Market Internals are Rolling Over

Weekend April 16, 2017

Gold Resolves Divergence

NASD bullish Percent

All f the internal indicators are rolling over. And the market ended on a down note before the long three day holiday. The gurus are stockcharts.com are calling for a return to the

lower uptrend lines on various charts.

Transports

Transports peaked March 1 along with the Russell 2000. the Dow, S & P and NASD 100 have now all turned their intra month trends down.

Five Year Rate

Rates have been correcting since the FED hike. This pattern will likely continue,a rapid rise followed by consolidation, a spike and then a correction for soem tiem.

FRAK

FRAK, an ETF of shale producers, peaked in December. It lost about a fourth of its value since. Now it is failing right along the 50 day MA. Lower prices ahead. See our previous post on energy as well as the weekly column posted next.

Apache

Apache is testing support at 50.  The weekly chart looks encouraging but the daily does not, see below.

Apache Daily

The weekly looks over sold but the daily looks like this was just another relief rally on the way down. It will be interesting to see what Apache and others testing support levels

telegraph over the next couple of weeks. See our crude oil chart posted earlier.

Transocean RIG

As one can observe RIG is ultra sensitive to market emotion. As with Apache watch for an upcoming test of support.

XAU

The Bottom Line

After the Trump Bump at least look for some across the board correction in stocks. That has already begun in Transports and Russell 2000.

Interest rates are correcting after a big rise and consolidation. Watch for a bottoming in rates.

Energy looks like a big corrective Wave A is completing. Lower prices ahead.

Gold and silver shares are showing real strength here.

Social Mood

Pop Trends Price Culture

What a way to announce a market top via a change in mood.The US launches 59 cruise missiles, drops the Mother of All Bombs, Trump announces we are at a low in our relations with Russia,

Ford announces it is relatively healthy, 

retail chains continue closing stores, Dan Heninger on WSJ Editorial Report this weekend notes that Democrats are expecting slowdown while Republicans are expecting economic pick u, more

political polarization and exclusion.  China asks for calm between the US and North Korea, a North Korean ICBM blows up 5seconds into launch as VP Pence arrives in South Korea.

France will elect a new President and we have detailed the ouster of Presidents in Brazil and South Korea. The President of Samsung is on trial. 

The lawyer representing Dr.Dao put it this way in his news conference kicking off his lawsuit against UAL.

“For a long time, airlines—United, in particular—have bullied us,” said attorney Thomas Demetrio, who is representing the passenger, David Dao, a 69-year-old physician. “You don’t treat the people who help make you the corporate entity you are like Dr. Dao was treated.”

CEO Munoz at UAL failed to notice that mood has been negative against airlines for some time. In fact I googles passenger dissatisfaction with airlines

and this  2008 artile popped up.  

Then United, US Air, and Continental were at the bottom of the pack in terms of popularity. Now they are all one, talk about a merger of the tone deaf!

Munoz initially issued an e mail backing up the action of the Chicago Aviation authorities that literally dragged Dao off the plane. Then when the video went viral and the negative mood surfaced, he back pedaled. Today Delta announces a $10,000 award to bumped passengers.  Worse we could now face hurried up legislation ins the mode of 'we have to do something' which would be at the worst possible time 'to do something'  in the midst of negative mood.

 

 

 

Taken together all this indicates a negative mood shift. so it is nor surprise energy and stock prices are at least correcting now.

 

denislelam@gmail.com

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