The Market Perspective

The Terminal List

Thursday July 227 2022

The Terminal List is a streaming series on Amazon Prime. I am happy to report that Prime has finally upgraded its offerings big time.

Lots more movies, not just B grade re treads, and some great series like this and Reacher.

The topic for this post is Terminal List starring Chris Pratt who is also a producer. It  is classic Saturday morning movie serial

stuff done very well. I just watched episode six and here are a few thoughts. Oh the series is about a Navy Seal Lt Commander who has lost his entire

squad and then wife and daughter, okay spoiler alert you can see where the title originates.

 

My thoughts on this episode

Just watched episode six of the eight part series terminal list. Like Reacher there are more books, two in fact rather than 27 but

 

I guess if one watches enough movies you see the same thing again

 

We have all witnessed the scene where the hero is in a totally impossible situration, there is no way out, but he manages to get out

 

well in episode six and I am not spoiling here it struck me we have a combination of scenes from

 

High Sierra with Humphrey Bogart

 

Lonely are the Brave - Kirk Douglas

 

Butch Cassidy - Newman and Redford, the clift scene

 

Rambo - Stallone in front of the cave

 

Aliens - Sig Weaver and Michael Bien - aliens are on top of us but we can't see them

 

and boy does episode wrap all of these into one

 

Wow

 

like Reacher this entire series is worth watching again

 

In the  1920s magazines like Colliers would serialize a novel encouraging subscribers to keep on buying to read the next

installment of the novel

 

all these channels are repeating that and the classic Sat Morning Serial that used to run a movie theaters

 

goes around, comes around

 

 

Oil Tops $50. Saudi Arabia Throws a Party

Weekend May 20, 2017

Elliott Wave International on Metals

Stock Market

Industrials

In late April the DJIA managed to regain the 50 bar MA and make a lower high. This time the target area is the blue square. eventually as we have noted, it is typical

for a market that breaks an MA to come back up and re test what is now resistance.That is where the DJIA will be this next week, testing.

Transports

Closely examine the Transports above and then the Industrials in the first chart. It becomes more apparent that the Transports are leading the Industrials down. the lower high lower low

patern is well along the way. The blue square is a likely target for the rebound, right at the 50 day MA.

 

As noted in the WSJ, money is pouring into technology as well as tech in emerging markets.

 

TWM Inverse Russell 2000

Best guess is that TWM corrects its advance by week end. That should be the time the rally in the Transports and Industrials starts to run out of steam.

USO Oil ETF

OIl crested $50 by week end and so USO is up. Let's watch what happens as it encounters the blue resistance lines.

 

XES Energy Service

XES will encounter big resistance at the cluster of EMAs around 19-20. The outcome will likely be decisive.

XES Two Hour

On the  two hour chart the battle at 19-20 becomes much more difficult. The trend is down here.

CDE Silver Miner

As the saying goes, CDE  is doing what it needs to do to break out. It re tested the resistance of the MAs and closed above them for the week. I bought about here after the big fall and it is

slowly coming back

Gold

 

 

 Central Fund

 

 

Gold has a positive chart pattern here. Central Fund CEF is trading at a -5.7% discount to Net Asset Value.  And the chart continues to test support and bounce higher. OBV at bottom and STO at top look very supportive for purchase.

As always we are in the summer months ahead and weakness may be expected in gold shares into mid June.

Brazil

 

The new Brazil once again looks a lot like the old Brazil. It dropped 0% this week over Presidential troubles.

The Bottom Line

We guess that the US markets will complete their recovery by week end. Look for the re test of the MAs outlined above.

Bond are stronger than expected.This adds to my perception of market weakness developing.

Crude oil is probably paralleling the general strength of the stock market. Look for tests of resistance there as well by week end.

Gold and silver look better, gold shares always a dicey play. I own a small position in silver miner CDE.

Social Mood

Learn about Socionomics

The podcast Price Trends Price Culture is transitioning to membership status at the socionomics site

Karen Elliott House, former Editor of the WSJ and the Daily Texan when I was an undergrad there, had an excellent article on the Trump Saudi visit this weekend. It as an op ed in the Friday WSJ.  See my column posted Friday . The Deputy Crown Prince Mohammad bin Salman MBS has 50 Islamic Leaders,  the Harlem Globetrotters, and Toby Keith on hand. Obama turned his back on the House of Saud favoring Iran. MBS is looking for a re start of the US in the Middle East. The television footage today Saturday confirms everything Karen predicted.

