Thursday Flatline – Markets Drift Weakly into the Weekend

chart

"Well we know where we're going

But we don't know where we've been

We're on a road to nowhere

Come on inside

Taking that ride to nowhere

We'll take that ride" – T Heads

As you can see frojm they  S&P ETF (SPY) chart, we haven't done much of anything since Monday's open but it has been an exciting week as the S&P has had a 100-point trading range (4%) but each of these exaggerated moves in the Futures, whether up or down, seems to get dragged back to the middle once the real trading sessions (with volume) begins.

Date Open High Low Close* Adj Close** Volume
Dec 12, 2018 267.47 269.00 265.37 265.46 265.46 97,760,100


continue reading

Meaningless Monday Market Movement – Waiting for the Next Shoe to Drop

Are the dip buyers still out there?

That's not entirely clear anymore as we're testing a triple bottom on the S&P since late October and 2,950 to 2,650 is 300 points down and 2,800 is right in the middle and that's where we kept failing – not a very bullish sign and this dip has been faster than the first two so, if the bounce is weaker than the first two – that's a bearish pattern we'll be able to hang our hats on.

Trade talks with China did not improve over the weekend with Lighthizer saying March 1st would be a "hard deadline" while Navarro says "China's predatory days are over" – and those are our chief negotiators!  China is demanding that Canada release the daughter of Huawei's Founder and is treatening "further actions" against the US if the issue is not resolved and this is what happnes when people pretend to negotiate a trade deal but are actually only interested in sabotaging it so Trump can keep taxing (oh, sorry, tariffing) Americans on things they used to buy under free trade agreements.

Speaking of Trump – things have not been going well in Trump Land and that adds to the market uncertainty so I would take any move up this morning with a huge grain of salt.  Very simply, for the S&P, the 300-point drop leads to a 60-point weak bounce so that's the goal for today and failing that (we will fail that) then it's more likely we'll have to keep an eye on the floor tomorrow to see if that holds.

Meanwhile, both China and Japan had poor economic data over the weekend and riots continue in France for the 4th week with 136,000 people marching on Satuday leading to 2,000 arrests while Retail Sales are down $1Bn for the month and restaurant sales are down as much as 50% as people choose to stay home rather than navigate Paris' burning streets. 

If you wonder why you don't hear much about the Paris protests in the US – it's because the Yellow Vest Protests are about economic inequality and the Capitalists that own the media like to pretend there is no
continue reading

Friday Market Follies – Will Non-Farm Payrolls Give us a Flip or a Flop?

Image result for monks roller coasterWheeeee – what a ride!  

Down 800, up 700, what a fun day in the market.  Now we're only down 750 from Monday's open so we can make that up by 11, right?  I certainly hope you have your hedges as we literally could go 750 points either way off the Non-Farm Payroll Report at 8:30 this morning – especially if it shows more than 250,000 jobs created as that would mean the Fed really needs to raise rates before wages start eating into Corporate Profits and spur inflation.  Even though wage inflation is "the good kind" that makes the economy stronger – the Fed doesn't give a crap about that – the Fed is a banking cartel, not some Government entity there to help you and they are only interested in protecting Corporate Profits, specifically Banking profits, they could care less whether or not you have a job – what they care about is that, if you do have a job, you are paid as little as possible so you have to take out lots of loans and pay interest to the Banksters.  That is literally their primary function.

Why does the Fed not want inflation?  Because you take a fixed loan on your home of, for example, $250,000 and put down a $50,000 deposit and, at 4.5%, you pay $1,266.71/month (not including taxes, insurance, etc) for 360 months which works out to $458,933 (plus your $50,000 deposit) paid out on your $300,000 home.  The problem the Banksters have, however, is that the last $1,266.71 you pay them isn't worth as much as the first $1,266.71 you paid them due to inflation so they want inflation to be as low as possible to maximize your effective payments.  THAT is what the Fed is concerned about.  

Keeping inflation down means keeping wages down, which has the side-benefit of keeping you perpetually in debt and, hopefully, they can one day sock you with a 8 or 10% mortgage and then they really start raking in the profits!  At 8%, that same $300,000 house with a $250,000 mortgage goes up to $1,834.41/month and that's $665,596.45 paid over 30 years on that $250,000 you borrowed.  Sucker!!!  

