Where The Markets Meet War (SPY,NOC)

bs’d Where The Markets Meet War (SPY,NOC) There are days to be thankful for, friends. And this is one of them. For all that we have (and don’t really deserve), we should bend over backward and thank our tormentors. For all that we want and still haven’t gotten (and really don’t deserve, either), hold on a bit. For in the end, there’s little doubt that the greatest of all Supreme Court Justices will bestow upon us our worldly dessert in the most precise and poignant manner. And may he do so doubly to our enemies! Revenge and the Making of Foes It’s hard to figure where the current round of trade wars will end. There are those who posit that we’re fast-tracking toward a military confrontation with the likes of Russia, China and Iran, and whoever else we might end up feuding with (Canada? Mexico?). And there are those, like the President and his cabinet, who claim that this is simply about protecting American business from an unfair playing field that we, in our unthinking ideological rush for an ill-defined ‘globalism’, created ourselves. It’s now simply a matter of healing those self-inflicted wounds and restoring thereby our former glory. In…

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Neither Here Nor There (QQQ,TLT,FB,IEF,SPY)

bs’d Neither Here Nor There (QQQ,TLT,FB,IEF,SPY) It happens all the time. The Mrs. goes out to buy some fish for Friday, and the boys and I are left lunchless, waiting all afternoon for the car to pull into the driveway. Sheesh. Not that we object to her having a few hours with Meave down at the Brutus Café on Plympton St. And I can certainly whip up a round of tomato, mayo and cheese sandwiches that the lads are downright fond of… But in the meanwhile, we still get to worrying. Oh, she’s never delayed too long – and certainly the habit is so common now that we should have faith that all’s well, and her need for a break and a wee chat is just fine. It’s just not knowing that’s the hard part. Kinda like today’s market direction. Where the Hellarwee!? It appears that any confusion you’re currently experiencing regarding the next moves in equities is now as widespread as the flu. NOBODY has a clue. As the following charts from the American Association of Individual Investors (AAII) show, the normal order of sentiment amongst investors has been inverted, shaken, pilloried and set to Stravinsky’s ‘Rite of Spring’….

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The Balsa Wood Festival (TSLA,GFI,AU)

The Balsa Wood Festival (TSLA,GFI,AU) When I was a kid, it was all the rage to build balsa wood gliders and send them sailing down the 70 foot drop at Dead Man’s Hill in Eglinton Park. The things never lasted more than four or five trips; they were balsa wood, after all. But watching them soar was a thrill. And if the winds were just so, and the balance and design were good, those contraptions were for us an awe and a wonder on par with the ten plagues. The crash-ups were equally exquisite. Those golden moments of silence when my buddies and I waited for our aircraft to finally touch down were the most breathtaking of my entire childhood. The anticipation. The hope. The subsequent speedy and dangerous descent to ascertain the damage, and the knee-slapping, ground-roll guffaws that followed. Childhood Nirvana… Funny. Now, as an adult, I feel I’m reliving those days watching the NASDAQ. There have yet to be any wild crashes – at least not among the leaders – though some appear to be headed in that direction. Could be that shortly we’ll be grabbing our popcorn and melting a stick of butter. Glider Death Among…

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Debauch of Self-Referential Verbiage! (FB,QQQ)

Debauch of Self-Referential Verbiage! (FB,QQQ) We’ve written literally dozens of letters in this space on the role of Facebook (NYSE:FB) in the market – and in the world at large. In fact, it was just months after the IPO was offered and the shares were trading in the $20ish range that we wrote As Goes Facebook, So Goes the World as part of our ‘Bourbon and Bayonets’ letter series. In that particular letter, we first introduced you to our thinking on the company. Thus spake fellow Normandy scribbler Matt McAbby back in May, 2013 – And five years later, that about sums up what happened – including the oxygen-deprived mockery part. But there’s more. This is a random sampling of our later scrawlings on Facebook – That’s where we were in April, 2014. Consider these, too – And the question is now whether our thinking is still as clear on the matter. Does Facebook, indeed, lead the market? And the answer is, yes. Have a look at a prophetic post we offered last summer in a letter called When Liberty’s the Target – We’ve discussed the ‘winnowing’ process that occurs at market tops at various times over the last several…

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Turn Tide, Turn! (TLT,LVNTA,SPY)

Turn Tide, Turn! (TLT,LVNTA,SPY) We file these reports on a strict weekly deadline. No matter what happens, we’ve committed ourselves to arriving at your inbox on time, week in, week out, every Thursday by noon. And, of course, it’s tough nuts to us if we have to offer a trade in the midst of a major market selloff. Lord knows how tough it is to read markets while a storm of volatility is crashing down upon us, just like that which appears to be at our doorstep. We have a few options available when this happens, to be sure. We can refocus on a calmer quarter of the investment world and attempt a trade where no one is looking, so to speak, and, indeed, that has proven an effective strategy on several occasions. The commodities, as a group, have been surprisingly stable during this week’s five percent NASDAQ selloff, and could provide us with a safe harbor trade, if needed. Or we could hedge ourselves with a bet on just about anything that offered limited upside or loss potential. A short term spread in either direction would accomplish that. But we’re going to undertake something a little less conventional at…