All We Had to Do was Buy Amazon

It was noted this past week in the WSJ that Amazon turned out to be the internet stock we all should have bought. It is in purple. Here it crosses the SRT chart showing the preference for on line shopping over brick and Mortar. WMT is doing better online but the same chart substituting WMT for XRT also shows a breka out by AMZN.

[email protected]

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 charts.

 

Emerging Markets Versus the US

Friday March 7, 2014

Michael Gayed has some very interesting comments concerning emerging markets. While he takes around the issue in this piece, his point it that emerging markets are wildly under valued compared to the potential over vaulation of the US Markets. 

Let's connect the dots. 

Gold rallies out of ultra lows for mining stocks since December.

Crude OIl tops $100, Natural Gas hits five bucks.

US Stocks take on Everyready Bunny status and keep on going.

But emerging markets are trashed. Brazil bonds yielding 10%.

We will take a longer look this weekend. But it could be that with commodity prices rising and emerging markets beat down, the emerging markets no one wants to buy now might just surprise the rest of the year. 

I suspect near no one bought the miners Dec 31 but the percentage returns since have been spectacular, they always are when one buys at a bottom. 

More to follow this weekend....Thanks for reading TMP. 

 

PS Until then, The Case for Never Retiring  Interestingly my weekly newspaper column suggests that most folks are totally unprepared to 'retire.l'  The idea of 'retirement' is only about one hundred years old, and it may have already seen its best days. The UAW is shrinking, cities are way short on funding their Defined Benefit Plans, the DBP is likely as gone as the Triceratops, and older workers keep the jobs millenials might want...

Order Placement

Wednesday August 1, 2012

Here are a few examples of the advantage of placing a succession of orders under the market. Today I bought the following by having orders under the market before the opening.

Bought

1 Sept 22 TLT 125 put at 1.34, interestingly I had an order for two but only one got filled, someone else was interested

This is even a better example than RAX below. I had an order for 2 TLT puts at 1.34, a lower price than my previous buys. This required a higher price for TLT, I noticed TLT was down over a dollar for the day yet I got onew execution, how?  Here is the answer, someone jacked up the price of TLT over a dollar this afternoon, and it quickly fell back, but that was long enough to get a nice lower price, essential in trading options. If the order had not been there I would not have gotten the price. NOw that I look I had a total fo four orders at that price but only got one, what luck!

25 Shares of EWZ at 51.99,  low for the day was 51.87 now back at 52.52

100 shares of gdxj at 18.99, the low was 18.80 just missing my next order at 18.74, now trading at 19.18

I thought better cancelling an order for RAX at 43.74 but did get 

25 at 43.54

25 at 43.34, it s now trading 43.52

The low for the day was in the early morning, I doubt one would have realized it at the time but by having the two orders in, and managing to cancel the higher order, I got an average of 43.44 for the two. As Steve Kaplan says, to buy low and sell high, first you have to buy low, this is the way to do it. 

I have heard two presentations on Rackspace by their CEO, it is a jaw dropping success story headquartered in San Antonio trading about 2/3 of its 52 week high of 60.55, it has  a 70 to 1 p/e which is why I have not mentioned it but th order strategy is still a good example. I also have a position in Globalscape GSB, another San Antonio Standout.

I had an order for 25 SIL at 18.01, got it at 17.92 and then another 25 at 17.91, now trading at 18.16

I have other orders successively lower in similar fashion for these and other stocks we have followed. But the point is that unless one has the order in on one of these quick drops you do not get filled. Trust me this is advice you will not get from your broker. Brokers tend to be paid for execution rather than strategy. 

 

 

Well Finally, Stocks and Oil Corrections Get Undersay

Friday May 4, 2012

Sunday May 6, 2012

Overview

Stocks and crude oil have apparently begun the descent that was suggested when internals topped back in early February. Yet the averages have stubbornly refused to retreat in the face of much much weaker internals. Now we have  a bit more clarity. 

Reading Assignments

Niall's closing comment:  "I did not come to this country to participate in its decline."

