The Market Perspective

Will Trump Be Removed from Office?

Friday Jasn 11 2019

 

Will Negative Social Mood Oust Trump? Watch the Stock Market

By Elliott Wave International

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Special Q&A With Alan Hall on Elections and Impeachment

At the end of this article you'll have the opportunity to hear Alan discuss his impeachment research with ETV Correspondent Dana Weeks.

You cannot afford to miss Alan's insightful political analysis. Please login to view the interview after reading the article.

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Those who want President Trump to stay in office should hope the stock market rises, and those who want him ousted should hope it crashes.

Why? History shows that the stock market is a useful indicator of people's attitudes toward the president. Socionomic theory proposes that society's overall mood regulates both stock prices and the public's perceptions of its leaders. Positive social mood makes society feel optimistic, bid up stock prices and credit leaders for their good feelings. Negative social mood makes society feel pessimistic, sell stocks and blame leaders for their bad feelings.

These tendencies are evident in presidential re-election outcomes. Presidents Hoover and Carter, for example, lost bids for re-election during trends toward negative social mood as reflected by declining stock prices. In fact, the stock market is a better re-election indicator than inflation, unemployment and GDP growth combined, as my colleagues at the Socionomics Institute demonstrated in a 2012 paper.

Social mood's influence is also evident in the results of U.S. presidential impeachments and near-impeachments. Twice in history the U.S. House of Representatives has voted to impeach a president. In both cases social mood was trending positively, as reflected by rising stock prices, and in both cases the Senate voted for acquittal.

Figure 1

Figure 1 illustrates the timing of the first presidential impeachment. On March 2, 1868, the House of Representatives formally agreed to eleven articles of impeachment against President Andrew Johnson. The Senate took three separate votes, and each fell one vote short of the two-thirds majority necessary to remove Johnson from office. The Senate acquitted Johnson on May 26, 1868, during a stock rally that added to the 250% increase since October 1857.

Figure 2

Figure 2 shows that a substantial trend toward positive social mood preceded President Bill Clinton's impeachment in the House and subsequent acquittal in the Senate. Note that some of the most serious events in the Monica Lewinsky scandal coincided with the largest downturn in the Dow during Clinton's presidency. Yet, as the Dow recovered, so did Clinton's approval ratings. And despite a $70-million prosecution of Clinton's related perjury and obstruction of justice charges, the Senate acquitted the president as positive social mood lifted the Dow, Dow/gold and Dow/PPI to important peaks.

Figure 3

President Richard Nixon's near-impeachment and resignation from office serves as a textbook case of how social mood influences the fortunes of public figures. Figure 3 shows the Dow Jones Industrial Average surrounding his time in office. The soon-to-be infamous Watergate break-in occurred toward the end of a strong 67% rally in the Dow from May 1970-January 1973. That trend toward positive mood helped Nixon win re-election in a landslide. But as mood trended toward the negative, the public's view of its leader darkened, its appetite for scandal increased, the investigation accelerated, and Nixon's fortunes changed. With almost certain impeachment looming, Nixon became the first president to resign from office on August 9, 1974.

Figure 4

What does this history tell us about the probability that President Trump will serve a full term in office? We considered this question in the June 2017 issue of The Socionomist. Figure 4 is a chart from that issue, updated to the present. It depicts the trend of social mood as reflected by the Dow. We left the gray arrows showing our 2017 analysis in place, and we added red arrows to indicate the possibilities going forward. In July 2017, Congressman Brad Sherman formally introduced an article of impeachment against the president in the House of Representatives. Yet as the market rose during 2017, President Trump--despite low approval ratings, tremendous staff turnover, unrelenting criticism from the political left and numerous indictments and charges of Trump associates in the ongoing Mueller investigation--did not face an impeachment vote. After the stock market peaked on January 26, 2018, however, the tone changed, and even some on the political right became more critical of the president.

Since the October 3 stock market peak, disapproval of the president has grown steadily louder and more strident. At the same time, the Mueller investigation has implicated more and more of the president's inner circle in illegal activities. The Democrats won control of the House in the 2018 midterms. A November 26 Gallup poll revealed Trump's disapproval rating had hit an all-time high. On December 10, Fox News's senior judicial analyst Andrew Napolitano said Trump could be charged with "three separate crimes and could be indicted while serving as president." By December 17, the Mueller investigation had issued more than 100 criminal counts and charged 34 people, 10 of whom have been found guilty. That same day, Wired published its list of "All 17 (Known) Trump and Russia Investigations" and said, "it's increasingly clear that, as 2018 winds down, Donald Trump faces a legal assault unlike anything previously seen by any president."

