Professor Elam

Tuesday Nov 10, 2015

TheSPX and Dow Industrials have made new highs unconfirmed by the Transports or smaller cap indexes. 

DOW Industrial

DOG

DOG is an inverse ETF of the Industrials and it is performing as it should generating  buy signal on the SAR PAR. Note MACD is quite low and looks to be turning up. 

Short QQQ

The same buy signal is here for the ETF that shorts the QQQ.

Mainstream thinking is that we had the usual fall pullback for an overbought market. After the very strong rally, another pullback is now in order. Then  after say Thanksgiving the markets being their usual Nov thru May rally. 

The other line of thinking is that we have a Dow Theory sell signal August 24 with Industrials and Transports both  making new lows. The Transports did not confirm the new high in the Industrials. The Bulls ignore this saying just give it time. Other bear thoughts are that we are in a 40 year cycle high similar to 1932-1972, 1974-2014. I have written extensively about the 1973-74 meltdown and this is exactly the way it began.  There was weakness in many stocks, take CAT or PG for example ignored by those buying the nifty fifty back then. Today that would be social media stocks like Google or FB. 

Mood in bear markets is exclusionary. Pages a 10-11 in today's WSJ make the point that the mood of 'throw the bums out' is taking over world wide. 

The military is on the way out in Mynamar

Brazil Crisis Stalls the Middle Class Rise (translation, Brazil is back to being the country of the future rather than a BRIC)

Eurozone Presses Greece on Overhauls (translation, nothing ever changes in Greece)

Catalonia Moves on Secessioin – the failure of Spain has long time Catalans demanding independence, Spain of course disagrees

Germany Hits the Wall in Immigration

And as Gerry Seib puts it on A4, A Fourth GOP Debate, no Certainty in Sight – here is the ultimate throw the bums out statement, two non politicians are the front runners, has anyone looked at Trump's platform of opposing trade?