Gary Shilling Sees Recession and Stock Correction

 5/2/2026

Shilling Sees a 20-30% Correction 

UAE Exits OPEC

 5/1/2026

UAE Exits OPEC

 

The United Arab Emirates UAE will withdraw its membership from the Organization of Petroleum Exporting Countries OPEC. Iran’s unprovoked attacks on the UAE have finally driven the decision. The decision includes embracing Israel military capability as well as preserving its own wealth through oil production.

The population is eleven million but only about 11% are native to the country.   The rest are immigrants who works and live there. UAE features the modern cities of Abu Dhai and Dubai. Dubai includes the world’s tallest building, the Burj Khalifa. The Dubai Financail Centre is one of the world’s largest financial centers. The airport experienced 92 million passengers in 2024, ten times that of San Antonio.  Luxury real estate and lifestyles are features of the country. All that has been threatened by the 2,800 drones and missiles from Iran.

The war with Iran has forced UAE to take a much more aggressive stand than most of its neighbors.  The UAE finds itself apart from OPEC in this regard.

The UAE has adopted Israel’s Iron Dome defense system. This is vital to preserve the claims of a safe lifestyle in the country.

Saudi Arabia and the UAE feature competing leaders. Saudi Crown Prince Mohammed bin Salman, MBS and UAE President Mohamed bin Zayed, MBZ, are now rivals moving their respective countries to modern states.

The war has constrained UAE’s oil production. OPEC has never had a real enforcement mechanism to heal members to its quotas Leaving OPEC lets the UAE work on pipelines to route around the Hormuz Strait and boost its oil production.

UAE’s 68,000 active military are well trained.  Unlike many Arab countries the UAE is not afraid to use the military power it has purchased from the West.

Before he was a US Senator, Phil Gramm taught economics at A & M College Station.  Gramm notes that the $188 billion in reduced taxes, the Big Beautiful Bill, is offset by the cost of $195 Billion in tariffs collected. Despite administration claims, tariffs are a tax paid by Americans. After the Supreme Court rejected Trump’s unilateral move to tariff near everything, he doubles down on finding new ways to do so. Look for more tariff pain in 2026.

Capital spending on Artificial Intelligence by Big Tech runs to many billions. This has rescued the stock market from the woes of high oil prices back in the 1970s. That and a newfound energy independence thanks to the Permian Basin.

The DOW, knocking on 50,000 this Friday morning, looks to make a new high this next week, over 50,512. That will call for a new re-think of the DOW Theory, suggesting higher prices in equity markets.

 

Markets Soar on Anything AI

 4/30/2026

a front page article in today's WSJ told of the billions high tech companies plan to invest in AI. Amazon and Google soared. Meta made lots of money and dropped  as did MSFT.

 

This is yet again how price weighted stocks can goose teh averages, above is Google.

CAT jumped nearly 10% just today, other DOW stocks were up but this is oe of the most expensive DOW stocks so boom the DOW rises over 700 points.  CAT is getting into the energy ge neration business but up is up regardless of reason. 

the ten year note yield had an inside day so expect omre sideways action. 

WTIC dropped about $3 but is above $100. As one who lived through the 1970s this is rather bizzare but...unlike then the US is energy independent. News reports are that Iran is out of space to store oil which means shutting in wells. As an oil field veteran nothing good happens when one shuts in a well. I have not been to the Middle East fields but they flow without mechanical assistance.  

 

DOW has yet to take out the February high at  50,512 but it really looks like it wants to do just that.  Transports were up 1.28%. I am beginning to wonder if any of the traditional rules like DOW theory still apply. 

At this point I have net feeling for where the market is liable to go in the near or more distant future. One can see RSI PMO MACD are quite high but then so are the markets. No sign of turning down yet. 

Visa saaves the day

 4/29/2026

the DOW would have been down much more today but for  VISA which jump[ed 8%

 The  major averages are topping.  $103 oil, tariffs, see Phil Gramm's column in the WSJ, are taking their toll. 

Transports

 Six days of decline in a row, the Transports lead, Note RSI top and PMO bottom, as Richard Russel used to say, there's a hard rain coming. 

In 2007 the buy write ooption funds, writing calls on securities, collapsed as a prelude to the overall collapse, it is about to happen again.

 All momentum indicators are about to roll over and descend. If you are reading this blog you are prepared.  T bills and bear funds preferred.

Polymarket Calling a Top in Speculation?

 4/28/2026

Not Guilty Betting on Maduro and winning $400 K 

 

Sometimes there is a seminal event that heralds a market top, this is the sort of thing that happens. It sounds bizzarre but the guy did it, so what, politicians bet on winning elections how is this different? 

UAE to leave OPEC 

Here you go, same thing! 

A Crackin the World - of AI that is

 4/28/2026

It's the returns on AI, it's the price of oil, it's well we don't know 

The media has no method other than to link the events to some news item, so today it was AI and Oil.

 

Yesterday I suggested the SOX index would be as god as any to track a top as semi conductors were goosing the market, well whaddya know! PMO is clearly topping in both graphs but you won;t hear that in the media. Industrials did not do much but NDX dropped 1%. Well that is a start.

I am working on a method for selling naked options, I know that sounds wild but not if there is a method and it has a track record. Stay tuned for more on this. 

MY short list of naked calls would be

 

Walmart WMt

V Visa

SHW Sherman Williams

NKE Nike

I made this list this morning, ow look at SHW, it has not fallen at that time

 Ok so I looked for an answer, bad earnings, hardly. This sort of thing is what one expects of a bear market,  in bear markets all news is bearish, yes it makes no sense but here we are.

Stay tuned to www.professorelam.blogspot.com, this is getting more interesting. 

The Sherwin-Williams Company recently reported past first-quarter 2026 results, posting sales of US$5,666.9 million and net income of US$534.7 million, alongside higher earnings per share than a year earlier.

Around the same time, Sherwin-Williams reinforced its focus on premium, sustainable products with the launch of Emerald Symmetry, a zero-VOC, plant-based interior paint backed by third-party certifications.

 

SOX 19 Days Up

 4/27/2026

 

First the daily then a  195 minute or two bars a day. Finally the SOX did not advance today but neither did it show an outside reversal day. So the trend remains up. this market  is the one driving SPX and NDX higher to it is the one to watch. 

FED meeting Wed, with oil at  $97 I expect no changes