Wed Feb 26, 2020
Here is a comparison of the bullish percent of energy stocks versus the price of XLE. XLE is fallling faster than the Percent of stocks.
The black line is XLE, price at left, the vertical bars at BPENER. XLE usually mimics the percent but this time is making a lower low.
My guess is that the extreme weakness of Exxon, now at 54 is dragging XLE lower than usual. For some time it has been thought XOM was not generating enough cash to pay the dividend, run the company, and explore and replace the oil sold. That reckoning may be near.
As I expected, oil broke 50 today closing at 48.63. Next stop is likely to be the low low 40s. Low in Dec 2018 was 42.50.
Dow Industrials
Liz Claman was talking buying bargains in the last hour of trading today. But hte PMO at bottom suggests we are not near the bargain level yet, And this is just the daily chart! It looks like this is a third wave of the first formation but
the average has already dropped about 2600 points and taken out the 200 day MA in just eight days. Stocks tend to fall seven times as fast as they rise, witness the above.
NASD 100
Tech has been the rage and actually caught some buys today.
Again he 200 day MA seems a good target.
Patience, buys for dividends should include REITS, DIV, MSB, and possibly some energy trusts.
Remember the Transports are the leader.
Transports look poised to take out the four previous lows at 9700. That will be an ominous indicator of lower prices ahead. And of course the virus scare is hitting those stocks world wide.
Social Mood was in chaos last night on the Dem Debate Stage, it sounded more like a cage fight than a contest for leadership of the Free World. The results from Carolina should be interesting. As Jonah Goldberg observed on Fox, this is like the big pack of Republicans running against Trump, most agree several need to drop out to give someone a chance but all think the drop out should be someone else. If Bernie gets another leg up with Carolina results it may be impossible for anyone in the field to catch him.
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