Monday, January 15, 2018

Goldilocks Stock Market Is Becoming Idyllic Unicorn Utopia

Party hats and noise-makers for everyone!

The major US indices closed the second Friday in January at record levels. Huzzah, huzzah, huzzah!

The most recent stock market maneuverings are enough to make people consider quitting their jobs, as their money invested is making more.

How much more? Well, anybody with $100,000 invested in, say, a Dow index fund, on the last day of trading in 2017 (December 29), is ahead by $4386 as of the close Friday, January 12. That's like making over $2000 a week, or more than $100,000 a year.

Back in the 2006, the heyday of the sub-prime mortgage mania, people in places like San Diego were literally quitting their jobs, simply because their homes had risen in value by so much, sometimes as much as 150-200%. People in tony neighborhoods with $250,000 homes were being offered $500,000, $600,000 and more.

Well, we all know how that turned out, but the point of making money, either in real estate, or stocks, or anything else for that matter, relies largely upon one's entry and exit points.

To say that sometime in January would be a good time to at least trim some of one's stock holdings would not be considered bad advice. However, who would want to give up on a stock market that appears to be heading to the moon, orbiting it and then taking off toward outer space. After the great returns of 2017 - and the eight years prior to that - it's become apparent that "buy and hold" is the preferred strategy.

That makes sense, since the ongoing bull market is the second longest in market history and nudging along toward the longest ever, having begun in 2009, when the Dow bottomed out at 7,278.38 on March 20th. Having already tripled in value, another solid year could push the Dow (and the other averages) to quadrupling levels.

In other words, if you had $100,000 invested in March of 2009, you'd have over $350,000 today, on your way to $400,000. If you had $500,000 back then, you'd be close to $2 million, and if you haven't cashed out and retired already, you're a fool. (Seriously, anybody who can't make $2 million last 30 years is an idiot. It's $66,666 a year, or $1282 a week. That should be more than enough, even if you aren't keeping some of it in bonds at two percent).

So, stocks continue to ramp higher and probably aren't coming down any time soon. Plenty of people are what they call baby boomers and they're retiring in droves, many of them pulling money out of retirement funds. No matter how much these people remove from the market, it won't matter. There will be new buyers lining up to take their places, bid stocks higher, reap profits.

It's really amazing. Next, unicorns and money trees will be abundant.

At the Close, Friday, January 12, 2018:
Dow: 25,803.19, +228.46 (+0.89%)
NASDAQ: 7,261.06, +49.28 (+0.68%)
S&P 500: 2,786.24, +18.68 (+0.67%)
NYSE Composite: 13,294.34, +83.57 (+0.63%)

For the Week:
Dow: +507.32 (+2.01%)
NASDAQ: +124.50 (+1.74%)
S&P 500: +43.09 (1.57%)
NYSE Composite: +191.11 (+1.46%)

Friday, January 12, 2018

Central Banks Have Complete Control Over Global Economies, Governments

US stock indices had their best showing of the new year on Thursday, with all the averages reaching new all-time highs.

The Dow Jones Industrial Average is higher by 875 points in just the first eight sessions of 2018. That is extraordinary. It is so extraordinary that, at that pace - of a little more than 100 points per day - the Dow average would nearly double in value this year.

The gain would be over 20,000 points, putting the Dow Jones average somewhere in the range of 45,000 by year's end. In percentage terms, it would be up 80%. Anybody who has over 100,000 invested in stocks and is making less than $80,000 this year might as well take the year off. Why work when your money is doing so much of the heavy lifting?

Of course, that's a speculation. The Dow won't gain 80% this year, or will it?

Is the economy that good? Are US companies making that much money, that they are severely undervalued today?

Or, are central banks intervening in stock markets with money created out of thin air?

For answers, or, at least, hints, to the answers, see yesterday's post, or, any of the posts from the past eight or nine years which have tags or labels "central banks", "central bankers", or, "Federal Reserve."

