Weekend November 5, 2017
Cycle Lows are separated by 14 years
1974 + 14 = 1988 + 14 = 2002 + 14 = 2016
Cycle Highs are separated by 17 years
1966 + 17 = 1983 + 17 = 2000 = 17 = 2017 Now!
Headlines Display the Mood!
Investors Can't Stop Buying Every Dip
Amid mild mood in 2014, Aston Martin abandoned the idea of an SUV
http://www.motorauthority.com/news/1093348_aston-martin-abandons-suv-plans-focuses-on-coachbuilt-cars-for-expansion
Now in 2017 with Maserati, Alfa Romeo, Audi, Jaguar, Porsche, Maserati, Lamborghini, and Bentley all in the SUV Market, Aston wants in
https://www.wsj.com/articles/aston-martins-mission-make-an-suv-that-isnt-ugly-1509796802
The JAG SU significantly increased Jaguar sales and the Cayenne and Panamera at Porsche now outsell the sports cars
The rush to SUVs is an example of the herding mentality whether it be mutual fund managers or high end auto execs, oh, Aston Martin finally turned a profitable quarter!
And as we go to posting, Sergio announces the first Ferrari SUV! Still 30 months off, I am guessing he will be way late to an overcrowded party. In addition the famed V 12 engine maker plans to go hybrid and electric.
https://auto.ndtv.com/news/ferrari-boss-confirms-first-suv-1761183
Meanwhile negative mood is on the rise as the accusations of impropriety spring from Cosby (early in this cycle, so he was able to get a hung jury) but not so lucky for those coming lately as Harvey Weinstein, O'Reilley, Keven Spacey, and yes the Defense Minister of Britain
The take away here is to note just how fast action is being taken.Cosby rumors swirled for years before a DA finally prosecuted. As noted, he was early before negative mood really took hold and got a hung jury. Netflix has already cancelled the popular Spacey series House of Cards. Numerous men, many unidentified, are claiming to have been mistreated by Spacey. New York authorities say if the case was newer they would arrest Weinstein if he visited the state again. Could Harvey become personna non grata in NY andCA? That would make continuing a movie producer carer pretty tough.
are all discovering
Exclusionary Mood is on the rise and not just for sexual predators. First it was Brexit and now Catalonia in Spain. The government is cracking down hard to keep Catalonia in Spain, more negative mood.
Brazil South Tires of Corruption
Billionaire Tim Draper wants California divided into thre states.
Amazingly he thinks the CA state government is doing a great job. Hard to believe that as we see more CA refugees moving to Texas every day.
But the bottom line here is negative mood towards predators and exclusionary mood in both states and nations, around the globe!
There is always a mix of mood and this is striking as we see negativism on the rise as stocks top in price.
Stock Market
DJIA
The end of the NASD move from 1998 - 2000 saw it gain a whopping 2,000 points of its total 5,00in just two years.
Now we are seeing a repeat with the DJIA adding 50% jumping from a rounded 16,000to 24,000 in the last two years of its move. This is the herding impulse pure and simple. The monthly PMO will be slow to turn at bottom.
Transports closed lower in October than in September but need a good deal more down to reverse the uptrend.
Buzz Lightyear to Infinity and Beyond Chart - AAPL
It appears AAPL is in a final fifth wave. The arrival of a $1,000 i Phone is surely a fitting conclusion to the wild ride from 1998-1999.
IF a $1,000 phone is not irrational exuberance, what is?
Bonds
Janet Yellen is unaware of just how lucky she is. She can claim some sort of victory while the market kept rates low. The new FED Chair is likely to be stunned at just how fast rates will rise in the near future.
Crude Oil
USO
Looks like USO is in a third of a third wave, hence the big rise Friday. Prices should move higher into December.
XES Energy Service
Energy service has not really joined the party yet. But the MAs circled are coming together. This usually happens prior to a trend change. So perhaps XES will play catch up from now to December.
The Bottom Line
Sentiment indicators are over the top and matching previous extremes seen at market highs of 1987, 2000, and 2007. Stocks are still advancing and will until the negative mood invades the stock market as well.
This has lasted longer than expected but the what could go wrong sentiment is now all pervasive. As headlines tout the great economy around the world, social mood is fracturing across predators and exclusionary geographic boundaries. Both political parties in the US are being re shaped. The Democrats have finally become Norman Thomas Dream, a modern Socialist Party complete with Bernie Sanders a declared socialist and Liz Warren from the
People's Republic of MA.
Flake of Arizona and Corker of TN are out already. Pelosi is tamping down the impeachment talk as stocks soar and mood is peaking, but among Trump supporters,not never Trumpsters.
Our greatest fear, see next post, is that Trump will repeat the Smoot Hawley tariff mistake and wreck relations and trade with Mexico and Canada.
Interest rates are rising, the potential for massive losses is in this reversal.
We have mixed signals on gold and silver.
Oil prices should continue rising into December.
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