Fearless Rick Called The Bear Market; Contributing To A Fund? You Are A Bag-Holder

There are very few people who ascribe to the discipline of Dow Theory.

I, Fearless Rick, am one of them. I am also the only person I know who has read Adam Smith's "The Wealth of Nations," and I am currently re-reading sections of that lengthy tome because it's important to understand.

I'm making these statements not to blow my own horn, but to point something out that readers of this blog and the millions of non-readers should acknowledge.

When I wrote this post on April 9, I had complete confidence in what I was delivering. There were no caveats, what-ifs, or other murky scenarios by which I could hedge my declaration that the bull market in stocks was over and that the next 18 months to three or four years would be losers for stock holders.

It's nearly a month later - and three months since the Dow Jones Industrial Average topped out at 26,616.71 (sorry, that number has been hard-wired into my brain) on January 26 - and nothing has changed. Stocks are still hovering between their 50 and 200-day moving averages. In fact, since the Dow Transports confirmed the bear market, the Dow Industrials are up - as of today's close - a whopping 184 points, a gain of less than one percent over the past 15 trading days.

Thus, I am here to say that it sure looks like I nailed it, called it, that I'm absolutely right. This is a bear market, and it will be a bear market until the Dow Industrials find some bottom and the Dow Transports confirm the primary trend change back to the bullish side.

And I will tell you when that happens and not a moment sooner.

I'm pointing this out because I've grown a little bit weary of toiling in obscurity while outright frauds like Dennis Gartman get to bloviate on CNBC in stultified language how "we" erred on the bullish side, or how he's "long gold in yen terms," or other such nonsense. He is getting paid to tout garbage. I get nothing, not even faint praise, when I'm absolutely right, 100%.

OK, so maybe I'm having a little hissy fit here, but I'm not going to lower my voice, nor am I going to stop speaking my mind, making my calls and writing this daily blog. My reward is out there somewhere, I just hope I get some of it before I get to heaven.

As for today's action in the markets, it was the same old saw that I've been commenting upon in previous blogs: up at the open, then a long, slow decline into the red, a typical and obvious chart pattern that the mainstream media will not ever acknowledge because they and their Wall Street banker masters want you to continue contributing to their ponzi schemes, at your own peril.

Fund holders will be the eventual bag-holders of this bear market. They'll lose anywhere from 30 to 60% of their portfolio if they don't reallocate their investments out of growth stocks and ETFs and into something more sustainable, whatever that may be. Bonds are probably a good spot as yields are rising. Commodities may not be bad, depending on the asset mix. Cash is more than likely to be king. You can send me some by clicking here.

We are entering a period in which it is more important to preserve capital than risk it and hope for gains. Hope is not an investment strategy. Watching your magic fund sink month after month is not pleasant, and being a bag-holder while the smart money runs for the exits is not what any rational person would do.

As anyone can clearly see, after taking losses in February and March, the Dow Jones Industrial Average finished with a gain of 50.81 points. That's not a gain, that is a rounding error, a pimple, a dot. It didn't even beat inflation. You lost money over time.

Get out, reallocate, or die.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21
4/25/18	24,083.83	+59.70	-28.51
4/26/18	24,322.34	+238.51	+210.00
4/27/18	24,311.19	-11.15	+198.85
4/30/18	24,163.15	-148.04	+50.81

At the Close, Monday, April 30, 2018:
Dow Jones Industrial Average: 24,163.15, -148.04 (-0.61%)
NASDAQ: 7,066.27, -53.53 (-0.75%)
S&P 500: 2,648.05, -21.86 (-0.82%)
NYSE Composite: 12,515.39, -78.64 (-0.62%)

Weekend Wrap: If This Isn't A Bear Market, Then What Is It?

Is this a bear market?

Nobody wants to admit it, but the patterns are clear on the charts.

In the most recent week, all of the four major averages displayed the same kind of market action throughout, all ending in the red, from the Dow's 0.62% loss to the S&P's narrow, 0.01% decline.

All four are currently trading between their 50 and 200-day moving averages.

It's been three months since the averages made new highs, which just happened to be all-time highs, occurring more than nine years into the second-longest expansion in market history.

Even though the indices are not at correction levels (-10%), they are close, and the argument that a bear market is defined as a 20% drop is begging the question to a large degree. In the case that investors want to wait until stocks are another 10% lower, it will mean that the smartest investors got out early and those remaining will be eventual bag-holders, losing anywhere from 35-60% of their investments as the bear matriculates to lower and lower levels.