Read the story at Strategic Investment Conference

And in case you were wondering after reading the article, Albanian ninth graders do outperform American ninth graders.

Albania is noted for having the lowest standard of living of any European country (thanks to years of Russian neglect). It was the supposed subject of the movie Wag the Dog.

Mr. Market is a manic depressive with huge mood swings, and you should bet against him, not with him, particularly when he is raving."

Barton Biggs on Investing

This comment from Barton goes right to the heart of contrary investing and socionomics. This is what I meant by running toward the buffalo herd. October 3-4 when the Dow dropped 400 points was the day to buy, the market was raving. The market is raving again but in the opposite direction, see Socionomic comments at end. 

 Stocks and Oil

 

Fundamental news has the economies in Europe in recession; employment and even auto sales slowing here. Most commentators on television, both popular and business, simply do not understand that oil and stock prices and the economy are all linked. High oil prices are also an indication of an economy that can afford higher energy prices. 

But, this week oil collapsed from 106 to less than 99, a much bigger event in my opinion than whatever happened to stocks. This indicates that yes stocks and oil are still linked, the economy is getting weaker, and the out of kilter oil to natural gas ratio is finally be ginning to correct. 

Bullish Percent 150 Day 

The collapse / correction begins. We turned off the log scale to better see the move down from over 90%. Topping is a process. The Summation index topped in early February, this indicator topped in late March. The CCI at bottom has quickly become over sold but this is the other side of what happened  from December to March. 

 

Summation Index

The actual NYSE price index is at top. It has dropped below its 50 day MA.

The Summation Index in the main panel is below all three MAs, CCI at bottom got just over the zero line before falling. 

The Transportation Index, not shown,  has refused to go higher since its top in February. 

The SOX index  of semi-conductors topped in late March.

SOX TLT VIX

Let's take a look at our Dashboard Concept again. What we want you to assimilate here is how the money has moved from risk off in December to risk on topping in March and now back to risk off again. 

    As SOX imoved up from December, see top panel, money moved out of bonds.

    TLT bottome as stocks topped.

    VIX at bottom, the fear indicator, pulled back a the same time. 

    Then SOX topped, TLT bottomed and VIX did a bottoming process, all during March. 

Now the process begins the other way, money moving back to bonds and out of stocks. 

International Europe Asia Far East

What do you see?  This is  a textbook pattern of a head and shoulders top. And the MAs are turning down at far right. At top the RSI has a H & S pattern with a much lower right shoulder. This is Europe, Asia, and the Far East. The BRIC chart has the same pattern, but I omitted it due to aa Stockcharts outlier error. The point is that markets are topping all over the world. 

France - How Bad is It?

Would you believe April 2009 bad?

I look at numerous versions of the charts before deciding which to post. And frankly I was a bit taken back by just how bad it is, note the CAC is at the same level as April, 2009,  Note all three MAs are headed down. The fact is that the CAC had a mild bounce after 2009, failing at the 200 week MA, and is now declining again. France is apparently set to vote for more of the same policies in Sunday's national elections. 

CRB Note to FED, It's Deflation Not Inflation

Every FED Governnor in every speech mentions the specter of 1979 inflation and how they are fighting just that. How about Deflation-the disincentive to invest? Bernanke thought throwing money from helicopters would work, but that just inflated the oil price  and fueld speculation in world stock, commodity, and real estate markets. With Rio one of the world's most expensive cities, the stage is now set for massive deflation, just as it was in 2007. 

Mish reports that this trend is already underway in Australia.  Australia is a mini Canada, with a commodity based economy, leaning on China. See EAFE chart above, see oil chart below, now read the article about what is happening down under. 

I read that some billionaire is planning to build additional  mega gambling casino in the Phillipines.   This is typical top of the market thinking that is not born out by the CRB chart. Longer term readers will recall my prediction that the MGM Macau Casino, doublling down with junk debt, would probably not rescue the US operation. So far investors are in my corner. 

MGM USA - How Much Did the Stimulus Help Anyway

The pre crash high was 100, the stock has never risen over 20 since. I read that net immigration from Mexico to the US has now gone to zero. This charts explains why, the construction jobs have simply disappeared, 

MGM Macau

MGM China #2282 on the Hong Kong Exchange has yet to exceed its initial post IPO high at 29,000. This is a huge divergence against the recovery in the USA markets. 