At the Close, Thursday, January 11, 2018:
Dow: 25,574.73, +205.60 (+0.81%)
NASDAQ: 7,211.78, +58.21 (+0.81%)
S&P 500: 2,767.56, +19.33 (+0.70%)
NYSE Composite: 13,210.77, +104.17 (+0.79%)

Thursday, January 11, 2018

First Red Day of 2018 is Laughable

Major US indices had their first negative day of the year on Wednesday, but the losses amounted to nothing more than rounding errors.

Stocks were off early in the day after reports that Japan and China were reducing their purchases of US treasury bonds, but the notion was simply shrugged off by the equity captains as buyers emerged to limit the losses.

Stocks have gain six of the first seven trading days of 2018, a trend that is likely to continue until central banks cease buying stocks outright. This story is getting rather stale, even though most Americans fail to realize that their pensions and 401k profits are being fueled by cash injections from the Bank of Japan, European Central Bank, Swiss National Bank, Bank of England, People's Bank of China, and, the US Federal Reserve.

To believe that the Fed, being the world's most influential central bank, is not engaged in the purchase of stocks - either outright through their trading desk at the NY Fed or through member banks such as Goldman Sachs, JP Morgan Chase, Bank of America and others - is to suspend reality.

Global markets have neither seen nor experienced anything like this unprecedented and outrageous activity by financial sources which create money at will, the ramifications of which are likely to result in a massive, destructive inflationary hyper-spiral.

Here in the US and across the pond in Europe, central bankers openly wring their hands and express concern that inflation is too low, when in fact the worldwide money supply - the lone reliable barometer of excess liquidity - has been increased by trillions of dollars during the post-crisis era which began in March of 2009.

Nearly nine years have passed since the great financial crisis and the excesses have only grown, reaching monstrous proportions. For what other reason would gold and silver be suppressed so virulently other than to eliminate their standing as real money? Why are governments so intent on clamping down on cryptocurrencies? Central banks do not want competition in currencies.

It is clear that the central banks of the world have pulled the global economy into a fully fiat regime, printing money backed by nothing at an unprecedented pace.

Future historians and economists - if there is indeed a future at the end of this madness - will look upon this era as one of rampant money creation by policy-makers whose only aim is to keep the failed economies of developed nations in endless debt.

The idea that the Federal Reserve wishes to "normalize" interest rates is a laughable concept. Doing so would only facilitate the ballooning of debt everywhere, to utterly unplayable levels.

Enjoy the ride.

At the Close, Wednesday, January 10, 2018:
Dow: 25,369.13, -16.67 (-0.07%)
NASDAQ: 7,153.57, -10.01 (-0.14%)
S&P 500: 2,748.23, -3.06 (-0.11%)
NYSE Composite: 13,106.60, -14.24 (-0.11%)

Wednesday, January 10, 2018

Central Bank Resolve To Be Tested If China, Japan Break Ranks

In yesterday's post, reference was made to the backstopping of stock markets by the global cartel of central banks and how the aforementioned banks would not allow even the slightest decline on the main US indices.

True to form, Tuesday's trading was a textbook example of the central banking gambit, with the Dow Jones Industrial Average and S&P 500 making new all-time records, the NASDAQ and NYSE Composite tagging along.

About to be tested is central bank resolve and unity. Overnight, Japan has apparently decided to cut back on the purchase of long-dated treasury securities, and China has - according to unnamed sources (the preference of manipulators, provocateurs, and liars) - likewise decided to cut purchases of US treasuries by as much as five percent.

Being that Japan and China are he largest holders of US treasuries and at the same time partners in the global central bank ponzi scheme to keep fiat currency floating and stock brokers gloating, these developments - if found out to be the truth - could be inflammatory and possibly devastating to the value of stocks.

With the US markets set to open, futures are forecasting a negative open, though that alone will not ensure anything other than alerting the main buyers of equities - central banks - to be at the bid early and often.

