Interesting SPY vs Stocks & Metals Graph

This is almost my usual graph, but not quite. It has a couple of interesting things to say.

Things of interest:

1) Gold and Silver index is diverging from GLD and SLV metals funds. What and why?

2) Stocks are looking toppy, again.

3) Brazil, a ray of hope as they impeach the President?

SPY vs other stocks vs Gold and Silver 2 year daily from 27 April 2016

SPY vs other stocks vs Gold and Silver 2 year daily from 27 April 2016

First off, stocks. RUT the Russel 2000, stays below SPY and is increasing the gap. That happens in down markets as the broader market has more weak stocks that can’t stand selling pressure than the 500 largest. QQQQ floats on top as the growth engine, but even it has a failure to make new highs. SPY is almost a match for the prior high last June July area, but weakening. In the context of QQQQ failing new highs and RUT falling, well, not good.

DIA, the Diamonds Dow Industrials is rather middle of the pack, which is about normal.

Look at volume. On the up cycle, it just dries up. Now it’s very slim, about like last April / May. We are in a ‘sideways roller’ with minor down bias. Trade rules are to short the tops (when at / over the SMA stack) and cover on the bottoms spikes. (Or equivalently, buy puts at the top, sell them at the bottom spikes).

I have a different SMA stack here. It is a longer duration and only 2 lines. This is to dampen the swings of the rolls and make the trend more visible. Note that it is still inverted so still a bear market trend. This is the 100 day vs 200 day set.

MACD is in one of those weakening sideways weaves. These usually resolve to the downside.

DMI is “blue on top” with ADX at about 15, that is, trendless. So “up”, but going nowhere.

All in all, I think this is likely a good time to start looking for a longer term downward run. Then again, LOTS of folks with buckets of money are vested in not rocking the boat until the election is over, so YMMV. Me? My usual behavior in such contexts: Shift to a faster time period with trends and trade it. So a 10 day hourly chart…

Gold & Silver & Brazil

What I noticed here is that SLV and GLD have risen a bit off their lows, but the Gold & Silver Index (gold line 2nd from the bottom) used by Bigcharts is on a rocket ride. I need to find out what’s in that and why. My guess is “gold and silver mining stocks”. An interesting thing, is it a short cover, or does someone with deep pockets thing inflation or recovery is coming? Dig Here, so to speak ;-)

Finally, EWZ, that bottom green line, shows a sharp upturn at the end. Perhaps Brazil is looking at good times what with having impeached their corrupt President? Or the shorts are just covering… Another Dig Here!

At any rate, there are a few areas needing attention, at last, in a generally toppy and “avoid” market.

Guess I need to start more regular market checks again. ;-)

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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18 Responses to Interesting SPY vs Stocks & Metals Graph

  1. I have found that cement consumption and production is one of the leading indicators of GDP growth and economic performance. Back in the early 1800’s UK lead the world in economic growth from the develop of cement manufacture, from about 1860 to around 1910 cement production in Germany lead the world through standardisation of Portland cement and continuous kilns, USA had huge growth in cement production from 1890 to about 1940 due to the development of rotary kilns. Japan saw huge growth with the development of large dry process kilns and precalcination.from about 1960 to about 1985 reaching a consumption of 800kg/capita the highest in the world at the time. South Korea copied and past Japan from around 1985 to about 2000 (I think they reached 900 kg/capita). The surge of Chinese production started around 1995 and peaked at about 1.2 tons/capita a few years ago. I think at 1.6 billion tonnes they were producing about 1/3 of the worlds cement.
    Right now there seems to be a huge growth of cement production and cement plant investment in Africa particularly centred around Nigeria where the producer Dangote is heading to be one of the top six producers in the world. Another area of growth is in the middle east with Iran,Turkey and some of the old USSR satellite countries India is seeing some growth but not at the pace of Africa and the middle east. In Asia, Thailand reached peak production of 1 tonne/capita a few years ago. Veitnam will soon reach a similar peak. Growth is accelerating in the Phillipines but Indonesia still has a long way to go with a production around 30 mtpa for a population approaching 300 million.

  2. E.M.Smith says:

    @Cementafriend:

    Yup. C.E. isn’t just Civil Engineer, it’s also Cement Engineer! ;-)

    Any rapidly growing economy makes roads, bridges, buildings, ports, etc. etc. all taking a LOT of cement and steel. That is why restricting CO2 from cement is so hideous. It, by definition, means strangling economic growth and construction.

    But I’ve not found a good source for production and consumption. Where do you find the data?

