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The Market Oracle |
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By: Wim_Grommen
The Dow Jones Industrial Average (DJIA) Index is the only stock market index that covers both the second and the third industrial revolution. Calculating share indexes such as the Dow Jones Industrial Average and showing this index in a historical graph is a useful way to show which phase the industrial revolution is in. Changes in the DJIA shares basket, changes in the formula and stock splits during the take-off phase and acceleration phase of industrial revolutions are perfect transition-indicators. The similarities of these indicators during the last two revolutions are fascinating, but also a reason for concern. In fact the graph of the DJIA is a classic example of fictional truth, a fata morgana.
By: The_Gold_Report
An aging world is a deflationary one, according to "The Demographic Cliff" author Harry Dent. In this interview with The Gold Report, he predicts a major, painful crash in the next two years based on population statistics and historic patterns. He has some positive short-term predictions for gold, and investment suggestions for how to be one of the ones still standing after the dust settles.
The Gold Report: Your book, "The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014–2019," predicted a great deflation based on demographic trends. Were you surprised by the strong stock market over the last year?
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By: Marty_Chenard
New Market Highs with New Lows Up Trending at the Same Time?
Today's chart show's the updated NYSE New Lows. The good news is that the VIX broke a support yesterday (a market positive), while the NYA New Lows did not break its thick red support line (a market negative).
See the NYA New Lows chart below for what is going on.
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By: Investment_U
Alexander Green writes: In my last column, I wrote about how life today is getting objectively better yet polls show we fail to recognize it.
Two-thirds of Americans believe the country is on the wrong track, a number that has hardly shifted in the last three years.
But take a closer look. We enjoy economic, political and religious freedoms denied to millions down through history and around the world today. Life expectancy is increasing. Standards of living are rising. Technology and medicine are easing and extending our lives. U.S. household wealth is at an all-time record high.
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By: Paul_Rejczak
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
By: Dan_Amerman
If a new collaborative document had recently been released in which some of the world's most influential economists were urging the nations of the world to force negative returns on savers as a long-term matter of policy – might this be of importance to you?
What if many of the world's leading economists believed that the path for the economic future could be one that directly contradicts the assumptions upon which traditional stock and bond investing is based? Might that be an important development to consider as you decide how to invest your retirement assets?
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By: Clif_Droke
Last month kicked off a new long-term Kress cycle. The Kress cycle, which answers to the Kondratief wave of inflation/deflation, is responsible for the overall climate of economic and financial market conditions in the U.S. This long-term cycle also influences the course of central bank monetary policy by creating the conditions which the Federal Reserve must tailor its policy response to.
By: Anthony_Cherniawski
SPX appears to have quit rallying and has broken down beneath the upper trendline of its trading channel. This is not yet a sell signal, just an alert that SPX is in a probable reversal mode. An aggressive sell signal may come beneath the upper trendline of the Orthodox Broadening Top or the lower trendline of the trading channel, both in the vicinity of 2058.00-2060.00.
Today is day 41 of the Cycle emerging from the October 15 low. The peak registers at 202.6 hours from the low. 202.6 is divisible by both 4.3 and 3.1416, which is often the combination for corrective moves, which this is.
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By: Ed_Carlson
It feels as if we've been here before. The previous forecast for a high to the right shoulder on 9/19/14 looked good but was obviously incorrect (on the other hand, it was followed by a drop of 1,163 points in the Dow). The evidence pointing to that high was like a Ford Edsel compared to the Lamborghini-like evidence pointing to a top now; a Lamborghini powered by a flux capacitor!
The Sept 9 breakdown from a flattened top counts 37 days to the low on Oct 15. 37 days later is Saturday, Nov 22.
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By: Chris_Vermeulen
Since July of 2014 the big cap stocks have continued to make new highs as investors dump more and more money into the stock market. Overall bullishness on the stock market is now at extremely high levels which typically happen before a major stock market correction and sometimes start a full blown bear market.
While the average investor continues to become more and more bullish, the market breadth/health has been rapidly deteriorating. Unless you are market savvy you would not know how weak the market actually is and this always leads to strong losses and drawdowns for the uninformed investor.
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By: Bob_Loukas
We're at the point in the equity bull market Cycle that every piece of news is construed as positive for the equity markets. In many cases, the news even appears to accentuate positive possibilities. The speculative nature of the current advance has by now captured the vast majority of market participants; the media and the pundits are no exception.
