Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

$DIA, $SPY, $QQQ, $VXX

The econ data feed this week includes: PPI, CPI, Retail Sales, Michigan Sentiment (MSI) October preliminary.

San Francisco is finding out that the higher minimum wage and the high cost of Barack Obamacare aka ACA compliance with restaurants is causing some of the middle market favorites to go out of business.

Not so shocking as in a low-margin business, forced higher wage costs and forced higher insurance
costs are causing companies to go out of business, as the price of low quality faster food rises, consumers, go back to cooking at home.

For every dollar increase in the minimum wage, there is a $20-K reduction in  independent restaurant profits that is about 10% for the size of restaurants being tracked.

San Francisco had a $5/hr hike, and so disaster.

The ACA added another $72-K of annual expenses in Y 2015, and prices have risen a lot since. That takes off another 30% of profits for these businesses. That is 50%, so the Big Q: Why do it?

There is lots of talk about an overblown stock market with too low volatility that surely must lead to a selloff soon.

Not to worry a selloff on Wall Street will come, but for not look at how the indices have acted of late: RUTX, S&P400 on big runs and are now resting.

S&P 500, DJIA, NAS Comp rested, but then last week they started back up with nice rallies.

Friends, rotation ongoing as an area rallies to gains, then rests in place or with modest tests while other parts of the market rally. Meaning new money coming into stocks because if not, money would be pulled from one area and put into another, with the former falling while the latter rises. That is not happening.

The action is very good overall, Wall Street indexes are moving up, resting, then moving up again. And, so far the new highs have not been sold.

We are seeing lot of solid setups, and so are looking at more upside this week given the action still
shows plenty of leadership with money moving into the market to drive sectors higher.

Remember, always take what the market gives and ignore the Noise to win in this Wall Street game.

 

The Bulls  Vs The Bears

Sentiment Indicators

VIX: 9.65; +0.46
VXN: 13.33; +0.45
VXO: 7.85; +0.22

Put/Call Ratio (PCR) CBOE: 0.87; +0.03

The Bulls Vs The Bears: Bulls again pushing to near 60 the Top of the typical range. Bears held steady.

The Bulls are at 57.5 Vs 54.3 last

The Bears are at 17.0 Vs 17.1 last

 

Support and Resistance

DJIA close: 22,773.67

Resistance

None

Support
22,420 the Sept 2017 high
The 10-Day EMA: 22,562
22,179 the Aug 2017 high
The 50-Day EMA: 22,109
22,086 a Aug 2017 high
21,681 the Jul  2017 high
21,638 a Jul 2017 high
21,529 the Jun 2017 high
21,169 the Mar 2017 high
The 200-Day SMA: 21,097

 

S&P 500: Closed at 2519.36

Resistance:

None

Support:
2515 the upper channel line from the March 2009 uptrend channel
2491 the Aug 2017 high
The 50-Day EMA: 2486
2480 the Aug 2017 high
2453 the Jun 2017 high
2409 the Jul 2017 low
2406 the May 2017 high
2401 the Mar 2017 high
The 200-Day SMA: 2396

 

NAS Comp close: 6590.18

Resistance:

None

Support
6477 the Sept 2017 high
6461 the Jul 2017 high
6450 a Sept 2017 high
The 50-Day EMA: 6397
6342 the Y 2016 trendline
6342 the Jun 2017 high
6300 a Jun 2017 high
6205 the May 2017 high
The 200-Day SMA: 6051

Have a terrific week.

The following two tabs change content below.

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.

You must be logged in to post comments :  
CONNECT WITH