Since Dow Theory has confirmed bear market conditions, only the most hopeful or ignorant traders will cling to the belief that those all-time highs made three months ago will be surpassed somewhere down the road. The closing high on the Dow is 26,616.71, made on January 26. A rally of more than 2300 points would be needed to get back to that level.

Does anybody in their right mind see that happening?

Presidents of the various Federal Reserve System regional banks may try to make a case that the economy is strong and still growing, despite evidence to the contrary and their overwhelming desire to raise rates in the face of obviously weakening data.

Friday's first estimate of third quarter GDP might have been the straw that broke the back of the Fed's narrative, coming in below consensus guesses at a depressing 2.3%. When one backs out inflation and considers that almost all of the contributions to GDP - consumer, business, and government - are based on borrowed money, i.e., debt, the real GDP figure might be somewhere closer to -2.3%, consumer and business debt beginning to grow beyond sustainable levels, while government debt is already well past that point at $21 trillion.

There is little doubt that this is indeed a bear market and the flattening of the treasury interest rate curve is more evidence that a recession is just around the corner. Raising rates at this juncture - which the Fed plans on doing again in June - will only exacerbate an already stretched situation and actually contribute to causing the very recession the Fed wishes, publicly, to avoid. In truth, behind closed doors, the Fed presidents and governors of the FOMC know full well that a slowdown is coming, not just for stocks, but for the general economy. That's why they are in such a rush to raise rates: because they need the additional ammunition of being able to reduce rates when the recession comes.

Investors have had sufficient time to reallocate funds to safe havens. Sadly, the bulk of investments are held by pension and other funds, and the bag-holders are going to eventually be the millions of working people whose investments and livelihoods are inextricably tied to the market with little opportunity to allocate funds correctly nor the ability to leave the market completely.

Life has its ups and downs, and its fair share of joy and pain. The joy of the past nine years is about to be eclipsed by the pain of 2019-2022, a bear market and deep recession that will reveal - to some - the true state of the US and global economy, one that has been built on debt, low interest rates, non-stop issuance of fiat currency, stock buybacks, manipulation, and shady practices by the world's central banks.

Forewarned is forearmed.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21
4/25/18	24,083.83	+59.70	-28.51
4/26/18	24,322.34	+238.51	+210.00
4/27/18	24,311.19	-11.15	+198.85

At the Close, Friday, April 27, 2018:
Dow Jones Industrial Average: 24,311.19, -11.15 (-0.05%)
NASDAQ: 7,119.80, +1.12 (+0.02%)
S&P 500: 2,669.91, +2.97 (+0.11%)
NYSE Composite: 12,594.02, +11.12 (+0.09%)

For the Week:
Dow: -151.75 (-0.62)
NASDAQ: -26.33 (-0.37%)
S&P 500: -0.23 (-0.01%)
NYSE Composite: -13.13 (-0.10%)

Facebook Helps Wall Street Rally; Amazon Posts Monster 1Q Surprise After Close

Facebook's (FB) blowout earnings were enough to propel markets forward for the day, but after the bell Amazon (AMZN) made serious noise when it absolutely crushed expectations, earning, in the first quarter, $3.27 per share on $51 billion in revenues for the quarter. Analysts had expected $1.27 per share on revenues of $49.96 billion. In the same quarter last year, earnings were $1.48 per share on $35.7 billion in revenue. Amazon was trading more than six percent higher in after-hours trading.

It's plain to see that Jeff Bezos of Amazon has taken internet technology and employed it to maximum capitalization. Traditional brick and mortar retailers have been failing and falling faster than the price of used shoes.

Amazon's monster quarter, combined with Friday's first estimate of first quarter GDP should be enough good news for a significant upside to close out the week. The timing could not have been better for the pushers of stock certificates, because February and March were down months for the Dow and other averages, and a third straight month of losses might have opened the selling floodgates wide.

