Tuesday Sept 3 2019

A bear market means lower prices, a bull market means higher prices.

There has never been a bull market in stocks that lasted for more than ten years.   We are in the tenth year of this one.   The market will not top for everything all at conce. Energy was leading stock up, now it is leading stocks down. 

Transocean RIG owns offshore drilling platforms that rent for hundreds of thousands  when the oi market is on boil. now the stock is trading for 21% of book value, near nothing.  This represents a huge amount of negative mood built into the market.

From top to bottom we have

the price of oil

the share price of RIG

the prices of the Energy Service ETF.

All this is broadcasting negative mood for energy service stocks. And the prices are still falling.

Tuesday Sept 3 2019

This weekend on the market perspective blog, I noted the DJIA had resistance at  26,400. Position squaring at end of week and month meant we would have to wait till this week for the market to reveal its thinking.

Sure enough the DJIA opens 200 points to the down side.

No wonder

Trade Conflict's Global Impact Grows – US levies another 15% tariff – no one can plan, so orders for goods slow

Trump denies he is the problem, I do not expect him to ever shoulder any blame for anything

Johnson calls for Elections if Brexit faills

Hong Kong Protests Drag on
Germany Inches Toward Stimulus

Texas Shooter Known as El Loco

Two writers note the lack of interest in democracy in Indo Pacific, all China cares about is Absolute Power

More 737 Delay

Doubts have long existed about the veracity of Chinese accounting, on B1 a Chinese bank skips a year of interest payments on its Tier 1 bonds – sign of trouble ahead?

Truck Sales Slow Big time in USA

 

 

 

Labor Day Weekend Sept 1 2019

http://www.360daily.com/pl/sVatJTN0?btoken=

 

Behold  the new sleeping giant, China

Friday Aug 30 2019

Markets at Critical Juncture

 

 

I have been expecting lower oil and stock price. The main reason is that both have been falling together. And the Art of the Deal President alternately threatens some measure, the market drops hundreds of points, and then he makes a conciliatory gesture (Xi is a great guy but Friday he was our enemy) and then the market bounces a couple of hundred points back up. Finally September – October are seasonally weak periods for the stock market. Panics have typically occurred in October such as 19259 and 2008.

 

As I write Friday morning at 10 00 AM CST, the DJIA range has been 26,385 to 26,513. This puts the Industrials right at the upper resistance of 26,400. This is a three day weekend and I expect we will see ‘position squaring’ today. . That means those heavily in the market are likely to buy puts as a hedge to the downside.

 

Another reason for my caution is the lack of a fresh Dow Theory buy signal. The This means the Transports should be making a high along with the Industrials, one confirms the other. Instead the Transports are below all four Moving Averages I track. Transports bounced up at 9700 but have not had a strong close above the 200 day moving average this August.

 

The small cap Russell 2000 looks much like the Transports. These two indexes are usually the leaders in overall market direction.

 

And today is the end of the week and a volatile month. So many analysts will be looking at the final numbers for clues at the close. But again given that as well as the three day weekend, traders may not show their true feelings until later in September.   At the moment that would be my best guess.

 

Crude oil has fallen from $66 to the mid $50.   It is down $1.72 this morning. The feeling has been that stalled trade talks will lead to less world commerce and less demand for oil.   And we have noted the move to electric cars in Europe by 2025.

 

The Eagle Ford and Permian producers remains victims of their own success. Pioneer Resources is down from $175 to $125 since April.

 

The energy ETF XLE has much the same pattern as Pioneer which is to say down since April. Energy service XES is down another 2% today.

 

In today’s Wall Street Journal Stephen Moore urges re-financing all U S Debt at these record low interest rate levels. He is correct. The risk in world bond markets has never been greater. Multiple European countries are now selling negative yield bonds. Any move up in rates would make such an issue virtually worthless.

 

Weeks ago amid rosy White House predictions I urged caution. I see no reason to change that warning. Check www.themarketperspective.com for updates this weekend.

Wed August 28 2019

The finance guy at the Infiniti had earned a Certified Professional in Financial Services CPFS

I did not see a college degree in his office but I did see the CPFS.

 

Point being the market place is creating degree substitutes that are industry and job specific. Such certification can be accomplished at far less cost than a degree. If you are the auto finance guy do you really need to have studied history of the US since the Civil War?  Interesting yest but you can get numerous library books on the topic.