In the weeks since, the Trump Foundation agreed to dissolve, and Secretary of Defense James Mattis and diplomat Brett McGurk have resigned. On December 24, Time reported, "National Christmas Tree to Stay Dark During Holiday Due to Government Shutdown," and several news organizations ran stories with versions of The Atlantic's headline, "President Trump's Nightmare Before Christmas," as the stock market plunged. Of course, stalwart supporters of the president remain. Yet the number of oppositional voices is rising. A December 19 NBC News/Wall Street Journal poll found that 41% of Americans favor impeachment hearings.

We don't know what the Mueller investigation will ultimately reveal, but for Trump, the facts may not matter as much as the social mood. Fasten your seatbelt and keep your eyes on stock market indexes, our best reflection of the trend of social mood.

Q & A With Alan Hall on Elections and Impeachment

You've read his essay, now hear from Alan Hall himself -- including how he connects the dots from election research to impeachment, plus how he hopes to "get thru" to people whose minds are already made up.

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This article was syndicated by Elliott Wave International and was originally published under the headline Will Negative Social Mood Oust Trump? Watch the Stock Market. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

 

New Year's Day, A Turn in Progress

Jan 1 2019

I remarked on the widespread level of fear among market writers last week.

Here is our most reliable market indicator.

THe MAs are begining to turn up which is positive as is MACD at bottom and RSI at top.

Bullish Percent 200 Day MA

 

A drop from  70% to near 10 percent in three months is a real correction. Again the MAs seem to be bottoming and MACD as well.

NASD New Lows Has Returned to its 'normal ' reading.

 

It is hard to imagine a new torrent of selling with these charts in this position.  Readers are again referred to McClellan's 10-1 article posted last Friday.

 

Weekly NYSE Bullish Percent

This view is one we have not heard on CNBC or Fox Business. The rally peaked early in  2018. the rest of the year represented a orrectionwhich collapsed in the fourth quarter. That done we may have a buying opportunity at hand.

 

Put Call Ratio Chart Supports Other Indicators Suggesting a Low is in Place

Weekend Dec 31 2018

This is a hart of the number of puts, negative mood, versus the number of calls, positive mood. A high reading indicates maximum fear like a high reading on the VIX or the high number of new lows shown at top, a collapse in the MACD indicating the air is out of the CPCE balloon, and finally a lower VIX at bottom.The message here is that the stock market should be turning up in  the New Year.

Monday Meltdown

Monday Dec 24 2018

I was in broker school from Oct 1973-April 1974. I have followed markets since I re entered that business in 1983. I do not ever recall a Christmas Eve day like this.

CNBC reports this is the worst Dec since 1931 that is the very heart of the Great Depression sell off.

The DJIA sold off 250 points the first hour. It then rallied back to 22 300 so it could fall another  500 points the last two hour. Clearly the smart money is getting out while the rest of the country is stuck in buy and hold mode.

Worse crude oil sold off  $3.06 to  42.53. Next stop $40 but this kind so shellacking suggests that 40 will not hold, and 26 is the next stop down.

It is near unbelievable that CNBC is still debating whether this is a correction. This is as the Brits would say a bloody awful prelude to a total meltdown.

NYSE Advance Decline - falling off the chart, this is the first reversal like this since teh turn down in  2008

Gold had a great day up $13. I am beginning to think stocks sell off into the end of the year and gold rallies into a top this week

and then we reverse in the new year with gold pulling back while stocks move up but that is a sheer guess.

 

USO

$8 on USO corresponds to $30 for crude oil at top. I am guessing USO goes to $5 given the PMO at the bottom. The last three months took out over a year of advance and sideways action.

Few are even beginning to grasp the significance of all this. The markets are flashing not just trouble but serious trouble for  2019.

 

Social Mood is crashing to the negative side.

Worst Week for Stocks Since 2008

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.

dennislelam@gmail.com

The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or predictions.

 

 

 

 

Meltdown Things Look a Lot Like 1973-74

Weekend Dec 22, 2018

 

Stock prices fall seven times as fast as they rise.

This fact is being demonstrated every day.

 

 

Stock Market

 

The bull  market in stocks and energy ended October 3, 2018.  This is a top of considerable significance possible dating back to 1982. The bull market in gold resumed August 17, 2018. It is imperative to switch your outlook from bull to bear in energy and stocks

 

There are plenty of statistics on the markets so let’s provide a different perspective on what may happen. In 1972 Richard Nixon was re-elected in the greatest landslide ever. He beat a very Progressive George McGovern. Nixon demanded resignations and new applications from his cabinet resulting in turnover. The media despised him and his victory. He faced a resentful Democrat Congress. The war in Viet Nam dragged on amid protests. OPEC created an energy crisis.   The stock market hit a new high over 1,000 but quickly reversed. Soon Watergate and various scandals dominated the news. Nixon aides eventually went to prison. Does this sound familiar?