With just two trading days remaining for the month, it's a safe bet that April will end in the black on the Dow, holding off, if only temporarily, the eventual sell-off everybody knows is coming. The Dow continues to wallow roughly 2000 points below the all-time high from January 26 (26,616.71). Expect the rally that started yesterday to continue into May, for a week or two. It should be good for 1000 Dow points at the minimum before it's exhausted. Look for pivot points upon which to place short bets, play puts or sell call options.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21
4/25/18	24,083.83	+59.70	-28.51
4/26/18	24,322.34	+238.51	+210.00

At the Close, Thursday, April 26, 2018:
Dow Jones Industrial Average: 24,322.34, +238.51 (+0.99%)
NASDAQ: 7,118.68, +114.94 (+1.64%)
S&P 500: 2,666.94, +27.54 (+1.04%)
NYSE Composite: 12,582.90, +65.04 (+0.52%)

Stocks' Bounce Not Very Convincing; Bears Taking Control Of Market Sentiment

The Industrials ended a five-session losing streak on Wednesday, but, as dead cat bounces go, it didn't even register on the Boo-Boo Kitty scale, leaving the Dow Jones Industrial Average in the red for the month of April and still within whistling distance of correction territory (23,954).

If it hasn't become obvious to just about everyone on Wall Street that stocks are in some serious trouble after nine years of relentless stock buybacks and jerking up by Fed policies of ZIRP and QE, it should be quite clear now. With earnings season winding down, there's going to be nothing with which to prop up stocks - other than the usual central bank manipulation and other wily shenanigans - from the first week off May until the next FOMC meeting in June.

Stocks and the Fed are playing a dangerous game of chicken. If the Federal Reserve insists upon its path of raising interest rates every three or four meetings, stocks are going to tank. From the Fed's point of view, it probably doesn't matter what they do in the interest rate scheme, since they consider the business cycle to be at an end. That kind of thinking gives them full reign to raise rates, crash the markets, send the economy into recession (late 2018 or early 2019), so that they have sufficient ammunition to battle the downturn they created. It's a sickening policy from the prior century that badly needs replacing in the 21st.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21
4/25/18	24,083.83	+59.70	-28.51

At the Close, Wednesday, April 25, 2018:
Dow Jones Industrial Average: 24,083.83, +59.70 (+0.25%)
NASDAQ: 7,003.74, -3.62 (-0.05%)
S&P 500: 2,639.40, +4.84 (+0.18%)
NYSE Composite: 12,517.86, +3.87 (+0.03%)

Stocks Tumble As Investors Flee Overvalued Stocks

Today was yet another example of the kind of days which are typical in a bear market, and make no mistake, this is the early phase of what could become a raging bear which will strip stocks of 40-60% of their valuations. Stocks were higher in the early trading and slumped in the afternoon, with the Dow Industrials closing at its lowest level in three weeks.

With today's losses, the Dow has plunged into negative territory for the month, following back-to-back declines for February and March. Even earning reports are not enough to keep stocks elevated, especially after Alphabet (parent of Google, GOOG) posted what appeared to be strong numbers only to reveal increasing expenses, crushing profit margins.

Dow component 3M (MMM) led the decline after posting earnings per share of $2.50, which missed analyst estimates of $2.52, and were 16% higher than the $2.16 posted in the year-ago period. The stock was blasted, losing 14.77 points (-6.84%) to end the day at 201.11.

Caterpillar was close behind in the loss column, down -9.80 points (-6.36%).

Alphabet dropped a stunning -47.47 (-4.45%) to close out the session at 1,019.98.

Only six of 30 Dow stocks managed gains on the day. The NASDAQ and other major indices were also badly damaged.

The prevailing trend this earnings season has been that whatever a company posts, it's probably not good enough for anybody seeking to get out of a position, as risk aversion has suddenly become popular once again, especially with yields on the ten-year-note approaching three percent and precious metals (gold, silver) at bargain basement prices.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35
4/24/18	24,024.13	-424.56	-88.21

At the Close, Tuesday, April 24, 2018:
Dow Jones Industrial Average: 24,024.13, -424.56 (-1.74%)
NASDAQ: 7,007.35, -121.25 (-1.70%)
S&P 500: 2,634.56, -35.73 (-1.34%)
NYSE Composite: 12,513.91, -96.87 (-0.77%)

Stocks Pop, Then Drop As Commodity Rally Is Killed By Advancing Dollar

According to the Dollar Index, the value of the US Dollar improved dramatically on Monday against a basket of other major currencies. Exactly why this occurred is unknown, since the US dollar has been bleeding out for the better part of the past 16 months, stopping from a high of 105 in December 2016 to as low a 89.10 earlier this year.

From Sunday night through the opening of the stock markets on Monday morning, the dollar was improving at a rapid rate, shooting past 91.00 just prior to the opening bell.