By the way, funny
continue reading

Follow-Through Thursday – 5% Correction or Just the First Step?

Related imageDOOM!!!

That's what I said would happen on Tuesday morning so this is certainly not surprising.  Even from my vacation on Monday I could smell the BS of the move up, as Team Trump's Trade Triumph was not at all confimed by their Chinese trading partners and, as I said in the Morning Report:

When you think about it, of course, not only has NOTHING changed since last week but now we know for sure there will be no trade deal until March at best.  Trump showed real weakness backing down on more tariffs since that was the only leverage he had in this negotiations and China's tariffs have always been retaliatory – so Xi has given up nothing at all and Trump has stopped fighting – how is that worth $500Bn of stock advances?

All pretenses of improving US-China relations were dashed yesterday evening as news spread that the CFO of Huawei was arrested in Canada on Dec 1st, at the behest of US Authorities over "Iran Sanction Violations" – something the company claims to have had no notice of and no one was more shocked (or insulted) than China's President Xi, who was pretty much sitting down to dinner with Donald Trump at the time and was embarassingly clueless that this was happening.  Making a Chinese leader look clueless has historically been a big mistake….

The United States is “resorting to despicable hooliganism,” China's Global Times wrote in an editorial published Thursday. “Anybody can see that the United States is maliciously picking holes in Huawei, trying to give it a hard time using the American legal system,” said the paper, which often reflects the foreign policy views of the ruling Communist Party.

The “persecution” of Huawei is “clearly contrary to the spirit of the consensus” forged between Trump and Xi, it said.


continue reading

Testy Tuesday – Is China Enthusiasm Enough to Flip the Death Cross?

We're still in technical trouble.

The rally, while impressive, has not been enough to avoid the dreaded "death crosses" in the stock indexes, where the 50-day moving average falls below the 200-day moving average (indicating acceleration to the downside) and, keep in mind that's 50 business days so more like 2.5 actual months of downward movement is being tracked – that's not the kind of thing you reverse in a single session or even a very bullish week – is it?

You can see from the "W" pattern on the NYSE that has formed below the 200-day moving average since early October and now it's December and we are making our second attempt at a rally after the early November rally failed so spectacularly into the Holiday.  But now it's Santa Rally time and Team Trump is promising us a trade deal for Christmas and when have they ever lied to us, right?

Trump has named China hard-liner, Robert Lighthizer, to head up the negotiations and that's not a good sign as Lighthizer fought hard in 2001 to stop China from joining the World Trade Organization in the first place so it would be really, Really, REALLY ironic if he were to suddenly put together the largest trade deal in history, with China…

Treasury Secretary Mnuchin would have been a more China-friendly and negotiating-friendly choice or even pro-trade Economic Adviser, Larry Kudlow, who said China committed to rolling back tarriffs on autos and agriculture to which China has already replied "He said we said what???"

Pushing things back 90 days let's Team Trump make all sorts of BS claims that can't be verified for 3 months and, even then, they can push it back another 3 months.  The two sides even disagree whether there is a deadline for talks.  While the U.S. said it would “endeavor” to wrap up talks in 90 days. In Buenos Aires, Chinese officials made no mention of any deadline, and were angered when told about the U.S. claims.

After popping 450 points near the open yesterday, the Dow gave back 150 of those points and, this morning, the Futures are giving back 100 more but that still leaves us with…
continue reading

Monday Market Madness – China Goes on Hold, Markets Go Crazy!

All fixed! 

That's how the markets are acting now that Trump and Xi have agreed not to employ more tariffs while they negotiate trade.  I'm not quite sure how they plan to fix, in the next 90 days, what they haven't been able to in the past 360 but it is fun to be hopeful, isn't it?  As you can see from the Chart, the S&P is flying back to 2,800, where we were in early November but still way below 2,950, where we were in early Ocober but it's only early December and now Trump and Xi only have to keep quiet for 30 days and we can all pretend everything is high and go back to paying record-high prices on stocks – Merry Christmas!

Of course a Santa Clause Rally is a time-honored tradition as it's how all the Wall Street Banksters lock in their bonuses so it was never likely we were going to end the year on a sour note – that's why we put a lot of money into our bullish positions in the last round of portfolio adjustments.  Even GE is up 2.5% this morning as all the switches have been thrown on all the Buy Programs and every stock – good or bad – is on the move this morning.

 

IN PROGRESS