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Finance 0
E Market Briefing For Monday, July 11
Goldilocks should feel leery about blowing through the old S&P highs. Note it occurred on light volume; and so the move perhaps continues a bit; but should be taken with a grain of salt, as it’s not really complacency but rushing to cover, as well as a strange scenario that takes the market from the edge of breakdown to new euphoria. All of this (especially given the dubious Jobs numbers, while others are revised in a downward way retroactively) is suspicious; people know that and pushes it up, though often such a move won’t have the extent of follow-through many expect. The focus increasingly is the idea of the Fed off the... -
Finance 0
So Now What?
I think the two-word phrase that captures 2016 for the bears is: “disappointingly brief.” Disappointing because all attempts to drive the market lower are aborted. Brief because the attempts to do so often last only a day, or a tiny bit more. 2009-2016 has been awful for the bears, but 2016 has simply been awful in a different way. Let’s take a look at how the bulls seems to have finally clinched real power: first, the Dow Jones Composite has had its channel violated. Before we all kill ourselves, I just want to point out that this same channel was violated to the downside briefly (see both tinted areas), so it’s not a totally lost ca... -
Finance 0
The Mess In Italian Banks (And Elsewhere) – This Week’s Global Market Analysis
Brexit Redux The Brexit remains a high topic of discussion, even if it feels like it is reaching the saturation point. One thing is clear: The political parties in the UK have been thrown into chaos. The British Prime Minister, David Cameron, has resigned, but not effective until October. A leadership campaign has broken out, and the PM presumed and a key leader of the ‘leaves,’ Boris Johnson, abruptly dropped out. Not so Michael Gove, a lieutenant of Johnson’s, who showed no interest in the leadership but who is now running along with Theresa May, who was a leader on the ‘remain’ side. The leadership race promises to be eventful. T... -
Finance 0
Weaker La Nina Trends May Portend Colder Winter: Could Energy Bulls Benefit?
With the new month, more climate models are beginning to print out their late fall/winter forecasts. The climate model consensus has generally been one that is quite warm, though there is a decent range. The NMME climate model, which just had its July run come out very recently, is forecasting widespread warmth across the country for December/January/February, as seen below. This also fits with recent runs of the other American CFSv2 climate model. There are reasons to be skeptical. The model does show a weak/moderate La Nina through the winter, as seen below. In such a scenario, we could see widespread warmth across the country. However, it ... -
Finance 0
The Great Market Tide Has Now Shifted To Risk-Off Assets
In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and U.S. Treasuries. But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit l... -
Finance 0
Bi-Weekly Economic Review: Confusion Reigns
Economic Reports Scorecard The response to the much better than expected employment report today is quite interesting although not in a good way. Stocks will surely get most of the attention, assuming they continue to trade higher by the end of the day (they did), but other markets – bonds and gold – are not confirming the strength of the report. I don’t know when the divergence between bonds, stocks, gold and commodities will be resolved but it would seem that at some point it must. There are so many cross currents at this point – Brexit and the rest of the European problems, a US election in less than six months with nary a decent c... -
Finance 0
Gold Daily And Silver Weekly Charts – Le Bon Samaritain
It would be hard to have seen a more technically perfect performance on the chart by gold today, as it came down and bounced off support and finished higher on the day. Gold was a snoozer in the deliveries and the warehouse reports, as is befitting a normally dull July contract. Let’s see how things go next week. Silver continues to bleed out, slowly but surely in the warehouse inventories, with JPM having a virtual corner on Comex physical supply. Price-wise silver is looking very good, and approaching the first of a big set of potential cups and handles with an eye towards $54. And so we’ll put this week in the books. There wa... -
Finance 0
Breakout Imminent… 10-Year Treasury Bond At All-Time Low. Explains The Bull Market
We have been going nowhere for a couple of years. Within that process the emotions of all traders were tested over and over. Many times it appeared that the market was about to break down. Action was terrible on price and their oscillators, and that bad action was accompanied by poor economic reports. One after another, they came in poorly. Just when all hope seemed lost for the bulls they’d pull some magic trick, also known as fed-magic dust. A QE program here. A bail out there. Low rates forever everywhere kept the markets from breaking down. It was good to be the fed. You needed a bull to keep the economy going through those 401K rep... -
Finance 0
Jobs Bounce Sends Stocks Soaring To Record High As Bond Yields Hit Record Lows
Well punk, “do you feel wealthy?” First things first, there is this… (2130.82 record close, 2134.72 record intra high) *S&P 500 RALLIES 1.6% TO 2,130.83, RISING ABOVE RECORD CLOSE And then there is this… for 2016… And since Brexit… And today… While on the topic – cash indices reached pre-Brexit levels… Stocks went sideways after Europe closed… And S&P Futures managed to run the stops above the Brexit peak… But financials remain below pre-Brexit levels… Despite the best efforts to mash VIX, S&P cash couldn’t hold above the record close… Since June&...
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