Commodities, led by oil, have been very strong since December 26th (just like equities). We are approaching the 50-day EMA, however, which could be an exhaustion point for this sector.(more…)
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Crude oil has been getting absolutely walloped for weeks now, having lost over a third of its value recently. Looking at the chart of USO below, it seems to me we are definitely primed for a bounce. The bounce will ultimately fail, but we’re really, really oversold at this point.
Preface to all sector posts: This weekend I’m organizing charts in a different way. I’ve picked from my existing portfolio of live short positions and have grouped favorite shorts in specific sectors. Here are the selections for this group, and hopefully the markups will speak for themselves.
A general review of the current status across different asset markets. This is not comprehensive, forward-looking analysis as per NFTRH, but it is an up to the minute summary (as of Friday afternoon).
Gold, silver and gold stock indexes/ETFs made what I had thought were bear flags yesterday, but today’s reversal painted them as short-term bounce patterns (‘W’ with a higher low in the miners and silver).
This chart of gold shows a flag breakdown, whipsaw and new closing high for the short-term move. As we’ve noted for weeks now, the Commitments of Traders (CoT) is in a contrary bullish alignment with large Specs all but wrung out of the market (they were fleeced again; don’t believe hype about their increased shorting being some sort of conspiracy). All in all, not bad for the relic. The bounce lives on. (more…)
So, honestly, I want to make sure I’ve got this straight.
- There was relatively free trade;
- We enact tariffs on agricultural imports to make them more expensive to American consumers;
- Other countries retaliate with their own tariffs, diminishing demand for American products;
- Farmers are selling less and making less money;
- So the U.S. government starts writing them checks to compensate with money we don’t have (in case the whole “$21 trillion in debt” thing wasn’t quite clear yet)
So, net result – – American consumers worse off with higher prices. Foreign consumers worse off for the same reason. American taxpayers paying for billions of checks being written to farmers.
Between weakness in gold (which is nearing its 7th consecutive year of its own private bear market) and an oil market that’s down over 4% so far today, commodities continue to tumble away from their reversal pattern. I’m not expecting a hard fall, but things certainly seem poised to continue melting away for weeks to come.
Hello, Slopers, and remember today is a shortened trading day, with equities closing three hours before the normal time.
My “Big Short” for 2018 remains bonds. The bond market has, since May 18th, had a powerful push higher, but as I so often write, it’s all about context. The multi-decade uptrend has decisively broken, and my view is that this bounce is nothing more than a push back toward resistance.