Dana Lyons Commentary – Fri 17 Mar, 2017

Are extreme sentiment levels good reason to invest?

Happy St. Patrick’s Day everyone! Dana Lyons, Fund Manager in Chicago kicks off today with comments focused on US equity markets and longer term bond yields. We discuss the extreme bullish sentiment towards equities and how this should make investors wary. That said, Dana points out that extremes in sentiment levels are not typically great timing tools.

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Comments:
  1. On March 17, 2017 at 7:09 am,
    GH says:

    Off Topic:

    http://reason.com/archives/2017/03/01/the-bloated-military

    Courtesy of Mr. Moriarty’s 321gold

    Will Trump supporters hold him to his promise to drain the swamp?

    • On March 17, 2017 at 7:18 am,
      GH says:

      Three candidates for what will be Trump’s biggest failures:

      1. Deepening the Wall Street swamp.

      2. Continued criminal wars and military overspending.

      3. Failure to roll back police state.

      • On March 17, 2017 at 8:30 am,
        Robert Moriarty says:

        GH:

        You missed tossing HRC and crew in the slammer.

        • On March 17, 2017 at 8:32 am,
          OOTB Jerry says:

          and ditto

        • On March 17, 2017 at 9:15 am,
          GH says:

          Very true.

          And his inappropriate friendship with Israel.

      • On March 17, 2017 at 8:31 am,
        OOTB Jerry says:

        ditto

    • On March 17, 2017 at 7:22 am,
      Matthew says:

      Drain the swamp? Not a chance. Hey Gator, would a principled person ever call Hillary a terrific person?

      https://www.youtube.com/watch?v=N5A02pNcGHs

      • On March 17, 2017 at 8:17 am,
        GH says:

        Good one. It would be hard to squeeze more dastardly lies into 53 seconds.

  2. On March 17, 2017 at 7:13 am,
    CFS says:

    The power behind the Swamp…..Nomi Prins:

    https://youtu.be/ZbGtCmwy_fE?t=1023

  3. On March 17, 2017 at 7:25 am,
    CFS says:

    The Federal Reserve needs to be eliminated.

    • On March 17, 2017 at 8:30 am,
      GH says:

      It may not be the root of all evil, but it’s close.

    • On March 17, 2017 at 8:34 am,
      OOTB Jerry says:

      ditto on End CENTRAL BANKING

  4. On March 17, 2017 at 7:52 am,
    CFS says:

    Silicon Valley move over; here comes the Promised Land!

    JERUSALEM (AP) — As the world moves toward an era of self-driving cars, Israel is positioning itself to be the Detroit of the future.

    The country has emerged as a global leader in the fast-growing field of driverless cars, as illustrated by Intel’s more than $15 billion acquisition of Israeli firm Mobileye this week.

    Israel is now home to hundreds of startups that provide everything from censors to cybersecurity to data collection for autonomous vehicles, putting it alongside Silicon Valley at the forefront of an industry that many expect to take off over the next decade.

    “In the last 12 months, the global interest is rising more and more,” said Lior Zeno-Zamansky, executive director of EcoMotion, a nonprofit group that promotes the smart transportation sector in Israel. “Everyone is looking for the next Mobileye.”

    She said the Israeli smart transportation sector has attracted some $4 billion in investment over the past four years, roughly half of it driven by two industry leaders, Mobileye and Waze. During that time, the number of Israeli startups in the sector has grown from 87 in 2013 to over 500.

    Virtually every major auto maker has established a foothold in Israel, and senior executives visit the country regularly. General Motors has already opened a research center in Israel, while Renault and Daimler are opening facilities as well. Other companies, including Ford, Honda, Toyota, Subaru, BMW, Mazda, Hyundai, Volvo and Audi are all active in the Israeli market.

  5. On March 17, 2017 at 8:09 am,
    CFS says:

    2
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    US Urged To Spend More On Infrastructure
    Associated Press – 11 minutes ago
    BADEN-BADEN, Germany (AP) — An organization including the world’s better-off countries says governments need to do more to create growth that benefits everyone, and nudged the U.S. to spend more on roads, highways, bridges and airports.

    The Organization for Economic Cooperation and Development says in a report Friday that countries should focus on providing better access to high-quality education, improving infrastructure and guaranteeing women’s ability to work outside the home.

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    CFS comment:

    I have another idea for a budget cut.
    Stop paying the OECD.

  6. On March 17, 2017 at 8:11 am,
    CFS says:

    Sorry, my computer did not do what I thought it would!

  7. On March 17, 2017 at 9:02 am,
    Dan, calgary says:

    Well being a SGN share holder now officially sucks. Are they one of the companies that lied about their future reserves?

    http://stockcharts.com/h-sc/ui?s=SGN.V

    • On March 17, 2017 at 9:32 am,
      Matthew says:

      Dan, in light of how the whole sector has been lately, I don’t see anything unusual about SGN’s price action. I bought some yesterday and a tiny amount today but still have an order for more in place.

      I don’t see any reason to think that management has lied about anything at all.

      • On March 17, 2017 at 10:27 am,
        Excelsior says:

        Agreed.

  8. On March 17, 2017 at 9:41 am,
    Dan, calgary says:

    Volume says that there is still selling pressure on this POS.

    • On March 17, 2017 at 10:21 am,
      Excelsior says:

      There has been selling pressure on a number of stocks recently, but it drops any lower I may add. Currently it is still above my cost basis, but if it gets down a few more pennies, I’ll be adding big time.

      Much of it was the missed exploration results and the legal settlement they put to bed. Honestly, I expected this price action back then and it worked out well that it waited until now to show up when the rest of the sector has been under pressure.

