Get A Haircut! (FXI,QQQ,DIA,USO,IYT)

Get A Haircut! (FXI,QQQ,DIA,USO,IYT)   Earlier this week, freewheeling Hugh L. O’Haynew over at our Wall Street Elite desk decided to push the toothless FAANG narrative.  He was keen on portraying them as no match for the traditionally more defensive sectors going forward.   Well, no sooner had the words spilled out of his Visconti fountain pen, than old Huey was once again proven King Solomon, wisest of all men. Our fellow Modern Bully got his timing wham-doggy perfect.  The market did a flip like a four egg omelet down at the Canary Restaurant on Cherry Street, splashing the butter and bacon fat this way and that, and scorching old Netflix by a greasy 6.5% on the day. There were signs over the weekend, of course (for those without crust on their eyelids – thick crusts like you find on the toast down at the Canary), that a selloff was in the making.  But Huey already laid it out here.   What remains for us to determine is whether the selling will continue or was just a one-off, bad hair day for the big tech NASDAQ honchos.   And the answer is…   A look at the chart of the…

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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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“Bond. Lamest Bond” (TLT,QQQ,USO)

“Bond. Lamest Bond” (TLT,QQQ,USO) We’ve been talking about the end of the nearly 40 year bull market in bonds for some time now. Indeed, we’ve been early on a couple of occasions explaining the case for its demise, even errantly putting our money where our mouth was. We admit now we were early, eager and foolhardy. It happens, sometimes. Part of the business. Yet today, with all signs again militating in favor of just such a rollover, viz. a rising rate regime, a Fed that projects its intentions to continue tightening, a bond market that appears to be accepting the threat, and both the inflationary and corporate earnings backdrop to support it, we see there are still some who are unable to swallow the case for a coming bear market for bonds. Case in point: Morgan Stanley, no newcomer to the world of Treasury investing, turned bullish on the long bond less than a month ago. In a move that’s astonishingly contrarian, the bankers at that esteemed outfit claimed that “trade tensions, declining equity markets and subdued inflation” are forcing it to recommend clients bulk up on the ten year note. We would be all in favor of Morgan Stanley’s…

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I’m Having An Attack! (AAPL,SPY,USO,FXI)

I’m Having An Attack! (AAPL,SPY,USO,FXI) Isn’t it always the case…? The news is horrible. The threats are palpable. The rhetoric and bombast are as hot as ever. Suspicion and anger are ubiquitous; finger-pointing; mud-slinging; muck-raking; belly-aching… For gawd’s sake, my meniscus has been twice herniated, my pylor valve is stuck, and I just burned the honey-garlic spaniel! The kids are gonna kill me… The Decibel Level Climbs When the news is not reporting the Mueller/Trump duel, it’s all about rising oil, with 1) Iran and the potential loss of three and a half million barrels of daily oil supply, or 2) Yemen trying to take out Saudi oil infrastructure, or 3) Israel gearing up for a takedown of Iran in Syria and Lebanon, or 4) Venezuela, whose oil production is veering toward zero, as funds to pay for the extraction of that country’s vast reserves go squandered or missing or who knows where. And now Warren! This week it was reported that Señor Buffett had his first losing quarter since 2009, reporting over a billion bucks lost for Q1. The damage is everywhere. And here’s what’s worse. From Wall Street we’re seeing growing concerns that the breadth of the market…

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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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THE POLAR VORTEX HAS SPLIT! (UNG,USO,SPY)

THE POLAR VORTEX HAS SPLIT! (UNG,USO,SPY) OH. MY. GAWD!   In a development that’s caught nearly everyone off guard, a massive high pressure system recently sundered the normally quiescent Arctic ‘polar vortex’ in two!   It’s a little known, unique weather event that, according to meteorologists, could bring MUCH WARMER TEMPERATURES TO THE AMERICAN EAST COAST AND MUCH COLDER TEMPS TO THE WEST COAST AND CONTINENTAL EUROPE! Did you get that?   In the coming weeks, the weather may change due to this disruption of the normally static low pressure cell that sits over the Arctic!   And whaddaya know, U.K. natural gas contracts have already spiked some 3.5% in anticipation of the cold blast, while the Russians, who supply a great segment of Europe with its natgas and heating oil, appear to be revelling in this ‘natural’, though odd, wintry phenomenon.   But was it all a Russian plot?!   It didn’t take long…   The inevitable conspiratorial plotlines have already begun spinning on the web and, to a lesser degree, from American and Western European officialdom.  The theorists are all wondering whether Vlad the ‘Vortex Cleaver’ Putin had a hand in this latest weather oddity.  And while we’ve…

