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Investors Remain Hypnotized
 



Once again all price dips remain bought as an early sell-off is brought to close the week green.

This despite Apple ($AAPL) warning that iPhone sales will fall a large 30% and the previous high correlation between the S&P 500 and oil prices broke Friday before the Doha weekend meeting.

Poor economic data continues to be ignored. Friday’s economic score featured a gain in the long standing Empire State Mfg Survey to 9.56 vs mostly a flat reading previously; but, Industrial Production remained flat at -0.6%, Consumer Sentiment fell to 89.7, and the New York Fed cut their forecast for GDP growth to only 0.8.

So, what’s the reason for the disconnect between the negative news and higher stock prices? Basically one thing—stock buybacks.

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And, as Home Ownership becomes less achievable for potential buyers rent increases are also taking a toll:

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Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red).

Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

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12-17-2015 9-04-44 PM Chart of the Day
 
 
 
4-15-2016 4-42-36 PM XLE



Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE


  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • DBB MONTHLY

    DBB MONTHLY

  • DBC MONTHLY

    DBC MONTHLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • NYMO DAILY

    NYMO DAILY
    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.



  • NYMO DAILY

    NYMO DAILY
    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.



  • VIX WEEKLY

    VIX WEEKLY
    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation has changed due to a variety of new factors including HFTs, new VIX linked ETPs and a multitude of new products to leverage trading and change or obscure prior VIX relevance.


 

















Institutional investors and even hedge funds aren’t buying this market strength yet.

Only corporate stock buybacks are boosting stock prices. In order for companies to grow, they have to start investing in cap-ex but this isn’t happening.

They’re only increasing debt, given low interest rates, to buyback shares. And this action means they’re just taking what the Fed is giving them.

In so doing they’re increasing the income inequality we hear so much about.

Doha OPEC meeting will be much watched Sunday although count me as a skeptic no matter the announcement.

Let’s see what happens

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