July 4 2015 Weekend
Part II of my interview at Elliott Wave on Socionomics
Tom McClellan believes The Top is one month away.
My leading indications say that THE top is not due for another month. So this high-volume day on Greece worries is a sign of an oversold opportunity within what is still an uptrend.
Tom McClellan July 2 2015
His indicator is here. It amounts to moving the commitment of traders report in Eurodollar futures (not euros but American dollars on deposit in Europe) forward a year and comparing it to a major stock index.
He may be right. We have uber bearish blood in the street headlines as though Greece will note to make itself disappear. I put the same indicators on several Dow Charts, let's look.
Composite 65
It's the same old story, old tops form new bottom. With MACD bottoming how much more downside is there likely to be short term?
Transports
The Transports paint much the same picture. We have had a lot to say about this decline as have others but the index is close to the October 2014 low at 7750 which generated a rally.
Industrials
Here it is back to the 50 week MA but that is about it.
Percent of Stocks versus MA
The low last August was a bit below where the indicator is now and the October low was another 15 points lower but it sure got there quickly and then reversed. This chart suggests we might see another Monday drop and then a reversal. I am not about to try to predict what will happen tomorrow but this argues for some sort of low in the near future.
Bonds
The consolidation continues in bonds. The thirty year yield needs to break above 3.2% to continue advancing.
China
Looks like this will fall at least to 3250 before finding support.
HUI Gold Bug Index
HUI is back to its 2008 crash low. Multiple cycles converge in July arguing for an important low here. HUI has lost 77% of its valuation in 2011.
Silver
Silver has lost 70% of its value since 2011. Again important cycle lows should be on hand in the next two months.
Silver Monthly
This makes more sense on a long term monthly chart. The bull market has corrected near the 200 month MA.
Natural Gas
Natural Gas has traced out a huge multi-year inverse head and shoulders pattern. It too should be bottoming but needs to move over 2.95.
Crude Oil
This looks just awful. Price never challenged the 50 week MA. THE MACD may be topping. After a grief foray into positive territory money flow at top is turning negative. The world is awash in oil with Saudi production surging.
Daily Oil
The breakout was at $54 that is now the level to watch. A break of that price would be very negative.
XLE Energy ETF at top and XES Energy Service at bottom are not encouraging.
The Bottom Line
Stocks are a bit over sold here to maintain an uber bearish stance at the moment. That does not mean the whole situation could not be reversed with a top in August and then a big fall, recall 1987 when just that happened.
Gold, silver, and natural gas should be making important lows this summer.
Crude Oil needs to stay above 54 but recall the article we posted a few days back, I see it again in the San Antonio paper today. Up to now firms were able to hedge with $90 futures. Those prices are now gone the best one can get is $60. So energy firms will be posting much lower earnings.
Shale Drillers are losing the ability to hedge with $90 oil futures.
Socionomics
Robert Folsom at EWI has posted a two part interview we had on my visit to Gainesville a couple of weeks back I have been invited to speak at the 2016 Social Mood Conference. In the mean time we are working on an internet presentation regarding the fundamentals of Socionomics. I can't say enough about the fine hospitality of our friends in Gainesville.
Thanks for reading TMP.
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