That sudden move sent precious metals into free-fall, and oil down sharply as well. Stocks seemed to be sympathetic to the move at the start of trading, but, by midday the love affair was souring, and stocks retreated through the afternoon session, closing flat for the day.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60
4/23/18	24,448.69	-14.25	+336.35

At the Close, Monday, April 23, 2018:
Dow Jones Industrial Average: 24,448.69, -14.25 (-0.06%)
NASDAQ: 7,128.60, -17.52 (-0.25%)
S&P 500: 2,670.29, +0.15 (+0.01%)
NYSE Composite: 12,610.77, +3.62 (+0.03%)

Weekend Wrap: Friday Fumble Leaves Stocks With Minor Gain For Week, Month

Hammered lower on Friday, stocks across the spectrum finished out the week holding relatively minor gains with the Dow Scoreboard showing a 350-point advance for the month.

On a percentage basis, the Dow Jones Industrial Average (^DJIA) was the weakest performer of the major indices with a gain of just 0.42%. After winning moves on Monday and Tuesday, stocks traded to the downside the final three days of the week as solid earnings failed to allay fears that the nine-year-old bull market had topped out in January and that any gains at this juncture might be wiped away in another cascade to the negative.

Ever-hopeful investors were still buyers, though volumes have diminished over the past few weeks as some seek the safety of bonds or more defensive positions in stocks.

A three-day losing streak to close out the week does not auger well heading into the final full week of trading on US markets. With February and March both ending in tears for the bulls, Monday's trading will likely set the tone for the remainder of the week and the month. If April's early strength continues to fade, the sight of three consecutive losing months for equity investors could turn the mostly orderly selling into more panicked disposal of assets.

While it would be folly to predict even one days' movement, the general direction may have already been established. With a downward tilt and the majors clinging to the 50-day moving average across the spectrum, it may be easier to call the market direction for the next three to six months. In conditions such as those present and the markets entering what are traditionally slow months, betting on sideways to lower could prove to be the prescient strategy.

After April, earnings flow will diminish from a steady stream to a trickle, with most of the important companies (banks, techs) having already reported, leaving a void and a downside bottom that will almost surely be tested within the next 30-60 days. June's FOMC meeting also looms largely, like a debt shadow overhanging already overpriced stocks. With the Fed determined to raise interest rates again, the threat of higher borrowing costs choking off the nascent growth theme is becoming more and more real.

Elsewhere, treasury bonds were on the move again, with yields on the 10-year-note approaching three percent by week's end. Also getting considerable notice is the commodity complex, led by oil, as prices for WTI crude reaching three-year highs, taking precious and base metals along for the ride to the upside. So important is the price of oil and gas that the president tweeted about it on Friday morning, putting a temporary cap on gains with his fiery comments.

As President Trump and others in the financial community know all too well, higher gas prices act as a tax on the American consumer and could do significant harm to the economy since nearly 70% of GDP is based on consumer spending. If the bulk of the money from the tax cuts recently passed go directly into gas tanks due to higher prices, there's little left to spend on other things, and that's also a real concern.

The week ahead should focus on oil and commodities. Any further upside to the price of crude oil could be seen as very damaging, though bulls in the precious metals arena are champing at the bit for an overdue breakout from the recent dismal price range.

All things considered, stocks seem somewhat imperiled by potentially better opportunities elsewhere and the continuing debate over whether the bull market has topped. The longer the Dow shies from the January 26 highs (26,616.17) the more compelling the case becomes for those calling this the beginning of a painfully episodic bear market.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55
4/20/18	24,462.94	-201.95	+350.60

At the Close, Friday, April 20, 2018:
Dow Jones Industrial Average, 24,462.94, -201.95 (-0.82%)
NASDAQ: 7,146.13, -91.93 (-1.27%)
S&P 500: 2,670.14, -22.99 (-0.85%)
NYSE Composite: 12,607.16, -64.32 (-0.51%)

For the Week:
Dow: +102.80 (+0.42%)
NASDAQ: +39.48 (+0.56%)
S&P 500: +13.84 (0.52%)
NYSE Composite: +61.11 (+0.49%)

Stocks Slide As Commodities Hold Gains

Stocks stumbled as oil, silver, zinc, and copper held tenuously to recent gains as market participants were spooked by Apple and found earnings of other companies to be good, but not great.

