Category Archives: Stock Market

Stock Market, Gold and Geopolitical Strife

Much like you do not buy gold on geopolitical flash points, you don’t short stocks either.  At least that is what I was telling myself all day yesterday as the news and the selling got worse but the market held unbroken status amidst the risk ‘OFF’ indicators.

‘At the least’ said I to myself, ‘wait until tomorrow’.

Now it is tomorrow, stocks are up (and surprise, gold is down) and I am in no hurry to do much of anything just yet.  We’ll see how things progress.

Just one little tale from one little lowly market participant.

Bearish Divergence

One reason I think that the next correction – if it’s not a bull killer – will be a big one is because of the bullish pressure building from the dumb money, while at the same time forensic indicators like junk bond to investment grade and T bond spreads show smarter money creeping out of the markets.

hyg

Nominal HYG is at a trend line, fine.  It’ll probably hold for a while.  But HYG vs. LQD and TLT has been declining all year.  This is a market sponsored by the dumbest of money.

Here is but one more view among many out there that I could post…

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DJIA: A Fata Mortgana

Guest Post by Wim Grommen

The Dow Jones Industrial Average (DJIA) Index is the only stock market index that covers both the second and the third industrial revolution. Calculating share indexes such as the Dow Jones Industrial Average and showing this index in a historical graph is a useful way to show which phase the industrial revolution is in. Changes in the DJIA shares basket, changes in the formula and stock splits during the take-off phase and acceleration phase of industrial revolutions are perfect transition-indicators. The similarities of these indicators during the last two revolutions are fascinating, but also a reason for concern. In fact the graph of the DJIA is a classic example of fictional truth, a fata morgana.

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Stock Market, 2 Hours In

Some thoughts nearly 2 hours into a fairly eventful day…

All of my regular stocks are green or flat.  That includes NFTRH+ standout Intel.  One that was red was Lattice Semi, a fellow NFTRH+ which was sold at a loss.  I personally jumped the gun on the buy but the actual ‘+’ buy target has not even been reached yet.  So it’s back on watch.  Also sold was the SOXS Semi sector short that was guarding LSCC.  It was sold for a profit, although it did not offset the LSCC loss.  That’s show biz.

I have by the way had more losses than gains trying to poke the market short lately.  I am currently holding one short, against big tech.  But that is because I hold big tech long.  If the market makes some more southerly hints, I’ll consider increasing shorts.

Here is a chart that people should pay attention to.  It is junk debt vs. supposed quality debt (HYG-TLT ratio).

hyg.tlt

Market players should not be chasing prices around (as in, is today’s Portugal inspired drop a shake out or something more; do I ba ba ba… buy or do I stand pat?).  Players should be looking at macro charts like the above and asking questions like ‘is that black arrow going to denote another bull trap and eventually turn red like the other 3 arrows or not?’

NFTRH 298 Excerpt: US Stock Markets

The following is an excerpt from NFTRH 298′s 38 pages of hard hitting, no b/s market analysis, which also included extensive work on the precious metals along with commodities, currencies, global markets and market sentiment.

NFTRH subscriber (7.6.14):  “You should publish pages 15 and 16 of this weeks report. I would like to share it. It is a great summary of the current situation.”  Pages 15 & 16 take it through the Dow chart below.  I decided to go with the whole segment on US stocks.

Stock Markets – US

Happy Independence Day America! Your markets are bullish… and over bought, over loved and running on increasing momentum.

sp500

Courtesy of SlopeCharts

The graph tells a story of the end of the Greenspan era’s commercial credit inflation, which was resolved in 2008, and the beginning of the Bernanke era and official credit inflation, which is ongoing.

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Semi Bullish

The semiconductors have led the way.  First in Q1 of 2013, when NFTRH subscribers were alerted that the semiconductor equipment companies were ramping up and then through the big long-term breakout in February of this year, the Semiconductor index has led the way.

In case #1 (the Semi equipment ramp) the implication was for a strengthening economy at a time when everyone thought otherwise.  What happened?  The canary in the coal mine chirped and the economy strengthened despite indignant emails I got to the contrary.  All of this was against a media hysteria about the Fiscal Cliff with even a family member / financial adviser advising that the best and brightest fund managers were in cash (at Thanksgiving, 2012).  Ha ha ha.  “Bullish!” said I to the drop jawed family member.  “Reeeealyyyy???”  Ah yah, really.

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Q: Is This the Beginning of the End of the Bull Market?

A:  Probably not, MarktWatch, if you keep putting headlines like this on page 1 every time the market takes a hiccup.  Click the graphic for the article.

headline

It would be totally normal – even expected – for the market to get a good drubbing into the July time frame.  But much though I abhor the policy that has created and sustained this thing, said drubbing might only quiet down the interest rate hike talk and cement an even longer run for ZIRP.

We just don’t know.  Meanwhile, the market has not even decided yet on the answer to its ‘manic melt up and termination or hard correction prior to new highs?’ question.  Here is the daily SOX (our leading index gauge) for perspective…

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BlackBerry Bonus, Thanks to Citron Research

Well on top of a really good (and notable) day in the precious metals, I got a bonus in that BBRY exceeded whatever bombed out expectation Wall Street had for it.  This is one I have been sitting on for the okay chart pattern and also (hat tip time) the fundamental research of Citron, which was very helpful to me and is linked over there on the right side bar.  I think I hat tipped Citron once before in helping firm my resolve to short the hell out of 3D Systems (DDD).  So you can consider this a hearty recommendation of Andrew Left’s analysis.

bbry