Tuesday August 25, 2020
I ran across a column I wrote after June 8 titled Third Wave Down Begins.
That comment was way early. But it does appear the tide is beginning to turn. Stocks, bonds, metals are slowly turning. Sure the FANG group is still powering various indexes to new highs but the majority of stocks topped months ago.
Frost Bank
Let's use a 240 minute chart for all dating back to the June 8 recovery high. While the headlines would make you think we are back in the summer of 1982 when the bull market really began this is hardly the case for the stocks in this post.
Exxon Mobil
Tens of thousands retirees depend on the XOM dividend. The stock is down 24% since June 8. That casts doubt on the future of the dividend.
Nustar NS
Nustar is headquartered here in San Antonio. Bill Greehey, former CEO of Valero is the Chairman of Nustar. He and others have made large insider purchases of the stock. That suggests he thinks it is cheap and can pay the dividend of $1.60 currently yields a whopping 11.43%. The problem is that NS lost $1.25 a share. Next earnings date i Nov 3-9.
DIV
DIV is hte ETF dividend stock. Currently it pays 11.53% but teh total return this year is a negative 35%. The fifty two week high was 24.02.
TLT 20 yr bond fund
Stocks topped June 8 but TLT bottomed and then rallied as stocks wandered sideways this sumer. Note it is under the 200 bar MA.
GLD
Gold rallied as the US Dollar fell. All these charts are the same time period, scan up the pages an notice all these asset classes are topping the first couple of weeks of August.
Bond Fund versus the ETF for the US Dollar
Note the inverse correlation. UUP in black appears to be bottoming as TLT has sold off.
UDN Bear Dollar versus UUP Bull Dollar
Bear dollar topping bull dollar making a low. I doubt this really resolves until after Labor Day as the election gears up and traders return from vacation.
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