Monday, May 23, 2016

05/17/16 #Review of #CrudeOil #Free

Crude Oil
Traders chasing oil's bounce should be listening to industry leaders and the message of the market. BP CEO says I do think the industry needs to prepare for lower for longer. A global economy plagued by chronic sub-growth and business cycle transition from prosperity to liquidation that IMF incorrectly believes can be managed, even for the once highly self-sufficient Arab States, supports continuation of the mega glut, the swamping of the demand by growing global supplies, and mark down to cycle concentrations not seen since 1998, 1931-1932, 1915, and 1891 (see Monthly Review of Crude Oil).

Investors, largely driven by emotions rather than discipline, tend to focus on volatility rather than the message of the market. This tendency prevents them from recognizing better opportunities in quieter markets.

Insights constructs and interprets the message of the market, the flow of sentiment, price, leverage, and time in order to define trends within the cycle of accumulation and distribution for subscribers.

Please join us.



Summary

The BEAR (Price) and Bull (Leverage) trends under Q2 accumulation as as seasonal high approaches position crude oil as consolidation/profit-taking against the bear opportunity since the fourth week of March.

Price

Interactive Charts: USO, $WTI

The long-term trend oscillator (LTCO) defines a down impulse from 34.96 to 11.75 since the third week of August 2014 (chart 1). The bears control the trend until reversed by a bullish crossover. Compression, the final phase of the CEC cycle, generally anticipates this change.

A close above 15.99 jumps the creek and transitions the trend from mark down to cause, while a close below 8.33 breaks the ice and maintains it.

Chart 1


Leverage

The long-term leverage oscillator (LTLO) defines a bull phase since the fourth week of March (chart 2). The bull phase, a conflicting message from the leadership of leverage and price, defines consolidation/profit-taking against the down impulse (see price). This has been tightening risk management for the bears for months.

A diffusion index (DI) of 16% defines Q2 accumulation (chart 3). A capitulation index (CAP) of 8% supports this message (chart 4). DI and CAP's trends, broader flows of leverage and sentiment from accumulation to distribution and fear to complacency supporting the bulls (red arrows), should not only continue to extreme concentrations but also restrain downside expectations until reversed (see price). A decline under these trends, a sign of weakness (SOW), would be bearish for oil longer-term.

Chart 2


Chart 3


Chart 4


Time/Cycle

The 5-year seasonal cycle defines weakness until the fourth week of June (chart 5). This path of least resistance restrains upside expectations (see price).

Chart 5


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Hedge Funds Slipping on Oil

News
There's been a lot of slips in the hedge fund community lately. Couple simple rules to investing, following the message of the market and ignore opinion. Any market interpretation not based on trends of price, leverage, and time is opinion.

Oil bulls, brutalized by two focused down impulses, the domain of the BEARS, have become reluctant bears as the trend transitions from focused down impulse to consolidation/profit-taking (see Review of Crude Oil). If consolidation/profit-taking transitions to focused up impulse, many of these bearish converts will slip again on oil?

Headline: Hedge-Fund Star Kyle Bass Slips on Oil

Hedge-fund manager Kyle Bass made a killing when the mortgage bubble popped. He wasn’t as lucky with the oil bust.

Reassured in part by a March 2015 meeting with energy investor T. Boone Pickens, who said the glut of crude wasn’t going to overwhelm the country’s ability to store it, Mr. Bass began buying shares of oil producers like Concho Resources Inc. and Whiting Petroleum Corp. It was a big mistake. Energy prices collapsed anew,...


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The Fed Will Raise Rates, Its Only A Matter of Time and Pressure

News
The Fed is trapped in the classic damned if you do, damned if you don't, paradox. The Fed, following market forces rather than the other way around, needs to raise rates to relieve the growing strain of iliquidity in pensions and insurance companies. If they do that, they'll be blamed for causing stocks to decline (at least temporarily) by those that incorrectly believe stocks and interest rates are inversely correlated. If they chose to keep interest rates low in support of government borrowing, will vanquish the majority of public pension funds to the boneyard of broken promises. This will break the back of confidence in the public sector.

Headline: El-Erian: Fed hike definite by September, probably in July

Mohamed El-Erian said Monday the market is still underestimating the chances the Federal Reserve will raise interest rates this summer.

The Fed has become part of the problem and "shouldn't be doing what they're doing, but exiting is quite hard. Now, they have a small window — a small window — to start normalizing, and I think they intend to take advantage of it," Allianz's chief economic adviser told CNBC's "Squawk Box."


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#Hillary In Trouble But Only The Public Seems To Know It

News
As the old saying goes, Hillary's goose is cooked. She likely recognizes it now.

Mainstream media may have crowned Hillary as the President, but it growing more obvious the public is not paying attention. The economy, while currently upticking, should maintain its downward trend until the election. Economic weakness means more finger pointing in the direction of the Democratic party and votes for Trump. Bottom line, the public is tired of lip service politicians from both parties that talk of change but do nothing once in office. This growing frustration will influence the 2016 and 2018 elections in unexpected ways.

Headline: Welcome to the general election: Where did Hillary's cakewalk go?

The presumptive nominee is despised and distrusted. No way they can win a general election. This thing is over.

Must be talking about Donald Trump you say? Nope. Hillary Rodham Clinton.

It's easy to lose sight of the fact that while wide swaths of the American electorate revile Trump, Clinton will begin the 2016 general election in nearly as bad shape. And while Trump has locked down the GOP nomination and is now consolidating support among the formerly reluctant Republican establishment, Clinton continues to fight a nasty rear-guard action against an irascible Bernie Sanders who apparently doesn't care if he mortally wounds the eventual nominee.