At the Close, Tuesday, January 9, 2018:
Dow: 25,385.80, +102.80 (+0.41%)
NASDAQ: 7,163.58, +6.19 (+0.09%)
S&P 500: 2,751.29, +3.58 (+0.13%)
NYSE Composite: 13,120.84, +6.49 (+0.05%)

Tuesday, January 9, 2018

If 2017 Was Good, 2018 Should Be Better

Anybody who owns stocks or has a portfolio in a retirement fund, 401k or other equity-style investments is well aware of just how good 2017 was.

All indications are that 2018 will be just as good, and probably better.

There's a number of reasons for this prognosis.

First, it's more than apparent that global stock markets are now completely under the purview of the global elite central banks, and that this central banks are actively buying stocks, boosting the underlying asset prices in the process.

Second, after that, nothing really matters, since central banks can create money out of the ether, at will, any time, for any purpose. Economics has been flipped upon its head. Price discovery has been delegated to a function of the central banks, i.e, they set the prices. No fundamental analysis is needed, nor will it be valid.

Since the goal of central banks is to keep their money ponzi schemes intact via their various currencies - pound, dollar, euro, yen, yuan - and the stock markets are primary vehicles, there exists almost zero chance of stocks losing value over even the short term. A longer-term decline would be unthinkable as it would destroy the fiat money that central banks employ in their quest to continue their global finance monopoly.

Knowing all of that, there's no reason anybody should invest in anything other than stocks, or, for added assurance, an index fund which tracks the Dow, S&P, NASDAQ, or all three, weighted, or otherwise.

Stocks will never go down again, at least not for any extended period of time.

Just Buy The Dips.

At the Close, Monday, January 8, 2018:
Dow: 25,283.00, -12.87 (-0.05%)
NASDAQ: 7,157.39, +20.83 (+0.29%)
S&P 500: 2,747.71, +4.56 (+0.17%)
NYSE Composite: 13,114.35, +11.12 (+0.08%)

Friday, January 5, 2018

Huge Miss on December Non-Farm Payrolls Won't Trigger Sell the News Event

Stocks ripped higher on Thursday on pure hope and fumes, in anticipation of Friday's BLS release of December non-farm payroll data.

As mentioned in yesterday's post, the market has set itself up for a "sell the news" event, having already bought the rumor in the form of an incredible 250,000 December private jobs gain from ADP.

Being a case of which numbers should be trusted, investors will probably accept the BLS, being that it is the "official" number, despite the wild swings, methodology and revisions for which the data set is so famous.

On Friday morning, the BLS announced a gain of a mere 148,000 net new jobs in December, on expectations of 190,000, the lowest print since July 2017. [full release here]

The unemployment rate remained moored at 4.1%, a rather humorous figure, given that the BLS counts part-time jobs and working more than one day a week as a "job."

As of this writing, roughly 15 minutes prior to the market open, stock futures are higher, but well off the levels seen earlier this morning.

The expectation for stocks to sell off throughout the session, given that valuations have been stretched to unsustainable levels, will likely not materialize since prognosis is as much the stuff of smoke and mirrors as the algo-driven market itself.

At the Close, Thursday, January 4, 2018:
Dow: 25,075.13, +152.45 (+0.61%)
NASDAQ: 7,077.91, +12.38 (+0.18%)
S&P 500: 2,723.99, +10.93 (+0.40%)
NYSE Composite: 13,028.46, +71.18 (+0.55%)

Thursday, January 4, 2018

Caution Thrown To (Bitter Cold) Wind, As Investors Ignore Tech and Weather Threats

Across the board gains were the order de jour on the second day of trading in the new year.

As on Tuesday, the NASDAQ outpaced the other major averages, continuing its meteoric rise beyond the 7,000 mark with tech stocks leading the way despite an admission from Intel (INTC) that their chips have a serious flaw, affecting nearly all chips made by the company over the past ten years.

The world's largest chipmaker was not immediately taken to the woodshed and whipped, though shares of the company were down more than three percent and are off another one-and-a-half percent in pre-market trading on Thursday.