Thus, the churn of the market continued, with many traders going into protective mode, not willing to risk much in a market that appears to have turned from bull to bear. Analysts across the financial landscape continue to argue both sides, some convinced that the recent market dip is nothing more than a needed correction, while others suggest that a hard look at the charts and outside financial data reveals a bear market and a struggling economy based mostly on noise, hype, and hope.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73
4/19/18	24,664.89	-83.18	+552.55

At the Close, Thursday, April 19, 2018:
Dow Jones Industrial Average: 24,664.89, -83.18 (-0.34%)
NASDAQ: 7,238.06, -57.18 (-0.78%)
S&P 500: 2,693.13, -15.51 (-0.57%)
NYSE Composite: 12,671.48, -61.37 (-0.48%)

Oil, Silver Lead Commodity Charge As Stocks Languish

James Comey, Andrew McCabe, Loretta Lynch, and yes, Hillary Clinton were cited in a letter from 11 Republican members of the US House of Representatives requesting the Department of Justice to open criminal investigations on those and others.

While that news was and is still hardly being reported in the mainstream media, these potential criminal referrals may auger a turning point in the quiet coup attempt that has swallowed up most of Washington DC and harassed the Trump White House from day one of his presidency through the Mueller probe.

Interestingly, anything even remotely related to wrongdoing by the president gets front page, bleeding headlines from the usual fake news sources, but, when Democrats or Hillary loyalists are involved, crickets. It will be up to DOJ head Jeff Sessions to determine if investigations and indictments are in order. By the body language of the ongoing swamp fight, he will go after the people who went after President Trump.

On the equity markets, it was a day of churning stocks and stomachs as the Dow Industrials hugged the unchanged line all day, while the NASDAQ and S&P 500 rode higher midday but had weak closes, suggesting that tomorrow and possibly Friday - which is stock options expiration day - may not be so robust. The likely causes of the sudden sluggishness in stocks could have been the Fed's Beige Book, released today, in which a majority of participants expressed concerns over President Trump's proposed tariffs, or the fear that the above-referenced referrals resulting in indictments, earnings that were good but not good enough, or, the relentless rise in the price of oil, which has now been joined by precious metals and other hard commodities, notably copper and zinc.

WTI crude oil, which not six months ago was trading below $50, spiked today beyond $68 per barrel, the highest price in 2 1/2 years. Silver was on fire today, rising well over the $17/ounce mark to finish the day in New York at $17.20. Gold had a more-subdued gain, but copper and zinc have been quietly building momentum over the past few weeks.

A spike in commodity prices signal two things, neither of which are necessarily good for stocks, and they could indeed be bad. First, a surge in commodity prices signals inflation at the base of the economy (also, lumber is, and has been very expensive for a while) and it also notes investors seeking safety, away from riskier assets, like stocks. On the downside for everybody, high oil prices translate to higher prices at the pump, which eventually damages consumers, much like an additional tax. Higher energy costs harm all kinds of industries as well.

If oil continues to rise and pull the rest of the commodity complex along could shape trading in stocks over the coming weeks and months. While its too early to call it a trend, silver has been set to break out for months, and is currently at a 2 1/2 month high.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29
4/18/18	24,748.07	-38.56	+635.73

At the Close, Wednesday, April 18, 2018:
Dow Jones Industrial Average: 24,748.07, -38.56 (-0.16%)
NASDAQ: 7,295.24, +14.14 (+0.19%)
S&P 500: 2,708.64, +2.25 (+0.08%)
NYSE Composite: 12,732.85, +27.09 (+0.21%)

Stocks Continue Rising As Geo-Political Tensions Ease, January Top Still Distant

The Dow Scorecard shows strong gains for April, yet a long way from returning to all-time highs set on January 26 of 26,616.71. Etch that number into your brain. In the near term, for all intents and purposes, as long as the Dow remains below that level, you should consider this a bear market.

Longer term, the market will resolve the issue. If the Dow makes another fresh low below the one put in on February 8 (23,860.46) or March 23 (23,533.20), it's near 100% certainty that this is a bear market. It's important to be positioned correctly, but at the present time, many traders are confused. Even some followers of Dow Theory, which confirmed a primary trend change to bear market conditions on April 9, are not convinced. All manner of arguments have been made, calling the confirmation false, due to extraordinary conditions, such as President Trump wanting to bomb Syria.

Such talk is pure hubris and rubbish, not worth the breath to speak of in real analytical terms. Geo-political risks are always paramount in markets; the current condition is nothing out of the ordinary.

