Deja Voodoo, 1994 Edition

By Tom McClellan

1994 SP500 Analog
August 30, 2018

In the election of 1992 there was an insurgent candidate, who did not win a majority of the popular vote, but who took the White House and set about reorganizing the government in a manner more to his liking.  The first two years of his term in office were marked by numerous scandals, and by a stock market which saw a scary dip in the 2nd year which eventually resolved itself into a strong uptrend during the 3rd year of his presidential term.  At that time, the Federal Reserve was commencing a program of rate hikes, which had market participants worried.

Does this sound familiar?

Continue reading Deja Voodoo, 1994 Edition

What’s So “Cryptic” About Trading Cryptocurrencies?

By Elliott Wave International

Lots and lots. Trading is not easy, period. But a few things can help.

Here’s a cool parlor trick: If you want to bring a loud, rowdy room to a screeching silence, ask if anyone can explain how cryptocurrencies work.

Cue crickets chirping.

Turns out, the “crypto” part of the name originally signified the encrypted nature of digital assets and their anonymous owners. But it’s proven foretelling, as cryptocurrencies have become synonymous with a cryptic impenetrability the likes of which no modern mainstream financial market — especially not one so fervently embraced — has known.

Even the experts are stumped by the exact logistics involved in cryptocurrencies, as these recent opinions suggest:

  • “[Cryptocurrencies] are volatile by nature and thus don’t follow traditional rules and conventions.” (May 22 Coindiary.net)
  • “The public’s fascination with cryptocurrencies is tied to a sort of mystery, like the mystery of the value of money itself, consisting in the new money’s connection to advanced science. (May 21 The Guardian)

That’s the bad news.

Continue reading What’s So “Cryptic” About Trading Cryptocurrencies?

Friday May Have Been the Day (but don’t count on it), From IKN 483

By Otto Rock

Here’s the intro to last Sunday’s edition of The IKN Weekly, IKN483:

Friday may have been the day (but don’t count on it)

If there is one thing you can count upon in the wild and whacky world of gold stocks and all who sail with her, it’s that sentiment among its investors and speculators will turn on a sixpence. By way of example, we’ve just come out of an eight week period when gold was repeatedly hammered by the strong dollar, by Trade Wars!, by disdain for the whole precious metals complex and talk of dying demand. Most recently, gold spent two weeks under the U$1,200/oz line and spiked as low as $1,152/oz at one point and the whole process has been boring, painful or just plain horrible in turns.

And then, suddenly, Friday wakes up and gold pops over U$20/oz, going back above the U$1,200/oz and bringing a welcome relief rally to the sector. That’s why I decided to run this small poll on Twitter that day and here are the results of the 169 people who took a click of their time to answer:

Continue reading Friday May Have Been the Day (but don’t count on it), From IKN 483

Control Top

By Tim Knight

Before I get started, I wanted to mention that I just received the full-color version of Silicon Valley Babble On, and it is just gorgeous. If you’re one of the well-to-do Slopers out there, you might want to spring for this luxury item, because it looks absolutely fantastic. It’s not cheap at 79.95, but here’s a link if you’re interested.

Now I’d like to share with you three charts of the S&P 500 cash index. I have deliberately left off the axis labels, so you’ll know neither the times nor the prices.

Continue reading Control Top

Downside Not Upside Global Risk

By Jeffrey Snider

The UST yield curve continues to flatten (as it does elsewhere). All sorts of mainstream articles have been published lately about it. Many of them often refer to academic pieces ostensibly trying assuage all fears about the yield curve’s threatening inversion. Fret not the distortion, they say.

And they are right. As I constantly remind people, it’s not inversion that anyone should worry about. All that matters is where the curve has been flattening, and not just recently. For years, it’s been shriveling and shrinking, a poignant likeness for the global economy.

Not so in the mainstream. The economy is booming. To reconcile how the yield curve could behave this way while strong growth is happening all sorts of intellectual byproducts are employed. Here’s another one published today:

Continue reading Downside Not Upside Global Risk

Home Prices Continue To Rise Faster Than Wage Growth

By Anthony B. Sanders

Las Vegas Fastest, Washington DC Slowest, First Time Homebuyers Face Grim Reality

Case-Shiller has released their June housing report.

The 20 metro home price index rose 6.31% YoY. The bad news? Hourly earnings for US private sector workers is only growing at 2.70% YoY.

csyoyearnmay18

As they say, all real estate is local. The fastest growing city in term of home prices is Las Vegas at 13% YoY with Seattle in close second at 12.8% YoY.

Continue reading Home Prices Continue To Rise Faster Than Wage Growth

Is This Really the Longest Bull Market Ever?

By Charlie Bilello

They say it’s the longest bull market ever.

