Kirkpatrick's Monthly Overview

Page 1

Kirkpatrick’s Monthly Overview The monthly publication of The Market Strategist march 18, 2016

Table of Contents

Long-term technical model

The Bond Market...............................................2 The Stock Market..............................................2 Commodities.....................................................4 Foreign Stock Markets......................................6 The Dollar..........................................................7 I’m now down in the Florida Keys, one of my favorite spots. The weather is windy and the seas rough, but it’s still better than Maine at this time of year. I won a 22ft Contender with a 300hp outboard and trailer in a raffle from the Recreational Fishing Alliance (cost= $25), and had to tow it down here from New Jersey. The resulting detour was quite pleasant, and I may return home the same way. Going down the NJ Garden State Parkway in the winter has fewer trucks, and the crossing of Delaware Bay by ferry and navigating the Chesapeake Bay Bridge is an adventure away from the normal traffic of the East coast. Meanwhile, the markets seem to be dawdling, waiting for something to happen. While the long-term evidence is still negative, the rally has generated hope the worst has been seen. There is a remote chance that it is true, but the preponderance of evidence is still negative. The earlier intermediate-term and longterm sell signals have little chance of reversing for many months. Even over the intermediateterm sentiment is excessively optimistic and momentum overbought. The net is that portfolios should be out of the stock market completely, and investors not consider new ideas seriously. The market is too dangerous. While bear markets are never the same as others, they always take longer to work out than expected at their beginnings. The fall being a traditional time for market lows suggests that

this estimate has merit. Other markets seem to directionless as well. Those that have been in sustained trends, especially downward, show signs of reversing for the intermediate-term but not necessarily the longer-term. The reversals so far have only reached levels that would be normal pullback percentages in shorter-term markets. In many cases, markets haven’t even approached those normal pullback levels. Gold even looks tired after an enthusiastic rally; crude oil is still trending upward but momentum is dying, and some commodities such as agriculturals and industrial metals have hardly rallied at all. The break down in the US Dollar exchange rate may help these other commodity areas, but there is still a question as to just how weak the dollar suddenly is. There is no question that the relationship between the long-term interest rate and the stock market is still on the edge, but momentum suggests that the decline in long-term rates is at or near its end. If so, it will be detrimental to the stock market. So, as I said before, prepare to take the summer off, sell your stocks, and wait for more substantial positive evidence. Charlie

www.charleskirkpatrick.com • kirkco@capecod.net • © 2016 Kirkpatrick & Company. Inc. All Rights Reserved • March 18, 2016 • Page 1


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.