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Monday, June 20, 2016

Daily update 6/20 Global bear markets.


Global stocks started out with big upside gaps especially in Europe.  After some initial short covering that drove SPX up to 2100 it was downhill all day.  The sellers came out on every rally attempt and sent SPX to new lows.  The breadth was strong all day starting out at +83% and ending at +74%.  The big boys were busy hitting the bids all day.  No panic though.  New highs came in at 176 which was up considerably from the last few days. 

The futures hit the upper channel line and turned back down.  They ended the day back below the 50 SMA after being above it early on.  This may end up being a rejection at the 50, but it is too soon to tell.  We have a confirmed upside break of the 20.  Mixed signals at the moment on this chart.

The red count dropped precipitously, but the green count only came up a little.  Bears still have the edge on this chart.

Today's bounce alleviated the slight oversold condition we had.  It didn'\t do much to make a bullish case here.  I find the rejection at 2100 pretty interesting.  At the time the VIX was well over 16 so unlike other times when we hit 2100 a low VIX was not the problem.  Either something besides brexit is bothering U.S. stocks or investors here are just not as sure about the vote as they are in Europe.  I can understand that.  The polls may show bremain with a slight lead, but most polls I saw were within the margin of error.  It seems too close to call to me even if currency markets seem sure.  Markets have been known to get things wrong sometimes so we will just have to wait and see what happens. 

Yellen testifies in front of the Senate tomorrow.  Maybe she says something that moves the market.  People did not take the last announcement and talk very well.  She might try to patch things up a bit.  I think we are in limbo here until after the brexit vote.  I suspect people will be hesitant to put on big positions either way in front of that.

Rant on:
My brain just works completely different then most people. I usually have the TV on CNBC during the day so I can hear what other people think.  While listening to the idiotic rantings of Cramer can be tough they used to have some people that really do have a brain.  Lately it seems like those people are in short supply.  They have been parading a lot of new faces lately and I hate to tell them, but they seem to have no clue what they are talking about.  Has Wall Street been taken over by a bunch of idiots?  They had some guy on there today talking about $80 oil.  He said that while global oil supplies are still building he expects drawdowns in the 2nd half of the year.  I guess he has never noticed the decades of data that show we are going through peak usage season right now and the 2nd half of the year tends to see somewhat lower demand.  Then he starts talking about oil needing to get over $70 before supply will start to increase.  I guess he has not seen any of the research that shows there is plenty of additional oil that can be pumped at $50 for profit.  Last week showed the rig count picking up again.  I think that will continue since producers have been able to sell quite a few futures to hedge production.  If oil is not lower then it is now over the next several months it will be pretty shocking to me.  Come on CNBC.  Get some people on that have a clue.
Rant off:

This is an interesting graphic.  Notice where Europe and Japan are.

Not a pretty picture globally.


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