The Denizens of Intelligenz (WWE,GLD,SO,NFLX)

The Denizens of Intelligenz (WWE,GLD,SO,NFLX)   By definition, exactly half the population possesses below average intelligence.   And that’s not a comfortable statistic.   So who’s the dumb ones?   Well, it certainly doesn’t break down on socio-economic lines.  Don’t think, for example, you got smarts because you got cash, Giles.  It don’t work that way.   And intelligence, by the by, we don’t measure by how many letters you have trailing your name, either; academic credentials have absolutely nothing to do with a person’s ability to intelligize, if you’ll permit us some new coin.   Brains in the Service of Life   Rather, intelligence – as we read the dossier – has everything to do with an individual’s ability to respond to whatever predicament he encounters, and to navigate it successfully.  That may be a business deal, an unexpected visit by the ‘authorities’, a crisis in the street, or anything else that might befall a person in the course of his or her life that generally tests what we would call his ‘survivability’.   Because it clearly does not behoove a man to be the planet’s best trial lawyer, or essayist, or jet pilot or code writer if, when…

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Monster Chiller Horror Market! (QQQ,DIA,USO,IYT,GLD,SLV)

Monster Chiller Horror Market! (QQQ,DIA,USO,IYT,GLD,SLV)   There’s a point in every horror movie in which the terror and gore can get no worse.  And then, as if the gods had collectively reached into their cruel joke handbag, it manages to do just that.   It gets much worse.   The freight train has just leveled the town, the bodies are strewn everywhere, widows and orphans and crying babies, fires burning, carnage, mayhem, bubonic sores and pus galore … and whaddaya know, that neo-Viking motorcycle gang from Peoria arrives, thirsting for a good mead-induced blood-letting and plump, diabetic children to sacrifice to Odin. It’s precisely at that point that the fright turns almost comic.  Sure, there are those who get up and leave because they can’t handle what they know is going to be barbarism for the most barbaric.  But for others, it’s hard to contain; the giggle is on, and it’s gathering strength, because the whole affair has been transformed into some sort of ‘surreal state of cognition’ – a dreamlike situation where you’re watching the horror, still somewhat involved, but you know it’s a dream.   Welcome to the Stock Market!   The current market set-up bears a striking…

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We Are Investment Artists! (AAPL,GLD,TSLA)

We Are Investment Artists! (AAPL,GLD,TSLA) We at Normandy prefer the use of options because of the (mostly) limited liability involved in their use, as well as the wide variety of strategies and structures they afford the interested trader to employ. Nearly any price projection you might make has at least one corresponding options strategy available to profit from. In short, options are, in our view, the premiere weapon for the prudent investor in this age of increasing financial and geopolitical uncertainty. We mention this now, because we’ve clearly entered a period in which excesses in valuation and government intervention have made predicting market moves a far less quantitative operation – less scientific, if you will – and turned it more into ‘artisanry’. The new keys to investment and speculative success reside in a number of less widely-used indicators, basic technical analysis and in-depth sentiment study, all of which we at Normandy excel in. Give us an example, McAbby! A look at traders’ positioning in VIX futures is instructive in this regard. Below is a chart of traders’ speculative posture in VIX futures over the last three years. It makes clear the overwhelming shift in sentiment that occurred literally ‘overnight’ in…

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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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Growing Cold and Crowing Gold (GLD,HYG)

Growing Cold and Crowing Gold (GLD,HYG)   In the same way that the mind and body can become inured to a constant barrage of negative stimuli – a crucial survival mechanism, no doubt – it can also grow insensitive to the positive.   That’s right.   And you can see this in the widespread American penchant for more, better, juicier and sweeter tasting food, a phenomenon that even manifests itself in a television channel dedicated entirely to eating!  There, you’ll learn how to make food, how to serve it, what to spice and spike it with in order to maximize your taste pleasure, and all in the name of moving your tastebuds further out the plank of ‘extreme experience’.   Completely insane when you think of it.   And so it goes with all of life’s other ‘experiential’ aspects; people are ever pushing the edge of the envelope, from skydiving to white water rafting to bunjee jumping, meth experimentation and orgiastic Thai getaways.  The movement to experience more, better, thrilling… everything! has become an integral part of 21st century living. Sadly, the result, in the end, is actually a deadening of the senses.  One so beholden to experiencing the latest…

