Wednesday, August 24, 2016

Tidbits: Election, Oil and Market-

- "Political designed to make lies sound truthful..."
- George Orwell

In the middle of these dog days of summer, it is too hot to do anything. With that said and the presidential election less than 75 days away, some tidbits are on the page to be shared with you.
Pew Research Center
released a study with poll numbers. They have Clinton leading, but for me a more important aspect of their study provides an interesting point. Of all the people that they polled, more people classify themselves as Independents than ever before. In fact, the numbers convince me that if a third party were to form, it would win a national election. There is hope for America.
People claiming to be independent were 37% of the total voters.
Democrats fell to 32% and
Republicans fell to 27%.
Keep in mind the total vote for the winning candidate in the past two elections. In 2008, Obama running to make a change won with 69 million votes. In 2012, Obama said he would get jobs with "shovel ready" approach. Do you recall that? The voters realized that change meant what would be left in their wallet as we brush off the dirt to realize that we were fooled again. Obama's total fell 10 million to 59 million. When you look back, you realize that President Obama just carried on the same program as President Bush: Tax cuts for the rich, two Middle East wars with both promising to reduce the deficit and both increasing it beyond recognition. Funny thing. I'm watching an "old" John Candy movie, "Delirious" from 1991. In an early scene the camera pans the street where his character is walking. He passes the "debt" billboard. The total was $3 trillion. It is now 7x that amount. Man, they both suck!
started to rise in February of this year from $26 a barrel. It made it all the way to $51 and change. The shills were calling for $80 oil, but reality said differently. Consider the rig count on the 3rd of June of this year. The US number was 408 and the Canadian number was 41. Last Friday, the US rig count jumped to 491 and the Canadian number climbed to 121. Either the oil and gas companies are desperate for revenues or they believed the hype. In any event, more oil is on the way even in the face of declining oil prices. When you add the fact that Saudi Arabia just lowered their oil price to Asian nations to keep market share away from Iran, the picture is not pleasant for the companies, but great for consumers. After this bounce, I see oil testing the low $30s, probably after Labor Day.
To get a more accurate price in oil, you can use Fibonacci. The market just did a .68% bounce in oil.
is a great tool and the man who it is named after should get more respect from our schools and society. The "golden number" will provide both a rising and declining target price for anything even football games. Anyway, subtract the present price of oil from its high.
High oil: $51. It fell to $39. It bounced to touch $48.
It should test $35 and at that point, check the volume of contracts because if they are strong, oil could fall to $27 which is the next level under the matrix system.
At present, the market hit new highs, but no conviction. By that I mean volume behind the trend. In fact, the only high volume has been on the down side. Consider our economy for some insight to the direction of the market. The lowering of unemployment has been mainly in service sector jobs. In that category, the restaurant business has the most job formations. This should be reflected in the Restaurant&Bar Index and it has. The index has climbed 257% since 2009. So, what is it saying now?
Wall Street is turning bearish and I do not mean the Goldman Sachs market call for a 10% correction. Stifel has downgraded 11 restaurant stocks even with declining oil which gives consumers more discretionary money. In addition, they said Chipotle could fall 50%. Ouch!
Stifel is not a lone wolf. Andy Barish of Jefferies sees 18 months of difficult times for restaurants, especially with fears of rising wages.
A report from Elliot Wave Theory shows Total Business Sales rose from 1948 to 2007 in an almost undisturbed advance upward. However, there was a big decline in the recession of 2008. The up-trend picked up in 2009 and it went straight up until January of 2015 when it fell to zero. It has been zero ever since. Very scary! In addition, corporate investments has fallen below zero. Companies are looking to preserve cash as they don't see returns from future sales. By the way, the zero reading is a indicator for a strong move to a recession.
Fed: They want to engineer the market. Chairperson Yellen will check her strength with her speech on Friday from Jackson Hole, Wyoming.
Bottom line: the GDP came in at a low 1.2%. Keep in mind back in January the shills said 3% plus. How many more times will we be misled by campaign promises and bureaucratic agencies? The count says every election from the time of Nixon. Not good.