Top Leaderboard 728x90 Advertisement Space

Advertising on Insights is good for you.

Sunday, December 21, 2014

Review of Gasoline - Message of economic weakness (Meltdown) from Periphery

Gasoline
The bears have enjoyed a steady decline since July. This decline, driven by a growing bearish majority, lead by oil's collapse, and anticipated by the invisible hand (chart 2), has frustrated the bulls. As long as the world economy continues its quiet meltdown, an unexpectedly implosion from the periphery to the core, gasoline's bear trend will continue. No market, however, moves in a straight line. Today's bear phase, originating in June when everyone was bullish, will transition to a bull (phase) at some point.

The professional investors must profit by anticipating future trends and events rather than chasing old news. This is done by following the invisible hand or message of the market. That message, the simultaneous study of the the cycle of accumulation and distribution (trend), the distribution, movement, and participation of leverage (leverage), time/cycles, and human behavior that excludes opinions is defined below:

Trend

Cycle A/D
Gasoline's trend oscillators¹ produced a bearish (negative) crossover in July (chart 1). This crossover triggered the current down impulse that's broken the ice of support three times. This impulse has downside targets of 30-31. A close below this zone will accelerate the decline.

UGA closed at 35.72 through 12/16.


Chart 1


Leverage

COT Matrix
Gasoline's DI reading of -5%, a slight increase from last week and sign of accumulation as price declined², is consistent with an inverted bull phase³ (chart 2). The steady decline in DI as price declines suggests distribution. This association is consistent with a bear phase. The positive to negative DI oscillation (bull phase); therefore, has been inverted. This rare event suggests an extremely weak market that's likely to test lower downside targets.


Chart 2


Time/Cycles

Seasonality
The path of least resistance is down until the third week of December (chart 3). After that, the cycle flips from down to up until March. If gasoline fails to generate a rally from December to March, it would be an addition sign of weakness. A market that cannot rally as expected often displayed unexpected weakness when the cycle flips. While few are willing to recognize gasoline, crude oil, and other key commodities' downtrend as a warning of economic, financial, and political trouble, they'll be forced to do so by the brutality of the trends from 2015 to 2017.

Please do not trivial this message as falling gas prices are good for households and spending. This trend, similar to the setup displayed in late 20's and mid 2000's, is a warning. The economy, driven by failing debt, is melting down at the periphery.

Chart 3


——

¹ The intermediate-term close oscillator (ITCO) and long-term close oscillator (LTCO) define a market's trend oscillators and impulse wave. For example, when both trend oscillators are positive and negative, they define up and down impulse waves, respectively. Mix readings, such as a positive ITCO and a negative LTCO, suggest a market transitioning up to down, and vice versa.

² The relationship between DI and price defines accumulation and distribution. Positive (direct) and negative (inverse) relationships as price rallies indicate accumulation and distribution accumulation, respectively. Positive (direct) and negative (inverse) relationships as price declines indicate distribution and accumulation, respectively. In general, bulls purchase accumulation and sell and/or reduce risk into distribution. Bears sell distribution and/or reduce risk into accumulation.

³ Bull and bear phases are defined as positive to negative and negative to positive diffusion index (DI) oscillations.

-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Belarus slaps 30 percent fee at currency exchanges

News
Flight of capital and controls trying to contain it.






Headline: Belarus slaps 30 percent fee at currency exchanges

MINSK, Belarus (AP) — Belarus has imposed a 30 percent fee on currency exchange transactions in an effort to contain panic that has spilled over from neighboring Russia.

The Belarusian National Bank announced Friday that it was mandating the fee for both businesses and individuals using Belarusian rubles to buy foreign currency.

more

-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Saturday, December 20, 2014

US Stock Review

US Stocks
The bulls have enjoyed a relatively stable up trend since 2011. This trend, driven almost exclusively by international capital flows fleeing economic and political turmoil, continues to mystify anyone citing fundamental overvaluation. As long as the world economy continues its implosion from the periphery to the core (1,2,3,4,5), the bull run in stocks, subtle at first but growing more obvious to the public as time passes, will continue. The skeptical public, coddled easy explanations and notorious bagholders of secular moves, will become chasers of higher prices if the uptrend accelerates.

