Christmas Weekend Begun Dec 24, 217
We believe the commodity markets made an important multi-year low in February 2016. The correction since then is now complete.
We are already seeing strength across many commodity sectors. This is confirmed by rising interest rates. Investors will do well to begin adding
positions in commodity intensive asset classes.
GTX Goldman Sachs
This is how big multi-year rallies begin. The GTX bottomed February 2016. It then rallied to resistance around 2400. It moved sideways as it corrected and all the weak hands finally sold out.
Now several positives appear.
RSI and MACD are high but confirming the move.
Price has finally moved above the two year resistance. As we say this is how big rallies begin.
XME Industrial Metals
XMA.TO exhibits virtually the same pattern. Here though the MAs are already turning up.
XMA.TO, Same indicator but for Canada on the Toronto Exchange
I like this better as it is lower in price but the same essential play.
MAs are converging which happens before a change in trend.
Emerging Market Currencies CEW
Emerging Markets are Commodity Exporters. These currencies are moving opposite the US Dollar. A weaker US Dollar will cause commodity prices to rise.
Hecla Siver Mine HL
HL rallies from near nothing to 7.50 then corrects to 3.5, now finding support at the 200 day MA. Back up the boat, and buy.PMO is a perfect set up.
CDE Silver Mine
Same pattern as HL,MAs converging, 200 week MA providing support.
CRR Carbo Ceramics
From finance.yahoo.com
CARBO Ceramics Inc., a technology company, provides products and services to the oil and gas and industrial markets worldwide. The company provides engineered solutions in its Design, Build, and Optimize the Frac technology businesses, delivering value to E&P operators by increasing well production and estimated ultimate recovery. It produces ceramic proppant; provides fracture simulation software; has proprietary technology that provides fracture diagnostics and production assurance; and offers consulting services for fracture design and completion optimization. The company also provides a range of technology solutions for spill prevention and containment. It sells its products and services to operators of oil and natural gas wells and to oilfield service companies for use in the hydraulic fracturing of natural gas and oil wells. In addition, the company provides high-performance industrial ceramic media products that are engineered to increase process efficiency, improve end-product quality, and reduce operating costs. It sells its products and services to industrial companies that work in manufacturing and mineral processing. CARBO Ceramics Inc. was founded in 1987 and is headquartered in Houston, Texas.
I would call this a rare opportunity, buy it.
FMSA
FMSA provides frack sand to drillers. Notice the higher low and trading at a third of its previous high.
PES
From Finance.yahoo.com
Pioneer Energy Services Corp. provides land-based drilling and production services to oil and gas exploration and production companies in the United States and Colombia. The companys Drilling Services segment offers contract land drilling services in Texas, North Dakota, Appalachia, and Colombia. As of December 31, 2016, this segment operated a fleet of 16 AC rigs in the United States and 8 SCR rigs in Colombia. Its Production Services segment provides well servicing, wireline services, and coiled tubing services to exploration and production companies in the onshore oil and gas producing regions in the Mid-Continent and Rocky Mountain states; and in the onshore and offshore Gulf Coast. As of December 31, 2016, this segment operated a fleet of 114 rigs with 550 horsepower and 11 rigs with 600 horsepower; 114 wireline units; and 12 onshore and 5 offshore coiled tubing units. The company was formerly known as Pioneer Drilling Company and changed its name to Pioneer Energy Services Corp. in 2012. Pioneer Energy Services Corp. was founded in 1968 and is based in San Antonio, Texas.
ICD
John Murphy reports that the stock market is up the next three weeks 75% of the time, the traditional Santa rally.
Dow Industrials
An old saying has it that markets buy the rumor and sell the news. This is been an astounding two year rally. I has gone parabolic the last couple of months. PMO is peaking. DJIA is three thousand points above the 200day MA. If the general market corrects that cold easily affect prices of the commodity stocks we have shown in this post. DJIA and Transports both posted new highs which is a Dow Theory continued confirmations of the trend.
Interest Rates Five Year Note
Interest rates are soaring. That helps confirm the idea that commodity prices are entering a new bull market.
TBT and TBF are bear bond funds. The price rises with interest rates.
Utilities and REITs are selling off in reaction to higher interest rates. The potential for disaster for those holding low coupon long dated bonds is the greatest since the bond rally began in 1982-84.
We suggest easing into any new positions with multiple buys spread over the near term.
Social Mood
Baseball’s Rainmaker Forced Out After Alleged Misconduct
Bob Bowman, long considered one of the most influential executives in media and sports, was pushed out by Major League Baseball after allegations related to his workplace conduct.
Another day, another guy out of his job.
A second trial after the first ended in a mistrial is set for Bill Cosby April 2. He has new lawyers. Jury selection will begin before that date.
The mistrial occurred June 17, 2017.
He was lucky in that this was before the revelations about Harvey Weinstein and Matt Lauer came public. Now with more and more revelations every week, Cosby may not be so lucky this go around. Herding occurs when individuals interact socially.And that has led to the intolerance of bad behavior.
The compliant media has claimed the public opposes the tax bill. It is hard to see how that will stick. Once the witholding tables are re cast about February, working individuals should see larger pay checks. The Democrats never thought tax reform would pass after ACA repeal failed. So they sat out the negotiations. And apparently they are still betting on winning the House and then impeaching Trump. But that depends on their taking the House. If so it would not matter if the process succeeded, it would provide a two year negative mood background leading to the 2020 Presidential race. Is the public really up for Nancy Pelosi claiming this is the worst bill in history all the way to November 2018?
There is not policy proposal from the Democrats. All offered s hatred of everything Trump. With John Kelly as Chief of Staff things have calmed a good deal at the White House. I suspect a big bet on continued negative mood, dismissing $1,000 average increase in take home pay as they are doing, is a loser. We shall see.
The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or charts.
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