The Market Perspective

Gold Shares

Weekend April 30, 2017

Here is a long term chart of the XAU, the bottom was October November 2000.

The last sell signal occurred in 2012. But now the two EMAs are coming together again. The XAU is trading in the vicinity of the  2008 low.

Let's take a closer look.

Weekly XAU

Gold and silver mining shares are quite volatile, which is why money is to be made buying at the lows.

a 641% re tracement from the 16 year low would occur around 68. And of course it could easily go lower. I suspect we will see a good entry point later this summer.

XAU Daily

XAU has posted a third lower high since the August high. Best guess here is  a secondary higher low above the January 2016 low around 40.let's watch the

77.50 and  72 levels, if they go our trading low should occur by early summer.

Central Fund is trading at a negative 7.8% to net asset value. Expect it to move to negative ten percent for a low.

 

Stock Indicators Diverge, Energy at Important Do or Die Support

Weekend April 29, 2017

U.S. stocks ended the month higher, boosted by strong corporate earnings. The S&P 500 now sits about half a percentage point from all-time highs.

WSJ Weekend Edition

Yes but, recall a handful of stocks are driving the markets higher, here is the breadth picture.

Bullish Percent 50 day MA

Here is classic divergence. The SPX at top is hitting new highs. But the percent above their 50 day A is falling. If breadth were confirming the main chart would be hitting new highs.

Transports

Transports pull back from two MAs, and at a lower high than March 1. This is how it begins, with one average failing to confirm the advance of others. Notice the smaller 'bump' in CCI on this rise. It will take a few weeks but I am guessing the MAS will all come together before a real downturn, that should be a couple of months ahead.

Meanwhile the NDX is screaming

Here we go again with the NASD 100 surpassing its  March 2000 high.

NASD 100 Monthly Back to the March  2000 high

 

Market in vertical position, further analysis not possible. How long will the mania last?  this is the result of herding as the hedge fund managers chase the same group of stocks.

This reminds me of Ron White's comment, how long can the airplane fly on one engine?

Answer-All the way to the scene of the crash.

But again, the internals do not support this new high.

NASD Summation Index

If the NASD is at a new high the summation index should be as well, it is not at a new high.Again,divergence among the  indicators.

Interest Rates

I am not sure what is going on with interest rates and bond prices. After the FED hike, interest rates fell and bond prices rose. No opinion here.

Energy

Anadarko APC

John Murphy likes the 13 and 34 bar Exponential   Moving Averages EMA for an indicator. I have been saying  that Anaarko and Apache may be leading indicators of where the energy markets are heading.  And so we have the EMAs threatening to cross lower. And CCI is over sold. Will these indicators go lower still, or is this support?  We shall see.

Apache APA

Yikes APA has experienced a cross over to the downside, the 13 has dipped below the 34. This is quite negative. RSI at top could stay low and MACD at bottom

and not shown signs of reversing yet.  Price wise we are at the last March thru August low 47.5-50, will support hold?  Like any good Saturday morning serial at the movies, this will unfold over the next few weeks.

XES

 

Likewise, XES energy service ETF is coming into potential support at  17. Again these are all valuable indicators and we will update as this unfolds.

 

 

 

 

 

 

 

 

Transports and Industrials Appear to be Topping

Thursday April 27, 201

Despite two 200+ up days in the DJIA, Transports look to be fading at the 50 day MA.

INdustrials

It ain't over here yet but I suspect the Industrials just posted a lower high, failing to exceed the March 1 high. This is unnoticed

in the media gushing over NASD 6,000 which is probably the Fab Five stocks doing well.

I see in this morning WSJ that even Proctor and Gamble is feeling the pinch of reduced consumer spending.

Anadarko and Apache both declined yesterday. I am still thinking they may be bell weathers for the energy sector. So far support at 60 and 50 has held, so far.

Markets Take Off

Tuesday April 25, 2017

The DJIA tacked on another 200+ points this morning, NASD headed for first ever 6,000.

We have our answer, higher highs ahead.

I was listening to the Mike Gallagher radio show driving to campus today. He and other consservative

types were at a White House Briefing yesterday. Despite the drumbeat of negative on Trump in the media, he remarked

how Trump was able to handle complex questions without help from aides. 

This morning CAT and MCD both posting great results.

Markets Surge on French Election Results

Tuesday April 25, 2017

The DJIA jumped 200+_ points after the French elections.

I suggested Anadarko and Apache would tip us one  way or the other in the next couple of weeks. But there was not enough movement in either to

resolve the issue of support just yet.

i did buy two refiners on the open Monday. Happily both ralled.  PBF Energy PBF and Holly HFC are both paying 4.5% dividends at this price and are rallying from

an oversold condition. At DJIA 20,800 that is about the best deal one could expect.

Halliburton HAL

HAL has reported the best earnings since 2014. But you wouldn't know it by the chart!

46-47 ought to offer some support, as one of the giants in energy service this bears watching as well.

 

Markets Rise on French Election

Monday April 24, 2017

This  results suggests mood has completed the correction from the March high. Crude oil in particular is finding support at the $50 level.

