Tucker Report

The dollar put in a very impressive performance today. There had been several tests of the lows since March, with three obvious pushes down, with the last push holding a higher low, and today making a slightly higher high over the peak between the lows. As would be expected, gold and some other commodity related plays were lower. I think this is more evidence that the commodity plays are in their final inning, at least for this commodity bull market. If the dollar rally can gather some momentum I would expect some significant downside in many of the commodity related issues, maybe even crude oil. (There seems to be a bad tick in the middle of this TradeStation chart. I can’t remove it.)
Stock indexes were lower, but were unable to extend the range down, as the bulk of the trading activity today took place within the tails left from the previous day. The Nasdaq created an inside bar, with the S&P taking out yesterday’s low by a couple of ticks. I would think a slide in oil could halt some of the downside in the stock indexes, at least temporarily. The big push up in oil three days ago does not seem to be holding and some negative momentum divergences are possible. The trend is up, but looking tired in my opinion. Every time I think a top is in, oil just ignores the indicators and pushes to a new high. One of these divergences will work. If so, the trend will eventually turn down and shorting the rallies would be safer than trying to pick a top. Oil and the stock market do not make a very good inverse correlation in normal times, but I would think breaking this huge uptrend would be positive for stocks. Barring that from happening, the stock indexes look lousy right now.

The stock indexes tried to fall apart again today. In the S&P the lows were rejected, at least for the moment, by a late day short covering rally, or at least a rally that looked like it might have been short covering. Maybe it was bargain hunting. The high of the day was resisted by the May 23rd pivot low. The trend has turned down and momentum is down. The Nasdaq looks slightly better, with the May 23rd low holding support for now. Momentum is down, but the trend, at least how I define it, is still up, although holding by its fingernails. It looks like prices want to test lower, despite the bounce from lows today. I am sitting on the fence regarding positions, and only trading some options as trends develop on the intra-day charts. It is getting very difficult trying to trade from the dailies with these violent swings. Plus I’m getting ready to go on vacation. Big moves usually happen when I’m away. Some jawboning looks like it is causing the dollar to firm up. Oil was only able to give back a portion of the gains from Friday. Corn is closing in on the price of wheat, on the ethanol hoax.
It is very cold and windy in the Pacific Northwest. We could use some global warming here. In fact, it is supposed to snow in the mountain pass. Which would be normal, except IT IS JUNE!! I heard today that our wise city government is proposing banning bonfires on the beach. BANNING BONFIRES?!?!?!?! They claim it adds to global warming. How can any semi-intelligent human being actually think a few bon fires on the beach can cause any change in the global temperature? It is beyond absurd. Bonfires in my area would probably amount to a dozen or so fires on a couple of beaches on a few days in the summer, mostly by high school age kids or young families roasting marshmallows. Bonfires would have absolutely zero impact on global temperatures if every beach in the world would have hundreds burning 24 hours a day. What makes me mad about this is the socialist power grab by our increasingly left wing city and state government, in the name of a cause. It could as easily be global cooling, which seems more likely as most scientists think that the earth temperatures have cooled in the last ten years as much as they’ve climbing in the last hundred. I believe that figure is about one degree. Hardly enough to cause panic, with solutions being proposed that would end most of our freedoms and rights, and would cripple the economy. But that’s what the socialists power grabbers want. They know what is best for all of us. Now I hear you can only idle a car for three minutes in Minneapolis. That would never work in Seattle with our traffic jams. I fear what will happen after the election if the polls hold up.

Stock indexes quickly erased the large gain from Thursday to close sharply lower on Friday. The S&P chart looks very weak, with the recent support pivot from May 23rd taken out, the trend down, and momentum down. Volume increased on the decline. The Nasdaq is holding up much better, with the trend still up. Momentum is flipping back and forth in these markets. Friday’s action in the indexes created wide range bars, which are usually followed by a contraction in range. It will be interesting to see if there is to be follow-through, or if the lows were over-done being much of the sell-off was late Friday action, which can sometimes exaggerate a move. I really don’t have a clue or a guess. The daily and weekly S&P chart looks terrible for the bulls. Oil, of course, is being blamed. The oil bubble has not given any sign of exhaustion yet. It will end when the bears throw in the towel. Even those calling for $150 to $200 are calling this a spike and project much lower prices after the bubble pops. But they are just guessing. Nobody can forecast turning points, or how large the bubble will get. I still think when the stock market gets on its feet and makes a meaningful upmove, that there will be different groups and stocks that become the momentum favorites. The commodity play may not be the place to be down the road. But it is just a hunch.

Note: I will try to post Monday, but will not be posting for the next couple of weeks.

Stock indexes rallied sharply today, despite crude oil being over $5 higher. The Nasdaq/QQQQ took out the high pivot of May 19th. You can see on the chart that the lows of two and three days ago held at the lower moving average. Momentum also stayed positive within the uptrend, although the short term momentum had turned down. With volume increasing on some of the down days and the very negative action in the advance/decline line I had some concern about this uptrend coming to an end. The Nasdaq volume on the rally today was still unconvincing in my opinion. The S&P held a low pivot from a couple of weeks ago, which was encouraging for the bulls, but price is still well below the May 19th high. Crude oil regained just today nearly half the loss of the last couple of weeks. Maybe too many people were trying to call the top and got caught short. I was very tempted to join the shorts, but I’m trying to maintain my discipline of only trading in the direction of the trend. It is difficult to not be tempted to go short when there seems to be little reason for a market to be so high. Bubbles, or at least large uptrends don’t pop or die easily. When the trend finally turns down there should be many rallies to short against. Corn pushed to a new high today as the ethanol hoax stays alive. Sometimes the markets and reality are not on the same page.

Stock indexes were lower today. The S&P did close well off the lows and so far have found support at the recent pivot. The Nasdaq found support at the lower moving average, which is still trending slightly up. Volume increase in both markets on the decline. The above chart shows the failure of the Nasdaq advance/decline line to follow prices up on the recent rally. The NYSE advance/decline appears slightly more positive. However, with the Nasdaq the stronger market on the recent advance, the advance/decline failure to follow upward is a bit ominous.
The dollar made a nice move up, and is blamed for the downmoves in oil and gold. The trend of the dollar index over the last couple of months appears sideways. At least the down trend appears to have some to a halt. We’ve seen this sideways action before, only to be followed by another leg down. This time feels more like a bottom is in place, but who knows. The recent decline held support and made a higher low. Now the index needs to take out the early May high to confirm a new uptrend.