The collision of global markets and social mood

Thursday, November 17, 2016

Thursday -- Relatively Soon

S&P E-mini Futures:
Slightly higher but going nowhere fast.

News:
Bloomberg was on fire this morning:

Boom -- Jobless Claims in U.S. Decline to Lowest Level in Four Decades

Boom -- Housing Starts in U.S. Surged to a Nine-Year High in October

Boom -- Yellen Says Fed Interest Rate Hike Could Come ‘Relatively Soon

Social Mood -- This New $680 Gadget Will Save Your Paper Scribbles in Your Phone

Even Bloomberg noted it was "...a solution in search of a problem." And so aid all the good news and ebullient mood, this last blurb has extra impact:

Reality -- Wal-Mart’s Sales Come Up Short, Even as E-Commerce Accelerates

Either people are suddenly doing so well that they no longer care about lower prices, or Wal-Mart may be getting suffocated by Amazon.

Elsewhere, snow may fall in northeastern US this weekend as temperatures plunge up to 50 degrees.

Wonder if this has anything to do with this:


"The entire cycle so far [SC24] has only been 56% as active as the mean cycle."

Also some amazing factoids (with emphasis added) here that could affect the markets:


"Solar maximum for cycle 24 was reached in February 2014. Since this time we've seen a gradual decline in sunspot numbers as we've moved out of Solar maximum and back towards solar minimum (expected around 2019).

"During June something dramatic occurred! We had a collapse in sunspot numbers compared to the month before. Sunspot number fell to a level that we've not seen since 2010!

"The drop in sunspot numbers was so large that we're now much lower than trend. This level of activity wasn't expected until around 2017.

"In terms of past solar cycles we know that SC24 is amongst some of the weakest solar cycles ever recorded back to SC1 (1755 to 1766) and past analysis shows that we've been running very closely to SC12 (1878 to 1890).

[late 1800s was the French Revolution]

"The solar cycles we now seem to be closest to are SC5 (1798 to 1810) SC6 (1810 to 1832) and SC16 (1922 to 1933). Solar cycles 5 and 6 were part of the "Dalton Minimum" a period of very low sunspot activity that also coincided with several severely cold winters.

[1830-1860 was a period of sideways market action. 1929-1932 was the stock crash brought on by The Great Depression]

"Although we haven't yet had an official forecast for SC25, another weak solar cycle is expected meaning that SC24 and SC25 would closely resemble the "Dalton Minimum" solar cycles 5 and 6. We don't expect a level of severe cold winters such as we had during the Dalton Minimum however.

"The Dalton Minimum was close to the Maunder Minimum/Little Ice Age which was still having an affect on northern European winters.The little Ice Age officially ended around 1850 and winters have shown a warming trend since. However, with an extended period of weak solar activity we certainly think cold winters are likely in the coming years, even if they don't reach the severity of those Dalton Minimum winters."

FX:
Mixed action still. Not thinking USD run is yet over.

Treasuries:
Price action not inspiring confidence.

Energy:
WTI crude up over 1%, NG down over 2%.

Metals:
Gold, silver, and copper green. Pl and Pa red.

S&P Outlook:
As with the USD, not thinking equity prices have top ticked yet, but like Wal-Mart, they're looking more and more wobbly. Financials fell 2% from yesterday's post.

Still viewing 2135.25 as critical, and still view a break of 2151.17 as a warning shot.

2186.16 remains a significant gap likely to get filled "relatively soon."

If not, look down.


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