For the present, this is a bear market and the recent gains, even if they run for days and weeks, are to be considered exit points for those who are still engaged in the equity game. Bonds, cash, tangible goods are preferred at this time.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70
4/17/18	24,786.63	+213.59	+674.29

At the Close, Tuesday, April 17, 2018:
Dow Jones Industrial Average: 24,786.63, +213.59 (+0.87%)
NASDAQ: 7,281.10, +124.81 (+1.74%)
S&P 500: 2,706.39, +28.55 (+1.07%)
NYSE Composite: 12,705.76, +77.55 (+0.61%)

Retail Sales Improve In March, Stocks Respond

Apparently, Amazon hasn't killed all of Main Street just yet.

After three straight monthly declines, US retail sales rose in March by 0.6%, beating consensus forecasts, with Americans spending more on big-ticket items.

Following a drop of 0.1% in February and a revised -0.2% in January, consumers stepped up to the plate in March, boosting hopes that the economic expansion would continue. Year-over-year, retail sales improved by 4.5%.

While those figures are encouraging, they're likely not much more than inflation, which, depending on where one resides and what one spends money upon, could be as high as 6-8% according to anecdotal reports. Other, more frugal consumers routinely report lower costs for food, though rent, gasoline, mortgage interest, health care, education, and taxes in general have been on the rise.

On the earnings front, Bank of America reported smashing numbers, with EPS up 51% to 62 cents a share versus the prior quarter. Adjusted revenue rose nearly four percent, to $23.1 billion, but the stock barely budged on the news, up just 13 cents (0.44%) to 29.93. While banking is back to being less risky after washing out all the bad debt from the sub-prime catastrophe, investors are still skeptical of the large banks, especially after revelations of many misdeeds at Wells-Fargo.

Banks like JP Morgan Chase, which has a better focus on wealth management, have fared better than standard retail operations such as BofA.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80
4/16/18	24,573.04	+212.90	+460.70

At the Close, Monday, April 16, 2018:
Dow Jones Industrial Average: 24,573.04, +212.90 (+0.87%)
NASDAQ: 7,156.28, +49.63 (+0.70%)
S&P 500: 2,677.84, +21.54 (+0.81%)
NYSE Composite: 12,628.21, +82.16 (+0.65%)

Stocks Close Out Week on Sour Note, But Still Post Weekly Gains

For the superstitious, Friday the 13th was not a disaster, but it wasn't particularly pleasant either, as stocks spent the entire session underwater, unable to follow through on gains from the previous day.

The up-and-down, give-and-take between bulls and bears has been a feature of the equity markets since late January. Thus far in April, the Dow has finished with gains in six session, closing down in four. An overview of the market presents a picture of a market without direction, as geo-political events, fundamental conditions, and economic data collide.

Being the middle of earnings season, the bulls appear to have at least a short-term advantage, especially since the US - along with France and Great Britain - chose to launch targeted attacks on Syria late Friday, giving markets ample time to digest the ramifications, which, at this point, appear limited.

Heading into the third full week of the second quarter, earnings from top companies will provide the catalyst for traders. There's a widely-held assumption that companies are going to put up good - if not great - first quarter reports, aided by tax benefits from the overhaul provided by congress and the president in December.

This would be a good week to take account of positions and perhaps take some profits off the table. Markets tend to be a little less volatile and generally trade higher during earnings seasons.

There isn't a FOMC rate policy meeting during April, and the May 1-2 meeting is probably going to result in no action being taken. The next Fed-driven stock market move won't be until the June 12-13 affair, when the Fed is expected to raise the federal funds rate another 25 basis points. While it doesn't sound like much, it will be the seventh such hike since the Fed got off the zero-bound in December 2015. It will push the rate to 1.75-2.00%, a significant figure sure to have an impact not only on stocks, but on the finances of individuals, families, businesses and governments.

Presently, this is the proverbial calm before the storm.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71
4/13/18	24,360.14	-122.91	+247.80

At the Close, Friday, April 13, 2018:
Dow Jones Industrial Average: 24,360.14, -122.91 (-0.50%)
NASDAQ: 7,106.65, -33.60 (-0.47%)
S&P 500: 2,656.30, -7.69 (-0.29%)
NYSE Composite: 12,546.05, -34.17 (-0.27%)

For the Week:
Dow: +427.38 (+1.79%)
NASDAQ: +191.54 (+2.77%)
S&P 500: +51.83 (+1.99%)
NYSE Composite: +196.94 (+1.59%)

Blackrock, Delta Boost Stocks; Dow Gaining Momentum As Syria Threat Fades

26,616.71

That's the only number any macro investor needs to know. That was the January 26 all-time high on the Dow.

Since that time, the world's most widely-followed stock index has fallen on some lean times, and getting back to its level days of glory isn't going to be easy, if at all possible over the near term.