For example, the markets were pushed higher last week by several news events, even though the headlines hit the same themes that have been recycled for the past 3 years, and that are almost certainly, by now, fully discounted in prices. The news events included Japan calling off next year's planned sales tax increase, China surprising with an interest rate decrease, and the ECB announcing that they will be buying assets. These are all related to the tired narrative that central banks and related authorities can alter the natural long term pricing/valuation trajectory of the markets. The world's equity markets soared on the announcements, and in the process completely ignored the weak fundamentals that gave rise to them. The S&P and Dow even reached new all-time highs, in general very bullish developments. But in this case, the gains were built upon the shifting sand of sound bites rather than economic fundamentals.
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By: Ned_W_Schmidt
On morning of 17 November, while Western investors were sleeping, China opened the door to its investment world. On that day China began two way trading between the Shanghai and Hong Kong stock exchanges. This development essentially opened the Chinese stock market to investors around the world through Shanghai-Hong Kong Stock Connect. They said to investors around the world, "Welcome, just bring your money and come right in".
Investors would be well advised to be aware of the money flowing into the Chinese stock market, and possible ramifications of that money movement.
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By: Paul_Rejczak
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
By: Andre_Gratian
Current Position of the MarketSPX: Long-term trend - Bull Market
Intermediate trend - While everything technical points to an overbought condition which should require an adjustment, the exact timing of that correction is for the market itself to decide and reveal.
Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.
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By: Toby_Connor
After two years of insane money printing designed to rescue its failing economy, Japan has now been rewarded with… another recession.
So what went wrong you ask? The same thing that always goes wrong when a central bank resorts to money printing to rescue an economy instead of allowing a cleansing period and a return to real productive growth. All they accomplished with their massive QE program was to spike inflation.
By: Money_Morning
Michael E. Lewitt writes: Stocks traded to new record highs last week on the back of new central bank initiatives to prop up struggling economies around the world. The People's Bank of China announced an unexpected cut in its benchmark lending and deposit rates for the first time since 2012. Hours later, ECB President Mario Draghi made another promise that his central bank would take new steps to bolster European growth and the ECB announced that it had begun buying back asset-backed securities.
By: Nadeem_Walayat
The stock market spent virtually the whole week giving the impression of levitating in thin air that increasingly convinced many with each passing day that the market would resolve to the downside. Instead the market surprised virtually all by doing what market trends tend to do most often which is to resolve in the direction of the primary trend, which for a bull market is UP.
By: Tony_Caldaro
Another good week for the market as new all time highs keep this uptrend rising. The market started the week at SPX 2040, rose to 2056 by Tuesday, pulled back to 2040 by Thursday, then rallied to 2071 on Friday. For the week the SPX/DOW were +1.10%, the NDX/NAZ were +0.55%, and the DJ World gained 0.90%. On the economic front it was a positive week. On the uptick: NY/Philly FED, the PPI, NAHB, building permits, existing home sales, leading indicators and the WLEI. On the downtick: industrial production, capacity utilization, housing starts, plus weekly jobless claims rose. Next week, a holiday shortened one, we get Q3 GDP, the Chicago PMI and reports on Housing.
By: Jack_Steiman
Futures were quiet early on in the evening last night. Out-of-the-blue the futures suddenly began a sharp, straight-up move. The culprit was more central bank stuff we're all used to by now. China decided to suddenly, and without warning, to cut interest rates by 40 bps. Europe saw their futures explode, and naturally, since we follow Germany overnight, we began to blast up. The futures rising steadily right in to the close. We gapped up and ran a bit higher. At the top today, we had daily RSI's on the key-index charts in the upper 70's. This is pretty much unsustainable. Add in all the froth prior to this explosion higher, and it seemed likely that the market would fade as the day moved along. That's exactly what happened. In this type of environment there is nothing more dangerous than chasing strength. Taking some exposure off isn't a bad idea at all.
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By: Clif_Droke
As several market technicians have pointed out recently, price oscillators and sentiment indicators for the U.S. stock market point to an excessively "overbought" condition, both technically and psychologically. To take just one instance of how overstretched the market has become, take a look at the following chart which shows the SPX in relation to its 200-day moving average. The 200-day MA is widely followed by small investors and big money managers alike.
