Weekend Nov 10, 2017
Here is an interesting article on Wyckoff Analysis
Tom McClellan on the new FANG contract
Bond Rally Ended June 2016, Commodities Building Strength
Deflation is ending. Bond price apparently finally topped in June 2016. That was five short months after the low in oil in February 2016. Crude has now taken out the resistance in the 50 - 55 area. TLT has had a 12 point counter trend rally which is likely to end in the near future.
USO Oil ETF
USO has resistance at 12. That may be a near term top and then we see a correction of the 8.75-12 rally.
XES Energy Service
As we have so often observed, the MAs converge prior to a new move. That is happening now, expect resistance and consolidation at 18-19.
No one would have believed this in 1982
The PMO at bottom is not showing any signs of a top yet. This has been an amazing experience.
There are many energy issues like RIG and FRO that are still incredibly cheap. given the potential I see in a commodity rally, already under way in energy, I am thinking of just devoting this space to the energy market, as expensive as FANG and such are now.
The Bottom Line
Transports and the Russell 2000 are falling while SPX, NDX, DJIA make new highs.
The bond versus oil chart suggests we are making a long term low in commodity prices. The high in bond prices, dating back to 1982 was likely seen in June 2016. the potential for disaster in European bond issues which have sold with zero or even negative coupons is enormous.
Energy is in the early stages of what will be a sustained long term rally possibly taking oil prices back to triple digits.
Gold and silver likely have bottoms coming in December.
Social Mood
Social mood is in a state of near collapse across many fronts. It is incorrect to suggest that the Republicans 'may' lose the Senate as they obviously are not in control of it now.
We probably have at least five political parties
Far Left Democrats of Bernie Sanders and Liz Warren
Rest of the Democrats like the guy who won the VA Governor race. Hillary is still not aware she is not a member any longer.
Republicans
36% Trump Contingent
the Rest of the Republican Party led by Ry and and McConnell
And then the no way I vote for anything contingent including Susan Collins, John McCain, and Rand Paul
Best guess at this point is that simply nothing of consequence will happen politically in the USA. Schumer has over 300 House bills bottled up with filibuster.
No ACA action has passed. Best guess on the tax bill is simply that even if one passes, no on will be able to tell any difference that change occurred.
In 1986 rates dropped from 50% to 28%, that was a notice able change. Now the number of brackets change but rates will change very little.
Harassment charges are flying everywhere, Spacey has been dumped on sheer hearsay.
On the international stage, still no evidence China or Russia do anything about North Korea. Trump runs a huge risk with risking a trade war. Did they not discuss Smoot Hawley when he was an undergrad at Wharton? It appears Trump has no idea of the potential danger of a trade war.
Mood seems to be breaking a bit on Wall Street. Broadcom laces $103B hostile bid for Qualcom, the largest tech offer ever.
Ackerman lost his bid to elect ADP Board Members
Disney is still sniffing around Fox Media.
Mood is shifting, the overall direction is not clear but does not look good.
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