      I’m holding and continuing to position in a number of distressed gold and silver producers at present, but SGN is one that I’m just not that worried about.

    • On March 17, 2017 at 10:27 am,
      Matthew says:

      If you believe it is a POS, you should sell it. That’s what I would do.

      • On March 17, 2017 at 10:33 am,
        Dan, calgary says:

        I’m my own sentiment indicator (;-)

        • On March 17, 2017 at 10:35 am,
          Excelsior says:

          funny Dan. I am as well several times per minute when I look my portfolio. (lol).

          • On March 17, 2017 at 10:41 am,
            Dan, calgary says:

            Bought 5k more. Heading to Banff (;-)

          • On March 17, 2017 at 10:43 am,
            Matthew says:

            Good move. 😮

          • On March 17, 2017 at 10:47 am,
            Dan, calgary says:

            5K stock. I am not that rich. Thanks M.

        • On March 17, 2017 at 10:42 am,
          Matthew says:

          The sector’s volatility is just nuts, that’s why it can be so good AND so bad.

          SGN is less volatile than many and looks just fine:

          http://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=2&mn=9&dy=0&id=p73697682848&a=513247025

  9. On March 17, 2017 at 10:47 am,
    spanky says:

    gdx:gld weekly ratio chart put in a black candle last week. I expect us to close below that candle body on a weekly basis sometime in the next few weeks. Black candles have always portended future weekness on this chart. It may take longer than a few weeks to play out, but I think the ratio is not done declining yet based on past history.

    I can’t stand black candles. They dirty up a chart similar to gaps IMO.

  10. On March 17, 2017 at 10:56 am,
    spanky says:

    Gold and silver still possibly setting up head and shoulders formations (right shoulders being built now). If the neckline on gold breaks, it portends at least a test of the December low.

    • On March 17, 2017 at 11:32 am,
      Excelsior says:

      Thanks Spanky. I’ve been watching to see if we get a bonified breakout in the metals and miners, or if we are putting in that right shoulder as you mentioned.

      We’ll know in the next week or two, but if it is the right shoulder forming, then it is time to trim as more downside pressure would be on the menu.

      • On March 17, 2017 at 11:34 am,
        spanky says:

        Don’t base any trades on my observations. I think the reason I make them is to see if Matthew can refute them and make me feel better. lol. Keep in mind I am holding onto silver miners for over a year and still holding.

        • On March 17, 2017 at 12:54 pm,
          Excelsior says:

          Spanky – your insights are appreciated, like all the good contributors here on the KER, and I always do my own due diligence and make my own decisions. That is all any of us can do. Nobody hits buy/sell except the person behind their own trading platform.

          I had seen others mention the H&S pattern in blog discussions, but when you mentioned it last week, it got me curious to pull up the chart to have a look and saw the left shoulder and Head (providing that this pattern plays out). I believe in giving credit where credit is due if someone points something out to the group.

          As I mentioned last week there are 2 paths forward:

          1) finish the right shoulder in the H&S pattern then a selloff after that likely through the summer doldrums.

          2) the rate hike fright, marked an intermediate “higher low” where the metals and miners will rally overall into May. Then the seasonal “sell in May and go away” would be the next resistance pattern.

          Currently, I’m not really that wowed with the response of the miners, even though the metals have shown some mild strength and resilience. It’s looking more likely that we are putting in that right shoulder, but until we see how the rest of March pans out, then we won’t know which pattern is playing out.

          For now it’s wait-n-see time and I’m just holding steady.

  11. On March 17, 2017 at 11:08 am,
    spanky says:

    GCC (commodities) looking extremely week on the daily chart. The weekly and monthly charts don’t inspire confidence either.

    I have a gut feeling commodities are going to break down on all time frames. Admittedly, $CRB (which is a weighted index–oil gets the biggest weighting) looks better than GCC on the weekly timeframe, but the giant black candles on the daily chart suggest, at best, choppy sideways action.

  12. On March 17, 2017 at 11:19 am,
    spanky says:

    I am going to go out on a limb and say many silver miners see new lows in the next couple of weeks, EXK, AG and HL to name a few. They are closing the week pathetically weak.

  13. On March 17, 2017 at 11:24 am,
    Matthew says:

    The GDXJ:GDX chart is fine and GDXJ is worth 42% more GDX than it was at the Feb. 2016 low for the ratio:

    http://stockcharts.com/h-sc/ui?s=GDXJ%3AGDX&p=D&yr=1&mn=5&dy=0&id=p32695747875&a=513258265

  14. On March 17, 2017 at 11:26 am,
    terry says:

    hi guys a little off topic what’s with theralase and first patient maybe something from roger would be encouraging

  15. On March 17, 2017 at 12:02 pm,
    Paul L says:

    Took another nice gain on at&t today and a bigger one on Wednesday. Just swing trading it as the market has not direction.

  16. On March 17, 2017 at 12:06 pm,
    spanky says:

    Look at $indu:$crb. Wow.

    The $indu:$gold month chart is coming up to the declining 200 month MA. Honestly, based on the MACD it looks like it is going to blow through that MA.

    Anyone long commodities and not the Dow has gotten mollywhopped in real and nominal terms. If 1999 is any indicator, the Dow can go up another 30% vs commodities.

  17. On March 17, 2017 at 12:16 pm,
    Paul L says:

    I am staying in cash due to the high risk in this market and coming out to buy dips in at support in the regular market and trading out as soon as there is enough of a gain.

  18. On March 17, 2017 at 12:27 pm,
    spanky says:

    $XJY coming up to the declining 100 dma. This could get very ugly for commodities and gold and silver in the next couple of weeks. The spike on the Fed was nothing but short covering.