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An IPO Wet Blanket Shrouds Wall Street

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Although I usually let charts tell me where stocks are headed next, the current technical runes are a tad sunnier than I am at the moment. This is notwithstanding recent weakness that has caused new record highs that were within spitting distance just a few weeks ago to recede. A 3095 target that lay just 4.5% from early May’s peak now sits 10.5% away. It’s certainly do-able, but I doubt buyers have the moxie to turn things around as sharply as they did in December.

The failure of much-ballyhooed IPOs in Uber and Lyft to get Wall Street’s speculative juices going is a wet blanket shrouding the Street right now, the wetter because the bloated airbag called WeWork seems likely to lay an egg when it goes public. If it bombs, that would complete a bearish hat-trick of IPOs. The office-rental firm sported a $47 billion valuation in January, and although that is now looking like pie-in-the-sky, there’s no telling how severely the stock will be marked down when it starts to trade.

Shady Numbers

However, because WeWork’s nifty accounting tricks are even shadier than Lyft’s or Uber’s, and because investors have been in such a surly mode lately, we should look for WeWork shares to get savaged in the early going. With such a drubbing in prospect, it’s hard to imagine investors summoning the bravado to push the shares of Apple, Facebook, Boeing et al. into the ether, especially since all of those companies have serious problems of their own that have been widely reported.

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  • none May 30, 2019, 6:29 am

    Economy Turns Downward = Civil Unrest.

    Breaking the 2.697 TYX (30 year) yield level will suggest a test of the all time low print in yield.

    The TYX has broken this level and as the recently printed all time highs and aggressive recent 3 day downturn while lowing yields in the Dow Utility Index now places the UTY Index giving a clear signal of the coming market decline related to recession.

    The Dow Jones Utility Index has now change from an ‘interest rate indicator’ to an ‘economic indicator’ and falls with the economy.

    ————-SPX INDU ‘low of last week’ 04042019 email update;

    Yesterday the SPX/INDU moved to the pass 3 week low point on a close, this created a buy point (spring for rising prices) in many breadth models. It will fail here today or in a few days towards lower pricing.

    The ‘largely talk about A/D market stats’ of the last few months towards new all times high suggested to many of ‘all new time highs in market pricing’ over the coming weeks and months ahead at and near the 04042019 date update. In ‘Bull Markets’ market breadth stats suggest when creating new all time highs that higher pricing will continue, this is true and called an ‘after burner effect’. While many A/D stats indicator’s are lower over time you will find that market pricing will consolidate and then continue to rise over the weeks and months ahead. In ‘Bear Markets’ very high spikes in A/D market breadth stats create a continue process of ‘buy setups’ at lower levels that fail, suggesting that the market had under gone a major ‘Bull Trap’.

    Over the years as mention ‘market breadth indictors’ have become polluted in their meaning and are entering an era of breaking apart towards their worth in analyzing markets. To further note that ‘volume indictors’ are as well under such scrutiny because of the rise in what is called the ‘4th market trading exchange’. Both types of market analysis are in long term jeopardy of long term worth.

    TYX, ZB, JYP, TYX has broken its long term trading range at the 2.697 level moving the market towards a longer and lasting trend lower over the weeks and months ahead.

    The CLX has created a small buy setup spring, suggesting short term rising prices, the larger slower moving NFI of the OBV grouping is in break apart pricing condition. Suggesting the breaking of short term buy signals can be extreme and volatile.

    SPX/INDU support comes in at every 3% hedging level from its recent high point, moving though or gaping though a hedging level should be observe as ‘short term buy signals ‘fail’, market pricing can speed up the fall in pricing far pass a 3% level on the way lower.

    Have a great Rick.

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