3-5-17 Market Commentary



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Market Breadth
: With this past week’s market advance, our Bull/Bear Point and Figure Ratio at 1.46 was down slightly from 1.57 last week, continuing within bullish territory. The total count of securities in bullish or bearish patterns decreased fractionally to 3172. The count of bearish stocks increased 4%, while the count of stocks in bullish patterns decreased 4%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now sixteen weeks in bullish territory. Paid subscribers have access to the OpenOffice Calc data from which the chart is generated.

The well known market breadth indicator, the NASDAQ McClellan Summation Index (NASI) fell 48 points for the seventh decline in sixteen weeks. At a positive 306.51 points, it continues above the the November 2014 top, and the March 2015 top, but continues below the December 2016, April 2016, May 2016, and August 2016 tops above +100, and it continues above all five bottoms below -100 in the last 3 years. 

Volume Analysis:
In this week’s volume analysis, the NASDAQ Composite Index ended in neither Accumulation nor Distribution mode with average daily volume higher than the prior week. In the last two weeks the NASDAQ had two (2) Accumulation days and two (2) Distribution days. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.) Last week the NASDAQ ended in neither Accumulation nor Distribution mode on lower average daily volume.

: Now at +71.21, down from +84.3 last week, we wait for the CCI(20) daily to return to the +/- 50 zone for a new trade.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The Weekly CCI(20) of the NASDAQ Composite Index began a Woodie’s up trend forty-four weeks ago, while the Daily CCI(20) began a Woodie’s up trend fifteen weeks ago.
The CCI(20) weekly has fallen to +146.22 from +158.17 last week. We await the return of the CCI(20) weekly to the +/-50 range for another trade.

Industry Rotation the last two weeks:
All of the top five industries are  positive and all of the bottom five are negative. Summary: Some Tech and Banking on top, Gold & Silver and Brokers on the bottom. Bullish: KBW Bank continues in the top five. Comp Tech has entered the top five. Gold & Silver PHLX continues in the bottom five. Bearish: Brokers has entered the bottom five. Oil and Oil Services have left the bottom five.
Focus this week: From www.zerohedge.comThis Is The Only Chart Americans Should Be Worrying About Right Now“. A few key points and the chart follows.

  • In 2015, President Obama and Republican congressional leaders agreed to suspend the federal debt ceiling until March 15, 2017. After that date – less then two weeks from now – the Treasury will surpass its cumulative $20 trillion borrowing authority.
  • So, with two weeks left until the debt ceiling suspension expires, Treasury’s cash balance plummeted to $109 billion this week as of Thursday… making this the most important chart in the world right now…

    Once it hits zero, as FiscalTimes notes, newly ensconced Treasury Secretary Steven Mnuchin is expected to order “emergency measures” to effectively buy more time for the government to pay its creditors and cover revenue shortfalls to keep the government operating. The stakes couldn’t be higher: Failure to raise the debt ceiling would do irreversible damage to the U.S. credit rating, trigger an uproar in U.S. and global markets, drive up the future cost of borrowing, postpone Social Security payments and tax returns, and force layoffs of non-essential government workers.

  • Not everyone is ignoring the potential risks ahead, David Stockman dropped this reality bomb last week:

    “I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash. 

    Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

    Stockman predicts very positive price moves for gold and silver as a result of the coming budget calamity.

–Donald Pirl www.s2pmarketsignal.com

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