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) .
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 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.
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