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Spies and Spycraft (FB,XLK)

Spies and Spycraft (FB,XLK) There’s lots to report today, so sit back and grabba java. We start with the following but of pithy wisdom straight from the leaders of our fair firm’s investment advisory board. And it goes like this – The more secrecy that exists in a state’s apparatus, the weaker the state is, and the more vulnerable it becomes to a widespread revolt or armed insurrection. Commit that to memory. We offer it up today, not only because our own fair commonwealth has far too much backroom subterfuge and chicanery, but more worrisome, because we’re moving in the wrong direction! We’re being ever more scrutinized, bureaucratized, analyzed and plain old watched – particularly via the technology we use. And that poses increasing problems for those of an independent freedom-loving stripe – like us, and, very likely, you, too. The news is filled with constant detail of how much data collection an average citizen is subject to, and what’s outright terrifying is the increasing ‘profiling’ that’s now occurring via the ‘innocent’ search engine technology we daily avail ourselves of and the social media sites we frequent. You Heard it Here First It’s no surprise to long time readers of…

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A Tale of Two Markets (QQQ,DIA,SPY)

A Tale of Two Markets (QQQ,DIA,SPY) Here’s some technical puzzlement to lead off the day… What’s to be made of the dichotomy between the Dow and S&P 500 on the one hand, both of whom have failed to better their former all-time highs from late January, and the NASDAQ, whose fashion-forward tech names have easily managed to best those levels over the last few days? Does it mean we’re headed for a retest of the February lows, as the charts of the Dow/S&P would suggest? Or are we rather headed higher, with any dip in the coming weeks or month just a chance to gather ye marbles, while ye may. The answer to that question may reside in the finer detail of the charts, and for that reason we’re now going to show you four indexes, and share a little of our thinking on each. We do so because immediate market direction is dependent upon a number of key resistance and support lines that we’re now about to show you. To start, here’s a look at the Dow Industrials for the last six months. What’s most prominent here is the unfolding pennant formation (in red), a continuation pattern that’s consistent…

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DR JOHN (DR,XLK,PRI,MTD,IWR)

DR JOHN (DR,XLK,PRI,MTD,IWR)   Our good friend, Matt McAbby, wrote in last week’s Options Trader Elite about a scenario that he referred to as the ‘non-bear’ market.  That is, the possibility that the current bull run in equities would continue until… well, there was no market anymore!   He was referring to a complete shutdown in trading that he suggested might continue either temporarily or, conceivably long enough to count as permanent because by the time everything was up and running again, the new reality would have rendered the whole project superfluous.   McAbby’s contention was that the possibility of an attack on American soil, either conventional or non-, is not a risk that investors pay enough heed to, let alone plan for, and he believes that’s a mistake.   He elaborated that we should start now, slowly and methodically, to prepare for such an eventuality. His chosen path was to begin the move back into precious metals – after almost seven years deriding that ugly puppy – as the signals now appear to be pointing toward higher prices for the gold and silver.   Pressing Further   And while we share in his belief that gold and silver are certainly…

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We’re All Numismatists Now (GLD,XPO,IYT)

We’re All Numismatists Now (GLD,XPO,IYT)   We’re going to lean against the wind a little this week and offer up something that gets little attention in the investment world, though, in our view, it deserves more.   There are many folks who, like us, like the market’s prospects in the near term.  There’s also a full throated minority that carry the bear case.  But both groups are in full agreement that bear markets begin where bulls end, and even saying so is too much a truism to garner any meaningful attention from either party.   But what if that were not the case?  What if markets did not turn over in the normal fashion after the last highs were hit?  What if, indeed, no bear market whatsoever ensued?  What if everything just stopped, and all the money that was formerly invested those markets just went ‘poof’?   Sound crazy?   We’re talking about a cataclysmic event, to be sure, one that would take down the system entirely, either temporarily or for good.  And we’re talking about it precisely because 1) no one else is, 2) there’s a remote chance it could happen, and 3) we want to be prepared for…

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Two Cent Technology Trade (XLK,GLD,FCX)

Two Cent Technology Trade (XLK,GLD,FCX)   It’s looking increasingly like the toppling market we saw just a month ago is now regarded by investors as ancient history.   Yes, there was a retreat – of sorts – over the last week, but it was selective.  And what emerges is that the leaders of this market – the big cap NASDAQ numbers – are stronger than ever.  Stocks like Amazon, Netflix, Google, Microsoft, Apple and Facebook are either at their all-time highs or pushing strongly thereto.   It’s a phenomenal show of strength on the part of some of the most obscenely valued securities on the planet, and an equally remarkable show of faith on the part of those investors who are ready to jump the bid at these levels.   Shocking, but maybe we shouldn’t be so surprised.   A Moving Target   At this stage, we can say that the momentum for equities is upward.  What will be in ten days or two weeks is anyone’s guess.  A look at just a few of the aforementioned companies’ charts shows that whatever danger the market perceived a month ago has clearly subsided.   Take a peek – These are six…

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