The Market Perspective

Monday June 5

My entire energy service screen is red meaning all stocks are down, same for energy.

This seems odd given the Saudi decision to cut production on MBD over the weekend.

 

This is why I waited to see what happened Monday. DJIA is off65 zt 9 52 CST

spx equal weight

 

We, and other sites, hve noted equal weight spx hs been declining while spx has been increasing.  The big move up Firday was in reaction to the debt ceiling.

Is is  a head fake or something more substantial, my guess is a one day wonder.

Friday Picks For June

Friday June 2 2023

My overall view of the markets has not changed, we should top in the NASD this month.  However recall Warren Buffet is buying occidental like 25% of the company.

There is more than I am up  to adding  this afternoon so check back this weekend. Here is a start, energy and energy service bullish percent is in the buy territory as is copper and CRB index.  While the world is goig  wild for TECH which is at its highest ever valuation, look at these charts. Energy and Energy service bullish percent are in buy territory,  CRB and Copper are comming off corection from their March highs. As the Administration is bragging that inflation is down, it is surely down temporarily, they may be a great contrary indicator.

While energy is over sold let's watchese stocks below for now.  The top I refer to in the open comment is being confirmed so the chance the entire market will sell off is strong.

 

I will be a adding more content.  Here is my short list for now

NR

Insider Stock Buying Reaches US$2.3m On Newpark Resources \

Insider Stock Buying Reaches US$2.3m On Newpark Resources \

PTEN

CLF

MSB - 27% dividend

FRO - 29% dividend

I sill like the NR complex esp the preferred

 

Macy's COstco Sound //warning

Friday June 2 2023

hAnother early warning indicator

Tom McClelan on Gold Predicting Oil Price

Friday June 2 2023

Gpd {redocts Oil Prices

A top in oil prices in November. a bottom next May-August

The Gathering Storm

Wed May 31 2023

Charles Payne, FOx BUsiness, had an analyst on explaining the cash flow collapse at Advance Auto Parts from a year ago,stock collapsed today, see below. Same analyst noted ten stocks were 50% of a couple of major indexes, something we have emhasized. Undeterred, the next analyst predicted  S & P 4600 by year end. It is  4180 today.

There are plenty of clues of troube ahead.

 

166 year old Credit Suisse vanishes in due to one customer

Second and third largest bank collapse in US History this year.

SPAC founders exit before collapses including 'look at me' Richard Branson who sold Virgin Galactic at  $30.

AAP massive cash flow deficit

IT is clear the market knew something since the gap down in November, this is typical bear market bad news.

What Went Wrong?

The banking system is sound, - Janet Yellen, Secy Treasury

KRE Regional Bank Idex

Bank Stocks Today

Cullen Frost Best Run Bank in Texas

Now finishing wave two up after wave one down, wave three next

Notice MACD bottomed with wave one and is peaking with wave two

XLF ETF for Financial Sector looks much the same story the chart will not print, at any rate the third wave down across many sectors draws more near.

Our Preferred B in Nustar had  great day today.  It was up 83 cents or 3.64%.

 

Staying Beyond Your Expiration Date

Friday May 25, 2023

The Cost of staying Past Your Expiration Date

In a unanimous decision, a Republican-led House investigative committee that spent months quietly looking into Paxton recommended impeaching the state's top lawyer on 20 articles, including bribery, unfitness for office and abuse of public trust.

Yahoo News this morning

Paxton was indicted for securities fraud in 2015 and has been under investigation for years.  This unanimous decision may lead to a vote today, If an impeachment vote passes he has to leave office Only two Texas officials have been impeached in  200 years.  Paxton should not have run for office again under these circumstances but he never asked me. Democrats will be delighted.  Negative mood is exclusionary, throw the bums out is the mantra and we see that here. /After years of investigation, bang, he is about to be impeached now.

Crude oil is bouncing in the $70-72 range.  It remains above its 200 day moving average at  $67.10. Gasoline is doing better at $2.55. Its MA is $2.07.

The major oil stock prices all experienced a terrific rally from the end of  2020. Conoco Phillips  ran from  $30 to $130 and is now $101.69. Warren Buffet has loaded up on Occidental. It ran from $10 to $75 and is now $58.81.

I have recommended shares in the Nustar NS complex. Nustar is a San Antonio based company which owns extensive pipelines in the  US as well as storage facilities along the Gulf Coast. The stock has climbed to the high sixteens. The Preferred B which was recommended in the low 22s is now $23.59.  Both issues have a 10% dividend.  We will discuss the stock market next but with a bearish view of the stock market it is important to find high dividend stocks somewhat independent of stock market action. Nustar seems to fill that requirement.

