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November 28, 2015 – Weekend Market Comment

November 28, 2015 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. For full details read my disclaimer (link at the bottom of this page).

As predicted last week this has been a strong up week for the markets. We are now 7 years in to a bull market -- that has only happened 3 times before. The PE of the market is running about 17, historically high. Friday was a super low volume day, and the first figures from Black Friday were mixed. Gold plunged to 1050, do you recall the days when it was supposedly IMPOSSIBLE for it to break 1200, ha! Canada got taken out to the wood shed with a lower stock market  and more misery in the "Norther Peso" the Canadian dollar.  The Shanghai Composite Index slumped 5.5 percent as authorities in China continued their crackdown on brokerages, with three of the nation’s largest now being investigated for alleged rule violations. After the close, the Securities Association of China announced that it will ban brokerages from financing stock trading using derivatives. Big Brother says "stop selling". In other news Turkey decided to flirt with starting world war three by shooting down a Russian fighter jet. The encouraging thing is that with all this bad news, the market probably should have been down more.






101 Bull Bear
Dark green over red this is bull market.

103 NYSE High Low Market Forces
Strength returns as green attempts to pass yellow.

105 Non Farm Payroll
Still looks good. Based on Oct 1 data

107 Industrial Production
Based on Oct 1 data

115 Renko
A new white square up - bullish.
 !
203 OBV
Red line must keep up with price. It is ok if it lags for a day but this is more than a day. This is your big warning.

207 VIX
Bullish heading for possible bounce at 14.5

209 VIX Evaluator
Falling looks bullish

211 S&P500 over 50 day
Bizarre flat line at 70.8% - indeterminate 

213 Green Arrow
Only put new money to work when I draw a green arrow. Not yet.






301 NASDAQ Summation
Very Bullish

303 Aggressive Defensive
Very Bullish, seldom can hold these levels more than a week.

305 Consumer Bonds vs Equities
Consumer flat, odd at Christmas, rest of market is confused about bonds.

307 Bond Direction
Bizarre flat line

309 Sectors
Bullish but beware NASDAQ exhaustion

311 Nations
German and USA only bright spots

313 Major sectors
Nada, zip nothing here. Gold = Toast Canada = Bangladesh



! = Pay attention this chart is important this week.


What I Find Interesting


I thought you might enjoy some cartoons from the great depression. What is interesting is they are still applicable today.

1929:


1934:



The Problem: 
Goldman Sacks is sending this out it its clients, in case you are wondering, the way over-priced FANG stocks (Facebook Amazon, Netflix and Google) are under U.S. software and recent figures show, the other U.S. bright spot, housing starts are declining. The tiny green blip in China software is mostly Alibaba.  As for the rest of the 6 billion people on the earth, the 2016 recession is already in full swing.


Consumer Staples -- The Lifeboat
When it is late in the market cycle and investors get fearful, they hide in consumer staples, things people need no matter how bad things get. Stuff like basic food. Well the maker of Hormel Chili and of course SPAM, is doing well these days. (ticker: HML)
  


What I Think
 
A quote from "Reminiscence of Stock Market Operator": Union Pacific stock just would not go down. Livermore was heavily short, and his position looked increasingly futile. Even his associates urged him to cover. That friend of his from Atlantic City admonished, "You see, Jesse, the market never lies." To which Livermore replied, "Yes, the market never lies, but it doesn't always tell the truth on an instant, either." And so it is now, the market is not telling the truth on the instant, but I feel strongly if OBV does not head up, we are going to see a pull back in the next 2 weeks. 

Still I see some resilience in the market until either the fed hikes rates in December or a sell in May 2016. When that big sell off comes, your budget might change your eating habits . . . might I suggest . . .






You can learn more about my indicators by visiting the CME4PIF school by clicking here.


Don't squint, All graphics can be enlarged by click on them.





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Yet another parabolic up week for the markets. Honestly folks valuations are really stretched here. The air is so thin at this altitude. Then again the markets can and do (on a short term basis) anything they want. Still I would expect a little pull-back in the next two weeks.


Lets see what is in the charts this week:

CLICK HERE: To see the 100 and 200 series charts



101 Bull Bear Bull market (dark green over red) and now the short term (light green) is up sharply. Also note the dark green 50 day average is in a firm uptrend. NOTICE THE SLOPE (second window), this could be part of a new long term uptrend.Bull market -- expect bullish outcomes…