Weekend February 17, 2019
Wild Swings in the DJIA
I suggested a couple of weeks ago that a 4th wave was ending.That was clearly wrong as the market continues to soar. The PMO at bottom is overbought but not turning down as thought it would.
Breadth looks great in this bullish percent chart.
This is one heck of a rally. And it is a mere 10 percentage points from where it topped and reversed,for no apparent reason, last September.
The Advance Decline line is making a new high.
I am not comfortable buying an index fund at this level after such a parabolic advance, are you ?
I did not participate in the down move nor in the recovery. Again MACD at bottom and RSI at top are way into over bought territory.
On the social mood front,things could not be much worse but that's wrong as the election is two years away and the lawsuits and vitriol will only get worse. As noted before
will all this negative mood eventually sour the markets?
Five Year Yield
As stocks have soared yields have fallen meaning investors are buying more bonds.If the stock rally is real, why aren't investor selling bonds anincreasing yields.
We have a clear four wave pattern so a fifth wave would take this chart to higher yields.
Energy
Big oil via XLE is doing much better. Smaller oil firms like Anadarko and Apache well, not so much.
From a pure chart standpoint PMO is bottoming. And price has regained the 200 week MA. Those are big positives.
Gold
on the weekly chart gold made a higher low and took off again. Gold the US Dollar an Oil are all moving up.
Bottom Line
Stocks are just too volatile to make a further prediction. Gold looks to be higher into March.
We have more job openings than job seekers which should be good. And stocks are still at an elevated level.
But mood is just awful. Social Mood is not a black and white indicator and there are lagging indicators as well.
Here in San Antonio positive mood has created numerous downtown building projects. University of Texas San Antonio hastaken43 years to get to its current 30,000 enrollment . In a socionomic burst of optimism it now claims it will grow its downtown campus by 125,00 in just ten years. This is the sort of wild eyed optimism that takes place at a social mood peak.
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