3-26-17 Market Commenatry



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Market Breadth
: With this past week’s market decline, our Bull/Bear Point and Figure Ratio at 1.10 fell from 1.46 last week, losing strength, but remaining within bullish territory. The total count of securities in bullish or bearish patterns decreased 5% to 3105. The count of bearish stocks increased 12%, while the count of stocks in bullish patterns decreased 16%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now nineteen 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 106 points for the tenth decline in nineteen weeks. At a negative 85.33 points, it continues below all seven tops above +100, and it continues above all four bottoms below -100 in the last 3 years. 

Volume Analysis:
In this week’s volume analysis, the NASDAQ Composite Index ended in Accumulation mode with average daily volume lower than the prior week. In the last two weeks the NASDAQ had three (3) Accumulation days and one (1) Distribution day. (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 Accumulation mode on higher average daily volume.

: Now at -72.63 down from +154.81 last week, the CCI(20) daily after signaling a valid ZLR (Zero Line Reject) Long entry for Monday 3/13 open on Friday 3/10 fell below +100 and below our ZLR pivot entry point at Wednesday 3/22 close. The result of this trade simulation was a loss of 51.17 points on the NASDAQ or $0.82 per share of QQQ.
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-seven weeks ago, while the Daily CCI(20) began a Woodie’s up trend eighteen weeks ago.
The CCI(20) weekly has fallen to +96.47 from +119.08 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 Gold & Silver, and REITs on top, Oil, Oil Services, Banking, Brokers, and Retail on the bottom. Bullish: Computer Hardware has continues in the top five. REITs has left the bottom five and entered the top five. Oil Services PHLX and Oil continue in the bottom five. Bearish: KBW Bank continues in the bottom five. Brokers has entered the bottom five. Gold & Silver PHLX continues in the top five. Semis PHLX and Disk Drives have left the top five.
Focus this week: From www.peakprosperity.com “Why This Market Needs To Crash And likely will” by Chris Martenson. The following are some key points.

  • Like an old vinyl record with a well-worn groove, the needle skipping merrily back to the same track over and over again, we repeat: Today’s markets are dangerously overpriced.
  • Our consistent view is that price bubbles always burst. Which is why we predict the world’s financial markets will implode spectacularly from today’s heights — destroying jobs, dreams, hopes, economies and political careers alike.

  • When this happens, it will frighten the central bankers enough (or merely embarrass them enough, being the egotists that they are) that they will respond with even more aggressive money printing — and that will then cause the entire money system to blow up.  Ka-Poom!  First inwards in a compressed ball of deflation, then exploding outwards in a final hyperinflationary fireball (see our recent report When This All Blows Up…).

  • It really cannot end any other way.  Money is not wealth; it is merely a claim on wealth.  Debt is a claim on future money.  

  • At the national level, the US is already insolvent, meaning liabilities exceed assets.  The US has been spending far above our means for decades and decades, amassing a tremendous amount of public and private debt (as well as entitlement promises) along the way. And, yes, even nations can go bankrupt.

  • But bankruptcy is a legal process, and it’s not possible for an entire economy to enter a legal process, so what do we mean when by talking of a looming bankruptcy? Simply put, all those the claims represented by all the debt and excess printed currency have to be destroyed, or reduced, to bring things back into balance. 

  • To understand just how dangerous this has become, we need look no further than this chart:


    Our current debts and other national liabilities now total more than 1,000%(!) of the nation’s annual income, a.k.a GDP.

  • [Referencing] the chart above, it’s sufficient to know that no country, ever, in all of history, has ever dug out from such a mountain of excess claims.  Never.  Not once.

  • …there’s no such thing as perpetual exponential expansion of anything. Even the universe itself is expected to one day stop expanding and eventually implode in a “big crunch“.

    Regrettably, though, that’s the ‘plan’ of every major central bank around the world right now.

  • All throughout history, oppressors and genocidal maniacs have always deployed elaborate psychological defenses to protect their fragile egos from the sort of crushing destruction that would result from a clear-eyed view of themselves and their actions.  It’s hard to transition from one’s self-inflated view of being a virtuous superhero to admitting you’re actually the source of untold misery and heartbreak.
  • …our strongest advice is to position yourself for crisis before crisis arrives.

–Donald Pirl www.s2pmarketsignal.com

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