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Silver’s Small Speculators Are Giving Up Hope

 
weekly Chart In Focus

Pessimism is taking over the silver futures market, at least among the small speculators.

In the weekly Commitment Of Traders (COT) Report, published by the CFTC every Friday, traders are broken down into 3 categories:

• Commercial traders, who use the subject commodity in their trade or business
• Non-commercial traders, who are large speculators
• Non-reportable traders, the small speculators

They are referred to as “non-reportable” traders because their position sizes are small... Read More

Corporate Bonds Show Oversold Condition For T-Bonds

 
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Last week I wrote about some of the corporate bond Advance-Decline (A-D) data published by FINRA.  The high yield bonds behave more like the stock market than like T-Bonds, and so their behavior can be an indication about liquidity that will come around and affect the stock market.

The investment grade bonds are a different story, and they behave more like T-Bonds.  Their A-D data is still valuable, if interpreted in the right way. 

This week’s chart looks at a Ratio-Adjusted McClellan... Read More

Anemic High-Yield Bond A-D Line

 
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After making an oversold low on May 19, the SP500 had a pretty impressive rebound effort, which included 3 really strong breadth days on May 25-27, 2022.  That got a lot of analysts talking about a “breadth thrust” signal of various flavors.  But the SP500 bonked at a resistance level that had been a prior support level at the March 2022 lows, and after several days it has now fallen back away from that test of the resistance.

Breadth might have been really good looking for the NYSE stocks... Read More

Flat M2 Growth Means Flat Period For Stocks

 
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Part of the Fed’s response to Covid-19 in 2020 was a dramatic increase in the money supply, pushing up the money supply measure known as M2 at the fastest rate in the history of record keeping.  That rise was already underway when Covid hit, and the Fed’s actions just boosted it some more.  Not surprisingly, we are seeing consumer price inflation now, because the price of anything is a measurement of money per unit of stuff.  If the money increases dramatically but the amount of stuff stays... Read More

Gasoline Consumption Rebounding, But Still Down

 
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When we were all locked down for Covid in April 2020, total gasoline consumption in the U.S. fell to a low rate that month of 228 million gallons per day.  That is the lowest single month reading in the EIA’s dataset, which dates all the way back to 1983.

Consumption has rebounded since then, of course.  This week’s chart shows a 12-month moving average of that gasoline consumption data, and a comparison to crude oil prices.  Not surprisingly, there is an inverse relationship between oil... Read More

Lumber’s Pullback is a Message for Real Estate

 
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Lumber futures prices peaked at $1,670 per 1,000 board feet back on May 7, 2021.  This is relevant because lumber prices tend to lead a lot of housing related data series by about a year. 

This week’s chart looks at the Case-Shiller U.S. National Home Price Index, which is a measure of the changes in average U.S. home values.  That is a tough data series to compute, because they have to use home sales to figure out what homes are worth, and the buying and selling of houses is subject to a... Read More

Investors Intelligence Data at Bearish Extreme

 
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When prices go down, people turn more bearish.  It is a natural human phenomenon, and it is still working during the current price decline.  The useful aspect of this is that when you see an extreme reading for a sentiment indicator, it is a sign that a bottom is at hand for prices.

This week’s survey data from the folks at Investors Intelligence showed a big jump in the percentage of investment advisors and newsletter writers they track who are being tallied as bearish, up to 40.8% now. ... Read More

The Bad Things That QT3 Will Bring

 
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The Federal Reserve announced on May 4, 2022 that it would start to reduce its holdings of Treasury securities and mortgage-backed securities (MBS) beginning on June 1, 2022.  Their plan is to sell off $30 billion of Treasuries and $17.5 billion of MBS every month from June through August.  Then in September they plan to ramp up to double those amounts every month. 
 

This will not be bullish at all for the stock market, based on our collective past experience with instances when the Fed... Read More

 
Daily Timing Chart

 

07/06/2022 IssuesVolume(000s)
McC OSC 12.371 -140258
Sum Index -521.471 -2120123

More Data

The McClellan Oscillator

 

OscillatorCreated 1969, the McClellan Oscillator is recognized by technical analysts as the essential tool for measuring acceleration in the stock market. Using advance-decline statistics, it gives overbought and oversold indications, divergences, and measurements of the power of a move.