Y’wanna Buy the PetroYuan!? (FXI,USO,MSFT,FB,XLK)

Y’wanna Buy the PetroYuan!? (FXI,USO,MSFT,FB,XLK) If we’re on the cusp of a new bull market in commodities, as we here at The Modern Bull believe, then the winners and losers will be clear cut and big. But when it comes to measuring the impact of rising energy, metals and foodstuffs prices, it’s very hard to determine how China will be affected. The reasons for this are manifold, and not least because that country is among the least transparent when it comes to all things economic – and, of course, because free markets don’t operate there as they do in many other parts of the developed world. China is among the world’s largest producers of farm produce – much of which ends up supplying domestic demand, though a great deal, too, is exported. At the same time, it’s the globe’s biggest importer of oil and gas, as well as many metals. So what’s the net effect on a country like China when, say, oil prices jack up sharply, as they have in the past few months? To put it in its most general terms, China’s markets and wealth are very closely correlated to global commodity prices, something that cannot be said…

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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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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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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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Washington Redeemed! (AAPL,EWP,CBOE,FB)

Washington Redeemed! (AAPL,EWP,CBOE,FB)   Never were fans of big government here at Normandy.  Don’t think it’s good for the overall health of the nation, nor for its better management or even for its longevity.   Never trusted it.  Always figured the goal was to put everyone on the payroll and then force feed them worthless currency.  Where else are the buzzturds gonna turn for a buck?!   Nope, always preferred the local brand of self-governance – really local! So the thought of someone – an outsider – coming to the big house ready to do battle with the forces-that-be was intriguing.  But whether Senor Trump actually fits that bill remains an open question.   We’ve heard about ‘draining the swamp’ and we see a contentiousness between the White House and the establishment leadership that has certainly never existed to this degree.  But whether this actually leads to the change that so many desire – a restrained government reach, and more power to local authorities – is too early to tell.   It would be nice if the extraordinary waste of our tax dollars were actually curtailed.  No more federal research money spent on “incontinence cups” and ‘flatulence valves” (no joke!),…

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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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All Hail the Dipstick Trade! (FB,PRI)

All Hail the Dipstick Trade! (FB,PRI)   Just to get a sense of how ridiculously slap-happy bullish the market for tech stocks has become, we offer the following look at the PowerShares QQQ Trust Series (NASDAQ:QQQ), a proxy for the NASDAQ 100, for the last two years.   What’s m0st striking about the chart, in our view, is the index’s price action in relation to her moving averages.  Have a look – This is amazing.  The last time the QUBES touched their 137 day moving average, indicated by the blue arrows, was back in July 2016 (black circle), and the last time they spent more than a few weeks below that marker was in May of that year.  There has simply been no retracement of any meaningful measure for the better part of two years.  And in short, the book is overdue. So what does that mean?  After all, if the rise has persisted for this long, who’s to say it won’t continue for another eighteen months without a retracement?   Buy the dip?  There ain’t none…   The financial headlines are packed with slogans and jargon that, in the end, really don’t have any value or importance to those…

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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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The Scent of Ascent (FB,C)

The Scent of Ascent (FB,C)   We’re going to start this week by claiming unapologetically and without any shame that tech stocks – particularly those sexiest FANG names – are about to spear the meat and offer a taste sensation that will be remembered by the longs for years to come. Here’s the setup.   First, earnings season is now underway and expectations for the quarter have been revised drastically lower.  Between storms and their damage and the effect they’ve had on employment and agriculture and tourism and the like, Wall Street believes aggregate earnings numbers will be far inferior to what was initially expected.   And that could bring a blessing.   Should there be upside surprises, we could see a great many stocks move strongly higher.   Indeed, of late, we’ve seen a slow tick higher in anticipation of better numbers, and even fresh, new highs on all three major averages as late as this week.  And that, too, bodes well for the bulls.   We would add that a great many of the biggest tech names are now showing technical signs of impending breakouts, and we’d highlight Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Tyler Technologies (NYSE:TYL), Tesla (NASDAQ:TSLA) and…

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Breaking Bulletin Bids Buyers Beware! (GWW,TYL,AOBC,FB,TSLA)

Breaking Bulletin Bids Buyers Beware! (GWW,TYL,AOBC,FB,TSLA)   This just in – earlier this week, one of our key indicators flashed a supernova warning.  It was our own ‘Volatility Compression’ marker, which we discussed at length only six weeks back in our Buy Everything Now! missive, a letter we’re sure you’ll agree both enthralled and captivated. In any event, the VIX (along with two other, equally important market readings) offered us what might best be described as a high probability pullback signal.   No, we’re not headed for the woodshed, and we’re not placing calls to next of kin.  But we are issuing a fitting warning that we could experience a short, sharp pullback (at least) in the weeks ahead in light of the compressed VIX reads over the last few days.   Wait!  Did you say READS, Plural?   That’s right.  On Monday, the VIX compression reading came in at 0.37.  Then, again, yesterday, we saw a second squished reading at just 0.46!  Two this close is something we’ve yet to see in nearly a quarter century of experience in this game, and we’re not taking it lightly.   Have a gander – The red arrows show two days with…

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