 

Now the energy crisis is on the other foot as Russia and the Saudis need higher oil prices to finance their economies. The media relentlessly attacks Trump over every imaginable sin. Protests occur around the world and here during the Cavanaugh hearing. Jim Mattis and John Kelly both resigned. Social mood is totally polarized now as then. The 1973-74 era resulted in a slow bear market taking the DJIA down from 1,000+ to 577 in two years. Now the DJIA falls hundreds of points a day, unable to rally. That period may well serve as a template for this one.

 

Energy

 

Last week I suggested a lower dollar might help oil prices. We got the lower dollar but not higher oil. So oil prices are declining on a weakened dollar, the worst of all scenarios.

 

Today Friday WTIC hovers around $45. Frankly the chart patterns are telegraphing the possibility of much lower prices ahead. Energy share prices have been decimated between the stock market and crude oil price sell off. The XES Energy Service ETF is now trading under its January 2016 low of $12.50. We have noted for months that the XES had failed to confirm the move higher to $76 oil.   Bell weather Patterson PTEN will probably trade in single digits by year-end.

 

The bear market in oil prices will not only mean lower pries for energy shares but many firms will be forced to merge be taken, or simply go out of business.

 

Again we suggest readers study the 1973-74 era as a guide for 2019.

 

dennislelam@gmail.com

http://www.themarketperspective.com

 

 

 

Investors not Waiting for the News to Exit the Market

Weekend Dec 16, 2018

One might want to review the events of the  1973-74 bear market.

https://en.wikipedia.org/wiki/1973%E2%80%9374_stock_market_crash

http://jasonzweig.com/learning-from-the-bear-market-of-1973-1974/

Nixon had beat McGovern 520-17 electoral votes. McGovern only carried MA and Washington  DC.  The press was furious. Does this sound familiar?

Nixon took the US off the gold standard, devalued the dollar, and endured the first oil embargo by OPEC.

A special counsel  was appointed to investigate Nixon's taping of conversations in his office.Nixon finally fired him. Does this sound familiar?

 

https://en.wikipedia.org/w/index.php?search=Archibald+Cox&title=Special:Search&profile=advanced&fulltext=1&advancedSearch-current={"namespaces"%3A[0]}&ns0=1&searchToken=1tmku9zcmt4ccbc6776x3qwpb

The stock market reached  1,000 DJIA for the first time in 1966. It did so again during the 1972 election It then turned down but never had a daily crash.

The Viet Nam war dragged on with no end in sight as the Afghan War does today. 

Again does this sound familiar?

I am suggesting we have the perfect set up for a social mod repeat of that era.  The Democrats have taken the House and promise endless investigations.   Trump sees the world in terms of winners and losers.The surprise may be that realizing he cannot win again, he chooses not to run. Nixon had to resign from office or face a real impeachment. And the I word is in the news again, not much chance of success, but again lots of negative news. 

Energy

XOP Spider

With PMO headed down I would guess XOP is headed back to its 2016 low of 22.  Between the double whammy of 76-50 oil prices and now a general market sell off, energy sector has been hard hit. But I have warned the XES has forecast this with its incredibly weak performance. 

WTIC

 

Can oil hold a price of $50?  PMO is stil falling so frankly holding looks like the less likely alternative. 

Transports

Transports took out the February low this year with the weak performance this wee. The small cap Russell 2000 and the Retail Spider did the same and this is the height of Christmas shopping Season.

There is usually a Santa Claus rally in late December. that appears unlikely now.  The stock market tends to lead the economy by six to nine months. This may well be forecasting a recession.  No stock rally has ever lasted as long as this one for ten years. Given the negative social mood world wide, see Paris, that seems more likely. 

The dollar remains strong. Gold has advanced but this week should reveal if gold  continues its climb.

dennislelam@gmail.com

The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or predictions.

 

 

 

Wall Street Has a Breadth Problem

Friday Dec 14 2018

Wall Street Has a Breadth Problem

 

There are a multitude of technical and fundamental indicators regarding the stock market.   Here are two which are easy to understand and cut through the clutter of the focus on FANG, Boeing, and Apple.

 

One t indicator would be the list of new highs and new lows printed daily in the Wall Street Journal. While the talking heads on CNBC have been more positive on the early December reversal, the new highs to lows indicator is flashing the real story.