We suggested this weekend that the next two weeks would be  important in signalling market direction. The results of  the French election suggest a French President that will work to restore the Euro, the Euro is up in trading already.

This re enforces the idea that it 'ain't over yet.

April 19

Weekend April 23, 2017

The Ides of March

If your life savings are in energy shares this might be a good time to at least place sell stop orders.

I have taken a good bit of criticism for suggesting the stock market topped in 2014. The Transports did top then, dropping thirty percent, and then making a new high. Well, that early warning indicator is flashing a danger signal again.   Transports topped March 1, along with the small cap Russell 2000. Moving averages on both have crossed to the downside.

This column last week April 14, 2017

Julius Caesar was assassinated March 15, 44 BC. That became an important date in the Roman Empire which, unknown at the time, was peaking in its world power.   Our warning last week is was borne out by the markets this week. And the Ides of March continue to be important for our markets today. The dot.com peak occurred in March, 2000, with the NASD at a then record 5,000. The bottom of the markets during the 2008-09 meltdown occurred on March 9, 2009.   The bottom of the oil market occurred a year ago February 11, 2016, just a month shy of mid March.

Last week we noted the increasing weakness in the energy sector. Yesterday, Thursday April 19, 2017, Brent crude dropped 3.33%. West Texas Intermediate WTIC dropped 3.78% that day. These drops erased two weeks of gains.

On April 14 I suggested we closely watch support for Anadarko APC at 60 and Apache APA at 50.   Those supports were breached with the two stocks closing at $59.13 and $49.19.   Both are ‘oversold’ on a daily basis and possibly those levels are a throw over prior to a bottom but the huge on day reversal in the underlying oil price suggests otherwise.  

In the S & P Energy sector only 26.47% of stocks are now in a bullish formation and that indicator hit a new low for this move yesterday.

And as I scan the dozens of charts I keep on stockcharts.com, it is apparent this is a world wide event. China National Offshore oil CEO dropped 1.8% yesterday. Conoco COP and Chevron CVX has similar declines.

Two strong performers in the Eagle Ford Permian Basin have also come off significant highs. EOG from 108 in December to 93 yesterday. Diamondback FANG (ya’ gotta love that West Texas stock symbol!) has trended sideways since December but dropped 2.5% yesterday.

The Energy Service ETF XES is down from $24.50 last December to $18.44 losing a fourth of its value in five months.

Most investing sites interpret such news incorrectly. They believe lower energy prices help the economy. Yet high energy prices of 2014 are a signal that the economy can actually afford higher oil prices. Indeed those sites today suggest that energy is leading the overall stock market lower.

Both the Dow Industrials and the Transports peaked March 1 along with the Russell 2000. Since then all exhibit the stair step downward pattern.

Copper prices are so important the metal is referred to as Dr. Copper in financial circles. Copper peaked in February and dropped 1.41% yesterday.  The Commodity Research Bureau Index dropped 1.41% yesterday.

With all this action on April 19, is that somehow a significant date in history?

• The American Revolution began with the Battles of Lexington and Concord on April 19, 1775.
• The Baltimore Riot of 1861 occurred April 109 with attacks on US Army Troops.
• On that date in 1956 Grace Kelly marries Prince Rainier of Monaco.
• On that date in 1971 Charles Manson was found guilty of the Sharon Tate murder.
• 1993 FBI siege of the Branch Davidians kills 81 people.
• 1995 Oklahoma City Bombing
• 2011 Boston Marathon Bombing

There are many other historic occurrences on April 19 but this serves to make the point.   So far the mainstream financial press marks all this as a correction. But the seventeen-year cycle marking a top in 2000, a low in 1983, and a top in 1966 is making its return known.

Oil Drops 7.5% for the Week, IBM Sinks, Bye Bye Sears

Weekend April 23, 2017

WTIC

Note prices made a lower high and then reversed

DBC Commodity Index

Notice the similarity in the WTIC and the DBC charts, they have the same patterns.

The downtrend has resumed here and the message is DEFLATION.

Weekly WTIC

Both Stochastics at top  and CCI at bottom registered much lower highs as prices have declined.

See our post on APC and APA Friday. We speculated the next two weeks would be decisive. It is going to take a tremendous reversal here to

keep the EMAs from crossing to the downside.  Anadarko and Apache held their support Friday but those levels are in danger of falling.

Energy Service

Here too the correction in Energy Service XES has ended, trend turning down.

 

IBM was Apple in the 1970s, not now

Here is one comment posted on yahoo finance

Ginni Rometty - PLEASE RESIGN!!!! 20 Quarters (5 years) consecutive of Revenue Decline!!! Stock drops over $9 in after hours trading and more decline tomorrow. Ms. Rometty - Please resign before you destroy a once great company.

EMA Crossover on 50 Day Bullish Percent

The crossover to the downside occurred  right after the March highs.  the longer 150 day has also crossed to the downside.

SHLD has risen from 5.50 to 14, in spite of the bad news about sales.

Russell 2000

Small caps are holding on as is the Transports. Is there one move left to the upside or are we now in the

typical seasonal high sell off after tax day?