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Sell-Off Lurking (HYG,GLD)

Sell-Off Lurking (HYG,GLD)   Not long ago we wrote about a market indicator we developed and brought public in the late 1990’s; something we refer to as ‘volatility compression’.  We described it recently in a letter called Buy Everything Now!, so we won’t put you through the labor a second time, only to say that it’s worthwhile going back to re-familiarize yourself with the concept, because it’s once again popping red on our screens this week.   Don’t Touch my V-Spot!   Bottom line is this: the CBOE’s VIX indicator, a measure of implied volatility on 30 day SPX options, has now registered repeated multi-year lows over the last six week period.   Have a look – The actual compression levels (along with what’s shaping up today to be another vice-squish of a day) give us an unprecedented and clear ‘sell’ signal for the near term (10 days to six weeks out).  And while we would have jumped on this like a mad monkey on a dirty bird some years back, we’re a little more reserved these days.   The reason for our circumspection is a general unease that those numbers that have guided us in the past are still…

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What are ya? Some Kinda Martian from Pluto!? (GDX,GLD,XBI)

What are ya? Some Kinda Martian from Pluto!? (GDX,GLD,XBI)   We get a good bit of hate mail.  Some of it derides our penchant for options trades, a realm of investing that many believe too fraught with danger to enter.  Others believe that options trading is only for the ultra-wealthy, as margin requirements make a good number of our trades prohibitively expensive to launch.   And we admit it’s sometimes the case.   But the hate mail that’s most venomous generally revolves around the ‘market top’ theme that we regularly write and recommend toward. Beyond our understanding that this greatest of all bull markets is now in the process of making a final blow-off top, the heights of which no one will accurately estimate, there’s also the issue of the social, economic and political fallout that ensues from such a topping process – and the fundamental change in lifestyle that surviving that process will entail.   Lifestyle Change?  No big deal…   No, we’re not talking about a little less or more meat in your diet, or going minimalist in the apartment instead of forging a “San Diego Dry” look.   Fundamental means fundamental.   And that means almost nothing…

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Gold is History (GLD,SLV)

Gold is History (GLD,SLV)   Despite the latest dipsy-doodle in the precious metals market, with silver diving almost fifteen percent in under a month, the outlook for the money metals still looks reasonably good.   We’ll get to the proof and the charts in just a moment, but first a little history.   Silver topped out back in the spring of 2011, losing three quarters of its value in a grinding, torturous bear market that spanned a full five years.   Gold, on the other hand, began its bear later that year, plateauing in September of 2011 and bottoming alongside her cheapskate sister as the bells of New Year’s, 2016 were still pealing.   The whole rollup took some two years to play out – as the chart below shows – and is still proceeding apace (and very likely too slowly for the bulls).   Have a gander – The above chart spans the period from silver’s high (close to $50 an ounce) through until today.   And as you can see, the picture is brightening.   We have every reason to expect that the fully formed and most sensual rounded bottom (seen above, in red) marks the end of…

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The Cure? A Few Mixed Metaphors and a Good Bloodletting (SPY,GLD)

Stories abound of fortunes that were lost in a moment of anger.   Whether it was at the poker tables of Vegas or at the directors meeting of a Fortune 500 company, it’s all the same.  It’s happened aplenty on the sidelines of championship athletic contests, too, where a single, vicious outburst derailed the work of years and the cooperation and sweat of dozens, if not hundreds of individuals committed to a common cause.   And you can add to that list countless marriages, innumerable hospital surgeries, crucial military battles and even the fate of whole nation-states… sunk at the hand of an improper word delivered at the wrong time that broke the morale or concentration of key players in what, until then, had been an even-keeled endeavor stewarded by cooler heads.   Anger…   Sometimes the pressure is just too great.   During those moments even the juggernauts can run aground, the heroes slash their Achilles heels and, sure enough, the ship begin to take on water.   We’re not there yet…   There’s going to be a whole lot going wrong over the next few years, to be sure, friends.  And casting about for blame will be all…

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