2014/05/16: TrendView VIDEO: Concise Highlights (early)

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TrendView VIDEO ANALYSIS & OUTLOOK: Friday, May 16, 2014 (early)

Concise Highlights   

Even after yesterday’s sharp US equities selloff on weakish retailers earnings reports and select weak data in an otherwise ‘mixed’ day, the European equities are holding up better than the late session US selloff yesterday might suggest. Could this be a sign the US will also be alright after yesterday’s June S&P 500 future sharp failure back below the 1,883-87 Negated DOWN Closing Price Reversal? We shall see, as the near term trend is back in a lower critical range (more below.) What is more striking is the degree to which the US equities led the way down on Thursday in spite of mixed data, where the US Weekly Jobless Claims and a couple of Fed district indices were both strong. Yet weak US Industrial Production and especially some much-weaker-than-expected US retailers’ quarterly earnings reports with downbeat guidance seemed to overshadow the stronger data.

And as we have been cautioning for some time that all of the additional burdens on the US consumer this year from the Obamacare changes to the poorer quality of jobs being created and higher taxes might restrain their activity, we can’t say retailers finally showing some problems is a total surprise. Yet the timing might be, as April was a month that was supposed to show the rebound from enforced weakness due to lousy first quarter winter weather. The market psychology seems to be if ‘masters of conspicuous consumption’ US consumers can pull back, maybe it’s time for an equities pullback as well.     

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