A Potential Game Changer

I spent a couple of decades literally in the business of helping extract oil from Mother Earth. I also wrote about  it and still do on a weekly basis in two West Texas newspapers. This past week I editorialized on the failure of both parties here to embrace a real energy policy. Billions are wasted at the Energy Dept which has done nothing to improve energy independence. Now however a real chance to do so with natural gas is here, but where is the plan?  A week ago the oil market was still in bull mode, it appears things have changed.

Crude OIl versus Natural Gas - Reversion to the Mean

Markets go from one extreme to the other, here is a case in point. This is a ratio chart of crude oil to natural gas. The historic ratio is 10 to 1, not seen on this chart. It rose to an out of kilter over 50 to 1. Now the correction has begun. See how far the weekly ratio rose above the MAs ?  One of Bob Farrell's ten rules is that markets eventually revert to their mean. That process has now begun. 

We have no way of knowing how 10 to 1 will play out. One extreme, oil stays $100 and natural gas rises to $10-not happening. The other extreme, Oil collapses to say $50, and natural gas rises to $5.  That seems more likely. The Mid East needs oil over $70, we shall see what happens. 

The Road Immediately Ahead

We look for a low in stocks and fold during the month of May. We expect a short term trade able rally in both to follow. That should lead to a high this summer. That will likely be the final high for the market since March, 2009. It should be affirmed with a divergence, the Summation Indexregistering a lower high than it did last February. 

Socionomics

College Tuition

San Antonio College SAC versus University of Texas San Antonio UTSA

 The vertical scale represents tuition dollars per semester. The horizontal scale is the year. 

The next sub prime crisis is pictured above.  The tuition  increase has been parabolic. And more increases are planned for Fall 2012! UTSA is 50 times its 1980 tuition  value, SAC is 14 times the base year. SAC is a community college. UTSA is a major university with both under and graduate programs. SAC enrolls over 50, 000, UTSA enrolls over 30,000. The vast majority of students are on some form of financial aid.  This picture is being repeated all over the country.  Now realize that, as Daniel Henninger noted in his WSJ column this past week, we have  anecdotal stories abound about college students now living in the bedroom they grew up in. Faced with a deflationary environment and a shrinking job market, see the Friday reports, this is unsustainable. 

Today the WSJ featured an article suggesting the banning of college football. Trust me, this is the beginning of a sea change in Higher Ed. Recall the near trillion dollar debt in college loans now. 

Television

One of the high or low points depending on your perspective of the last period of stagnation, was the evening soap opera Dallas. It gained an international audience as Larry Hagman created his role of a lifetime in JR Ewing, the unscrupulous oil tycoon. Well, a sequel series will be back this summer on TNT. Both Hagman and Patrick Duffy are in their original roles with their  sons now battling for control of company. If indeed oil peaked this week, this may be a bit late to the small screen. The original series rode the price of oil up to all time ratings. The episode Who Shot JR ran from mystery March 1980 to solution November 1980. At the time it was  the highest rated tv shows of all time. Remakes and sequels tend to be echoes of the original. The original timed the high in oil prices perfectly. So the show matched the  mood and desire to watch the foibles of the rich and famous. Remember Dynasty? Such shows amid a recession in the US at that time were in their own way an echo of the fabulous Fred Asatire musicals flaunting a fabulous lifestyle during the Depression.

Images from Malaysia

Let's not forget the human dimension of what is happening all around the world.

Robin Wong has captured powerful images of the desire for change in Malaysia. The internet and digital images, now available in really good form via the latest camera phones, are turning everyone into his or her own television studio.  The way such images are instantly broadcast around the world has led to a faster rate of change, the first derivative of a an social mood. Robin used an Olympus E 5 and two of their best lenses, the 11-22 wide angle and the 50-200 to capture these outstanding 'you are there' images. 

The financial markets are topping. The desire for change is really getting underway from North Africa to Malaysia. How this plays out in say Wisconsin, or France, where embedded government workers do not want to budge ontheir benefits, remains to be seen. 

Scream

As soon as The Scream fetched $120 M the markets reversed, with crude oil down over 4% for the week. Social mood is hardly an exact market timing device, but it worked pretty well this week.  

