Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street


The stock and bond markets are channeling US President Elect Trump’s expected policies since last Tuesday. Equities has liked them and Bonds have not.

Stocks rallied sharply on the pro-growth trade.

Longer-dated US Treasuries sold off sharply on the understanding that pro-growth = pro-inflation + they are apt to be financed through increased debt issuance.

These 2 responses are fostering a beautiful mix of contemplation in here.

The Big Q: How far will stocks and bonds run in each of their directions?

My take is is that the behavior of the US Treasury market will ultimately dictate the stock market’s course.

The financial sector was up 10.9% last  week alone, spiking on the back of a steepening yield curve and amid talk the Trump Administration will work to dismantle Dodd-Frank.

The industrial and health care sectors were up 7.7% and 7.4%, respectively.

Short-term overbought is a phrase that should talked about Monday, but “buy the dip” is also in the talk about a year-end rally, driven by under invested money managers pressing for results and bonuses  and a resuscitated growth outlook, picks up.

In the wake of the Trump Rally we are seeing weakness seen in emerging markets since election night, making it clear the pro-growth US rally will come at the expense of Asia.

Donald Trump’s election campaign presented a vision for the US that was both less weighed-down by regulation, but also less engaged in shaping global consensus.


The Bulls Vs The Bears


Sentiment Indicators

VIX: 14.17; -0.57
VXN: 18.95; -0.12
VXO: 14.19; -0.99

Put/Call Ratio (PCR) CBOE: 1.07; +0.18  Back above 1.0 after one day off. 10 of 11 sessions over 1.0 on the close.
There is lots of Southside speculation.

The Bulls Vs The Bears

The Bears posted their greatest numbers in months and stocks rallied.

The Bulls are at 42.9 Vs 41.7 last

The Bears are at 25.7 Vs 24.3 last


Support and Resistance


DJIA close: 18,847.66



18,669 the Aug 2016 all-time high
18,595 the Jul 2016 high
18,351 the May 2015 high
18,288 the Mar 2015 high
The 50-Day EMA: 18,256
18,247 the Aug 2016 low
The 50-Day SMA 18,234
18,168 the Apr 2016 high
18,016 the Jun 2016 high
17,992 a Sept 2016 low
17,978 the Nov 2015 high
17,960 the Oct 2016 low
The 200-Day SMA: 17,829


S&P 500 close: 2164.45

2175 the Jun 2016 high
The Y 2016 trendline: 2179
2194 the Aug 2016 high

The 50-Day SMA: 2145
The 50-Day EMA: 2142
2135 the May 2015 high
2130 the Jun 2015 high
2126 the Apr 2015 high
2120 the Jun 2016 high
2119 the Sept 2016 low
2116 the Nov 2015 high
2111 the Apr 2016 high
2104 the Dec 2015 high
2094 the Dec 2014 high
The 200-Day SMA: 2090


NAS Comp close: 5237.11

The 50-Day SMA: 5238
5252 the Y 2016 up trendline
5271 the Aug 2016 high
5288 the Sept 2016 high
5340 the recent all-time high.

5232 the Y 2015 all-time high
The 50-Day EMA: 5207
5170 the Oct 2016 low.
5162 a Nov 2016 high
5100 a May 2016 high
5042 the Mar 2015 high
5009 a Mar 2015 high
4999 the Oct 2016 upper Gap mark
4980 the Jun 2016 high
4969 the Apr 2016 high
4960 the Sept 2015 high
The 200-Day SMA: 4958

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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