Friday 12/20/2024
The Bears are Out
Overall, Dow Jones is down by a total of 2,700 points compared to December 5, when its down streak started. Wednesday marked the tenth straight losing session for the index—the longest streak since 1974, when it fell for eleven days in a row.
Neewsweek Today
You can’t say we haven’t warned you. For months this column has warned of weakening internals. Social mood theory holds that momentum is greatest at the end of move. The 1,000+ point decline occurred near the end of the losing streak. Wednesday there were 14 stocks down for every advance. That is a serious kick off (hmm or kick down) after posting an all-time high DJIA record.
The media informs the cause was Jerome Powell’s suggestion that there may not be as many rate cuts as next year as investors may have expected. How on earth can Jerome predict next year no better than he has done this year? After the quarter point cut Wednesday the yield on Ten Year Treasury note was up not down. Hence the market disagrees and the FED should have done nothing. Rates will be rising next year not falling. Rates made their 39 year cycle low March, 2020. Rates have steadily risen ever since as we are now in the uptrend of a new 39 year cycle.
The market is down because the Elliott Wave Pattern of human behavior is now complete from its 1932 low. Social mood is so bullish there are simply no buyers left to sustain the market.
While the US stock market mood is uber bullish, elsewhere negative mood abounds. Canada, France, Germany, Britain, South Korea, and yes the US are all in political turmoil. A US government shutdown looms today.
The same can be said for Syria, Lebanon, Gaza, Ukraine, and Iran. Putin just sustained a 4.5 hour television rant to assure his ‘voters’ he is in charge.
A AP headline tells us Americans end 2024 with a grim economic outlook. But retail Christmas sales are strong as it air travel. Things do not all fall apart at once. Did you notice Amazon workers are on strike? They want what the longshoremen got with their strike.
The last high in Ten Year Treasury yields was 5.7%. I expect that rates will exceed that number by the end of January.
Gold and silver prices continue to correct. Gold is down 200 points form its 2,800 high. The correction may not end until the previous low of 2,540 is erased. Silver violated its $30 break out closing at 29.41 Thursday. It will likely go lower before a bottom is set.
Crude oil remains range bound at $68-70. However Patterson jumped 4.4% today and Apache APA as well up4.2%.
It’s 1973-74 all over again both politically and socially. The markets are taking notice.