PPT To The Rescue, But For What Purpose?

Prepare for lower lows and lower highs.

It's long been maintained that central banks and/or governments should intervene in capital markets to keep people from panicking. That can also be read as "whenever stocks go down too much, too fast, we're here to protect our friends' investments."

For context, the Dow Jones Industrial Average was down more than 700 points today. It rallied to close with a minor loss. One problem. All other major stock indices around the world closed down between two and three-and-a-half percent. America is great, but not so great that it can avoid a global slowdown. Nefarious forces behind the scenes - much like the man behind the curtain in the Wizard of Oz - averted a major selloff. Globalism is ending, and with it, many multi-national stocks are going to be badly damaged.

That's what today's miracle late-day rally was all about, because if stocks lose value, the system falls apart. It's really that simple. For context, figure this: corporate buybacks have been at record levels the past three years. Corporations have been buying their own stock at a frenetic pace, at the highest prices. If stocks fall, these companies will be sitting on mountains of their own stock which they bought at ridiculously-high prices. When they are forced to sell to raise capital, they will be losing money on investments in their own companies.

It's not just stupid, it's corrupt to the core, and that, friends, is why stocks can't go down.

But they will.

For a little more context, consider that according to Dow Theory, the primary trend has changed again from bull to bear. More on this in a later post.

Caveat Emptor.

Dow Jones Industrial Average December Scorecard:

Date	Close	Gain/Loss	Cum. G/L
12/3/18	25,826.43	+287.97	+287.97
12/4/18	25,027.07	-799.36	-511.39
12/6/18	24,947.67	-79.40	-590.79

At the Close, Thursday, December 6, 2018:
Dow Jones Industrial Average: 24,947.67, -79.40 (-0.32%)
NASDAQ: 7,188.26, +29.83 (+0.42%)
S&P 500: 2,695.95, -4.11 (-0.15%)
NYSE Composite: 12,144.41, -77.57 (-0.63%)

Something To Do While Awaiting Speaking By Janet Yellen

Stocks were briefly lower, then higher, but finished split, almost even, for the day.

This is part of the effect of having globalists like Janet Yellen and the Federal Reserve controlling global economics. ON Monday, all of Wall Street is apparently waiting for the Fed Chairwoman's speech before congress on Wednesday and Thursday, or the release of the Fed's Beige Book of economic conditions on Wednesday.

Or the market is waiting for something else. Earnings, CPI, Industrial Production. It's always something, and it seems that the market is always waiting.

Over the past eight years this strategy has worked out pretty well for stock investors. Waiting has resulted in massive market gains over time, even though data has been less-than-splendid and often outrightly bad. That's where the "bad news is good news" meme came about: even though economic conditions were seen as negative, it was good for stocks because interest rates would remain low (making sure that stocks were the only game in town) and the free money from the Fed fountainhead would continue to flow.

Seriously, nobody is actually waiting for anything, no matter how much the TV and newspaper financial pundits like to propound on the topic. Investment decisions aren't exactly made based on data, at least not since the GFC. Stocks, and to a large extent, central banks and the Federal Reserve, have become disconnected from reality.

By almost all generally-accepted measures, stocks are overvalued. However, they remain the principal product of the Wall Street hucksters in terms of return. Bonds are returning little, and, if there is any appreciable inflation, they will return nothing in nominal value.

Stocks go up. They also go down. Some do better than others, but, to believe that the entire market is making a conscious choice to wait until Janet Yellen drools and stutters her way through her annual congressional hearings, is a monumental fraud in thinking.

Those who are buying are buying. The sellers are selling. Mostly, it's computers doing all the work and there's no good reason, presently, to make any meaningful changes in any meaningful portfolio.

At least that's what it looks like, but we'll wait and see.

At the Close, 7/10/17:
Dow: 21,408.52, -5.82 (-0.03%)
NASDAQ: 6,176.39, +23.31 (0.38%)
S&P 500 2,427.43, +2.25 (0.09%)
NYSE Composite: 11,751.79, -1.19 (-0.01%)

Globalism Is Dead And Dying At Davos

As the world prepares for a new American era to begin with the inauguration of Donald J. Trump as the 45th president of the United States, the global elites are gathered at Davos to interpret the condition of the world economy.

