We’re All Gonna Die! (XLK,GM,F)

We’re All Gonna Die! (XLK,GM,F)   Just a moment to recap exactly where we are and how we got here.   To begin, our bull market began in March, 2009 and, despite the odd shimmy and shake, it continues apace, spurred ever higher by the machinations of a giddy central bank that refuses to take bear for an answer. This past fall, with the election of Snidely Whiplash, the market kicked into overdrive, beginning what we believe is the final blowoff top to the bull that began in either 2009, 1981 or 1933, depending upon how cataclysmic your worldview.   But that’s for another time.   Today, we find ourselves at a crossroads.  Not a difficult or impassable one, in the least.  Rather, a point at which a pause is necessary before the next phase of the bull unfolds.   The Story of a President   When the latest phase of the bull was launched in November/December, it was the financials that assumed the leadership mantle.  All the banks and brokerages saw double digit gains, at least, within just a few weeks.  And after a few months, additional profits of 40% to 60% were booked.   And then the financials…

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Dancing in Detroit (F,GM,HYG)

Dancing in Detroit (F,GM,HYG) What’s more American than a monster truck hoedown that pits a Ford F-150 against a Chevy Silverado.  (Apologies to Ram fans, of course.)   American carmakers are still a force to be reckoned with 100 years after Mr. Ford’s assembly line thrust Detroit into the center of the industrial world.   And though we may be at the dawning of the electric age for vehicles, Ford and GM still have market caps that come close to $50 billion.   Why?   Because they sell a whale of cars.   A look at the chart below offers an idea of the types of numbers on offer from both companies. A company that sells more than $150 billion in product is a force to be reckoned with, even if the stock is waggling and the competition looks slicker and sexier.   So which one is better?   The question often arises in our monthly, inner-sanctum bourbon and billiard gatherings – for which Normandy is gaining notoriety from the White House’s West Wing to the Financial District’s White Horse Tavern – ‘which is the better buy: Ford or GM’.   And we have an answer to the question.  …

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How You Feelin’? (HYG,GS,GM)

It’s rare that we see the sun shining so brightly in the middle of February.   For stocks, that is.   In fact, can you name a time in the last ten years when a) we’d reached all-time highs in the indexes, b) consumer confidence levels were this robust, c) institutional investors were all-in, d) business confidence and homebuilder sentiment looked so rosy, e) emerging markets, like a horde of thunderous elephants, had just broken higher after eighteen months in the doldrums, and f) a stack of S&P 500 firms (36 of them – see below) just cracked through resistance into record territory?   It would be hard. Does that mean we’re living in the best of all worlds?  That the country and planet have turned a corner and are headed toward a gold tower utopia that will make all of us bottom feeders rich beyond our wildest imaginings? It’s more likely there’s something else at work here, and if you’ll permit us a Biblical allusion, we’ll offer it up thus –   “Pride comes before a fall.”   It was stated by King Solomon some three thousand years ago, and as he’s counted among the wisest of men, let’s…

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Breaking: Transgender NYSE Floor Trader Charged with Self-Rape! (GM,HD)

Breaking: Transgender NYSE Floor Trader Charged with Self-Rape! (GM,HD) Sometimes you get hit with a single news item or piece of data that literally knocks you off your feet.   It’s unnerving, to put it mildly, because over time one gets used to the sanguine moves to and fro in the regular series that one examines.   And then whammo!   We had a day like that yesterday when the NFIB released its small business optimism survey, and we were thrown to the mat like “Killer” Kowalski in his title match against “Mad Dog” Vachon back in 1978.   We were there at the old Maple Leaf Gardens when it happened, and no kidding, it looked exactly like this – Call it euphoriorus de la Trumpus, but c’mon guys, is it not a little overdone?   Anyway, it got us thinking. How much optimism is this guy really worth?   The market flew after the election.  Homebuilders’ confidence soared.  Small business has now apparently gone messianic. And, as we’ll show below, investors’ propensity for risk has just breached a fold in the space-time continuum and entered a hybrid dimension known as eh-nys. Is it not overdone?   Small business may…

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Sell Everything! (SPY,GDXJ,GLD,TSLA,GM)

We had a very strong sell day on Friday, and much of the ink that was spilled over the following days was dedicated to convincing us that the blood is only beginning to flow.   But is it really time to break out the cautery?  Grab the gauze box and squeeze the wound?   Time to throw on some cayenne pepper, maybe?   Ho, ho…! MY. GAWD.   Before we get to the answer, consider some arguments in favor of the continued grand selloff hypothesis –   Investor Complacency   Some swear by it, but we don’t see it, frankly.  The AAII numbers that we watch show a very frightened Ma and Pa investing cohort that’s unable to do anything but sit on their thumbs.  The last AAII bullish sentiment readings were 29.75, and the bearish were 28.48.  That means we’re anything but complacent in the traditional sense.  For that to be the case, we’d have to see at least 50 or 60% bulls.  And we don’t.   What we do see is the neutral crowd in the lead by a longshot.  Neutral, by the way, may as well be ‘neutered’ as far as the investment game goes.  Someone who…

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System Signals Silver Sale (SLV,GLD,XAU,TSLA,GM,MSFT)

