The Market Perspective

Cullen Frost Nearing Break out, DJIA on a Roll

Wed March 24, 2020

CFR has been basing since March 9, it is joining what I suspect is an overall fourth wave rally.

 

Dow industrials

 

This looks too strong though to be a fourth wave.

120 minute chart

The 120 minute chart is roaring into over bought status in a hurry.  Amazing just how fast things are changing.

 

 

VIX Pulls Back

Wed March 25, 2020

The Volatility index is pulling back from its peak.  This indicator hit the same 80-90 region that was recorded in  2008.

The inverse relation  is clear with the SPX at top paneel. SPX bottomed as the VIX toped out.

But the  20008 problems were more financial than economic. Now with most conferences cancelled, it is hard to see airlines hotels restaurants or auto dealers recovering any time soon.

240 Minute Chart Trying to Turn up

Tuesday March 24 2020

The 1500 point rally today is helping the 4 hour chart.

A lot of damage has been done inn terms of violating moving averages. But we may be into a fourth wave consolidation.

Daily Chart Still has work to do.  Notice the wide space in the PMO at bottom.

 

Armageddon

Monday March 23 202

 

Tens of thousands of retirees have their retirements in REITS such as WRI for income.  WRI originated in the Weingarten grocery chain which sold to Safeway in 1984. I will investigate, guessing a lot of their real estate is in energy sensitive Houston.

 

 

All the financial planners had better take a deep breadth...

What is a Cruise Line to Do? Shall The Bernie Sanders Cruise!

Monday March 23 2020

The World Never Recovered from March 2009

Monday March 23 2020

Here are the world markets outside the US. , Europe Asia, Far East

These markets never recorded a new high as the US did. At bottom one can see the efforts of Central Banks to 'goose' things along, dropping rates form 5 to less than 91 percent. Now there is no interest rate stimulation left. The world is awash in deflation, too much oil, luxury goods, you name it..

See page B  9 in today's WSJ, yep the banks are still playing games this time called Corridor variance swaps. Banks have been once again slicing and dicing loans and what have you so that no one really knows how owns what.   This is another reason big bank stocks are in a swoon.

 

Year to Date

Monday March 23 2020

From the eebsite Morning Brew

 

Buy the Dip Mentality Still Around but Perhaps Fading

Monday March 23 2020

6 26 AM CST

I just received the latest from someone named Kevin Matras, Exec VP at Zack's,, see below.

Apparently not enough 'dippers' signed on so Kevin is extending his offer.

Page B 1 of the WSJ suggests just what I wrote this past weekend. The headline reads

Investors Fear Worst is Yet to Come

or page B 9

Bets on Stocks Backfire in Slump

Once we start seeing those kinds of headlines, a bottom might be in the making.  Or at least the first bottom. The govt imposed lay-offs insure a recession, just a matter of how long before business can resume

Hotels Furlough, Cut Thousands of Staff

All the large hotels in downtown San Antonio are now closed the Marriott alone has 1.000 rooms vacant.

And the multiplier effect to near by restaurants, taxis, musesums, you name it, is long lasting.

Now that we are down 11,000 DJIA points, some fear starts to set in.okay that is a good thing. We will not hit bottom until fear is the headline and Kevin has no buyers for his always uber bullish service.

DJIA down 400-500 this morning at 18,522m 11,000 points down from  29,586 registered Feb 12.

Socionomics teaches us that positive social mood brings inclusive mood. This typicallly leads to the idea of big projects, say the Empire State Building in NYC planned in  1928, or the desire to buy and merge. I personally think such mergers are the result of rising ego among CEOs who simply feel that they have to do 'something' to prove their mettle. In this case that something  was Occidental's new female CEO  ppyaing $38 billion for Anadarko. Now oil is priced at  $22 and no one would approve buying Anadarko.  Carl chan increased his share of ownership. If CEO Vicki Hollub wants to keep her job she will comply with Carl's request for a new board.

Similar deals were the Time Warner takeover, Daimler buying Chrysler, Fed Ex buying Kinko's and so it goes.

Goldman Sachs thinks economic output in US could tumble  24% in the second quarter, I think it probably already has. And besides, how on earth can GS make such an estimate, based on what?

Years ago the market followed money supply, the idea that the growth or shrink of total money drove the economy and investing.  Belief has moved on to what the FED is doing I guess but this is a good time to re visit that idea. The velocity of money, how fast it changes hands, has slowed to near nothing.  So the money supply is shrinking as we get more lay-offs, the worst of both worlds.

My take is that the worst of the immediate sell off is behind us.  Markets will be moving into a corrective fourth wave and then a final fifth wave down as the reality of the economic slow down sets in.

Zack's invitation is below

____________________________________

Last night was the deadline to claim all the advantages of our long-term investing services and Zacks Premiumresearch at a small fraction of their worth.

You were on the restricted list of Zacks members who were given this opportunity and I'd hate to see you miss out.

Right now, prices for many strong stocks are at bargain levels. When the coronavirus outbreak subsides and the US.-Mexico-Canada and U.S.-China trade deals gain momentum, I expect the release of pent-up demand to send the markets skyrocketing.

This is too good of an opportunity. So I'm extending the deadline until midnight tonight.

Fifth Wave in Progress on Consumer Staples

Weekend March 21 2020

 

Here is yet another chart showing it is not time to buy yet. The fifth wave is in progress to the downside.

In the really big picture, I suspect this is just the start of a much larger five wave decline.In short allof this when this fifth wave ends is just a prelude to a much larger five waves down.  Which is to say the bear market is just getting underway.

 

Just getting started.....Note the PMO peaked in  2015 and is just now turning down again.  We are a long way from thte  2009- bottom.

Transport Re Tracement, Other Indicators Suggest a Much Deeper Fall

Weekend March 21 2020

A closer look at PMO on the same graph

The PMO is still falling in the bottom panel. It would take an unbelievable rally to revers this plunge. The Tranports have fallen vertically right to the  2016 low. But I do not see any signs of a bottom.

Okay let' ssubstitute another indicator for PMO, On Balance Volume

OBV is falling vertically and shows no signs of a bottom. See previous post, why are all theses so called experts wanting to buy when there is no sign of a bottom?  Answer they are not nearly as expert as one might think.

A bottom will only be reached when the selling volume dries up and can be replaced with net buys. But on the weekly graph the OBV is just now turning down!

 

NYSE Advance Decline

 

We have long indicated this is the most reliable indicator.Notice the MACD is just now turning down. The  actual A/D line is not even close to the low recorded Dec 2018. Taken together all this suggest to me that this sell off is just getting started.

The scary thing about this sell off is how fast it is happening compared to every other recent sell off.

Consider this comparison with  2009.

 

If a bull market can stay over bought for years, a bear market can stay over sold for some time.

The fact that so many indicators have approached the  2009 low so quickly suggests that this is not your ordinary correction, after which you quickly buy in.