Weekend Dec 22 2018
Regarding Jim Mattis resignation, this comment from Kremlin spokesman Dmitry Peskov
When stability and predictability is being replaced by unpredictability, surprise, and I would even say the cchaotic nature of certain decisions, this of course causes discomfort in foreign relations and concern.
And that is from Russia no less, certainly not our good buddy.
Trump discusses firing Powell
That would really tank the markets. The FED prides itself on independence. By tweeting the FED should not raise rates, Powell had no choice but to do so or look like the FED had lost all independence from political influence. Once again Trump defeats himself. In my newspaper column see previous post I suggested the period ahead would be much like the period of 1973-74. If Trump were to fire Powell that would parallel Nixon firing Archibald Cox, his special prosecutor.
Carl Swenlin at Decision Point and Art Hill and John Murphy all continue to be in the bear market camp. Friday was options expiration which gave us a 14 B share day.
New Lows 
The market is about where the last two sell offs in 2012 and 2016 ended in terms of new lows. But this indicator could go higher. And those previous lows ocurred in a bull market.
Now that we are in a bear market, I would look more towards the 2008 extreme.
NYSE Advance Decline Weekly
Note the break down is much sharper and well below the MAs that in 2015-16.
Monthly Twelve Year
This is ominous. The MACD has turned down on the slow moving monthly chart. And it did so from a lower thigh than in 2016. That suggests a lower low than in 2016.
It took from the fall of 2007 to the spring of 2009 for the market to bottom in the financial meltdown. Hmm the top this time occurred in the fall, a similar time frame would be spring 2019 as tehe next election cycle really gets going.
In 2008 I recall Joe Granville interview on CNBC. His comment that October was that when it took a foot and a half to print the new lows in the WSJ that was a low.
That was the internal low but the index of prices did not bottom until March five months later.
Take a look at the new low print in the weekend WSJ. It runs several feet! This is another clue we are truly in a bear market.
Only 15.8% of SP stocks are above their 200 day week moving average. Such an extreme suggests a bounce but it also suggests a mass exit from the markets.
Volatility Index Long Term
Monthly Same Chart but much smaller time frame
The big move up in MACD at bottom suggests a lot more down side price action.
This indicator also matches 2011 and 2016 but is way lower than 2008.
DJIA Weekly since Trump
The next test is clearly the 200 week MA at 20,668. If that fails the market gives back the entire Trump advance returning to 17,000. That frankly makes sense given that Trump
has used the stock market as his success gauge. Imagine MSNBC running videos of Trump bragging about the market moving up as it melts down.
Apple The World's Most Valuable Stock, or it was four months ago
Notice how six months wiped out the prior one year advance, and price is still falling. Apple faces falling sales in China and with the ninth or tenth phone costing $800 they are poorly positioned for an economic down turn.
US Dollar
The dollar broke its 34 day MA.Often markets will reverse trying out the new resistance level and that happened Friday.But the MAs are turning .
Energy
the bullish percent of energy stocks now stands at 3.3%, cow from 75% in July, what a decline. Transocean RIG is trading at one fourth book value.
Gold Silver
Ratio Chart of GLD paper gold to UUP U S Dollar
Weekly close was 45.59. If 40 goes, the next stop is the 2016 low at 26. And yes that is a real possibility.
Apache APA is already below its 2016 low suggesting that is in fact where oil prices are headed, see above. IF Apache is below its 2016 low this suggests oil prices are headed for their 2016 low. Eventually this will bring a great buying opportunity but that may be well into the distant future.
this ratio chart has been valuable to gauge gold and the Dollar. The Dollar was breaking down Thursday and bounced Friday testing upside resistance. See previous dollar chart.
In the ratio chart the indicator fell back to fill the gap from he 20th, The MACD looks positive for a reverse back to the upside particularly if the Dollar falls this week.
I was having difficulty seeing a fundamental reason for a dollar fall. Mattis resigns on the heels of Kelly and Trump threatens to fire Powell and the Interior Secy is out and he replaces the Homeland Security appointee, and as noted in our opening, even Russia is perplexed. On top of that he is doubting his Education Secretary Betsy deVoss for some reason. Losing Mattis is a very big deal on the international front no matter what Trump thinks. Clearly Mattis did not wait to be fired on Twitter.
Euro versus Dollar
This is the Euro ETF versus the Dollar ETF. No break out but bottoming action for the last two months. Note the pullback o Friday.
Ratio of Euro to the Dolar looks near a bottom on the 30 minute chart 
The Bottom Line
My attempts to identify the wave count have failed but that is another feature of a bear market, all support is over run to the down side.
After ten years of bull market few remember the bear of 2007-2009. And no doubt many never experienced it at all. I watched CNBC Friday and they were touting Utilities and Materials as the 'leaders.' That meant those two classes were down less than the others. Stocks are too oversold to go short now, Cash is King. The Smart Money is getting out.
The purpose of a bear market is to wipe out all the excess speculation of the previous bull. Here are a couple of energy examples. When oil was 100+, Sanchez Energy borrowed hundreds of millions of dollars to acquire more acreage. Now the stock is under SN 33 cents. Weatherford WFT made the same mistake building a giant yard south of San Antonio to service the Eagle Ford. Now it trades at 27 cents and is being de listed from the NYSE. Both are zombie bankrupts.
The lack of any Santa Claus Rally is yet another tip off that things will get much worse.
Bonds
The ten year note price is still above the two year note price but for how long? IF the price of the ten year falls below the two year we have an inverted yield curve such that lohnger term rates are below much shorter term rates. This indicates fear, investors are hiding in even longer term securities fearful rates will fall further.
Currencies - Gold
We look for the US Dollar to fall and the Euro to rise this week. Thsisshould strengthen gold. Silver has yet to really move but I am accumulating shares of CDE ad HL.
Energy
Energy is incredibly weak. A weaker dollar may help but has not done so thus far.
Social Mood
Social Mood turning more and more negative world wide as well as in the US. Trump's threat is now real though government shutdown is more symbolic than anything terribly serious. No one in Congress will miss a pay check and no doubt Trump will point that out. If they did Government would not shut down. Trump will face calls for his tax returns, investigations into his business, and no telling what from the Mueller investigation. Notice pre owned housing sales are slowing London and NY city prices down. Kasich is apparently palnning a Gene MCarthy style run against Trump. Will Trump decline to run if he senses he cannot win, probably.
The recent French demonstrations, 136,000 strong, suggest there are Trump voters in France weary of being ignored by the cultural elites.
The US withdrawal from Syria is exclusionary and as our opening quote points out, has the world wondering about what Trump will do next. In short, is the US a reliable partner?
See the lead editorial in the WSJ today on that very topic.
China continues to slow and the news has them adopting yet another Soviet style long term plan.
Ibdia's Modi may get the boot in India this spring. Macron and May both reeling.
Saudi's hope for an Aramco IPO is toast. check out this article on Saudi Foreign Reserves and break even
Every country south of the Rio Grande is a mess, killings continue in Mexico, the peso is 20 to 1 against the dollar.
In short social mood has turned negative with a throw the bums out attitude. And it is just getting underway.
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