 Month Cycle
The last low for the ten week cycle was Feb 11. Ten weeks later the top came in right on schedule April 19. Note the previous high in November 10
weeks prior to the Feb 11 low. If this continues the next cycle low would occur the last week of June. While the DJIA regained its high other indices did not.
The weekly CCI at bottom reflects this very well.
Transports
Bell weather Transports dropped right on schedule in the tenth week as well.
SOX Index of Semiconductors, another bell weather for the tech sector
August to November low to high in ten weeks
November to February, high to low in ten weeks
February to April 19 low to high in ten weeks.
This is an early warning for the tech sector and down on the week, recall Apple is not down 20 % and in bear territory.
Apple
The weekly chart shows just how precarious Apple is now. It is just above its 200 week MA and right at price support of 92.5. Not the big exodus from Apple this past week.
DOG An inverse fund
The correction has concluded, the advance is under way.
Meanwhile fund managers pile into the few remaining tech stocks still advancing, like FB AMZN and PCLN for the simple reason that the funds are buying them. The volatility ETF VXX is up sharply and the tech index XLK is headed down fast.
Bottom Line here stocks are rolling over for another ten week drop into the last week of June. Taking out the February 11 low will be quite a negative if it happens in this cycle.
Energy
Natural Gas had a nice up day friday.
Recall our theme in the last weekend update commodity prices were moving up. Here is more evidence.
XES Energy Service
the fifth waves we saw last weekend are now more extended. It is late in the game to be piling into the energy sector or gold and silver now. Yes they have further to run but are extended now.
Gold
the MACD has corrected on gold. But the weak dollar is clearly aided the gold advance. This is not what I would term a high percentage gain situation, ie buying gold now.
The bottom line in gold and energy is that metals especially tend to spike at the end of moves. that is when social mood is strongest. I would wait for a pullback to start new positions in these markets now.
Social Mood
Both parts I and II of my latest price trends pop culture pop culture are here
https://itunes.apple.com/us/podcast/pop-trends-price-culture-podcast/id966298261
Politicians in the US have used negative mood to appeal to the worst of human emotions. The better idea would be to evaluate what emerging powers are seeking to do.Our school just hired two Asian accounting professors. Looking over other university accounting departments I see more and more Asian names. Nothing wrong with that but it suggests other ethnicities are lowing the academic race. We can construct STEM Science Technology Engineering Math buildings all we want but that does not in itself stimulate the desire to succeed in those fields by American students. China is serious about becoming a world power. The yuan is being incorporated into more currency indexes. The Asian Infrastructure Investment Bank
is a clear challenge to the US Dollar as the world reserve currency. China continues its move into the South China Sea with a growing naval force. Yet no one here seems to take that threat seriously.
dennislelam@gmail.com
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