    Also, how does one sort out domestic vs foreign consumption? IF China makes 1 ton/capita-year, how do you know most of it isn’t being shipped to Korea or Mongolia or Russia? Or is cement heavy enough and water sensitive enough that it isn’t shipped much / far?

    I know I ought to do the work of finding that data myself, but it just has been easier to look at steel and copper… and they are all correlated.

  3. EM, I have been getting emails for years to let me download the Global Cement Magazine from http://www.globalcement.com (a few years ago i provided some information for an article -maybe that is why I get it free). Not long ago I started getting emails from newsletter@cemweek.com I did not subscribe and do not know how they got my email. Here is a copy of a recent one (I delete most of them after a quick read)
    Can’t view this email correctly? | Forward to a colleague | Unsubscribe Facebook LinkedIn Twitter

    CWR_Cement and Clinker Price Assessment_NL_leaderboard
    enews | daily cement industry update
    This email was sent to ******* Wednesday, 27 April 2016

    Price Assessments
    Persian Gulf – Arabian Sea and East Africa (April update)
    Mediterranean Basin (April update)
    Persian Gulf – Arabian Sea and East Africa (March update)
    Mediterranean Basin (March update)
    Mediterranean Basin (February update)
    Read More
    Analyst Meetings
    Global cement and concrete admixtures Market and Outlook
    World energy status and outlook
    AshTrade Europe 2016
    AshTrade India 2016
    Cement Business & Industry India 2016
    Recent Reports
    Global Cement Trade Price Report
    Cement & Clinker Price Assessment: Persian Gulf – Arabian Sea & East Africa
    Price Assessment – Cement and clinker price markers: Americas
    Cement and clinker Price Assessment: Mediterranean Basin
    Uzbekistan Cement Market
    Global refractory market report
    More Reports KHD DailyNewsletter Top Banner Jan 21 2016 – Jan 21 2017

    Industry News
    Saudi Aramco confirms steady supply to cement companies
    The company supplies oil to all the cement companies in Saudi Arabia

    Peru: Cementos Pacasmayo announces first quarter 2016 results
    The company recorded surge in revenues

    India: Cement prices slashed in Himachal Pradesh
    The cement prices slashed after the government intervention

    Cemex likely to buy back up for its debt
    The debt is on senior note issues due to mature in 2018, 2019 and 2022

    Qatar National Cement Company records decline in profit
    The company posts performance result of the first quarter

    Russia: Verkhnebakansky Cement Plant records surge in losses
    The company posts its 2015 results

    India: UltraTech Cement records surge in net profit
    The company posts its fourth quarter results

    Egypt: Cement prices witness stability
    The cement prices stabilized this week

    Pakistan: Lucky Cement posts nine month results
    The company records surge in profit in the nine months

    Egypt: Companies accused of inflating prices artificially
    The accusation is made by local dealers and traders

    Semen Indonesia looks for financing for new plants
    The company wants to set two new plants in East Java and Aceh

    Dangote talks about Nigeria cement exports
    The company’s president sees Nigeria as the highest cement exporter

    China: Cement producers seek to increase waste heat recovery
    The cement kilns waste heat power generation has improved energy efficiency of the plants

    Iran: Clinker production unit restarts operations
    The clinker production unit will help fulfill the local demand

    Pakistani exports increase sharply
    March was a good month for the country’s cement exporters

    In Depth & Analysis
    Captive power plants: the solution within
    Cost and energy efficiency and production continuity through power independence are constantly sough

    CBI Brazil & LatAm 2016
    The 11th edition of the Brazilian & Latin American Cement & Lime Conference – CBI Brazil &am

    Market Data
    Spain (February 2016)
    Thailand (February 2016)
    Ukraine (February 2016)
    Vietnam (February 2016)
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    GCVFR March 2015
    GCTPR March 2015

    Latest Publication
    CemWeekMagazine, Issue 31

    Most Read
    Saudi Aramco confirms steady supply to cement companies
    Peru: Cementos Pacasmayo announces first quarter 2016 results
    India: Cement prices slashed in Himachal Pradesh
    Cemex likely to buy back up for its debt
    Qatar National Cement Company records decline in profit

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  4. EM, brain working a bit slow this morning. Just thought this site might help with data
    http://www.cembureau.be/about-cement/key-facts-figures Europe based but has world data

  5. E.M.Smith says:

    @CAF:

    Euro centric is fine… you may have noticed I’m not tied much to one culture, language, or continent :-)

    Cement and rebar are the stongest indicator of industrial growth. Copper of manufactures. Energy of prosperity. A lotcomesfrom commodities. ..

