Weekend June 24 2017
Social Mood
A writer at the Chicago Tribune suggests Apportion Ilinois to neighboring States
Negative social mood towards oil not over supply is sinking the oil price
One of the categories I created when this blog began in 2009 was The New Civil War.
\Click here to view the original three maps outlining the previous and now present Civil War States.
The New Civil War pitted states against other states just as the 1861-65 conflict did. Except this time it would not involve physical warfare but warfare wages
along business commerce line, as some states attract and other states lose business
a hunt for new business locations
a demographic shift as NY and CA and CT and IL continue to lose citizens
A right to work fight as more states enact such laws to attract business
Now Texas Responds to the CA Atty General ban on state travel to Texas
CA is trying to impose its political ideas on other states given the size of its budget and population. In this way CA is now competing with the Federal Government. In the same link Single Payer Healthcare is sidelined for now in CA, as it did not get done at the Federal level.
Between the states social mood is not just negative, it is shattered.Consider Johnny Depp venturing into Kathy Griffin territory.
Markets
WTIC
The move from Feb 2016 at $25 to January 2017 at $55 was Wavwe A. We are now in a Wave B. Fib re tracements come in at 40 and 37, pretty close to the two blue arrows where teh market corrected and then moved up again in Wave A. MACD is still falling in the lower panel so a move to 36-38 looks reasonable before we can expect MACD to bottom.
DUG A bet on lower oil prices
On the other hand, the chart of DUG, a bearish bet on energy companies, is just really getting underway. I took a position in DUG this past week and expect top add this next week. IN the top panel DUG is just now passing the zero line, this is what we mean by saying it is just getting underway.
Apache APA - Our Bellweather
If 45 goes, the next stop is 35, APA closed the week at 46.
CRB index
The CRB index is still falling. Not much support between here and the bottom.
I am guessing the various stock markets finally peak as these commodity markets bottom. probably by this fall. All will not simultaneously peak and bottom at the same time. It will be a process.
The stock market is still climbing, no sign of a top here. Transports are higher and the Russell 200 hit a new high three weeks ago.
Interest Rates
Rates on the five year note doubled in Wave 1 form1 to 2.1%. Wave 2 is correcting that rise, nearly filling the gap set last December on the chart. Certainly a test of the MAs before the uptrend resumes is not out of the question. And as with commodities, rates will probably begin really advancing again when stocks begin a topping process.
XLF
Rising rates are good for banks. Here the XLF is falling with the correction in interest rates. XLF should be bought as rates bottom in their correction.
XLV John Murphy keeps raving about how XLV keeps advancing, but it looks late in the day to me to be buying now.
The Bottom Line
The last couple of days watching the tape it appears the summer doldrums have hit the stock market. Let's look for an assault on final highs in August for stocks as commodities and rates pull back to their eventual lows. Buying commodity stockcks this fall should pay off as well as it did in February 2016.
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