Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street


Earnings are for the most part over, Jackson Hole is past, but expect more Fed “Jawboning” on interest rates this week: somme Hawkish and some Dovish

December’s CME odds have moved to 63.7% from 51.7%. The USD rallied, bonds sold, Gold seeing some pressure. Market may be pricing in a rate hike in December, do not see one in September.

The markets will likely go about their business, and might even hit some more new highs.

The US economy is bifurcated, good for those that get the easy money and have the scale to overcome the regulations including
the ACA and its crushing costs.

The economy is not strong across the board as the weak GDP and other data show. The US will never be the strong engine it was
until these policies are changed, monetary, fiscal, tax, and regulatory.

The US Treasury has taken in record tax receipts for several years in a  row and still piling up more and more debt. All that tax revenue but GDP is at an anemic 1%.

Something, is very wrong with the US structural economy, as the reported US government gains are largely on paper, and that huge amounts of tax dollars are coming from inflated financial asset gains fueled by the US Fed’s continuing stimulus, along with the other Key world central banks.

That begs the Big Q: Why would the government ever want to change things?

It gets more tax dollars without having to ‘spend’ any on fiscal measures. More for spending on pet projects that further strengthen the central government by giving it more money for more areas to spread control, such as local police forces with the ‘do it our way our you don’t get money’ Carrot & Stick as on keen observer that I read puts it.

Back to stocks

The NYSE large caps have weakened while growth still looks OK. There is leadership, as leadership is the stuff of moves.

We are in a mature Bull market that needs strong leadership to advance, not start up, fade and fizzle.  Money has been rotating through the market.

So, if the money continues to move play the Northside of that action, as the Bulls will try to squeeze out some more gains Vs all of the Bears that have bet against it.

This week we will see how S&P 500 and DJIA try to shake off  their weakness and how NASDAQ reacts with the Friday improvement from its headline names.

Cheap money has built this long Bull Run, and it saved a selloff and extended the rally this year. I do nor believe that the rally can continue when the cheap money is pared.

Meanwhile, let Northside positions work, add to them if more good moves are made, but  when areas weaken and fall over, play them to the Southside.

Remember, always take what the market gives.


The Bulls Vs The Bears

Sentiment Indicators

VIX: 13.65; +0.02
VXN: 15.16; -0.2
VXO: 12.2; -0.34

Put/Call Ratio (PCR) CBOE: 1.04; -0.11. Saw 2 sessions back over 1.0 on the close, making it 3 in the past 2 weeks,29 of 35 below 1.0, 20 of last 52 over 1.0. After a stretch of sub-1.0 closes, a second 1.0+ close out of the last 2 weeks.

The Bulls edged higher last week, rising 0.5, it is still enough below 60 to have some remaining Northside.

The Bears rebounded to 20.2 from 20.0.

The Bulls continue higher, the Bears lower.

The Bulls are at 56.7 Vs 56.2 last

The Bears are at 20.2 Vs 20.0 last


Support and Resistance

DJIA closed: 18,395.40

18,595 the Jul 2016 high

18,351 the May 2015 high
The 50-Day EMA: 18,310
18,288 the Mar 2015  high
18,247 the Aug 2016 low
18,168 the Apr 2016 high
18,100 the Dec 2014 high
18,016 the Jun 2016 peak
17,978 the Nov 2015 peak
17,600 the bottom of the Apr/Jun 2016 trading range.
The 200-Day SMA: 17,528


S&P 500 close: 2169.04

2175 the Jun 2016 high
2194 the Aug 2016 high

The 50-Day EMA: 2150
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 high
2062 a Jan 2015 high
The 200-Day SMA: 2052


NASDAQ close: 5218.92

5232 the 2015 high
5271 the Aug 2016 high

5162 the Dec 2015 high
5100 a May 2015 high
The 50-Day EMA: 5097
5042 is the Mar 2015 high
5009 a Mar 2015 high
4999 the Oct 2015 upper Gap mark
4980 the Jun 2016 high
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: 4865

Have a terrific week.

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