Weekend / Monday August 29, 2016
Dow Transports
This marks the tenth week from the low of June 27. We have remarked that the market has been moving in a ten week cycle. The high of this cycle clearly occurred in early July. The Transports have been moving sideways to down since. There is a pattern of lower highs. We now await the end of this week and month to see if the Transports take out 7704 which would reverse the daily trend to down.
150 Day Indicator
Notice the similar pattern to the Transports in the number of stocks over their 150 day MA.
We expect lower prices into the seasonally low time period of October. Stocks have peaked during the normal seasonal high of August.
Bonds Five Year Yield
ever mind what the FED is saying, look at what the market is doing. Last week we suggested the five year yield would be of predictive value.
Sure enough the five year yield is climbing higher.
TLT 20 Year Bonds
Like the Transports, TLT has moved up from a June low and then sideways. Lower bond prices are likely ahead.
Composite Chart of Silver, Miners, Gold
Hmm this is an interesting composite chart I constructed including from the top silver, mining stocks and gold. Clearly this sector is rolling over to the downside.
We mentioned in our last two weekend posts it was not the time to be entering the PM sector.
Energy
XLE energy stocks at top, then crude oil, with XES energy service at bottom. XLE has moved up with the price.
XES is stalled with the sector having to cut prices to keep working and hold the workers jobs. Here price looks headed to $55.The risk reward though was at 39 and then 41.
So be careful jumping on board here.
Bottom Line
We look for lower stock prices into the seasonally weak fall time period. Interest rates are slowly rising. Gold and silver are correcting. Energy prices are still rising.
Social Mood
Update from Iowa Electronic Markets
This graph represents real money bets on the outcome of the Presidential Election. Hillary is so far ahead as we noted last week
It is difficult to imagine Trump turning this around.
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