Rival chipmaker, Advanced Micro Devices (AMD), was the main beneficiary of the Intel news, its stock advancing more than five percent on the day, though it appeared that AMD chips are also vulnerable, though not to the same extent nor by the same exploits as Intel chips.

While the immediate impact may be slim, the long-term repercussions of this revelation may be significant. The world's major chip manufacturers may be facing a black swan event once hackers devise attacks that could legitimately effect computers and servers worldwide, for years.

Traders were not on the defensive, however, as the lure of early gains overwhelmed any concerns for troubles ahead, such as the massive snowstorm and bitter cold that is expected to affect most of the Northeast in days ahead. The storm - being called a Bomb Cyclone - is primarily focused off the Eastern coast of mainland North America, though New York, New Jersey, and Massachusetts were making preparations for a major winter weather event which has already bettered Southern cities such as Charleston, SC, and Savannah, GA.

The apparent complacency of equity speculators is somewhat confounding, given the potential for severe disruptions from weather and technology in coming days.

On the other end of the asset spectrum, precious metals responded to a slight rise in the dollar index, blunting a strong run for gold and silver over the past three weeks, though the selling seemed to be transitory, with the metals recovering early on Thursday morning as the dollar fell to fresh lows (91.933).

On Thursday morning, prior to the opening bell on Wall Street, ADP private payroll data for December showed a massive 250,000 job gain for the final month of 2017. While the AMD numbers are preliminary and subject to revision, they are sending a strong signal in advance of Friday's BLS non-farm payroll dataset for December.

With caution being thrown largely to the (bitterly cold) wind, Friday and/or Monday could be a day of "selling the news," or, as has been the case for the past nine years, the stock market rally will not be impeded by facts nor insinuations of negativity.

At the Close, Wednesday, January 3, 2018:
Dow: 24,922.68, +98.67 (+0.40%)
NASDAQ: 7,065.53, +58.63 (+0.84%)
S&P 500: 2,713.06, +17.25 (+0.64%)
NYSE Composite: 12,957.28, +54.55 (+0.42%)

Wednesday, January 3, 2018

Stocks Advance to Start 2018; Gold, Silver Rallies Continue

Stocks ramped higher at the opening of the first trading session of 2018, continuing a trend that carried equity investments to major gains in 2017.

At the same time, gold and silver continued their impressive three-week-old rally. Silver has been the out-performer of the pair, rising from a low of 15.67 per ounce on December 13 to 17.15 as of the close of trading in New York on Tuesday. Gold crested above the sticky $1300 level, finishing the day at 1317.10. It also bottomed out on December 13, dropping below 1240.90 on that date.

While there's certainly nothing unusual about stock gains, the rally in precious metals is raising some eyebrows and prompting talk of future Fed rate hikes and incipient inflation, which has been a false flag for eight years running.

On Wednesday, investors may get some indication of the Fed's intentions. Minutes from the December meeting - at which the Fed raised the federal funds rate for the third time in 2017 - are to be released during the session. Of particular interest is the discussion over rate increases and any dissenting opinion.

The Fed has made it clear that they intend to continue raising rates this year, with four increases of 25 basis points the proposed path. At the same time, the Fed will continue to unwind its bloated balance sheet, shedding billions of dollars worth of treasury bonds and mortgage-backed securities (MBS) and increasing the rate of disposal as the year commences. By October, the Fed is supposed to be dumping as many as $60 billion worth of notes, bills and bonds.

The combination of a general tax cut for consumers, a large tax cut for corporations, rising rates, bond dumping, and an improving economy suggests a formula for inflation, which is generally understood to be good for gold and silver, though the rise in precious metal prices may have more to do with currency debasement than a knee-jerk response to the economic climate.

At the Close, Tuesday, January 2, 2018:
Dow: 24,824.01, +104.79 (+0.42%)
NASDAQ: 7,006.90, +103.51 (+1.50%)
S&P 500 2,695.81, +22.20 (+0.83%)
NYSE Composite: 12,902.72, +93.88 (+0.7329%)