There are all sorts of trading systems out there.   Some old-timers swear by the Graham and Dodd fundamental model, that tells you to buy them when P/E ratios and dividend yields are sparkling and dump them once the ratios are no longer competitive.   Others will tell you that’s balderdash, and only technical analysis can produce for you winning trades over the long haul.   There are those who swear by cycle analysis, point and Figure charting and Elliott wave theory.  Some adhere exclusively to Dow Theory. And still more go in for Gann triangles and Fibonacci retracements.  And believe it or not, some have even made consistent money trading the interplanetary orbitals of financial astrology!   Here at Normandy we’ve examined them all at one stage or another, and we’re here to tell you that absolutely no system has all the answers – and certainly none is foolproof.  But we can also tell you from experience (and the academic literature is fully behind us on this) that the single best method of making money in the trading arena is by using a trend following system. It doesn’t sound too exotic, and it’s not likely to make you the…

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Imminent Inter-Galactic Planetary Barrage! (TSLA,GM)

It’s getting a whole lot of coverage these days, so folks are beginning to wonder if it’s actually something to worry about.   The issue of the infamous ‘Planet 9’ or ‘Planet X’ or ‘Nibiru’ has captured the imagination of doomsayers and conspiracy theorists for decades… but now Wall Street?   Indeed, it’s so.   A number of anonymous strategists and directors from some of the biggest corporate entities on the street recently formed a group called “Renegade Prophets” that issues fortnightly press releases commenting on the approach of the star (or planet, or whatever it is), including photographs and advice to investors about how best to survive the inevitable impact of the nebulon comet-rock… and, of course, where to put their money.   The latest missive is signed by a man (apparently) who calls himself the MonoCol Priest of Caitlyn, and in it he urges readers, among other things, to engage in a degrading bacchanalian ‘subservience’ ritual that follows a minimum deposit to the group’s offshore trust.   Returns are guaranteed, of course, and are based on movements in LIBOR and an apparently new metric called the BOWELL-QUAKE.   We’ve yet to verify any of the group’s claims, though…

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U.S. auto sales up (GM), JPMorgan Chase (JPM) settles lawsuit and Oil hits new lows.

Markets were heading lower on Monday after U.S. auto sales data was released for the last month of 2014. General Motors (GM) surpassed expectations with a 19% gain to a total of 274,483. Pickup-truck sales reached 87,000, which brought the company’s total sales for the year to 2.9 million. This also marked the strongest December on record for the automaker in seven years. Ford (F) announced that their sales were up 1.2%, to a total of 220,671. The company partially attributed the lower data to smaller-than-expected sales to rental companies and fewer supplies of their top-selling F-150 pickup. In total for the year, Ford reported sales of 2.5 million, down 1% from 2013. Nissan Motor C. (NSANY) reported that they sold 117,318 vehicles in December. The sales were pushed by an increase of 12% in car sales. The strongest selling cars were the Altima and the Lead. Annual sales came in at 1.4 million, which was an 11% increase over the year before. Analysts are projecting sales to slow down in the coming year to between 16.7 million to 17 million. Adam Jonas, an analyst with Morgan Stanley, said, “U.S. auto sales are dancing to a very different (and we believe…

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Construction spending down, ISM activity lower and General Motors (GM) announces another recall

Markets were heading higher after construction spending dropped in November. The Commerce Department announced that U.S. construction spending fell unexpectedly by 0.3% to a total annual rate of $975 billion. This marks the first decline for the sector since June. There was an upward revision of October’s data to show a 1.2% increase instead of the previously reported 1.1% increase. The drop was not in line with the projected 0.3% gain economists’ were expecting. The fall was partially attributed to the government withdrawing spending by 1.7%. When compared with last year, spending was still up 2.4%. Anika Kahn, a senior economist with Wells Fargo, said, “As the labor market continues to show improvement and wages increase, especially for young adults, we expect the pace of single-family building to pick up this year.” In keeping pace with declines, U.S. manufacturing data came in slower than expected for December. The Institute for Supply Management announced that it’s index of activity dropped from 58.7 in November to 55.5. This marks the lowest level recorded in six-months. The data came in below economists’ expectations of a 57.6 reading. Any reading that polls in above 50 still indicates an expansion for the sector. Guy Berger, an…

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Existing home sales dip, General Motors (GM) claims rise and gas prices hit five and a half year low

Markets were heading higher on Monday after existing home sales slipped in November. The National Association of Realtors announced that home sales hit a six-month low last month following two back-to-back months of gains. Sales fell 6.1% to an annual rate of 4.93 million units in November. Despite the large tumble last month, analysts are suggesting that this is not signaling trend. However, it is partially attributed to shrinking inventories, which also hit an 8-month low level last month. Existing home sales are up 2.1% over this time last year. Brian Jones, a senior U.S. economist at Societe Generale, said, “The recovery in housing remains slow. I don’t think it’s really an indication that there’s a fundamental weakening in the housing market.” General Motors (GM) share prices were on the rise over 1% as news was released the company’s ignition switch claims continued to rise. Throughout the previous week, the company received an additional 104 claims, bringing the grand total to 2,430. The total number of claims for deaths now sit at 260; there are 172 for catastrophic injury claims and 1,998 for less-serious injuries that still required hospitalization. They have approved a total of 42 death claims related to…

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