The Market Perspective

Stocks Complete a 90 Day Cycle

Weekend May 28, 2017

Industrials and Transports both exceeded our expectations. The Industrials are a smidge under the March 1 high. The Transports are about 500 points lower than

the high around 9650 recorded March 1. Under Dow Theory this is a non confirmation as the Transports would need to hit a new high as well.

So the stage is probably set for a  pullback into the summer. That would make sense seasonally as well as the fact that major markets are now at the same overbought stage that has occasioned pullbacks since December.

Transports

Also notice that the three MAs appear to be headed together. Sure it will likely take another month. And it may be that Transports run out of momentum stopping short of the April high, we shall see.

Refiners

I picked the wrong two, HFC and PBF, thought PBF is still within its current range but needs to quickly rally.

Oil fell over two dollars as noted earlier this week and took these two down with it.

HFC

HFC trades for half its value two years ago. And now ithas fallen below all three weekly MAs. As the saying goes, I should not have

tried to catch the falling knife.

Crude Oil

Crude is trading for a bit less than half its 2014 value. And the MAs are slowly coming together here as well.

Just days ago all were celebrating cresting $50. But now we are back to oil oil everywhere. See our earlier post of this week's newspaper column

on 'OPEC Speak."

XES Energy Service ETF

We warned of this last week. The new weekly low for the XES suggests a return to the February 2016 low of 13. If that is the case, the price of oil itself

may well be headed lower.

DBC Commodity Index

The DBC Commodity Index looks a lot like the oil chart. Both bear watching.

US Dollar

And commodity  prices are not rallying even with a falling Dollar, so here is another reason to be skeptical of inflation.

Our Bottom Line is that Stocks are in a strong uptrend re visiting previous highs for the Industrials. This is not confirmed by the Transports which are well below their March 1 high.

So we look for some sell off over the next couple of months in the Industrials.

 

Elsewhere energy and energy service shares are weak. Technology is going through the roof. Gold and silver not doing much.

 Learn more about ssocionomics here.

 

President Erdogan's security guards attacked US Protestors while he watched from his car. An outright attack on US Citizens by a foreign 

dignitary suggests other governments are not even fearful of the US on US soil.  This seems an odd way to shore up US Goodwill on an official visit

But it an ample demonstration of negative social mood prevalent here and there.

 

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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.

Market Turns Thumbs Down on OPEC Cuts

Market Turns Thumbs Down on OPEC Cuts West Texas Intermediate for July delivery fell $2.46 to $48.90 a barrel on the NYMEX. Total volume traded was 70% above the 100 day average. Bloomberg News, Today 5/26/2017 7:30 AM CST Markets are the summation of multiple decisions by millions of participants. From that standpoint the market is actually a living, breathing life-form, given to extremes of positive and negative social mood. Sometimes markets can be downright prescient. This was the case for investors continually bidding up profit less Amazon for years. The market saw the end of brick and mortar dominance in retail. Now the decline in retail stocks affirms that outlook.

The oil markets in particular swing from wildly optimistic ($110 in 2014) to decidedly pessimistic $25 in February 2016). But sometimes the mood of oil investors like Goldilocks porridge, is just right. The headlines this morning suggest that oil has bottomed and that investors are disappointed that the latest cobbled together OPEC does not extend far enough into the future. I suspect the market is simply seeing the reality that OPEC never actually cuts production. Understanding this requires an understanding of what we might call ‘OPEC Speak.’

OPEC would have us believe that it and Russia and other non-OPEC producers have agreed to a production cut of 1.8 million barrels per day MBPD. Further these ‘cuts’ would be extended for nine months. This resulted oil prices for both WTIC and Brent jumping over $50. That was short lived for a few days.

Saudi Energy Minister Khalid al-Falih insists the coalitions efforts are working and that more time is needed. He dismissed the notion that expanded US Shale output would grab more market share. That comment occurs as multi-billion dollar export docks are being constructed along the Texas Gulf Coast for the explicit purpose of exporting oil and gas.

Understand that Vladimir Putin intentionally bet the entire economy of Russia on oil. Seventy years after the end of WW II, Russia, like Saudi Arabia, is not a world player in a single consumer market, other than energy. One-half of the Russian GDP is oil derived. Saudi is eve more dependent on oil revenue than Russia. In OPEC Speak, a promised cut really means, well, we will promise not to expand existing production from current levels. That is certainly what Russia means. And recall Russia is a country notorious for fudging on any and all promises.