Certainly makes for a good headline, but what does “bull market” mean? And is determining its length of any value for investors? Let’s take a look…

Defining the “Bull”

There is no standard definition for “bull market.” If you ask 10 different market participants you could easily get 10 different answers.

Continue reading Is This Really the Longest Bull Market Ever?

Harder Markets Are Typically Followed By Easier Markets

By Chris Ciovacco

S&P 500’S BREAKOUT ATTEMPT

The S&P 500 closed above 2532 on October 3, 2017, and eventually rallied to 2872 on January 26, 2018. The S&P revisited 2532 on February 9, 2018.  Last Friday, the S&P 500 closed above 2872.  Therefore, price stayed inside the orange box for 325 calendar days.

short-takes-ciovacco-aug-27-218.png

The S&P 500 broke above the March 2018 highs in July.  The same “it is important not to overthink singular outcomes” concepts apply to the present breakout attempt:
Continue reading Harder Markets Are Typically Followed By Easier Markets

COT Blue: May 29 Not Trade War

By Jeffrey Snider

I have to hand it to my colleague Joe Calhoun. In recent months, he’s been able to almost perfectly predict the Trump Administration’s response tactics to all this trade war stuff. Back in July, it was mere comments on the dollar. Not long thereafter, aid to farmers caught up in the China dispute. When that happened, Joe predicted it wouldn’t be long before NAFTA.

According to my record keeping, Mr. Calhoun is now three for three. You might only give him half credit for this latest one since technically the current NAFTA news only includes Mexico and doesn’t yet touch Canada. Yet. With the midterms approaching, you can see where all this is going.

That was pretty much Joe’s point all along. Politics is somewhat predictable in this way. And it reveals something else perhaps more relevant to what’s going on. Is this all really trade war stuff?

The political math adds up in that direction. The Trump administration has been messing with China which would only create collateral domestic damage. Betting on a booming economy, in the data anyway, the President need only clean up the rough spots. He’s doing it and one right after another.

Unlike earlier in the year, however, markets aren’t impressed; at least, those markets that actually count (stocks have no bearing on the real economy). The eurodollar futures curve, for one big example, wasn’t at all impressed and barely budged on today’s NAFTA news. In the all-important EDM 2020-EDM 2021 inversion, it had lessened intraday by all of 1 bps.

Continue reading COT Blue: May 29 Not Trade War

Miranda Gold (MAD.v): And a Mad Time Was Had by All…Directors

By Otto Rock

Here’s one that made me giggle, sent by a friend who was sent it by A Concerned Citizen. Back in late January, Miranda Gold (MAD.v) ran a $1.5m placement in order to raise funds for paying management to do nothing business and exploration and stuff. All normal so far, but then on February 1st they announced this:

Continue reading Miranda Gold (MAD.v): And a Mad Time Was Had by All…Directors

US OIS Forward Swap Inverts For First Time Since June 2007…

By Anthony B. Sanders

…As 10Y-2Y Treasury Curve Flattens To 18.75 BPS (REAL Fed Funds Target Rate Remains NEGATIVE)

We have been watching out for the US Treasury yield curve to invert (e.g, 2-year Treasury yields greater than 10-year Treasury yields).

fedtightinv

And the US Treasury 10Y-2Y slope has flattened to 18.75 BPS.

Continue reading US OIS Forward Swap Inverts For First Time Since June 2007…

Another Gold Bearish Factor, Report

By Keith Weiner

Last week, we said that the consensus is that gold must go down (as measured in terms of the unstable dollar) and then will rocket higher. We suggested that if everyone expects an outcome in the market, the outcome is likely not to turn out that way. We also said that this time, there is likely less leverage employed to buy gold and that gold is less leveraged as well. And this, combined with a contrarian perspective on the consensus view, means that this time gold won’t go down before going up.

Dan Oliver of Myrmikan Capital emailed Keith to say that people in the third world use gold as collateral on their loans. When they can’t repay, the gold collateral is sold by the creditors. This time around, there is likely to be a larger crisis in the so-called emerging markets and their currencies, and hence this selling of gold will be a bigger factor. With greater selling pressure on gold, we’re back to the bearish case.

Million Ton Rock, Meet Million Ton Force

The bottom line is that we have several forces pushing gold up, and several pushing it down. On the up side (not upside, sorry we couldn’t resist) these include creditors rightly fearing dreadful losses when debtors default, speculators wrongly thinking that an increase in the quantity of dollars causes gold to go up, and even the possible path to remonetizing gold if we are successful in help Nevada to issue a gold bond. On the downside, we have speculators who front-run the consensus that gold must go down first in a crisis, and we have forced selling by leveraged gold holders in the first and third worlds.

Continue reading Another Gold Bearish Factor, Report