The equal weight SPX has fallen from 6300 to 5700.  The move down should accelerate from here. The SPX has rallied from its March low at 3825 to 4150.  This divergence in the weighted SPX versus unweighted SPXEW is hiding the real weakness in the market, stay alert and be prepared.

The decline in stock prices lately is attributed to the debt ceiling debate. No doubt we will see a rally in stock and bond prices once a deal Is reached, then the bear market in both should resume.

Bear markets are marked by a renewed interest in horror movies. The 1930s had Frankenstein, 1972 had the Exorcist and now no less than six horror movies are in various theaters.  Dead Rise, Nefarious, Beau is Afraid, the Pope’s Exorcist, Renfield, and Outpost are all telegraphing that a bear market in mood is upon us.

30 Charts on Where We Are Now

30 Historic Charts, take a look

Ger,amu FsOmtp Recession

Thursday may 25, 2023

Germany Falls Into Recession

 

This is the biggest economy on the EU continent,  More evidence that the bear market is getting underway in  athird wave.

Perspective on Silver

Wed May 24 2023

 

Here’s What Silver Investors Need to Know
Large Speculators have been making this bet on silver

By Elliott Wave International

Observations over the years reveal that hedge fund managers tend to extrapolate current trends of financial markets into the future -- just like most Main Street investors.

In other words, hedge fund managers are just as much a part of the "crowd" as the little guy.

So, this 2021 headline from the American Enterprise Institute is not surprising:

The SP 500 Index Out-performed Hedge Funds over the Last 10 Years. And It Wasn't Even Close

Hedge funds and trend followers are known as Large Speculators in the Commitment of Traders report published by the Commodity Futures Trading Commission. They usually take the opposite side of the trade from a group known as the Commercials; insiders who participate in a business related to a given commodity. The Commercials usually turn out to be on the right side of a trade.

With this in mind, let's focus on silver. Here's a chart and commentary from our May 15 U.S. Short Term Update:

Large Specs... are strongly betting that [Silver]'s rally will continue. The middle graph on the chart shows the Large Spec net long or net short position as a percentage of total non-spreading open interest. Two weeks ago, it was 23.49%. Last week, despite a 9% decline in silver prices over just five days, Large Specs are net long 23.14%, hardly budging from their prior stance... We will keep you apprised of new developments.

The U.S. Short Term Update makes clear that Commitment of Traders positions are not a great short-term timing tool. At the same time, be aware that extreme positions often occur at key trend turns.

Also keep in mind that silver's Elliott wave structure can help you to anticipate price turns.

Indeed, here’s a quote from the Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior:

It is our practice to try to determine in advance where the next move will likely take the market. One advantage of setting a target is that it gives a sort of backdrop against which to monitor the market’s actual path. This way, you are alerted quickly when something is wrong and can shift your interpretation to a more appropriate one if the market does not do what you expect. The second advantage of choosing a target well in advance is that it prepares you psychologically for buying when others are selling out in despair, and selling when others are buying confidently in a euphoric environment.

No matter what your convictions, it pays never to take your eyes off what is happening in the wave structure in real time. Ultimately, the market is the message, and a change in behavior can dictate a change in outlook. All one really needs to know at the time is whether to be long, short or out, a decision that can sometimes be made with a swift glance at a chart and other times only after painstaking work.

If you’d like to read the entire online version of the book, you may do so for free once you join Club EWI, the world’s largest Elliott wave educational community.

A Club EWI membership is also free and members enjoy complimentary access to a wealth of Elliott wave resources on investing and trading.

Get started now by following this link: Elliott Wave Principle: Key to Market Behavior – get free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Here’s What Silver Investors Need to Know. 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.

 

Third Wave Down Gets underway

Wed May 24 2023

The media would have you believe the sell off yesterday and today is because of the debt limit impasse.

But the bear market began Nov 2021-Jan 2022. The counter trend wave 2 is ending now meaning the third wave down is beginning.

Sure once there is a deal,we will probably see a bounce back but that will be short lived.

SPX

Notice the gap down in today's SPX action. This took out the trendline from May 4 and is further confirmation that the counter trend rally is ending.

Equal weight SPX topped back in February. Today's action took it below all four MAs.

We need to start scaling into Hedge, a bear fund that advances as the market decliines

If we do get a bounce back it will probably just return Hedge to this level but I would not add too aggressively here now.

TBF a vbear bond fund has rallied on debt worries and will likely fall back on a resolution. This is another area we need to add.