Prince Mohammad bin Salman did pull off an impressive welcome for President Trump this past week. But a serious look at who skipped the party reveals less than a complete presence of all the necessary players. It was pretty much a Sunni event lacking prominent Shite leaders. Okay no one expected Iran to be on the guest list. But the fact that Iran is pumping all the oil it can and it not in the deal weighs on the market. Turkey’s President Erdogan was absent. Pakistan’s Prime Minister Nawaz Sharif was denied the opportunity to deliver a speech. While Saudi is the location of both Mecca and Medina, Egypt still sees itself as more of a regional leader.

So what can we glean from the markets about all this? Apache has drooped below three weekly moving averages of 50,125, and 200 bars. WTIC s flirting with its 50 and 125 Moving Averages MA. The 200 week MA is much higher at 65.05. Brent is in the same position. The XES Energy Service ETF ($16.28) has dropped below all three MAs. Any further drop here suggests a return to test the February 2016 low around $13. The ETF FRAK representing American Shale producers looks very much like XES, trading below all three of its Moving Averages. The bottom line is not just that the traders were disappointed. Rather they are seeing lots of oil and not much commitment. After all there is no enforcement arm for OPEC. At this point the oil price charts look more robust than the shares of energy or energy service companies. In pre-market trading, oil has is already down 50 cents from the Thursday close.

Oil Tops $50. Saudi Arabia Throws a Party

Weekend May 20, 2017

Elliott Wave International on Metals

Stock Market

Industrials

In late April the DJIA managed to regain the 50 bar MA and make a lower high. This time the target area is the blue square. eventually as we have noted, it is typical

for a market that breaks an MA to come back up and re test what is now resistance.That is where the DJIA will be this next week, testing.

Transports

Closely examine the Transports above and then the Industrials in the first chart. It becomes more apparent that the Transports are leading the Industrials down. the lower high lower low

patern is well along the way. The blue square is a likely target for the rebound, right at the 50 day MA.

 

As noted in the WSJ, money is pouring into technology as well as tech in emerging markets.

 

TWM Inverse Russell 2000

Best guess is that TWM corrects its advance by week end. That should be the time the rally in the Transports and Industrials starts to run out of steam.

USO Oil ETF

OIl crested $50 by week end and so USO is up. Let's watch what happens as it encounters the blue resistance lines.

 

XES Energy Service

XES will encounter big resistance at the cluster of EMAs around 19-20. The outcome will likely be decisive.

XES Two Hour

On the  two hour chart the battle at 19-20 becomes much more difficult. The trend is down here.

CDE Silver Miner

As the saying goes, CDE  is doing what it needs to do to break out. It re tested the resistance of the MAs and closed above them for the week. I bought about here after the big fall and it is

slowly coming back

Gold

 

 

 Central Fund

 

 

Gold has a positive chart pattern here. Central Fund CEF is trading at a -5.7% discount to Net Asset Value.  And the chart continues to test support and bounce higher. OBV at bottom and STO at top look very supportive for purchase.

As always we are in the summer months ahead and weakness may be expected in gold shares into mid June.

Brazil

 

The new Brazil once again looks a lot like the old Brazil. It dropped 0% this week over Presidential troubles.

The Bottom Line

We guess that the US markets will complete their recovery by week end. Look for the re test of the MAs outlined above.

Bond are stronger than expected.This adds to my perception of market weakness developing.

Crude oil is probably paralleling the general strength of the stock market. Look for tests of resistance there as well by week end.

Gold and silver look better, gold shares always a dicey play. I own a small position in silver miner CDE.

Social Mood

Learn about Socionomics

The podcast Price Trends Price Culture is transitioning to membership status at the socionomics site

Karen Elliott House, former Editor of the WSJ and the Daily Texan when I was an undergrad there, had an excellent article on the Trump Saudi visit this weekend. It as an op ed in the Friday WSJ.  See my column posted Friday . The Deputy Crown Prince Mohammad bin Salman MBS has 50 Islamic Leaders,  the Harlem Globetrotters, and Toby Keith on hand. Obama turned his back on the House of Saud favoring Iran. MBS is looking for a re start of the US in the Middle East. The television footage today Saturday confirms everything Karen predicted.

