Posts Tagged ‘trickle down economics’

Thrilling Thursday – Will Jackson Hole Give us S&P 2,000?

SPY 5 MINUTEI could take today off.  

Why?  Because I already wrote this article last month, on a Thursday, when the S&P was at 1,988 and topped out at 1,991, which was $199.06 on SPY and, as you can see from Dave Fry's chart, SPY topped out at $199.16 yesterday (before plunging back to $198.90 on strong volume into the close).  

Will this time be different?  I certainly hope so because last time, we plunged about 5%, back to 1,904 over the next 10 sessions and it's taken us another 10 to claw our way back for another attempt at an all-time high.

In our Live Member Chat this morning, we shorted the run-up in the Futures at Dow 16,990 (/YM), S&P 1,985 (/ES), Nasdaq 4,045 (/NQ) and Russell 1,155 (/TF) because, as I said to our Members:

I'm sorry but I simply can't reconcile this news with what's going on in the markets so I'm going to continue to lose money hedging to make sure we keep what we have.  The alternative is going to cash but there is simply no way I can endorse getting more bullish on this market at this point.  

NDX WEEKLYOne major difference this time is we DON'T have money flowing out of SPY (as much), as we did last month and we DO have the Fed's Jackson Hole conference tomorrow, which looks to Global Investors like a Santa Claus convention with Yellen, Draghi, Carney and Kuroda sitting under the spruce trees with gigantic bags of FREE MONEY – and that's why traders are as giddy as kids before Christmas this week.

But, Virginia, is there really a Santa Claus, or are the bulls hopes and dreams about to be crushed by cruel economic realities they have, so far, been avoiding like the plague (or Ebola)?  Realities like China's horrific PMI this morning, that dropped from 51.7 to 50.3 (barely positive) and France's PMI, which is back in heavy contraction at 46.5 this morning.  Retail Sales…
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Monday Market Movement – Not Up for a Change

SPY DAILYThis is frustrating isn't it?

The S&P fell to 1,355 in the Futures, breaking our rule to get bullish as they must hold 1,360 for 2 consecutive days so we're back to watching and waiting now as it's been two full weeks of teasing this line as the index creeps back into the bottom of David Fry's SPY channel.  

We thought we were going to fail back at 1,300 but we caught a nice bounce off the bottom at the beginning of the month and flew up another 5.5% since then but now we're almost 10% over the 200 dma on less and less volume and that's one hell of an air pocket below us on the S&P so of course the lack of more free money from the G20 is going to hurt today – the question is – how much?  

We discussed the G20 over the weekend, so no need to re-hash it here.  Let's take a little time today to delve into the logic of S&P 1,360 and see if we can find some good reasons for it to stick.  In his letter to shareholders this weekend, Warren Buffett very plainly says that his entire bullish premise is based on his believe that housing will make a comeback.  Jim Bianco had an article on that this weekend noting Homebuilder Optimism has risen for 5 straight months, back to the highest level since May of 2007, at the early stages of the slowdown BUT – let's keep in mind that the sentiment level is 29 and anything below 50 is still NEGATIVE – so we have a long way to go!  

XRT WEEKLYWe have been playing XRT short, expecting it to have been rejected at $56, like it was last summer prior to a 20% drop.  Now XRT is at $58, up 31% from it's October lows and we have to wonder if the situation for Retail has REALLY gotten 31% better than high-volume investors were pricing it AFTER seeing last July's earnings reports or is this another major air bubble that's about to burst?

The January Retail Sales Report showed $361Bn in sales and that was up 5.6% from last year's $342Bn.  This month we'll see an automatic 3.5% bump as February has an extra day (people fall for that one every 4 years) and we have strong…
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Why the Dow is Hitting 10,000 Even When Consumers Can’t Buy And Business Cries “Socialism”

Many may be asking this question, as the market surges higher and the news (looking out past gov’t influenced near term numbers) looks so bleak…

Why the Dow is Hitting 10,000 Even When Consumers Can’t Buy And Business Cries "Socialism"

 Courtesy of Robert Reich at Robert Reich’s Blog

[IMG_0516.JPG]So how can the Dow be flirting with 10,000 when consumers, who make up 70 percent of the economy, have had to cut way back on buying because they have no money? Jobs continue to disappear. One out of six Americans is either unemployed or underemployed. Homes can no longer function as piggy banks because they’re worth almost a third less than they were two years ago. And for the first time in more than a decade, Americans are now having to pay down their debts and start to save.

Even more curious, how can the Dow be so far up when every business and Wall Street executive I come across tells me government is crushing the economy with its huge deficits, and its supposed “takeover” of health care, autos, housing, energy, and finance? Their anguished cries of “socialism” are almost drowning out all their cheering over the surging Dow.

The explanation is simple. The great consumer retreat from the market is being offset by government’s advance into the market. Consumer debt is way down from its peak in 2006; government debt is way up. Consumer spending is down, government spending is up. Why have new housing starts begun? Because the Fed is buying up Fannie and Freddie’s paper, and government-owned Fannie and Freddie are now just about the only mortgage games remaining in play.

Why are health care stocks booming? Because the government is about to expand coverage to tens of millions more Americans, and the White House has assured Big Pharma and health insurers that their profits will soar. Why are auto sales up? Because the cash-for-clunkers program has been subsidizing new car sales. Why is the financial sector surging? Because the Fed is keeping interest rates near zero, and the rest of the government is still guaranteeing any bank too big to fail will be bailed out. Why are federal contractors doing so well? Because the stimulus has kicked in.

In other words, the Dow is up despite the biggest consumer retreat from the market since the Great Depression because of the very thing so…
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Phil's Favorites

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

 

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

Markets know what has happened each time the yield curve has turned negative. The idea of a negative curve without a a recession would take some getting used to. Shutterstock

Courtesy of Mark Crosby, Monash University

Since President Trump tweeted about imposing new tariffs on China, global equity markets have gone into a tailspin.

Trump’s more recent announcement that the new tariffs would be ...



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Zero Hedge

Morgan Stanley: "The Global Economy Is Deteriorating Faster Than Offsetting Policy Action"

Courtesy of ZeroHedge View original post here.

Sunday Start, submitted by Jonathan Garner and James Lord of Morgan Stanley

As regular readers know, Morgan Stanley is pretty bearish on global risk assets. This applies to emerging markets (EM) too, where we've been calling for wider credit spreads, weaker EM currencies, particularly in Asia, and lower equity prices. However, not so long ago the narrative guiding investors ran something like this: The Fed was ahead of the curve, EM bond yields looked attractive in a world of negative interest rates and a US-China trade deal seemed within reach...



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The Technical Traders

Negative Yields Tell A Story Of Shifting Economic Leadership

Courtesy of Technical Traders

Negative yields are becoming common for many of the world’s most mature economies.  The process of extending negative yields within these economies suggests that safety is more important than returns and that central banks realize that growth and increases in GDP are more important than positive returns on capital.  In the current economic environment, this suggests that global capital investors are seeking out alternative solutions to adequately develop longer-term opportunities and to develop native growth prospects that don’t currently exist.

Our research team has been researching this phenomenon and how it relates to the continued “capital shift&rdq...



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

Reminder: We're is available to chat with Members, comments are found below each post.

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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