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PhD Economists Oughtta Know Better…
Thursday, the Dow rose 79 points – or about 0.5%. Nothing proved one way or the other. We told you about our visit with President Reagan’s former budget advisor and Wall Street veteran David Stockman. Unlike almost every other analyst or investor we know, David has been a true insider. He has seen how the system really works from within. He played critical roles at critical moments – in Washington and on Wall Street. So he understands, maybe better than anyone, how the game is played… and how the deck is stacked to favor the insiders, the elite, the cronies, and the Deep State. Meltdown David was cheerful when we met him on Wednesda... -
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Value Investing With Help From Wyckoff Logic
Buying something at good value is a good approach, however it is another approach to know when to enter and exit the market, enter Wyckoff logic. If You ‘know nothing’ of Wyckoff logic now is a good time to learn. ... -
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PBOC Hedge Fund Battle
The China currency debate in financial markets is rather interesting right now with many market ramifications. A rapid depreciation in the Chinese currency could lead to an Asian currency market crisis. I can see both sides of the current debate of a rapid devaluation versus a prolonged drawn out devaluation of the currency. ... -
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The Weak Relationship Between Bear Markets And Recessions
The February 4, 2016 edition of Nightly Business Report included a segment assessing the ability of the stock market to predict recessions. This is of course a timely piece given the stock market’s current plunge and growing recession fears arising from analyst commentary and softening economic data. Steve Liesman, chief economist for CNBC, took a crack at this age-old question. He used S&P 500 (SPY) price data going back to 1945, the post-war era. He overlayed these data with the timing of bear markets. This periods covers 13 bear markets and 11 recessions. A bear market occurs after the S&P 500 loses 20% from its last all-tim... -
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E NASDAQ Breakdown Confirms Start Of Bear Market
Since June of last year, we have been monitoring the development of a massive topping formation in the stock market that signals the likely termination of the speculative cyclical bull market that began in 2009.” One week ago, we observed that the developing cyclical top had entered an important phase and noted that a weekly close well below critical congestion support in the 1,880 area on the S&P 500 index would essentially confirm the start of a new bear market. This week, the S&P 500 index returned to the 1,880 area and continued to test that important support level. However, the NASDAQ composite and NASDAQ 100 indices, whic... -
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The Real Bane Of Equity Markets Is Actually A US Currency Problem
Sometimes it’s dangerous to stick out from the crowd. As traders, it’s a near necessity to have at least somewhat of a contrarian mindset, but you also have to know when to blend in with the environment if you ever want to survive. But even if you’re riding in a strong trend, you have to question when it might end. You have to manage your risk and you have to adjust your stops regardless of how strong the move is, or else even your best laid plans will prove ruinous. But when we can find a trend, or perhaps more accurately described as a ‘theme’ in a market, well that’s something that we can plan around. A good example of this was... -
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The Dogs Catch A Bid
The Dogs of the Dow theory suggests investors select the ten stocks that have the highest dividend yield from the stocks in the Dow Jones Industrial Index (DJIA) after the close of business on the last trading day of the year. Once the ten stocks are determined, an investor invests an equal dollar amount in each of the ten stocks and holds them for the entire next year. Below is the 2016 Dogs of the Dow. As the below table shows, year to date through Friday’s close, the Dow dogs have outperformed the Dow Jones Industrial Index, -2.5% versus -7.0% . As the below table also shows, the average yield for the 2016 Dogs of the Dow of 3.97% ... -
Finance 0
Puerto Rico Cries Wolf (Again)
The Governor of the Commonwealth of Puerto Rico, Alejandro Garcia Padilla, is crying wolf amid an ongoing – and deepening – debt crisis. The island’s taxpayers are on the hook to pay back a whopping $49.2 billion in debt. Actually, Puerto Rico has about $73 billion in debt – but a big slice of the debt pie belongs to its troubled utility company, as well as other government entities. Thus, the island’s obligated bond payments continue to swell. Currently, around 36% of Puerto Rico’s revenue services its debt payments (versus 7% in the United States), but the island says it can’t afford to pay more than 15%. In a meeting with la... -
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Shanghai Gold Exchange Withdrawals For January 2016 Total 225.8 Tonnes
Shanghai Gold Exchange has decided to publish their gold withdrawal figures on a monthly basis rather than weekly. For January 2016 there were 225.8 tonnes withdrawn from the exchange. ... -
Finance 0
Big Position Adjustment For Euro, Smaller For Yen
The latest Commitment of Traders report covers the week ending February 2. It covers the FOMC meeting and the BOJ’s surprise cut. It included speculation of a potential deal between Russia and OPEC to cut output. Speculative position adjustment in the futures market was more limited than one might have expected. Speculators cut 10.5k gross long contracts, leaving 82.5k contracts. The bears added only 2.3k contracts to their gross short position, giving them 44.9k contracts. The result as a modest pullback in the net long position to 37.2k contracts from 50.0k. The strength of the yen since the end of the reporting period may ha...
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