All We Had to Do was Buy Amazon

It was noted this past week in the WSJ that Amazon turned out to be the internet stock we all should have bought. It is in purple. Here it crosses the SRT chart showing the preference for on line shopping over brick and Mortar. WMT is doing better online but the same chart substituting WMT for XRT also shows a breka out by AMZN.

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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.

 

End of the Trump Rally?

Friday May 19, 2017

The Trump Rally Ends

Energy Markets

Our suggestion that oil prices would bottom in early May has proven correct. A spike down to $43.76 on May 5, has quickly reversed to yesterday’s close at $49.07. That improvement in price has not been enough however to stem the decline of energy and service stock prices.

The XES Energy Service ETF bottomed May 5 as well at $16.57. But it has only managed to rise to $17.07 since.   The energy producers ETF XLE had only gained a $1.25 from its low around $66.

I had suggested that the new kids on the block, Anadarko and Apache might offer more insight on price direction.   Anadarko suffered from an accident in Colorado which knocked the stock down nearly ten bucks, so that idea is out.   Apache posted its high last Monday, having risen from $45 to just over $52. It closed yesterday at $49.92. This is troubling from a bullish perspective. The peak just over $52 is lower than the last high in April at $54.   A pattern of lower highs and lower lows defines a bearish, or lower pattern.

And looking at various share prices, many are exhibiting such patterns.

The problem though exists on a much larger scale. The Trump rally from last November has probably ended, as well as the longer rally from March, 2009.

Stock Market

As we have noted, the Dow Transportation Index along with several other indexes, peaked March 1 around 9,650. It then dropped 900 points. One would never know that reading the rest of the financial media, all agog over Amazon and Apple. It then recovered to 9,300 or about half way to the former high.

And then the bottom fell out on Wednesday. The media is forever attempting to pin causality on some event. In this case the popular choice is President Trump who continually offers his critics garbled messages, sending them into another round of frenzy.   The point here is that the peak and decline of the Transportation index forecast a change in market direction. All the taunts and charges in Washington are just white noise confirming what the internals of the market were telling us.

Transports dipped below support at 8850. The Industrials DJIA collapsed 372 points Wednesday. Interestingly one fifth of that drop was due to weakness in Goldman Sachs. GS is the most expensive stock in the DJIA.   The DJIA stocks are price weighted. So the largest price had the largest effect. GS fell from $222 to $214.

Now what can we expect? A guess is that the Transports continue the recovery begun Thursday.   The close was 8825, yes, that support level again. Having breached it once, I suspect Transports will seek but fail to regain a bullish stance. Often markets after a sharp fall, re-test the breakdown area. A final failure signals further market decline.

Meanwhile in Saudi Arabia

President Obama turned his back on the Saudis, favoring Shia Iran. It is no accident that Sunnui Saudi Arabia will be Trump’s first overseas stop this week. And here are a couple of names to keep in mind regarding a re-set in the Middle East.

Saudi King Salman is 81. His son, Mohammad bin Salman holds the title of Deputy Crown Prince. The King has appointed another of his sons, Kalid, age 29 and a former fighter pilot, as ambassador to the United States. Clearly an all out family effort is underway towards regaining US support in the Middle East.

And Mohammad bin Salman MBS is planning quite a get together for the Trump visit. No less than 50 Islamic political leaders will be on hand to greet the President.

Another thing to remember is that it is the objective of MBS to diversify Saudi off its reliance on oil revenue in just five short years. Big investments in the US are planned. An IPO offering of part of ARAMCO has been discussed. And to set the stage for all this a genuine Western Style extravaganza over two days is scheduled.

No less than the Harlem Globetrotters will play a Saudi basketball team. And the group will be serenaded by Toby Keith, what could be more western than that ( I shoulda’ been a cowboy!).

Rumor has it that women may soon drive cars in this formerly constricted society.   Saudi does not want a potential conflict with Iran occurring in Saudi Arabia. Seeking US support to avoid that is the aim of this gathering.