Today was an effort to allay the fears of those looking at their 401k statements from the first quarter, which showed losses, possibly, for many, for the first time in years, perhaps as long as nine years.

Stocks continued to ramp higher throughout the day without any discernible news other than the usual flow of corporate earnings reports, most of which were positive, and the thought that President Trump won't actually send missiles into Syria. The tail is truly wagging the dog on this one.

The gain today on the Dow was close to 300 points. Putting that in perspective, if the Dow was to go straight up at the rate of 300 points per day, it would only take seven trading days to get back to the all-tme high.

But, how likely is that?

Not very.

What is likely is that the Dow will continue to gain through the month, as corporate earnings continue to fuel a rally, as visceral and fleeting as that may be. Something negative will come along to upset the status quo, as it usually doesn't, but investors are keen to ignore the negative and trade on the positive. That's because everybody likes to be positive, whether the reality supports it or not.

Examining a couple of representative corporate earnings reports, Delta (DAL) and Blackrock (BLK) stood out, both reporting before the bell.

Delta gained 74 cents per share, down from 77 cents a year ago. The stock gained 1.51 points (+2.93%). That's some wishful thinking there. The company is in the midst of a $5 billion stock repurchase, begun just over a year ago and scheduled to be completed by 2020. Putting this most-recent quarter in perspective, the company's EPS would be declining if the number of shares outstanding had held steady.

Blackrock was expected to hit 6.39 per share. The New York-based company's net income rose to $1.09 billion, or $6.68 per share, in the first quarter, up 28 percent from the year-ago period.

Adjusted for special items, BlackRock earned $6.70 per share. They have money (yours) and know how to put it to good use. The stock was up 7.70 (+1.47%) on the day. Blackrock executives - including CEO Larry Fink - are Washington and Fed insiders, expert at employing the most extreme accounting tactics, thus making up extraordinary investment opportunities. They are hardly saints, but they are well-protected.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11
4/12/18	24,483.05	+293.60	+369.71

At the Close, Thursday, April 12, 2018:
Dow Jones Industrial Average: 24,483.05, +293.60 (+1.21%)
NASDAQ: 7,140.25, +71.22 (+1.01%)
S&P 500: 2,663.99, +21.80 (+0.83%)
NYSE Composite: 12,580.22, +65.63 (+0.52%)

Stocks Continue See-Saw Movement After Outrageously Mindless Fed Minutes

As mentioned yesterday, sharp one-day gains (Dow was up 428 points on Tuesday) should be discounted, since a clear sign of a bear market was issued by the Dow Transportation Index on Monday.

That should be the overriding theme with any and all sharp moves higher (+1.00% or more), or, in more pedestrian terms, we've moved from Buy The Dip to Sell The Rip because there is little confidence amongst traders at this juncture.

Since this is also the heart of earnings season, expect some individual stocks to outperform and those with influence may help carry the market higher. Consensus is for very strong first quarter earnings reports and there is little reason to believe that they won't be good, though probably not as good as many are hoping.

From today's activity, it's clear that there is no follow-though on commitments by traders as the major indices were uniformly in the red today. The Dow Industrials are now clinging to a mere 76-point gain for the month, barely out of correction territory, following a first quarter that was a loser. Prospects for a second quarter rebound in the stock market appear to be increasingly slim and built on false hope from an equally false narrative.

It's also quite evident that the Federal Reserve System presidents and FOMC governors are either blind, stupid, or deceitful, because in the minutes from the March meeting - released today - they were unanimous in their opinion that the economy was improving and that inflation was growing when the actual condition only mildly supports either viewpoint. Outside the rose-colored offices of the Eccles Building it's easy to see a squeezed middle class, cities that are beginning to look more like third-world sh--holes, complete with tent encampments, than the modern, urban paradise the Fed imagines.

Additionally, with individuals and families tapped out and heavily in debt, price pressure is almost nowhere to be found, except at the gas pump and the local, state, and federal tax offices.

The economy is made of mostly smoke and mirrors, built on mountains of debt.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66
4/11/18	24,189.45	-218.55	+76.11

At the Close, Wednesday, April 11, 2018:
Dow Jones Industrial Average: 24,189.45, -218.55 (-0.90%)
NASDAQ: 7,069.03, -25.27 (-0.36%)
S&P 500: 2,642.19, -14.68 (-0.55%)
NYSE Composite: 12,514.62, -51.35 (-0.41%)

Trends Take Time; Why Tuesday's Sharp Gains Should Be Discounted

Less than 24 hours after making the bold proclamation that the bull market was over, Wall Street traders seem to disagree, sending the Dow Industrials up nearly 400 points at the open, with the Transportation Index cruising 130 points to the upside when the bell rang to start trading.

