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My Blog


DJIA Quiet consolidation

Posted on December 20, 2016 at 11:39 AM Comments comments (166)
Quiet Consolidation. After the market makes a large move to the upside, it often becomes “overbought,” which mostly means some stocks have moved up too much and too fast, and now need to go through some kind of a consolidation period before the uptrend can resume. This appears to be where the market is positioned now after the 10% gain by the DJIA and S&P over the past six weeks. We believe the market can relieve this condition by moving sideways for a few weeks, or by pulling back and correcting a portion of the previous advance, or something in between, where some stocks pull back, but others do not. For the Dow and S&P, we see the potential for a pullback of about 5%, but more for some stocks, like Financials, and less for others, like Technology. We could see the consolidation period continue on into next year, but suspect some typical January volatility could also set the market up for another good rally in the first quarter of 2017. RBC Dec 21 2016.

New highs, for Christmas, DJIA approaches 20K

Posted on December 19, 2016 at 10:44 AM Comments comments (32)
To Be Continued. The stock market has been hitting new highs recently, but the number of stocks supporting the move has been decreasing over the past few weeks, which is an indication a pullback could be coming. We think the long-term trend continues to be positive, but the market is extended for the near term, and a dip of about 5% on the indexes would not be unusual to see over the next few weeks. The short-term sentiment has also become a bit high on the bullish side as the Dow approaches 20,000, which also suggests to us a correction is due. However, many of the market-letter writers we see continue to doubt the longer-term bullish trend, and we view this position as one that has plenty of room for improvement. And so we continue to view the stock market as bullish into next year, with a potentially rocky period around year-end to set us up for the next rally. RBC charts.

Oil peak again

Posted on December 16, 2016 at 10:44 AM Comments comments (139)
Oil Peak Again. The rally on oil appears to have stalled again, despite the world developments that would indicate a strong likelihood of higher prices. The price has peaked in line with previous tops of the past year, and even though the recent peak was a slight new high, it has so far not carried through with an extended gain. This makes it likely that the commodity could pull back to the low end of the recent range of around $45 again. The recent weakening trends of a number of the energy-related stocks adds to the likelihood of a pullback in the price of oil as well, in our view, and suggests that investors should hold off for now on increasing exposure to the group. It is possible that this range that has held oil for most of this year could continue for several more months, with little indication of a larger trend coming in either direction. It’s the definition of a neutral hold. RBC Dickey.

DJIA new high up 10% / continued Bull run

Posted on December 12, 2016 at 10:31 AM Comments comments (22)
The stock market has made a dramatic move to the upside since the election, with the Dow Industrials rising more than 1800 points, or 10% in a little more than a month. This size of a rally is not unprecedented, however. It rose more in both percentage and actual points when it recovered earlier this year in January and also in the fall of 2015. Both of those advances led to some months-long consolidation periods, and we see the same thing coming for the current rally, but we are also confident that the longer-term trend will continue to be bullish. The smaller-sized growth stocks have led the Dow and S&P in performance during this most recent rally, which is a change from those previous rallies, where the FANG stocks led on the upside, and this is a positive change that should have better long-term implications, as it signals a higher level of investor confidence that is needed to support longer-term gains. Eventually, we expect the underperforming Health Care stocks to join in on the upside, but this probably won’t happen until later next year when the policies of the new administration are more apparent. Donald Dickey RBC.

7 year Crude technical chart / bounded @ $40-50 PBBL

Posted on December 7, 2016 at 1:18 PM Comments comments (156)
Crude is bounded $40-$50. RBC Technical Charts Dec 7 2016.

Crude resistance $52-53

Posted on December 1, 2016 at 2:51 PM Comments comments (26)
$43–$53. That has been the range of crude oil for the past four months, and it continues to be neutral within that range on an intermediate-term basis. The OPEC news has caused oil to rally in the short term, but if it fails to get through the ceiling of resistance in the $52–$53 area, we would expect it to roll back down to the lower end of the range once again. And so, for the oil bulls, we think it is important that this short-term strength carry through with a breakout over the next week or two. At this time, we would put the probability of a breakout at less than 50%. Many of the oil stocks have rallied on the recent optimism as a result of both the election and the OPEC meeting, which we believe makes a breakout in oil even more important to provide support to the Energy sector.

Oil on the verge......

Posted on October 20, 2016 at 3:00 PM Comments comments (223)
Oil on the Verge. The trend on the price of oil has been largely neutral for the past year in what appears to be a bottoming trend, and we think the trend would be confirmed as bullish if the oil price was to clearly close above the $52 level. Oil has topped out in the $50–$52 area three times over the past year, so we believe a breakout above that level would be a significant change from the stalling and struggle we have witnessed for quite some time. We think, on a technical basis, such a breakout would generate a target to the $75 area, and obviously would have major implications for energy-related investments and the market as a whole. The breakout hasn’t happened yet, and we think it would really need to close more than a few cents over $52 to be valid, but the recent strength has increased the likelihood a breakout may be coming, in our opinion. The next week or two will likely provide us with the answer. RBC Update Dickey Charts October 20 2016.

Oil on the line

Posted on October 9, 2016 at 12:43 PM Comments comments (572)
Oil on the Line. The trend on oil has been moving up over the past several weeks and is now up to what we believe is the critical resistance area of 50–51 that has been the high area for the past year. If oil were able to clearly break through the 51 level, the technical measure would be up to a target of 75. At this time, we would say the likelihood of a breakout is good, as the pattern of the past year appears to be that of a long bottoming range that may have longer-term bullish implications if the breakout happens. Many oil-related stocks also have similar trends in that they are generally at the high end of their ranges of the past year. So, while a breakout and rally is not certain, we think the recent action demands more attention by holders and prospective buyers of energy-related investments, with an answer to the breakout possibility likely over the next two weeks.

EPCA Budapest / 30 minute free consultation

Posted on September 18, 2016 at 4:57 PM Comments comments (251)
During this EPCA I will be available on the Monday and Tuesday full days for consultation.

Please email me for a free 30 minute consultation on your business needs.

See you in Budapest.

Propylene volatility returns USA/ drives solvents price up Q4

Posted on September 9, 2016 at 3:04 PM Comments comments (90)
September propylene nominations are up 7 cents/lb ($154/tonne) and 8 cents/lb ($176/tonne)

August contract settled up 3.5 at 37.0 cents/lb due to unplanned outages. Propylene contract prices have been rising on higher spot prices, which have climbed 8-9 cents/lb since the end of July.

According to producers, that increase has mostly been tied to tighter supply from crackers, propane dehydrogenation (PDH) units and increased exports, drawing down inventories.

The spike in price has pulled refinery-grade propylene (RGP) prices up a lot to 32.5 more than 10-11 cents/lb in the same period. Propylene may continue to tighten because of refinery production issues in mid-August.
This is all bad news for the value chains, due to weak demand, and the ability of customers to destock. Downstream already  there are several large 5 cent solvent price increases are set for 1 October