Stocks Down in Pre Open Trade

Thursday May 18, 2017

 

    The news  is, as usual, attempting to link the 372 point drop yesterday to Donal Trump's vagaries and uncertainties.

But we have noted the world wide unrest for politicians as well as the declining Transport index for weeks. The market itself is the real culprit.

Which is to say social mood is turning more negative towards everything. Deputy Atty General Rosenstein's appointment of a Special Prosecutor will assure us that the media now has an official instrument of never ending uncertainty about the entire Trump administration.  Notably the WSJ cites this as a never ending mistake.

And in the  'don't bet on it category' today Heard on the Street column on the back page concludes "there is a limit to potential losses."  

At DJIA 21,000 the potential is here for huge losses. WE have noted the decreased breadth of the market, just a few NASD 100 stocks provide most of the gain.  And on page B 11 the WSJ notes that one stock, Goldman, caused over one fifth of the decline.

Transports

Prior to the market close yesterday we suggested 8850 as support would be more important than 9300 as resistance. The close was

8783, a mere eight points above the low for the day.

RUssell  2000

1340-1350 seems to be the area to watch here. This appears to be a broadening top, a sign of distribution after a sustained rally.

And we were tight that oil prices are higher but the overall weakness of the stock market drug share prices to the downside.

Bullish Percent Begins Acceleration

TheTrump Rally began at 42.5%, but that was right at the annual season low in November. As we are now at the

After May Go Away Point, it is a long seven months until November arrives again.

VIX

Just a week ago the WSJ reported massive complacency among investors indicated by a new low in the VIX.

That of course is a contra indicator that things are probably about to change, and change it did.

We will be reporting more often as there is now much more to report!

Dow Down 372

Wed Afternoon May 17, 2017

In today’s WSJ on the very back page of the last section the WSJ interviews
the CEO of SW Air. He notes that America is now characterized by a ‘coarse mood.’ No kidding, the news is here for all to see, the job of a socionomist
is to put those changes in perspective. To wit

Ed Secy DeVoss booed at college graduation, she was invited by the Black College President

Ann Coulter cannot speak at Free Speech Berkley

Cornyn out as speaker at Texas Southern, again invited by President

Presidents in Brazil and S Korea impeached

A throw the bums out attitude in the US, Hillary still cannot believe it or accept responsibility, Hollande could not even run in France, Cameron out in England, BREXIT,
same in Italy, Venezuela and Syria both failed states, Brazil back to being the same old failed Brazil of my youth, the country of the future that never is

We are even seeing a way heightened level of ire in e mails from students here at our campus so much so we will be adopting a civility code this fall

tomorrow you will see all sorts of experts in the news who will say about the DOW drop

No one could have predicted this ( which is what experts that we had to have in whatever office always say once the crash hits)

Well anyone understanding socionomics could see this coming a mile away

Mood is turning negative and markets will fall right into August

You heard it here first

 

 

Book Recommendation

Weekend May 14, 2017

I am about one-third of the way through Fed Up by Danielle Booth.

She is a University of Texas at Austin Finance MBA graduate as am I. She worked for Donaldson Lufkin  in NYC, then moved to Dallas becoming a financial writer for the Dallas Morning News. She is a great writer, very able to describe complex financial transactions for the average person. 

The book was written as an inside look at the FED as well as the financial melt down of 2008.Actually her description of the

size of derivatives at the time makes me wonder, indeed, that the entire world financial system did not melt down.

Her disdain for the  Economic PhDs that infest the FED is obvious. No real world experience and always looking back at dat in an academic model trying and failing to predict the future.

As she was not an economics PhD those types had little use for her.

No problem with Danielle.   A high recommendation  for both history and a practical under standing of

just how much derivatives can be borrowed and leveraged. More on this when I finish the book.

 

Looking Back at 2015, Energy Stocks Problematic

Weekend May 13, 2017

 

Transports

 

This is an update from the last post, Transports are dropping while energy prices are weak, now below three MAs, OBV weak at bottom, diverging from Industrials

Transports 2015

Here is a shot of how this went in 2015. While it does not have to copy in time and price, set up looks quite similar.

Shanghai 2015

 

In  2015 the Shanghai Exchanges peaked a couple of months later and then plunged.

Shanghai Today

This time we have more of a double top than a big run to a spike and reverse as in  2015. This bears watching.