As we have noted here, takeover mania is inclusionary and seen at market tops. The offer by Facebook  of $1 B in stock which will be issued for Instagram which has no net earnings, the move by MSFT to acquire a spin off from Barnes and Noble for

$300 M and this record for art at auction are all indications of an approaching (or have we seen it already?) market top.

 

Thanks for reading The Market Perspective

[email protected]

 

 

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 ands 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 charts.

 

 

Stocks Begin a Pullback

Friday April 6, 2012

The Road Ahead

Stocks look like they are beginning a Wave 4 pullback. That should be followed by a final Wave 5 move to new highs. Bonds are therefore gathering strength. This pullback should be a buying opportunity for a succession of lower orders in Central Fund CEF. Overseas markets continue weak recoveries.  

Daily High Lows

Regular readers will recall our exit in early February. And almost anyone will recall that Mr. Market continued his march upward via the green line. Meanwhile internals, as we have documented, steadily deteriorated, whether shown by the McClellan Oscillator, Summation index, or here the Daily Highs and Lows. All the internal indicators peaked in early February. So where are we now?

Note that USHL, daily highs and lows,  is already  back to December levels when the market was much lower, 1225, about 200 points lower!  I suspect enough has happened to suggest a possible wave count as follows. Indeed headlines abound that last week was the worst of the year so far for the indexes, but only about .7-1% down. 

SPX

I am not suggesting any price targets for Wave 4 but a  possible pattern. It looks to me like the market declined enough this past week to make the case that some sort of pullback has begun. Wave 2 was steep so this may be more of a sideways affair under the Rule of Alternation. RSI at bottom suggests the Wave 3 has run out of steam. 

Bombay, Bovespa Brazil and Shanghai indexes also look weak.

An A B C  progression over the next few weeks would complete a Wave 4 down. That would set up a final push to higher levels to finish a Wave 5. My guess, as I have said, is that will coincide with the FB

 Facebook IPO now announced via NASD for May. The Facebook IPO should mark the top of Wave 5, the most positive social mood possible. The excitement of course could last into early summer. 

 

 

 

 

 

 

 

Junk Bonds, a proxy for stocks, would seem to confirm this analysis, note how much JNK looks lke SPX.

 And the drop under  50 on RSI for JNK would seem to confirm that some sort of correction has begun. 

Bonds

If stocks are weakening, are bonds showing signs of life?

The performance charts graphs IEF, 7-10 year, TLH, 10-20, and TLT, 20 year bonds. 

At far right all three picked up at during this week's trading. 

Crude Oil Then and Now

Then - 2007 - 2008

Then crude broke out at 100 and ran to 112.5

Crude Oil Now 2011 - 2012

Now crude oil broke out around 100 and ran to 110!  The moving averages were much steeper in 2008.That shows a  much stronger uptrend than we have now. 

Gasoline demand is down from a year ago. But the refinery business is unprofitable, there are too many grades of gasoline, and the government continues to send all the wrong signals to establish energy independence. And little is being done to exploit the independence of our own natural gas fields as an energy source. Finally throw in Iran and Israel and well prices are up. 

Jesse's Cafe explains how High Frequency Trading fakes out the locals. A huge number of sell orders appear, the locals sell, the huge number of sell orders are then withdrawn, prices fall, the HFT then buy at lower prices having shorted from higher prices. 

Central Fund and the US Dollar in Green

The inverse nature of the Dollar and CEF is clear in this chart. The Dollar looks to be higher near term which fits with the idea that the stock market is pulling back. So I would expect lower prices for CEF as the stock market traces out its Wave 4 correction. 

The Euro

This is a four year weekly chart of the Euro. Lower highs and lower lows suggest a long term bear market. I am wondering if, yes you heard it here first

the Dollar goes to 100 form its present 79

the Euro comes back down to parity with the Dollar, from 132 back to 100

Here is the long term picture for the Euro

It makes sense. Europe continues to make itself less competitive. Singapore, Hong Kong,et al are where the world is moving, Jim Rogers got that one right. Recall he moved to Singapore. 
IN the  nine year chart above the MAs have all turned down. Only Germany appears to really be having substantial growth. Yes things may be great in Estonia but I don't think that will save Greece and Portugal.  

