One pro summed up the frustration some market participants are feeling: “This continues the astronomically abnormal market activity over the past week.”
November 7 (King World News) – A portion of today’s note from legend Art Cashin: The Narrow Rally Syndrome Continues – In his latest report, Jason Goepfert of SentimenTrader made a couple of observations on the relative narrowness of the record setting rally:
Indexes keep masking failing stocks. The S&P 500 keeps hitting records, but many of its stocks are struggling. An abnormally small number of stocks are trading above their moving averages on multiple time frames, or are at 52-week highs. The other two times it happened in 2017, the S&P quickly erased several weeks’ worth of gains. That was a common occurrence during the past 27 years.
Then, a bit later, he noted:
Just buy the indexes (again). The Dow Industrials set a new high on Monday, yet there were only 12 advancing stocks in the index. Over the past 20 years, that ranks as tied for the 3rd-worst breadth reading on a day the index hit a 52-week high. In the S&P 500, there were only 24 more advancing than declining stocks. This continues the astronomically abnormal market activity over the past week.
I’m reminded of the old comment that – “According to aerodynamic science, the bumblebee cannot fly but the bumblebee never studied aerodynamics so it flies anyway.” Another new record.
Overnight And Overseas – In Asia, Tokyo and Hong Kong had sharp rallies, while Shanghai rose a bit more moderately. India, however, sold off.
In Europe, caution appears to be the guiding tone. London, Paris and Frankfurt all are seeing fractional losses.
Among other assets, gold is slightly lower as it continues to grapple with resistance at $1300. Crude looks like it’s consolidating its recent sharp gains. The euro is a touch softer against the dollar and yields are a smidge higher as Monday’s mild haven play unwinds.
Consensus – Mr. Trump in South Korea so will Kim make a move? Rumors swirl that scores of Saudi bank accounts are frozen.
Stick with the drill – stay wary, alert and very, very nimble.
Inflation anyone?
From Peter Boockvar: Yesterday’s 1.7% rise in the CRB index matched the 2nd biggest in about a year…Just read again the rising inflation commentary in the Markit press release on eurozone services and manufacturing and combine with this the rise in commodity prices and I have to believe that higher inflation is one of the most underappreciated risks in the European bond market…Another anecdotal commentary on inflation out of Europe, Markit reported its German construction figure for October which was little changed at 53.3 but they said “intense supply chain constraints contribute to sharp rise in input costs…The incidence of delivery delays was one of the greatest seen for over a decade, while purchase price inflation was pushed to a 6 ½ year high.”
King World News note: This inflation will, of course, be extremely bullish for gold medium- to long-term when sanity returns to the markets. For now it is just a matter of waiting and watching carefully for signs that the greatest experiment in central bank history is about to hit the wall.
***To listen to legend Pierre Lassonde discuss $12,000 gold and the coming global shock CLICK HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: What Is Happening In The Gold & Silver Markets Is Remarkable CLICK HERE.
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