 

 

 

Russell 2000 Now

 

 

The Russell 2000 has not broken down to the extent that the Transports have but it  displays a broadening top. RUT 2015

Note this is 2015!

But once the decline began in 2015, it fell hard.

TWM A Reverse Russell ETF

IF the analysis is correct, the TWM is a way to play weakness in the RUT. TWM has not generated a buy signal with an MA crossover but I am guessing bottoming action is taking hold now.

WTIC

We did bet a buy signal in crude oil itself. But this is not really translating into much upward activity in energy and service stocks. I recenely wondered if overall weakness

in indexes like Transports would dampen activity in Energy. That appears to be the case.

XES  2 Hour

The 2 hour chart will need to improve really fast to keep hope alive for an energy stock rally. Otherwise just another bear market bump.

Here is a ratio chart of gold to the dollar.

The weaker dollar is not rallying oi either. But it is rallying gold, main panel and silver at top.

SLV

SLV needs to stop right here at a higher low and then take out both MAs to establisha new direction to the upside.

Bottom Line

Transports and Small caps are diverging down from the  Industrials and NDX. Transports are the lead dog on a market transition. We predict an August surprise drop.

Energy stocks are not rallying along with oil And with a weaker dollar that is even more disappoints.

Treasury yields fell on Friday suggesting less inflation worry, another worry for higher oil prices.

Gold and silver are rallying, watch SLV for bottoming action.

Social Mood

Be sure to check out our earlier post on the visit to our campus at Texas A & M University San Antonio in our Thursday May 18 post.  Matt Lampert Research Director and Alyssa Hayden, Executive Director, delivered two great presentations, met with students on their research projects, meeting with our Library Personnel about the collection donation (our campus first in the nation to receive one from SI!), and were well received all around.

Their edited version is here.

http://www.socionomics.net/2017/04/youre-invited-to-san-antonio/

We thoroughly enjoyed their visit during our Student Research Symposium and hope for a return visit next year.

 

 

I delivered a talk to the San Antonio Institute of Internal Auditors at their April meeting. The talk focused on how a socionomic perspective would help IAs anticipate changes that could bring risk. A lengthy list of 'Skyscraper Events' right here in San Antonio over the last century helped make the point.

Elsewhere

California Congresswoman Calls Middle America Podunk USA

Well that is the negative mood of the Democrat party still in denial as to why they have lost 900+ elected seats in Podunk USA. Polarization on the rise!

The French Election assures a continued EU for the time being. Germany stepped up to the plate on funding their military 2% of GDP.But as usual, Italy is falling off the table.

 

Shares of J.C. Penney crashed as much as 10.9 percent to $4.70 in afternoon trading.

Said Piper Jaffray analyst Erinn Murphy, "While we wholeheartedly agree with the strategic actions underway, we remain worried that structural factors have more influence at the end of the day."

The news comes after on Thursday, both Macy's (M) and Kohl's (KSS) reported weak quarterly reports, only adding to concerns that the outlook for retailers is grim. Nordstrom (JWN) had a slightly better first quarter but its same-store sales still slipped 0.8 percent.

J.C. Penney, Macy's and the dying Sears Holdings Corp. (SHLD) are part of a growing list of 20 battered retailers, by TheStreet's count, being forced to shutter massive amounts of stores due to declining mall traffic, the rising cost of rent and wages and heightened pressure from e-commerce giants like Amazon (AMZN) .

Read the whole story here.

Yes people are moving to on line shopping. But did all of them move to on line or is this a sign spending is on the decline?  After all, retail is the best barometer of social mood, do people spend money in an expansive environment?  If not,   this is surely a sign of growing negative mood.

Pop Trends Price Culture

Pop Trends Price Culture Joins the Full Suite of Socionomic Research

In the future Robert Folsom's podcast moves to a monthly issue versus the considerable mount of work of a weekly version. The monthly issues will only be available to Socionomics Members.

Socio in the News in 200 seconds will continue to be available for free on a weekly basis.

 

[email protected]

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.

 

Energy Column

Dennis Elam

Friday May 12, 2017

Word Count 721

Takin’ Care of Business

Despite OPEC’s increased expectation of more oil output world-wide, US crude for June delivery ended Thursday up 1.1% at $47.83 and Brent added 1.1% to $50.77.