Ian Goldin, a professor of globalization and development at Oxford University spoke briefly at the World Economic Forum in Davos, Switzerland, saying,

“You can’t stop managing an entangled environment by disconnecting. This is the fundamental mistake of Brexit, of Trump, and of so many others. We are not simply connected. We are entangled. Our lives, our destinies are intertwined. What happens in China, what happens in Indonesia, what happens in India, what happens across Europe, and what happens in North America, across Africa and Latin America will affect all of us in dramatic new ways. The idea that somehow we can forge our future in an insular way, even for the biggest countries like the U.S., is a fantasy.”

Obviously, Mr. Goldin has been smoking too much of what he's been growing over the past couple of decades. To put it into a more precise perspective, Mr. Goldin kneels at the altar of globalization, thus, he's unprepared to express or even admit that there's any other opinion or world view than the one he personally promotes.

If one were living in a rural area in America, or India, or the Congo, even, the effects of global initiatives like those espoused and implemented by the people at Davos would be minimal, at best. One would still water plants, feed livestock, wash eggs, and perform all the other chores of a minimal farming/subsistence lifestyle. Mr. Goldin, being of the elitist character, has virtually no concept of digging holes for posts, erecting fences, germinating seed, slaughtering hogs, gathering chicken eggs daily, and so on. He's about as disconnected from the reality of everyday life as one could possibly be, viewing the world from his ivory tower at Oxford as he glances up briefly from his reading of some other obviously clueless professor emeritus or other "authority" whose mantra to which he subscribes.

Therefore, as we've seen in the Brexit movement and the election of Donald Trump as the next president of the United States of America, the globalist agenda is dead in the water, disconnected and disintegrating. The annual fete at Davos - through the media filter, at least - gives everyone an opportunity to see firsthand just how audaciously and vigorously the gathered elitists continue to promote their agendas. Liberalism, diversity, and globalism are all joined together into a kind of religion of the rich and powerful, but, the masses need not adhere to what is looking increasingly like failed policy.

If globalism has taken thirty or forty years to expand itself into monstrosities such as the European Union, the Arab Spring, and unadulterated acceptance of gay marriage, it's likely going to take an equal amount of time to dismantle its various parts and replace them with more stable value systems. As the globalists retreat from their worn-out traditions and values, popular uprisings will accelerate the decline. It starts, as do all major moral or political or economic upheavals, on the fringes of society, in the hinterlands, so to speak, before spreading to all ranges of the spectrum, from old to young, from the countryside to the cityscape.

We are at the beginning of a new age, one which promises the demise of authority at all levels from local to supranational and more freedom for the working classes and ordinary citizens.

On cue, one day before the actual inauguration of the man all the "experts" said had no chance of winning, Donald Trump, world markets continued a dizzy dance of denial and suspense, especially the Dow Jones Industrial Average, which spasmodically descended today to a point below where it began the year, closing at its lowest level since Decemeber 30 of last year (19,732.40, -72.32 (-0.37%)).

Though the drop in percentage terms was hardly sensational, the level is of more immediate concern. Since December 12, the intraday level never fell below 19,718, the mark made on the final day of trading for 2016, December 30.

While broader indices, the S&P 500 and the NASDAQ, retained a positive tilt for 2017, it has been the Dow that garnered the most attention of late, especially over its historic (failed) attempt to crack the 20,000 level.

With Trump taking the oath of office at noon tomorrow, the question on every trader's mind is how the markets will respond. With a whimper or a yawn, or might the Dow set aim again for an historic close?

At The Close 1.19.16:
Dow 19,732.40, -72.32 (-0.37%)
NASDAQ: 5,540.08, -15.57 (-0.28%)
S&P 500: 2,263.69, -8.20 (-0.36%)
NYSE Composite: 11,151.69, -44.41 (-0.40%)