Social Mood - Abraham Lincoln, Vampire Hunter Premiering in June

In three years, Seth Grahame Smith has gone from writing The Big Book of Porn to the million best seller in 27 languages no less, Pride, Prejudice, and Zombies. This spawned a genre of weird spoofs of famous works resulting in Android Karenina and Wuthering Bites. (So what am I doing writing an investment blog....)

Now he is in demand, his production company has 15 movie and tv projects in the works 

Well America is the land of opportunity and this fellow saw an opportunity.

Here is the operative social mood explanation, though I doubt the writer has grasped it (that's our job here at TMP)

 

His irreverent literary reboot landed at precisely the right cultural moment. In recent years, digital remixing and sampling—once viewed as derivative at best and illegal at worst—has grown widespread in music, film, television and fine art. Mash-ups are no longer just kitschy parodies. Literary writers like Colson Whitehead and Michael Chabon have experimented with horror and science-fiction themes. A zombie-infused Regency romance doesn't sound so ludicrous in today's mash-up rich environment.

In an 18 year period of stagnation, emotions move violently from fear to joy, witness the stock market rise form last October to now. Texas Chainsaw Massacre debuted at the bottom of the market in 1974. Yet Rocky, an upbeat film, followed in 195-76. Yes this is the right cultural moment amid fascination with zombies and vampires. The national election has undecided in the lead, no wonder reader seek new genres. The trick of course is to catch the weird idea that connects with the fickle mood of the moment. Even Historian Doris Kearns, a Lincoln expert, is an admirer of Mr. Smith's work. If the markets peak this summer and tumble the next two years as we expect, Mr. Smith will have hit the cultural moment dead center, so to speak. 

Peace and Love, back from the 60s

The Peace Movement was big during the 1966-84 period of stagnation. Now it's back wtih 

Natural Frequency Watches. . They are said to contain an element that is in tune with the frequency of the earth's movements. And so a person wearing the watch sleeps better. Hmm, Remember the negative hell Earth Shoe also popular in the late 1960s, it was supposed to make one feel better as well. Wave theory and social mood, it's all around us, we report, you decide. 

Thanks for reading The Market Perspective

[email protected]

 

 

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 ands 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 charts.

 

 

Thursday Evening

Thursday March 9, 2012

I will be out of town from tomorrow Friday until next Monday evening. I frankly don't see much happening other than what we outline below.  I suspect the market will slowly put in a B Wave top and then begin a C Wave to the downside.

Thirty and Sixty Minute charts can be quite helpful in determining just where we are on  a shorter term basis. We suppose the market will top in the next day or two and then make a C wave low. 

The Dollar

The Dollar UUP was down the last two days supporting the move up in stocks. Here one can see the MACD bottoming, perhaps the dollar will now rally causing our C Wave in stocks to the downside. 

We look forward to a visit to the booming oil fields of West Texas And frankly out hard working 

research staff here at TMP can use a couple of days off....

 

A Look Back at 2008

Monday August 15, 2011

2008

In the summer of 2008, the SPX declined by 220 points from 1420 to 1200. The market then reboounded about half of that fall. 

2011

NOw let's fast forward three years to the same time frame ending today. 

The market has fallen, in the summer months, from 1350 to well, 1125-1100 (briefly), a fall of about 225 points. This is an eerily similar fall ...

1. of about the same total points, 220-225

2. one month moved forward.

3. it did occur in less time indicating a more heightened sense of 'panic'

4. MACD bottomed then as now and the markets recovered about half the fall into late August

And then

the whole thing fell apart in Fall 2008

Now compared to the 'story thus far' in the first graph, in retrospect the summer sell off and recovery in 2008 do not look like a big deal, no doubt this is how investors were lulled to nonchalance about it all. 
But clearly the summer sell off foretold a much larger decline in the seasonally weak fall.

As I thought about it, I went back and placed the volume in the bottom pane. Yes sure enough, on the summer decline volume peaked at the low in the market . On the rebound to 1300, volume declined dramatically, ie, there was not enough volume to regain the previous highs and overcome the selling pressure. Then volume dramatically expanded into the fall on the collapse. 

So TMP will faithfully track price and volume, notice we have taken that into account this past week noting the lower volume this past thursday and friday. 