No market, however, moves in a straight line. Today's bull phase, originating in early 2014 will transition to a bear phase at some point. The study of trend, leverage, and cycles help 'time' this transition.

The professional investors must profit by anticipating future trends and events rather than chasing old news. This is done by following the invisible hand or message of the market. That message, the simultaneous study of the the cycle of accumulation and distribution (trend), the distribution, movement, and participation of leverage (leverage), time/cycles, and human behavior that excludes opinions is defined below:



-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Banks Freed From The Restraints of Dodd-Frank and Volker Rule

News
The fall of Dodd-Frank which eliminated the swap push out rule also includes what will likely be a permanent 'delay' of the Volcker rule. This delay allows some big players, mostly investment banks posing as traditional banks, to maintain their proprietary trading another two years. Proprietary trading benefits the bank rather than clients or depositors. It was the failure of Goldman Sachs' proprietary trading that transformed it from an investment bank to a bank in order to gain access to bailout funds. The Volcker delay prevents major players from recognizing big losses in July.

The fall of Dodd-Frank carries consequences that will be realized during the next crisis. While those consequences will likely exceed the fallout of 1929 and 2008, few seem worried about them today.

Headline: Fed Grants Volcker Reprieve in Banks' Second Big Win This Month

Banks added to their wins in Washington this month by getting a reprieve from the Volcker Rule that will let them hold onto billions of dollars in private-equity and hedge-fund investments for at least two more years.

The Federal Reserve granted the delay yesterday after banks said selling the stakes quickly might force them to accept discount prices. Goldman Sachs Group Inc. has $11.4 billion in private-equity funds, hedge funds and similar investments, while Morgan Stanley has $5 billion, securities filings show.

“This is a great holiday present by the Fed,” said Ernest Patrikis, a former Federal Reserve Bank of New York general counsel who is now a partner at White & Case LLP.


more

-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Court rules on whether obesity is a disability

News
Rising obesity rates across Western nations not only affects quality of life but also carries substantial indirect costs for society and increasingly fragile global economy. Another Great Depression, likely not called that until much later, will change generations of Americans, Europeans, Asians, etc. This change, embedded with plenty of finger-pointing up front, is necessary to fuel the cycle of creative destruction.

Headline: Court rules on whether obesity is a disability

LONDON -- The European Court of Justice says obesity can be a disability, a ruling that could have consequences for employers across the continent.

The court ruled Thursday in the case of a Danish child-care worker who says he was unfairly fired for being fat.

The court said if obesity hinders "full and effective participation in professional life," it could count as a disability. Discrimination on the grounds of disability is illegal under European Union law.

more

-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Friday, December 19, 2014

COT Matrix Updated 12/16/14

COT Matrix
COT Matrix
Select Market





-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.

Rising Number of Exit Taxes Foreshadow Trouble Ahead

News
Japan could join be the next to join a growing list of countries and States employing exit taxes designed to 'balance budgets' under the pretense of patriotism. While these taxes, such as the Reich Flight Tax of 1931 (illustrating once again that money is not stupid) encourage hide and park rather than active investment in the productive capacity of a nation and/or global economy, they are consistently used throughout history as viable, corrective solution. History tells us that exit taxes usually precede significant turmoil.

Headline: Japan Targets Wealthy With Exit Tax

Japan could become the latest country to consider taxing wealthy individuals who move abroad to take advantage of lower rates.

The government and ruling party lawmakers are considering an “exit tax,” under which people with over ¥100 million ($857,000) in financial assets would have to pay a tax on any unrealized capital gains on those assets if they moved out of Japan.


more

-------------------------------------

As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.



Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.