What does oil and the economy have to do with stocks??

News Highlights


High oil prices and high stock prices and a lower dollar go together. The strength or weakness of the economy is a virtual reality created by the system to justify prices. The truth is that if you try to trade stocks based on the economy then you are in big trouble. The worst stock traders are economists.   That is why staying with the trend and not getting involved with the economy is the only chance you have. Price will always do what it wants to do based on the newest story. 

The relative value or worth of a company has nothing to do with its price. The price is a reflection of the value that the system puts on a company.  In other words, what can the company do for the system.  It is easier for the market makers to move a stock higher that is "overvalued" and ridiculous than a stock that is selling below book. The public looks for value. The big winners appear to be overvalued. What you should look at is the trend. In most cases stocks under book are in a downtrend and stocks selling at high value prices are in uptrend's.  Always choose the trend.

The same thing applies to the economy and stocks. The wall of worry is they gap between prices and reality. The truth is that stocks top long after the economy tops. This keeps the buyers out and the shorts engaged until the price blows their brains out. The public is always late to the party they will capitulate to price movement at the top. What keeps them out, a weak economy means nothing because prices are moving higher and there is money to be made.

The talk now is high oil prices may hurt this getting stronger economy. If you by into my argument you will know that higher oil prices are what you get with higher stock prices because of the currency manipulation by the Fed. The fact is that because of currency manipulation the Feds options to carry the stock markets are narrowing because of higher oil prices. The recent sideways move in stocks shows this to be the case. Based on the recent comments by the Fed they are not ready to turn lose of stocks just yet. The result is a stalemate and the fact is that they are buying time.

The question then would be is oil topping?  The answer is probably. I say that because the same things always happen when oil tops. A war or possible conflict between Israel and somebody, the last 2 times Iran, check. Refinery fires at big refineries in the US, check. The local news showing pictures of price signs at gasoline stations, check. The public acting like they have never seen any of that before, check. The press saying that there is no end in site, check. If oil tops so will stocks. In the meantime, don't take the story seriously and keep your eye on the trends.


Mikey

Key Indicators

Current trading range: 12500 -13027 DJI Close 12962
MACD Crosses: Negative cross =consolidation/correction Positive cross=uptrend
Short term (50 hour) Down (14 Hr) ...signal 3-5 12951 
MACD  Hourly -11.76
Current trend (50 day) Up (65 days)...signal 12-2-11 12019
MACD Daily (+104.69),Negative cross 2-13
Intermediate trend (50 week) Up (13 weeks)...signal 12-19-11 12294
MACD Weekly (+332.41 ), Positive cross 10-24-11 
Long term trend (50 month) Up (16 months)...signal 12/1/10 11577
MACD Monthly (+535.36) Positive Cross 9-1-09
IBD Current trend 12-20 Up  (52 days) Market in confirmed uptrend 12103
Volume(Millions) NYSE 698 NASDAQ 1703
Advance/Decline NYSE -575 NASDAQ -236 Mikey A/D line 48832
New Highs NYSE 80 NASDAQ 53 New Lows NYSE 22 NASDAQ 28
Overbought/Oversold (+100 overbought/-100 oversold)
Mikey5 -35 Neutral, Mikey10 -9 Neutral, Mikey20 +11 Neutral, Mikey50 +193 OB
% Stocks above 200 day ave 74% (above 50% uptrend)
Trader Psychology
Put/Call day .98, 10 day .84,  Put Premium .64 10 day .64,  
Bull/Bear Ratio 2.00 Bulls 51.1%, Bears 25.5%
Mutial Funds Buy/Redeem ratio 1.23
VIX 18.05 VXZ 55.75 Mikey Fear 88 (80 Low 20 High) 

Averages (uptrend 20>50)
20 hour 12961 Falling/ Price above
50 hour 12979 Flat/Price above
20 day 12922 Rising/Price above
50 day 12664 Rising/ Price above
20 week 12383 Rising/ Price above
50 week 12113 Rising/ Price above
20 month 11908 Rising/Price above
50 month 10790 Rising/Price above