Interest Rates

Rates rose, the FED increased a quarter point, and it looks like the correction after that is coming to an end.

Gold and Silver

Gold in the middle and silver at bottom are attempting to buck the negative trend in commodity prices.

Bottom Line

Stocks are correcting and consolidating, the highs of March 1 remain but indicators like bullish percent could bottom and turn back up.

Interest rates have corrected, falling after the FED hike and are now likely to resume an upward trend.

Oil and commodity prices are flashing deflationary signals. The correction from the $25 low in oil has apparently ended. support levels for

energy stocks and indexes will give us more clues in the next two weeks, ie, will they hold?

Gold and silver are holding up but that is the best that can be said.

Social Mood

College Campus

Both college Republicans and the California state Republican Party are increasing pressure on school administrators at the University of California, Berkeley, demanding the institution provide a venue for conservative commentator Ann Coulter to speak next Thursday.

Attorneys for the university’s Republican club, which invited Ms. Coulter, sent administrators a four-page letter late Thursday night asking that the school respond to them by 5 p.m. on Friday or confront claims in federal court for injunctive relief.

Weekend WSJ

Liberals have long sought relief for their ideas which won't pass at the ballot box by going to court. Now Republicans are doing the same. This is rather extraordinary over a speaker in campus.

Ann Coulter shot back with this remark.

On Thursday, UC Berkeley Chancellor Nicholas Dirks said the school had received credible threats against Ms. Coulter and those attending any event where she spoke, so the school couldn’t safely facilitate a speech until the afternoon of May 2. Ms. Coulter rejected that offer, saying the school was creating an undue burden on her and denying her First Amendment rights.

 

She compared administrators to “southern sheriffs” preventing blacks from voting.

There is always a mix of mood. But no doubt the school has received threats against Ann's literal safety on campus. But this suggests negative mood is winning

as liberals reject the results of the Trump election. The school offered the May 2date as classes will have ended, no doubt they are hoping fewer would be around to protest but I doubt that.

Meanwhile the Review section of the Weekend WSJ asks

Le Divorce?  referring to the French Election today. .By the way notice a national election in France lasts for weeks not over a year like ours. We should know the results by tomorrow. Will this be a Frexit vote as in England?

North Korea arrested a US citizen Friday.

Venezuela seized a GM plant, workers let go. Rioting claims a dozen lives.

And so it goes, negative mood is on the rise.

Pop Trends Price Culture

 

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The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or charts.

 

 

Exactly Where are The Markets Now?

Friday April 21, 2017

Stock charts features a series of blogs by various technicians. As I scanned through them one particular title caught my eye. Better than anything else I have read,

it seems to sum up where the markets are now.

Martin Pring's Market Roundup21h ago

Some Markets And Key Ratios Are At The Brink, But At The Brink Of What?

Agreed, I read multiple reports and newsletters.Right now you can read that the rally continues, or this is a short term correction, or the big top is expected this summer,

or the markets topped March 1.

Weekly INDU

The blue dots are the PAR SAR signal, which flashed sell on the drop from the late February high.

At bottom MACD has crossed over to the downside.

the markets have not re visited the 50 week MA since July 2016.

So at least a short term correction is under way.

Anadarko PetroleumAPC

APC has a market cap of $33 billion. Markets gain or lose momentum when exponential moving averages come together nad then head in another direction. that happened at the first blue arrow last August. Now we are at another critical juncture. The EMAs are clustered together.  Support looks to be around 60. MACD has generated a downside crossover in February.

Apache

The EMAs have broken further for APA market cap $18.65 B. But it may be that $50 will hold.

And it may be that these two charts are bell weathers for the entire market. Notice the headlines lately, oil leads markets lower.

APA Daily

APA is re testing support around $50 on this daily chart. On balance volume at top is certainly low. MACD is arguing for more sell off as it has risen since the last price low in APA and ow is headed down.

APA Daily Two Months

Here is a close up look with the Money Flow Indicator added at top. I don't know how this will turn out, all we can do is track the situation.

But I do know this is likely to be highly predictive for the rest of the market.

Stocks Test the MAs

Tuesday April 18 2017

An article in today's WSJ reports that ten stocks account for one-half the gain in the stock market so far this year. Narrowing breadth is a sign of toping action, fewer and fewer stocks are participating in the overall rally.

When stocks break a moving average to the downside, typically they will then move back to re test the failure. That appears to be the case now.

DJIA'

Te first break occurred in late March. Then the DJIA popped back over the 50 day MA. Now it has fallen below again.  On Monday the DJIA reached back up to re test

the break-down. The next week or two should tell the story of whether the DJIA can regain its uptrend. Seasonally the market typically peaks on or around tax day which is today.

NYSE

The NYSE exhibits the same pattern.

Transports

The Transports are the better early indicator. Here the Transports have broken two MAs and are re-testing the 125. Notice all peaked around March 1.

Russell 2000

Again the same pattern but too early to really call this The Top for March 1. But cycles have argued for a top here for some time. We are now a near perfect 17years from the top of recorded in March 2000 and eight years from the bottom in March 2009. Amazing eh?