The collision of global markets and social mood

Monday, January 25, 2016

Monday -- The Fear Drug, Outflows, Spring Color Forecast, A/Ds

S&P E-mini Futures:
From flat to down.

What's the mood in the USA today?

Maybe that's why there's now a drug to cure FEAR?

Investors sound like they need it.

Perhaps investors should check out the Pantone® Spring 2016 Fashion Color Report, the theme of which is "A Transporting and Transformative Canvas."

"Colors this season transport us to a happier, sunnier place. Vivid brights give way to excitement and optimism, though quiet stability prevails in this season’s palette."

Sounds like a buy signal for the Dow Transports, as well as the overall market. It is also an excellent description of the anticipated social mood that should follow if the market truly is undergoing the "surprising disappointment" of a wave 4 consolidation.

Ever since the first edition of The Socionomic Implications Of September Vogue in 2011, I've learned to use color and fashion as more of a leading indicator rather than a contrarian one. It's paid off well.

The best example was probably last fall's STORMY WEATHER cue from the Pantone® Fall 2015 fashion color report which was a well-timed heads up to buy volatility. There was even a volatility headline out of Davos recently.

If fear does give way to excitement and optimism, it should be quite a show.

Somewhat of a cautionary picture thus far. JPY and CHF strength. AUD & CAD down.

Low volume pullbacks on 10s and 30s should support higher prices.

WTI crude has people in a bad mood already, even though it appears to be simply correcting recent gains in a normal fashion. NG doing the same.

Gold and silver catching a bid. Copper flat to slightly higher.

S&P Outlook:
Here's my favorite chart of late. Very simple.

With the S&P getting below the October 2014 lows, yet A/Ds nowhere near it, the chart massively supports the wave 4 thesis.

A/Ds are a deceptively simple and effective indicator. Advancing issues versus declining issues. Just facts. Maybe this is why TRIN never really "went anywhere" during the decline.

Regardless, if the current rally is the real thing, I would not want to see the S&P anywhere below 1859.86 without reaching a new rally high, preferably with a close above the 1945 area. The level on the E-mini is 1876, the chart's subwaves being a little different.

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