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Friday, November 25, 2016

Daily update 11/25 IP and Wholesale inventories

Bulls took full advantage of a lack of sellers this week.

To the moon.  Internals don't mean much on a part day.  

The overnight volatility remains very low.  The market is slowly creeping up.

The green count popped up near the overbought level.  That is about the same level as the peaks back in Sept.  Whether that is a problem or not I cannot say.

The short term lines are still diverging from price.  Bulls would like to see that last peak in the red line exceeded.  So far no go.

The market was pretty much totally devoid of sellers this week.  How much longer that continues I have no way of knowing.  Until the market does something wrong for the bulls there is not much to talk about. 

IP has been muddling around the last few months.  Has IP started a new uptrend?  Is the bounce in IP already over and it is headed back down?  We really need IP to take out that July peak before we can say an uptrend has started.  A sharp move down would probably indicate the downtrend is resuming.

This close up look shows that for the last two months the wholesale inventories have been negative YOY.

Expanding out to the full data set shows that the last two times this data went negative the U.S. was already in recession.  Unfortunately we have a very limited amount of data available.  At least over the last two decades it has not been good for this indicator to be negative.  Currently the other available data does not suggest we are in a recession.  However, the economy is weak enough that future downward revisions could change that picture.  There is not enough data to tell us how significant an event this is.  However, there is enough data to suggest this may be a warning sign.


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