Weekend Sept 2 2018
I often begin with a link to the McClellan weekly chart. This one seems particularly important.
I don't know how he finds these analogies but this chart compares the first two year of Trump with the first two years of Clinton. The parallel is remarkable. It calls for a top August 30. And indeed the markets reversed Thursday and did not particularly rally Friday. Some of the indices have made new highs the DJIA has not. In my weekly newspaper column I discussed other factors. The mid term elections really don't start until after Labor Day and we are there now. There is considerable uncertainty there. If the Democrats take the House they will surely attempt to derail Trump with Impeachment. Yet in 1994 the market bottomed in December and then took of again.
Elsewhere emerging country currencies are being crushed by the US Dollar. A strong dollar is usually hard on gold but it may be that gold is coming back as an alternative currency.
Gold versus the Dollar
This is an update on the comparison chart from last week. We do not have a crossover of the EMAs for godl but it is above $1200 support. The PMO for gold is turning up. The Dollar has not convincingly turned down yer. As gold is priced in dollars, the red black bars are a ratio chart to the dollar and again it has not turned up yet. Priced in Euros gold has not turned up yet either. Silver is the same. The XAU of gold mining shares looks the same.
WTIC
This looks like a head and shoulder top. Crude would need to take out the July high to signal renewed strength. For sure there is not lack of crude oil in the world. A weaker dollar might help.
NYSE Advance Decline
We do not have a turn down here yet but the end of August looks like the end of January.
Emerging Markets
Emerging markets are getting crushed along with their currencies.
Something is Terribly Wrong in China
China never recovered from 2016 as the US did. And now Shanghai has turned down again on the weekly chart. Apparently there are over building to keep employment up and a questionable accounting system are coming home to roost.
TSLA
A lengthy article in the Weekend WSJ questions the judgment of Elon Musk. Others suggest he needs a real automotive guru running things.
Technology
Technology does not look like a buy here. OBV has hit the same high as it did in March leading to a needed pullback.
Bottom Line
There are reasons to expect a correction there in stocks. We do not have official buy signals in metals but a bottom could be forming.
Social Mood
https://dailycaller.com/2018/09/01/judge-jeanine-jeff-sessions-resign-immediately/
And article in the WSJ this past week reported Sessions circling wagons by having some of the Judiciary over to his private dining room for breakfast. But mood seems to have shifted with Lindsey Graham suggesting Sessions should go after the election. This is a big shift for Graham who previously said it would be impossible to confirm another AG. That may also be the case if the Democrats gain the Senate.
Here in Texas Beto O'Rourke is out raising Ted Cruz in money and has yard signs all around my neighborhood. There are no Cruz yard signs nor students wearing Cruz t shirts on my campus, but I did see a BETO shirt. Trump is promising to campaign here for Cruz. But the Cruz campaign at this point looks terribly weak. BETO is of course campaigning as a moderate which he is not. He is for impeachment of Trump. The big cities in Texas, Houston, Dallas, El Paso, and San Antonio all have Democrat Mayors.
Finally taking back a Senate seat would signal a big shift. If Democrats ever control Texas again, it is over for the Republicans as the Dems would have CA, IL, NY and Texas just for starters in the electoral college. That could put them back in love with the EC.
https://www.wral.com/beto-o-rourke-dreams-of-one-texas-ted-cruz-sees-another-clearly-/17809047/
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 predictions.
Comments