 

The indicator is just what it seems. It lists those stocks making either new highs or new lows for the year. The ratios for the last three days starting Tuesday are lows to highs 8 to 2, 9 to 1, and 9 to 1. So the new low list is nine times that of the new highs. How can that be when stock indexes have recently seemingly turned up?

 

The answer is that most indexes weight some stocks more than others.   A big drop in Boeing for example can account for a big drop in say the DJIA.

 

Another simple indicator is the relative position of the exponential 50 day moving average EMA to the 200 day. A buy signal occurs when the shorter rises above the longer. A sell signal occurs when the shorter 50 falls below the longer 200. Such a sell signal just occurred for the S & P 500, the Dow Transports, and the Russell 2000 small cap stocks.

 

Worse, the Russell and the Transports both hit new lows Thursday.   As I write this Friday morning, the DJIA has dropped another 200 points. I had thought we would have more of an upward correction but it is not happening yet.   The crash of 2008-09 is a distant memory to most ‘long term investors.’ But the new high new low indicator is flashing warnings that the selling should probably be done now rather than later.

 

 

Last week I was skeptical that OPEC (Saudi) and Russia would cut productions 1.2 MBD. And sure enough, OPEC increased its output in November. Today the story is that OPEC will simply ship less oil to the USA.   It is difficult to imagine two countries with nothing to sell but oil, will cut production.

 

Crude oil needs a close over $54.77 to turn its trend up and is trading below that level now.

 

Meanwhile negative mood towards politicians continues around the world. British PM Theresa May survived a no confidence vote, the French riot in the streets, and India’s PM Modi may get the boot in elections this spring.

Corrective Wave C Up Ends,Violently

Tuesday 12/4 1 14 PM CST

Here is the ending to my weekend newspaper column posted last Friday.

 

The 617 point advance in the DJIA Wednesday generated a lot of positive buzz in the media. But there are reasons to remain cautious. This move up looks like a normal Wave C rebound, A up, B down C up, after the October collapse.

 

The Dow Transports are re-testing the 200 day moving average and need a close over 11,000 to turn the turned up. That is not far from 10,679 today but markets are trading lower as I write.

 

If stocks turn down next week, which I suspect they will, the specter of a bear market reality looms.

TMP posted Friday Dec 1

Forget what I wrote about bottom signals this morning, I did notice the SAR PAR had not generated a buy signal in energy stocks, and they have reversed hard to the downside. One analyst made the comment in a WSJ article this morning that the last thing Trump should be wishing for is cheaper oil. That of course is indicative of a weaker economy world wide.

Here is an update on the Wave Count

This is as textbook as it gets in Elliott Wave.  DJIA posted a clear five waves down in October. We then had an A B C corrective A up B Down and C up. The 617 point day last week really got the talking heads on CNBC bullish, ignoring the wave count. Note Wave C peaked below Wave A.  We are now beginning a new five wave sequence to the downside. Notice PMO is breaking over to the downside.

Paris is on fire, Xi and Trump do not have a deal, and the USMCA will probably get hung up in the Democrat House, probably, come on Dennis.

The Jury Is Out, Make or Break Time for Stocks

Weekend Dec 2 2018

Let's start with our most reliable indicator.

NYSE Advance Decline

The A/D line is attempting to turn up, which would be a good thinkg We do not have a crossover of any of the MAs to the upside just yet.

150 Day Moving Average

This indicator is challenging the  50% level and MACD and RSI are struggling to turn up.

Transports tend to lead the Industrials.  This is encouraging. This week will tell the story.

Russel 2000

 

The small cap market is not showing much energy which is worrisome. Apple is bouncing at tehe 170-180 level, 180 being the number from May through July.

NASD 100

The NASD led on the way up to Oct 3  and thenled on the way down.  Here it is stil below its  200 day MA. PMO is turning up at bottom.

WTIC

Crude oil is oversold but no sign of a turn up yet.

Dollar Index

The dollar viewed through the UUP ETF is looking  a bit toppy with resistance at 26. If the dollar rolled over it would help gold and oil

Gold Bug Index to SPX

The rally in the stock market has this ratio chart of gold stocks to SPX stalling.

Bottom Line

This is the seasonal time for a stock market low and then recovery That may be happening but it is not clear at all. The Russell 2000 and NDX are lagging the Transports.  More time is needed to  see how the markets progress. 

Worrisome Mood

Shanghai is down  25%  this year.

Xi and Trump are not budging on trade

Trudeau is unhappy with tariffs.

American Manufacturers are unhappy with tariffs.

No vote on he new NAFTA yet.

Emerging markets struggle to recover.

Interest rates are rising.

Weak oil prices threaten Saudi and emerging markets

dennislelam@gmail.com

The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or predictions.