Weekend August 5, 2017
That means trillions of dollars are managed to keep exposure to stocks constant (or even declining) over time.
The math is simple: If you had a target of 50% in stocks and they go up 10%, you are suddenly off-target, with more than half your money there. Your financial adviser or target-date fund will automatically sell stock and buy bonds to get you back to 50%.
That’s what happens now, mechanically, millions of times a month as the stock market rises. Such continuous, gradual selling may well have helped the market rise so smoothly and keep it (so far) from overheating.
This market really is different. Jason Zweig, Weekend WSJ
That is an interesting observation and perhaps does explain how this market has risen without any sudden bouts of selling.
Despite the negative media on Trump, the stock market is up 20% since the election. We may get a minor correction here during the weak August and September months. The Transports and Russell 2000 have weakened but that is about it.
Southern Company
SO generated a buy signal via the PMO in the lower panel. The dividend is 4.7%.
NYSE Advance Decline Line
Social Mood is wildly positive to the stock market,as we say, despite all the negative media on Team Trump.
Bonds TLT
Despite all the talk about the FED raising interest rates, TLT is clearly in an uptrend. And it generated a buy signal in both PAR SAR, the blue dots, and the PMO this past week. Notice the 125 MA crossing above the 200 MA.
West Texas Intermediate
Crude oil has a PAR SAR buy signal. The PMO is getting closer to a cross over. But as I noted in my weekly column, we need to see the sensitive energy service stocks advancing. So far they have at best been flat.
XES Ratio Chart to WTIC
When this ratio chart is falling, the XES is under performing the price of oil. Clearly a lot of work needs to be done to stabilize this and form a bottom. All the MAs are falling and ratio is below them.
XES
At best XES may be forming a higher low than at the low in oil prices February 2016. I would guess this will resolve in two or three months. That coincides with the idea of a final low in this sector by Fall.
XLE Energy Shares
XLE on the other hand looks much better. PMO has not crossed over yet, RSI is still below 50%. XLE is converging with some of the MAs.
Apache APA
My weekly column is in the previous post. I note the market really dumped on APA just missing earnings expectations even though APA
earned millions of dollars. So negative sentiment still stalks the energy sector. We have been worried that a further drop might take APA back to teh 30s. If so let's add this to the watch list. Recall it doubled from its lows in 2016.
Commodity Research Bureau Index
CRB looks a lot like the XES. Again this could resolve in the next three months.
Bottom Line
Stocks are still strong. Bonds amazingly appear set to rally further. We are waiting on a potential and possibly quite profitable opportunity in the energy sector.
Social Mood
I have three speaking engagements this fall with a socionomic perspective.
http://www.socionomics.net/announcements-events/
Chuck Thompson comments on social mood and nukes.
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