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05/17/16 #Review of #Copper

Copper
While coordinated 'stimulus' supports a countertrend rally of commodities foreshadowed by negative concentration discussed months ago, it won't reverse global capital flows regardless of the hype. Copper, an economically-sensitive commodity, has been leading a cyclical downturn in the global economy for months. While this and other bearish commodity trends are well recognized among industry leaders, they continues to elude the public, a majority that generally believes the US economy remains on solid footing. The majority, a day late and dollar short in terms of timing, will panic only after undeniable economic contraction completely invalidates their beliefs.

Insights constructs and interprets the message of the market, the flow of sentiment, price, leverage, and time in order to define trends within the cycle of accumulation and distribution for subscribers.

Please join us.





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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Sunday, May 22, 2016

05/17/16 #Review of #GasolineRBOB

Gasoline
Traders chasing oil and gasoline's bounce should be listening to industry leaders and the message of the market. BP CEO says I do think the industry needs to prepare for lower for longer. A global economy plagued by chronic sub-growth and business cycle transition from prosperity to liquidation that IMF incorrectly believes can be managed, even for the once highly self-sufficient Arab States, supports continuation of the mega glut, the swamping of the demand by growing global supplies, and mark down to cycle concentrations not seen since 1998, 1931-1932, 1915, and 1891 (see Monthly Review of Crude Oil).

Investors, largely driven by emotions rather than discipline, tend to focus on volatility rather than the message of the market. This tendency prevents them from recognizing better opportunities in quieter markets.

Insights constructs and interprets the message of the market, the flow of sentiment, price, leverage, and time in order to define trends within the cycle of accumulation and distribution for subscribers.

Please join us.





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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Saturday, May 21, 2016

05/17/16 #Review of #Nasdaq100 #Free

NASDAQ 100
As long as the US Stock rally continues defying conventional wisdom of the majority - for instance a bull market in stocks cannot coexist with a bear market in bonds (WRONG!), bearish calls (1,2) that lack support from even the most basic long-term cycles, the flow of time, will continue.

US stocks, following growing concerns about the health of the global economy and a contagion spreading from China or other emerging economies, continue their decline from the November high. The unwinding of Sentiment, a process that turned greed into fear, produced major buying opportunity (MBO) in August 2015; the lows of price and sentiment will be retested if support fails. The retest process not only supports continuation of cause, a trend containing stocks since 2014, but also raises the possibility of false breakdown if the majority panics. A false breakdown, emotional or capitulation selling that places a confused majority on the wrong side of the trade (bearish) ahead of a larger upside move, also favors extending the 2009 US stock rally beyond 2017.

Investors, largely driven by emotions rather than discipline, tend to focus on volatility rather than the message of the market. This tendency prevents them from recognizing better opportunities in quieter markets.

Insights constructs and interprets the message of the market, the flow of sentiment, price, leverage, and time in order to define trends within the cycle of accumulation and distribution for subscribers.

Please join us.



Summary

The BULL (Price) and BEAR (Leverage) trends under Q1 accumulation after a seasonal high position the Nasdaq as consolidation against the bull opportunity since the second week of May. The focusing and unfocusing of the impulse reflects not only indecisiveness for technology stocks but also the broader market.  This sideways chop, a technical process transitioning sentiment from optimism (greed) to pessimism (fear), is accumulating the energy necessary to fuel an upside breakout large cap technology stocks (see leverage).

Price

Interactive Chart: QQQ, $NDX

The long-term trend oscillator (LTCO) defines an up impulse from 110.36 to 106.47 since the fifth week of March (chart 1). The bull control the trend until reversed by a bearish crossover. Compression, the final phase in the CEC cycle, generally anticipates this change.

A close above 113.59 jumps the creek and transitions the trend from cause to mark up, while a close below 93 breaks the ice and transitions it to mark down.

Chart 1


Leverage

The long-term leverage oscillator (LTLO) defines a bear phase since the second week of May (chart 2). The bear phase, a conflicting message from the leadership of leverage and price, defines consolidation against the up impulse and tightens risk management for the bulls (see price). 

A diffusion index (DI) of 88% defines a high energy bullish setup and Q1 accumulation (chart 3). A capitulation index (CAP) of 68% supports this message (chart 4). DI and CAP's trends, broader flows of leverage and sentiment from accumulation to distribution and fear to complacency supporting the bulls (red arrows), should not only continue to extreme concentrations but also restrain downside expectations until reversed (see price). A decline under these trends, a sign of weakness (SOW), would be bearish for large cap technology and US stocks longer term.

Chart 2


Chart 3


Chart 4


Time/Cycle

The 5-year seasonal cycle (orange series) defines weakness until the third week of June (chart 5). This path of least resistance restrains upside expectations (see price).

Chart 5


Intermarket Analysis

Nasdaq 100 to SP 500 Ratio

The long-term trend oscillation (LTCO) defines a down impulse since the first week of March (chart 6). Large cap stocks (SPY) outperform large cap technology stocks (QQQ) until reversed by a bullish crossover. Compression, the final phase of the CEC cycle, generally anticipates this change.

The down impulse reflects a growing preference for liquidity (large cap stocks) over illiquidity (technology) by global capital (flows). This preference, driven by growing social, political, and economic strain within Europe and emerging markets, must be recognized by Insight readers!

Chart 6


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.