We cannot of course blithely assume that history will repeat in exactly the same fashion. But the increased sharp sell off in 2011 compared to 2008 certainly has my attention. IN addition everything else, emerging markets and oil, have also fallen into place now as then. Recall that oil started falling from July 2008 and never looked back. This time it has paused and bounced. Be sure to readFeuerstein's comment on oil in the previous post, he expects $60. That seems reasonable to me. And of course it would completely collapse all the alternative energy schemes like wind and solar as well as much of the recently expanded shale gas plays. This is how energy peaks always end. The price of crude gets cheap so fast again that all hopes of 'alternative energy' are dashed The alternatives always require infinite periods of high oil prices coupled with massive government subsidies as they are never price competitive anyway. 

I was just watching a PBS documentary on the Crash of 1929. A descendant of legendary Jesse Livermore remarked that they had stock tickers in their various houses. And back then seemingly everyone was invested in stocks. Anyway, it occurred to me that now, everyone has a stock ticker in their house via CNBC or about any cable news channel. And we have portable stock tickers in the form of cell phones with internet capability. And all the pension promises in America now hinge on, yes, stock prices. 

Another notable 'advance' of the 1920s was buying appliances on credit, a little bit down and pay things out. If you think about it, buying on time has now become more than that, as the debts are sold as 

CDOs, collateralized debt obligations to investors and the public. And so we have moved the debt off the balance sheets of the originator into the homes of every American. We're all on the Titanic now....

Well we have certainly ramped up the bets in three to four generations. 

The Empire (Wall Street) Strikes Back !

Tuesday after market close August 9, 2011

Yesterday we opined that an extreme had been made with maximum and  whopping 11 Billion shares traded on the NYS. This turned out to be the case. Richard Arms, creator of the Arms Index, is a fan of the last half hour action. Take a look at this chart of the Dow, notice the volume spikes at the end of the day.From the intraday low the Dow Industrials had a roughly 600 point rally the last hour and fifteen minutes. 

We put ten days on this chart to show you that the pros wait for the last hour to make their decisions. And look a the stunning rally, counting as 429 from the previous day's close. So markets tried the bottom one more time, a brief overthrow occurred and boom the fourth wave rally we suspected this morning is under way, our apologies to Peggy Lee......

TLT Ten minute chart

In the last hour of trading TLT registered an intraday low of 103, soared to 109, then collapsed back to our sale price on the close yesterday of roughly 105+. Wow!  Part of our mission here is educational. We are showing you the ten minute chart to hopefully dissuade you of the notion that one can be expert at intraday trading. If that was the case, in one year traders would become rich and retire to yachts in Monaco Harbor. 

At the top of the forthcoming fourth wave we expect to buy TLT again at a lower price anticipating a rally to the very bottom of the fifth wave in stocks. 

NASD Summation Index

Despite the rally, using last summer as a ruler, one can see we have some work to do before the bottom is in. We continue to believe this is a fourth wave bounce; one can see looking at last summer that bottoming is a process not a one day event. 

Trader Perspective - Note that the NASD Summation Index had to make a higher low before the QQQ got its legs and really rallied last summer. Expect no less this time. 

I am making my buy list up now and will share it with you tomorrow morning. Like any good TV or Saturday matinee serial, we need to plant some seeds to get readers to stay tuned (think, who shot JR?)

Seriously the bottoming process continues we will show you a list of oversold candidates most of which pay fat dividends, let's get paid for waiting, that merit your attention. 

 

thanks for reading TMP The Market Perspective

 

The Lone Ranger

Tuesday May 31, 2011

And, blogs should be fun. This is a parody I wrote back in 203 but is as lively today as it was then. 

 

With a Cloud of Dust and A Hearty Hi Ho Silver, It’s the Lone Ranger!

~Opening to the weekly serial
to the tune of the William Tell Overture

by Dennis Elam

As a boy, I faithfully watched weekly episodes of Clayton Moore as the Lone Ranger and Jay Silverheels as Tonto.

Even then, the plot was pretty thin. With only twenty two minutes (sans commercials) plot and character development was minimal. Only the opening shot was filmed outside, the rest was obviously soundstage. Each week the Lone Ranger and Tonto would just happen on a scene of distress. Most frequently, it was the old miner (standard 1950s TV issue, floppy hat, overalls, threadbare everything, lots of slang words) sans wife but with, surprise, beautiful daughter who had clearly overcome the old man’s obvious genetic weakness.

