That’s Some Horse! (DIA,AAPL,UUP,IYT)

That’s Some Horse! (DIA,AAPL,UUP,IYT)   There are stats and there are stats.  And, of course, when the market is in the middle of a panic breakdown, all the facts fit to print are lugged out of the analyst valise in order to convince you of what’s to come. And here at Normandy, we’re really no different.  Regardless of how little we trust the mainstream, fundamental approach to investing in this era of absolute government intervention, we have to rely on something.  Coin-flipping went out at least a century ago in the stock buying game.   As we’ve stated repeatedly, the contest is now being played on the sentiment front – in large part – while flows of funds, sector rotation and some basic technical analysis still offer clues to market direction.   The larger picture will continue to be dominated by the size and degree of intervention by the Fed and Treasury, and while we’re always watching those two do-gooders like a chickenhawk, much of what they do is simply not transparent and the rest grinds its way through the system very slowly.   So it’s to the stats we’re forced to return for our commentary.   And we start…

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Jimmy! We’re Stuck in a Market Maelstrom! (GDX,DIA)

Jimmy! We’re Stuck in a Market Maelstrom! (GDX,DIA)   That’s the way bookie fumbles, folks.   You enter the casino either as an oddsmaker or a bettor, and it doesn’t matter which – in both roles you run an equal risk of exiting a loser.   And that’s the lesson of the last week in equity markets, too, a period that witnessed volatility jump from near record low levels to VIX 50 yesterday!  A 1600 point drop on the Dow also made history.   Yet the masses still don’t understand the nature of the beast.   If sentiment levels are any guide – and they should be, because that’s the only thing that’s truly guiding markets these days – we’re still in for a wham-doggy selling event in the weeks ahead, one that could make Monday’s six percent intraday decline look like a drugged out monkey on a 70’s sitcom. The total decline from the top registers at slightly more than 10%, qualifying as a ‘correction’ for those who like to define these things by the numbers.  But while many believe there’s more to come, the market’s follow through on Tuesday provides near term hope for the bulls.   Why?…

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Let’s Talk Dollars (UUP,DBC,DIA)

Let’s Talk Dollars (UUP,DBC,DIA)   We’ll open today with a look at the dollar and a few comments that the White House has been making in relation thereto.   And we start like this –   Steve Mnuchin, the President’s Treasury Secretary was in Davos this week to laugh at the world’s poor and confabulate over how to keep things humming without too much acting out on the part of the hoi polloi.   And in the midst of it all he offered the following on the sinking American dollar – And that immediately sent the buck-sellers directly into action.  The Dollar Index tanked, adding shame to the already existing scorn, and creating a picture that looked like this – We’re going to take a minute now to unpack the above dollar chart before we get back to the White House and Dr. Mnuchin and examine where things are headed for the markets in the weeks ahead.   We begin with the oversold RSI read that occurred last week (in green).  After a steep decline and a break of long term support at 91 (in red), the dollar bounced slightly but has declined to deeper lows since then – likely…

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Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)

Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)   The local authorities in my city have just notified me that my newborn son’s name is  not acceptable to them, and that I’m going to have to change it.   If ever there were a case of government overreach, this is it.   They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.   If, of course, the judge agrees. In this day and I age, there’s no shortage of asininity in the world.  I can be a Satanist.  I can have a sex reassignment.  I can purchase and cohabit with a robot.  But I can’t call my kid what I want to call him?!   What the hell is going on!?   People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.   That’s right, Dander.   My wife’s great uncle from Denmark, who passed away nearly…

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The Lord Giveth… (QQQ,DIA,VOX,HYG,CBOE,KKR,FB)

The Lord Giveth… (QQQ,DIA,VOX,HYG,CBOE,KKR,FB)   It’s hard to find anything negative to say about a market that has been on an even-keeled, upward trajectory for the last eight years.   You can mock what underpins its strength, you can deride the foolishness of those who’ve made millions just buying and sitting put, and you can wail like a newborn over the fundamental and technical excesses that are sure (eventually) to rock the very foundations of the financial edifice and send the global economy off the edge of the planet. And eventually, we admit, you’ll be right.  The fun will come to an end.   But it’s far more likely to be a jagged up-and-down affair than the simple cliff-dive that most imagine.  We’re of the school that contends that a wild volatility will seize the market before the final top is in, sending it hithering and thithering in a manner that breaks every man Jack who has more than a few bucks invested in the equity amusement park of the next few years.   And a quick look at the charts of the major world indexes reveals that we might now be approaching our first fitful turn in that process….

