Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
Earnings are for the most part over.
The Key economic reports this week are regional manufacturing reports, New York, Philadelphia, CPI, Industrial production/Capacity utilization, and the FOMC minutes.
The economics data is always important. But, this 7 year old Bull Market has been given support since 9 March 2009 by the world central banks thus maintaining the move North.
Remember, last February the Wall Street was in a 2nd dive after a rebound off the January low failed.
Phone records of the US Fed Chairwoman, Janet Yellen, public record, show phone calls to the BOE at the lows, followed 20 mins later by a turn in the market.
The next session saw a call to the ECB’s Mario Draghi, and within a 30 mins stocks were moving North again. Likely, you never saw that written anywhere, much lest talked about.
That action tells me that this market is not solid and is being propped but by the central banks, and that this market is set up for a correction of at least 20-22%.
That is because I believe that the central banks have run out of their ability to prop up the markets during selloffs. What makes them believe that is that they are elite and we are just mullets.
What is clear is that the NFPs is so corrupted that in no longer has any impact on interest rate resets.
The US Fed is now in the economic micromanagement business, and tell people how they have to conduct business, the result is anemic economy we have today.
This happened in the 1930’s as the leaders tried to manipulate markets out of the depression, something that did not happen in the 1920’s depression that quickly turned into the Roaring 20’s, happened again in the 1970’s when massive regulation, taxation, wage controls, dollar
floating led to another long period of economic stagnation.
We are seeing the same policies, the same results, all thanks to Benjamin Bernanke, PhD lauded as a student of those times.
We can talk about all of that stuff we want to but I will not make us any money. So, let’s look at the markets carefully and take what they give.
As money rotates around Wall Street, and new leaders arise as the prior leaders fade. That action is a sign of a healthy market.
With the major indexes at all time highs continue looking for Northside opportunity until the leadership fades. When that happens the market will roll over, and if Wall Street cannot find new leaders even after the US Fed and central banks step in, signalling the end of this long Bull run.
So, again we play the market we have and take what the market gives.
The Bulls Vs. The Bears
VIX: 11.55; -0.13
VXN: 13.99; -0.32
VXO: 10.67; -0.15
Put/Call Ratio (PCR) CBOE: 0.76; -0.19, 22 of 25 below 1.0, 17 of last 42 over 1.0.
The Bulls VS the Bears: Bulls higher, Bears lower, both still below the Y’s 2014 and 2015 highs and lows, but both approaching levels that show the
complacency that can lead to reversals.
The Bulls are at 54.3 Vs 52.9 last
The Bears are at 20.9 Vs 21.2 last
Support and Resistance
DJIA close: 18,577.94
18,595 the Jul 2016 high
18,351 the May 2015 high
18,288 the Mar 2015 high
18,247 the Aug 2016 low
The 50-Day EMA: 18,204
18,168 the Apr 2016 high
18,016 the Jun 2016 high
17,978 the Nov 2015 high
17,600 is bottom of the Apr/Jun trading range.
The 200-Day SMA: 17,492
S&P 500 close: 2184.05
2175 the Jun 2016 high
The 50-Day EMA: 2136
2135 the May 2015 high
2130 the Jun 2015 high
2126 the Apr 2015 high
2120 the Jun 2016 high
2119 the Feb 2015 high
2116 the Nov 2015 high
2111 the Apr 2016 high
2104 the Dec 2015 high
2094 the Dec 2014 high
2079 the Nov 2014
2062 a Jan 2015 high
2046 the July 2015 low
The 200-Day SMA: 2048
NAS Comp close: 5232.89
5238.54 the Aug 2016 intra-day all-time high
5231.94 the 2015 high
The 10-Day EMA: 5196
5162 a Nov 2015 high
5100 a May 2016 high
5042 the Mar 2015 high
The 50-Day EMA: 5029
5009 a Mar 2015 high
4999 the Oct 2015 upper Gap mark
4980 the Jun 2016 mark
4969 the Apr 2016 high
4960 the Sept 2015 high
4916 a Nov 2015 low
4902 the Jul 2015 low
4894 the Sept 2015 high
The 200 day SMA at 4859
Have a terrific week.