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!
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