Some land grabbing scoundrel was out to do them out of their only asset-usually a worthless mine that just happened to be in the path of a railroad or development. The Lone Ranger would size up the situation, announce to Tonto that he had a plan, Tonto would get hit over the head (Tonto’s skull must have looked like a golf ball!), Ranger would come appear in disguise, and then turn the tables on the bad guys! Tonto would be freed, the old geezer would say shucks by golly, the daughter would – naw this was the 50s – she never got to hug The Ranger. He  and  Tonto would ride off, well to save money they only shot that once outside and re ran it each week. Still a great role model! Well, I got to thinking. Would there ever have been a Lone Ranger if the government had been in 1875 what it is today?

We take you now to a hearing convened by a group of bureaucrats and other public servants (yeah right!) circa 1875. The players are identified in bold.

Justice department: Now Mr. Ranger, that is your name? We see that you are acting as a vigilante law-enforcement officer. Do you have any defense to that charge?

LR: Why I was a Texas Ranger. Tonto found me, the sole survivor of a vicious ambush. With Tonto’s help, my strength was restored. I swore an allegiance to avenge the death of my fellow Rangers and fight for truth and justice.

Justice Department: Please stop being circular. By the way, are you represented by an attorney?

LR: Attorney, what’s an attorney? We never had one on my show!

 Justice Department: An attorney needs to be present to inform you of your rights, to defend you in this hearing, and explain the justice system to you.

LR: Why would I need such a person when I understand and fight for truth and justice?

Justice Department: Because it’s the law!

LR: But I thought you were the Department of Justice, what I stand for?

Justice Department: Don’t try our patience!

Tonto: Hmm, Kemosabe, this put you in bad light

Ricco Division, Department of Justice:  Hey, is that Kemosabe anything like Godfather?

EPA: It says here that you left a silver bullet as your signature or business card? Do you have a permit for distributing unminted minerals?

DEA: Silver bullets, huh? Has anyone looked inside one of those bullets-and since you crossed Arizona into New Mexico, let’s search those saddle bags in the name of interstate commerce!

Silver: Neighhhhhhhhhhh!

LR: Easy, big fellow!

Department of Labor, Handicapped Division: By the way, we have 215 petitions of fellows who claim you caused carpal tunnel syndrome by, what’s this, shooting a gun out of their hands?

LR: Every one of those was a rascal or genuine bad guy, They had it coming!

Justice Department: Can you produce 215 indictments?

Department of Labor: Oh, and here is another stack for a guy just like you, hmmm, we might go easier if you could provide the whereabouts of one Roy Rogers?

Department of Treasury IRS: By the way, how did you say you made a living? And have you filed as an independent contractor, DBA Ranger at Large?

LR: Income tax won’t be law until 1913!

Department of Treasury: This is our parody. Don’t get smug, such comments will be taken as lack of cooperation and could lead to violation of Ricco!

LR: I’ve never even been to Jersey, how would I know someone named Ricco?

DEA: Kemosabe, Godfather, Silver Bullets, running around in the western wilderness? Sounds like a drug coverup to us; get the cuffs!

Department of Animal Control: Do you have the vaccinations for Silver as well as his horse tag, bill of sale, and horseshoe records?

American Federation of Equality for Indians in Acting Guild: So how come there’s no spin-off series for Tonto? And how come he doesn’t get a good-looking Indian maiden to moon over him? And why don’t you get whacked over the head so he can...

LR: Hi Ho Silver Hoy! The Ranger jumps on Silver and exits, followed by Tonto on his beautiful paint horse. (Does anybody remember the name of Tonto’s horse?)

Entire Group: Cough, hack, gag, snort, Good grief, that’s a bunch of dust, where’d he go? Somebody call the EPA! The environment has been disturbed!

 

Yep, if the government had been then what it is now, he would have been the All  Alone Ranger! Thank goodness it only happened in this column. I mean there’s still a place for those who fight for truth and justice right,  – or are they All Alone Rangers today?

 

Dennis Elam teaches in the College of Business at Texas A & M San Antonio and can be reached at [email protected], when he is not on the trail with the masked man.