OPEC Makes Bearish Oil Forecast, WSJ, Friday May 12, 2017

Last Friday, oil prices sharply reversed their downward trend.   The low was $43.75 and the close a whopping $46.22. Only one down day was recorded since.

So far that has not been enough to reverse the downtrend in the Energy Service XES. But it too has moved off its lows. The same is true for the Energy Producers represented in the XLE.

I have been suggesting that the ‘newer kids on the block’, like Apache might hold some clues for what direction prices will take.   Apache APA hit a low of $46.09 last Friday, closing at $51.07 Thursday.   Bell weather Patterson PTEN is struggling adown nearly ten dollars from its February high near $30.

Natural gas continues to prove my point that social mood sets prices, not supply and demand. The US Energy Information Administration reports natural gas stockpiles grew by 45 billion cubic feet this week.   But contrary to what one might think, natural gas futures on the continuation chart rose from $3.27 to $3.38.

While crude and natural gas prices have firmed, it may be that stock market weakness will pull energy and service shares lower.   What do I mean by weaker prices as the NASD 100 makes new daily highs?

If energy prices, at least for crude and gasoline are low, one might think the Transport Index is hitting a new high, right? Nope, Transports recorded their high March 1 at 9,600. Thursday was a down day closing at 9,037.    The same sort of thing occurred in 2015. Prices peaked in February and March, 2015 around 9,200. By late August Transports dumped sharply the last few days of that month to 7,500. I am officially on record as expecting the same thing this time around.   By the way, in 2015 the NDX NASD 100 rallied right into a peak of 4,700 by early August. But a low of 3,800 was recorded before August ended.  

Meanwhile across the Pacific, the Shanghai Index has fallen from 3,200 to 3,061 since April.   From June, 20115 to August, 2015, that index fell from 5,200 to 2,900. Will history repeat?   This bears close watching. Another sort of contrary indicator was noted this week. Complacency or investor worry as indicated by the VIX volatility index fell to a new low. Here is what I mean by a contrary indicator. Complacency always registers a new low at market highs. Investors take on ‘a what me worry attitude’.   This was the case for March, 2000 and Fall, 2007.   At market lows, think March, 2009, VIX is off the chart, literally, as investors worry and fret. So divergence occurs with the Transports headed down amid low energy prices while the NASD 100 is setting new highs, just as it did in March , 2000, exactly 17 years ago.  The fact that retail shopping is undergoing a sea change is also indicative of a change in markets. Retail chains are closing stores at a record rate as on line shopping grows in popularity.   This is the very reverse, ironically, of the catalog shopping Sears created in the 1890s.  The irony is hat every week another article appears speculating on a Sears bankruptcy.

Investors should be on high alert with low volatility, complacency the new normal, and Shanghai already weakening.

We end this column on a personal note. My research interest revolves on how changes in social mood generate social change. This area of research was pioneered by Robert Prechter.   Bob first gained prominence by writing a book on the social theories of Accountant Ralph Nelson Elliott. This led to his creation of Socionomics, the predictive social science of mood. This past weekend it was my pleasure to have the Research Director of the Socionomics Institute, Matt Lampert, and the Executive Director, Alyssa Hayden as guest speakers at our 2017 Student Research Symposium.   A great time was had by all as they brought the concept of changing social mood to our campus.   You can check out the results on both my blog and the website of the Socionomics Institute listed at column end.  

Follow Dennis at http://www.themarketperspective.com

Learn more about socionomics at http://www.socionomics.net

Slowly the Market Turns

Thursday May 11, 2017

Again,the transports lead the market. What interested me today is that the MAs  for the Transports are converging.

 

1. Once the TRAN fell thru the red 50 day MA in March, it has never really vaunted back over it in convincing fashion
2. I have four moving averages on the chart, yes the usual 50 and 200 but I add 50 + 200 = 250 / 2 = 125, and 125 + 50 = 175/2=87
3. Notice that the three shortest MAs are all coming together. This typically happens prior to  a major trend change. With the high still firmly established March 1,this is significant.
4. PAR SAR issued another daily sell signal today along with the MA convergence.

Energy advanced, refiners still okay.