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Top o’ the Year to Ya! (DIA,FCX)

Top o’ the Year to Ya! (DIA,FCX)   It’s always easier to look back after the fact and act the sage, point out how obvious all the signs were, how the charts all pointed to that particular Wednesday being the top, and that particular earnings report triggering the selling, and the weak kneed trader at that hedge fund, already embroiled in a drug takedown that implicated the Gandhi crime family, whose sticky finger opened the selling when his Xanax wore off and he was without pills for better than an hour.   Sure.  It was easy as pie. But the truth, of course, is much more mundane.  Very few see the day or the sign or the true cause of any market’s rollover.   Though everyone tries to guess at it…   So they’ve been doing since the first day we walked into the business, wide-eyed and expectant, warning us, on the one hand, that the whole thing was about to explode and send up a dust cloud that would cover the earth for a century.  And they had the books to prove it.  We read them all.   On the other hand, were the Panglosses of the business, falling…

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“The Kids Are All Right” (XBI,HYG,DIA,PRI,PFE)

“The Kids Are All Right” (XBI,HYG,DIA,PRI,PFE)   It’s the end of the year, friends, time for stock taking, and boy-oh-boy have we got a surprising summing-up on offer.   Consider first that 2017 has been a year unlike any other in this generation in terms of natural disasters, politics, intrigue and war, never mind the markets.   Globally, we’ve never seen such equity success.  Have a look – Global equity markets have done the impossible, rising 13 months straight, in an unprecedented, non-stop ballistic climb toward the succubus nebula.   The What!?   That’s right.  From the media to the Oval Office to the New York Stock Exchange, it’s abundantly clear that we’re living through unprecedented times, and there’s very likely more to come in the year ahead.   Consider – nothing has been resolved in North Korea, nothing with Syria and the Middle East.  And financially, in all our thirty years investing experience we’ve yet to see a market levitate in the manner it has over the last several months – without the slightest pause to refresh.   Something Has to Give   It’s hard to figure which peg, if any, will fail first.  Or if something unseen will…

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The Crypto-Reformation (GFI,AU,AAPL,DIA,AOBC)

The Crypto-Reformation (GFI,AU,AAPL,DIA,AOBC)   The biggest story by far this year in the financial world is Bitcoin, and the hop-along crypto-currencies that have been developed in its wake.   Our own commentary on the phenomenon has been limited thus far, with fellow Normandy scribbler, Hugh L. O’Haynew, chiming in earlier this week with his feelings on the matter at somewhat greater length.   We don’t want to bedevil you today with too much more on the story except to say that there is real evidence that the Bitcoin religion is stealing adherents from the chapels of the precious metal god. Hugh mentioned this in his tirade earlier this week, but just yesterday we caught wind of a story that lends substantial weight to the matter.   Congressman Ron Paul, among the lone voices for ‘sound money’ in the legislature, published the findings of an ad hoc Twitter poll he took last week in which he posed the question –   A wealthy person wants to gift you $10,000. You get to choose in which form you’ll take the gift. But there’s a catch: You must keep the gift in the form that you choose, and you can’t touch it for…

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The Problem With Flying (XLP,DIA,TLT)

The Problem With Flying (XLP,DIA,TLT)   There are a few things that kinda trouble us these days, but none so much as the technical picture of the Dow Jones Industrial Average, whose daily, weekly and monthly charts are all now spinning through lala-ville, overbought every darn j-candle of them, and presenting the very picture of a dead man walking.   So it is.   And we have to acknowledge the reality.   But before we turn to the actual charts, know that neither the S&P 500 nor the NASDAQ are as bloated as the Dow.  Know, too, that the Dow Transports and the rest of the world’s major market indices are also nowhere near the froth-flood we see on the Old Lady of New York.   And we’ll have more to say on that in a moment.   But first, take a look at the Dow’s daily paste-up – Here, you see a picture of some 1500 points achieved in under just eight weeks (in blue), a relentless juggernaut of a climb that rarely saw a down day and pushed the index’s Relative Strength Indicator (RSI) high into overbought territory for almost a full month (in green).   What the…!?…

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WAR! All the Latest Bellicosity and Bombast! (SPY,C,FB,DIA,IYT)

WAR! All the Latest Bellicosity and Bombast! (SPY,C,FB,DIA,IYT)   North Korea, friends.  It’s all about North Korea.   What do we mean?   Well, in the first place, you can expect that the news cycle is about to be dominated by that nuclear-tipped maniac, Kim Jong Un and his merry band of scribblers for the next couple of months, as the move toward a full scale erasure of the wicked Northern Kingdom is hatched, plotted and executed.   Already we see signs that, at the very least, the stage is being set for a negotiating turn of the screw the likes of which haven’t been seen since Bold Boy Arnold threatened the entire stickball crew behind P.S. 113 in Brooklyn back in 1931. Anyhow, we note several new developments in the last few days that we believe will provide the backdrop for a temporary top in the markets and subsequent short-term decline.  They’re connected to North Korea, and they’re as follows –   First, the New York Times is reporting on drills to evacuate American citizens from South Korea in the event of a peninsular war.  These are drills that have taken place in the past, to be sure, but…

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