Closing Prices

US Stocks
DJIA 12962.81 -14.76 S/P 500 1364.33 -5.30 NYSE Comp 8091.27 -33.91
NASDAQ  2950.48 -25.71 DJT 5121.74 -34.39 DJU 454.51 +.76
US Debt Markets
US Gov rates: 6 mo .1370%  2 yr .2935% 5 Yr .8669% 10 yr 2.00 30 yr 3.14
Ave Mtg rates : 30 Yr 3.90% 30 Yr Rifi 3.96% 15 Yr 3.16% 5/1 ARM 2.80
IEF (US 7-10 yr) 104.82 -.21 TLT (20 yr) 116.05 -1.10
MUB (NatlMuni) 110.20 +.10 Cal Muni (NCA)10.07 +.04
BND Total Bond Index 83.61 -.13
Commodities
CRB Commodities Index 319.45 -1.72 Gold 1703.90 -5.90 Silver 33.71 -.81
Copper 3.86 -.04 Platinum 1691.70 -9.40
Oil 106.72 +.02 RBOB 3.26 -.01 Nat Gas 2.35 -.13
US Dollar Index and World Currencies
Euro 1.3155 +.0009 Pound 1.5730 +.0024 Swiss Franc 1.0823 +.0020
Yen  1.2077 +.0046 Aussie 1.0683 -.0042 Canadian Dollar 1.0000 -.0057
Dollar Index 79.38 -.08
World Debt markets
BWX (Intl Treas) 60.09 -.03 PCY (Emerg debt) 28.29 +.05 IBND (Intl Corp)33.38 +.03


All Markets Current Trends 

US SECTORS

(Green up Red down White Neutral)

NASDAQ
DJ Trans
DJ Util
Long Bonds
Energy

Tech
Healthcare
Materials
Retail
Housing
Consumer Discrestionary
Consumer Staples
Airline
Metals and Mining
Financial

World debt markets
US Bonds: 2-3 current trend neutral
US Natl Muni Markets:: 2-23 current trend neutral  

Intl Treas Bonds 1-26 current trend up

Intl Corp Bonds 1-26 current trend up
Emerging Markets Debt: 1-26 current trend up
US High Yield 12-12 current trend up
US Preferred Stocks 11-30 current trend up
Currencies markets

US Dollar Index 1-26 current trend down
Aussie Dollar 1-10 current trend up
Euro 1-26 current trend up
Brit Pd 1-26 current trend upl
Swiss Franc: 1-27 current trend up
Jap Yen 1-27 current trend up
Canadian Dollar 1-18 current trend upl
Mexican Peso 1-18 current trend upl
Brazilian Real 12-12 current trend up
Indian Rupe 12-12 current trend up

Commodity index
(Broad based) 1-19  current trend up
Metals

Gold: .1-26 current trend up
Silver: 1-21 current trend up

Copper 1-17 current trend up
Platinum 1-18 current trend up
Palladium 1-17 current trend up
Agg, Fiber, Wood

Grains 1-24   Current trend up
Cotton 2-14 current trend downl

Livestock 1-24 current trend up
Coffee 2-7 current trend down
Sugar 1-18 Current trend up

Lumber 2-3 current trend up
Energy
Oil  2-14 Current trend up
Heating Oil 1-3 Current trend up

Gasoline 12-21 current trend up
Natural Gas 7-28 current trend down

World Stock markets
US Stocks: 12-14 current trend up

Europe 1-18 current trend up
China: 1-17 current trend upl
Brazil 1-17 current trend up
Japan 1-18 current trend up
India 1-17 current trend up
Russia 1-18  current trend upl
India 1-17 current trend up
Total world markets 1-17 current trend up

Intermediate Term Trends
Dollar:Up
US Bonds: Up
Emerging Markets: Up 
Total World Stocks: UP
Emerging Debt: Up
World Bonds: Neutral
Oil: Up
Gold: Up
Silver: Up
Commodities: Up
China: Up
Brazil: Up
India: Up
Europe: Up