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Angry Billionaire Implodes! (PFE,USO)

Angry Billionaire Implodes! (PFE,USO)   Many have asked us over the years to summarize in our own pithy way the true meaning of life and to mince no words in doing so.   But as we’re not yet accredited philosophers, we here at Normandy prefer to limit our ruminations to subjects we’re familiar with.  And that means money, brother – its acquisition and, at times, its loss.   So, in an effort to please the many who took pains to contact us on the matter, we hereunder offer the following, limited piece of useable wisdom.  Please commit it to memory –   The transience of affluence is caused by 1) an overabundance of opulence, and 2) a lack of proper vigilance that leads to 3) arrogance, decadence, corpulence and the inevitable call for an ambulance.   We call it … To put a slightly more serious spin on it, money will come and money will go, friends, and everything – absolutely everything – depends on the trait of pride.   Hunh?!   That is to say, it is the quality of arrogance – or, more accurately, what the ancient Greeks referred to as ‘hubris’ – that marks the beginning of…

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Let’s Have an Oil Chat (USO)

Let’s Have an Oil Chat (USO)   It’s taken a heckuva long time, but the day has finally arrived.   After losing close to 60% of its value between July, 2014 and January, 2016, and falling below $40 a barrel, oil has now begun a move higher that we believe marks the end of its downtrend and very likely much higher prices over the short to intermediate term.   But before we get to the charts that illustrate the new reality, we’re going to digress briefly to discuss the fundamental backdrop that’s boosting oil prices the world over.   Bear with us.  It’ll take but a minute.   First up is OPEC member Venezuela, a nation literally circling the drain.  In the next few weeks the country will officially be declared bankrupt, as both excuses and cash run out, and payments on its debt are left unpaid.   With both production and refining in that country also about to grind to a halt, the market will look very severely at the near term shortages caused by the bankruptcy.  And even though any number of other nations will attempt to fill the supply breach, there’s no gainsaying that a domino will…

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Robbing with Copper (FCX,DIA,IWM,USO)

We’re not the dragon slayers we once used to be.   Or thought we were…   We still get the odd piece of correspondence that congratulates us for decapitating some carpetbagger or snake oil purveyor on Wall Street, but on the whole, our life has taken a quieter turn, and though age has something to do with it, it’s more likely a matter of changing temperament than anything else.   And that means we’re not as apt to write the hit pieces we once did.  Knowing how to write doesn’t mean you know how to think.  And even though we generally like to show we can do both, it wasn’t always the case.   One Last Swing   Today, however, we believe there should be a smear laid on a fella they call Shawn Langlois (surely of lapsed Acadian lineage), a writer for the Marketwatch group of copycats.   Shawnee seems to have a penchant for writing ‘hits’ as well – political hits, even though he works for an ostensibly finance related outfit.  Oh, well.  It’s all politics these days, we suppose. In any event, of all the silly and errant things that have slipped from this youngster’s pen, none…

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OIL HIGHER (USO,XLV,XLU)

There’s a lot to say and a trade to close, so let’s get right to it.   In the first place, the country is angry.  And nothing makes Americans angry like the thought of some privileged elite that arrogates to itself the right to decide things for them.  The original British colony, you’ll recall, was ousted on its keyster and left to fester like a busted oyster.  And for what?  Arrogance.  Thinking they had a right to determine things from afar.   Well, it’s clear today that Washington is the new London, and the self-proclaimed kings of Capitol Hill are neither wanted nor welcome, if the latest presidential primaries have anything to say on the matter.   A New World Dawning   America is about to change in ways no one can imagine.  And a great deal of that change is going to be less than pleasant.  And it’s also going to affect the markets and your money.   But before we get there, we still have one final, stomach-churning rocket ride higher, and it’s going to be juiced by the following factors:   Short Covering – there’s a massive short interest out there, and it only seems to grow…

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