  6. Larry Ledwick says:

    Interesting that in china they just went on a speculative buying bing on rebar and cotton. Looks like speculative buying to get out of other investments just before an expected crash to me.
    If they are right or just getting sold a bill of goods by stock sharks will be determined at a later date.

    http://davidstockmanscontracorner.com/china-trades-enough-cotton-futures-in-one-day-to-make-9-billion-pairs-of-jeans/

  7. E.M.Smith says:

    @Larry:

    China had a gigantic overhang of physical cotton. They had bought something like a year worth of production. Then demand dropped for clothing… Not just ‘failed to skyrocket’ as planned. So there’s a big scramble to do an unwind on that cotton, and folks will panic into all sorts of options as that causes large volatility. Likely the same with rebar. Building ghost cities ran out of steam…

  8. cdquarles says:

    Remember this: Capital goods/services always lead a recovery (yep cement, energy, etc. up) and capital goods/services always lead a recession (so yet again cement, energy, etc.; and remember that a recession is always a monetary phenomenon set in motion by governments monkeying with the supply of and/or demand for money and credit *is* a form of money).

  9. Larry Ledwick says:

    Everyone has been waiting for this shoe to fall for some time, just did not know when it would happen.
    Puerto Rico announces it will default on most of $422 million in payments due this week.

    http://bigstory.ap.org/article/8209eadba027426d8607bdce21c9c08b/puerto-rico-governor-warns-new-default-crisis-worsens

  10. E.M.Smith says:

    http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=spy&uf=0&type=4&size=3&sid=9864&style=320&freq=8&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=18&rand=1947315261&compidx=aaaaa%3a0&ma=4&maval=23&lf=268435456&lf2=2&lf3=4&height=820&width=720&mocktick=1

    So a few days back I said “buy puts”, and here’s the picture now…

    @Larry

    Yup. Puerto Rico is now “fat in the fire”… and sparks to fly soon… I expect some kind of “Latin Restructure” as has been done so often with various South American countries… Either that, or the Dems will try to make a political football out of a “relief” package with Those Nasty Republicans blocking help for Hispanics…

    The really big problem is that those bonds were sold in many cases to very many folks who are retired on the income… Saw that one example was the Maryland? Delaware? One of those states around there, Tax Free fund, that was some large percentage (40%?) Puerto Rico. So all sorts of folks in that Staate, buying a bond fund in their State’s Bonds, got P.R. too.

    Now the Dems are going to seel this as Hedge Funds and Banks owning the debt, but the reality is that most of it is being held for all sorts of folks retirement accounts. They can’t let P.R. go under, but they can’t just forgive the debt, nor is a bailout going to look good as all the States will then be lining up… Royal Mess.

  11. Larry Ledwick says:

    Link for an interesting financial summary of multiple sources. It seems to give quick cut to the chase summaries of lots of different financial sources.

    http://creditbubblebulletin.blogspot.com/2016/04/weekly-commentary-red-line.html

  12. Larry Ledwick says:

    Interesting reference source to watch the currencies of countries which are in trouble financially.
    There are country specific links that show charts of both the official exchange rate and the black market exhange rate.
    http://www.cato.org/research/troubled-currencies

  13. Larry Ledwick says:

    Interesting commentary about what is currently going on in Venezuela as it undergoes a currency collapse and hyper inflation. Even more interesting that there is no major media coverage of it, it simply does not exist unless you go looking for it.

    https://www.dollarvigilante.com/blog/2016/04/08/venezuela-is-feeling-the-bern-murder-capital-of-the-world-hyperinflation.html

  14. E.M.Smith says:

    @Larry:

    Yeah, I’ve thought of doing a posting on Venezuela, but time…

    They were hours away from collapse of their economy due to lack of rain, for one thing. Seems that despite having more fossil fuels than just about anyone else on the planet, they use Hydro for just about all of their electricity. Very badly run Central Authority Powerplants have gone to ruin in many ways, and they have zero skill at contingency… Oh Well… IIRC, they had something like one meter of “head” left in the main dam before it was “no power, no water”…

    It is an “interesting in a very sad Groundhog Day kind of way” process to watch Yet Another Socialism, even with $Millions / person of natural resources, auger into the dirt…

    Were I running the place, I’d have had enough oil driven generation to be able to hold the water for domestic use in an emergency. The profit from their oil could easily have funded some large standby gas turbines or Diesels. (Or, heck, buy a single nuke from Japan and call it done…)

    I think it just felt too much like “piling on” and I felt bad about posting it… so didn’t. I wish them luck in their “transition”, to whatever it may be…

  15. Larry Ledwick says:

    Previous link gets a little over the top and they obviously have a sky is falling approach to the topic, but I just tune all that out as noise and try to pickup the basic reported facts from their experience, so take with the appropriate amount of NaCl.

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