Days like this are precisely why investing is a longer-term proposition. Markets can turn on a dime, on a word from some prominent investor (see: Warren Buffett), a Fed President, a presidential tweet or even something more innocuous, like the trade balance (a new record, ignored), or jobs data (a bad miss on Friday, not ignored).

It's imperative to maintain perspective and not question what your own eyes told you a day ago, a week ago a month ago. In fact, for the Dow Theory components to finally trigger a sell signal took nearly three months from start to finish, all that time merely suggesting something ominous, before finally saying, "yes, here it is."

Tuesday's massive bounce contained no earth-shattering qualities in and of itself. The way the markets have been performing of late, one could hypothesize an equally violent downturn on Wednesday, Thursday, or Friday, though it appears the bulls are discounting the Dow Theory as a false flag for now. One wonders what the perma-bulls will be eating come June - steak tartar or boiled crow?

Instead of taking a short-term approach and admitting one was/is wrong, it's likely a better plan to look back at the charts and see exactly where the Dow Jones Industrial Average has to go before making a judgement on the efficaciousness of Dow Theory. I's a simple number: 26,616.71, the high from January 26, and the Transportation Index would have to close above 11,373.38, the all-time high from January 12.

Those numbers are far away, so the test will come over the coming weeks of earnings releases, when Wall Street and the financial news-speakers on CNBC, Bloomberg, and Fox Financial Network will be falling over each other to proclaim the greatness of the latest "beat." Bear in mind that all of these funny numbers coming out over the next three weeks, especially the EPS (earnings per share) figures, have all been manipulated by stock buybacks, diluting the number of shares outstanding, and in many cases, by lowered expectations by analysts. The true comparisons can be found from year-ago EPS (i.e., growth) and gross revenue numbers.

So, despite the snorting of the bull for a day, reserving judgement on a dead-cat, one-day wonder of a rally may be not only prudent, but prescient.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01
4/10/18	24,407.86	+428.76	+294.66

At the Close, Tuesday, April 10, 2018:
Dow Jones Industrial Average: 24,407.86, +428.76 (+1.79%)
NASDAQ: 7,094.30, +143.96 (+2.07%)
S&P 500: 2,656.85, +43.69 (+1.67%)
NYSE Composite: 12,575.63, +195.08 (+1.58%)

It's OVER! Dow Transports Confirm Dow Theory Primary Trend Change Bull to Bear

Right off the bat, here's the theme for today's trading: Frankie Valli and the Four Seasons 1964 hit, "Dawn."



For the uninformed, today's epic pump-and-dump collapse on all the major indices was more than just "the usual." It was, simply put, a day to be marked in financial history, the day the most phony, contrived and manipulated bull market that ever existed, died an overdue death and gave birth to a bona fide bear market, something most of today's millennial day-trading demons have never experienced.

Why would the death of a bull market and the beginning of a bear market be something suitable for celebration?

Good question.

Here's an even better answer: because the bull market, which started March 9, 2009 - nine years and one month, to the day - was one built on fumes and Fed happy talk, endless fiat money printing, rounds and rounds of Quantitative Easing (QE), artificially low interest rates approaching zero (ZIRP) and corporate stock buybacks of unprecedented quantity. Almost nowhere was there a single sign of real growth; much of the gains in stocks were due to buyback manipulation as gross revenue stagnated for nearly a decade.

It was a decade of fakery, of spoofing and high frequency trading as GDP never reached three percent until nearing the end, and never actually did for a full year, including 2017, the last. Almost all of the supposed growth in the "recovery" was due to inflation, nothing else. A false sense of security was promoted by the governors and presidents of the Federal Reserve System and their regional banks and the public gobbled it up.

Meanwhile, in the real world, mark to market had been replaced by mark to fantasy, and price discovery was banished from the equity world.

According to Dow Theory - a nearly infallible projecting tool - as the Dow Transportation Index closed today below the February 9 low of 10,136.61, at 10,119.36, confirming the primary trend change, the bull market can be properly buried and a bear market born.

For anyone unfamiliar with Dow Theory, the primary trend change goes like this:
New Closing Low
Interim High, Below Previous High
New Low Below Previous Low.

This simple pattern must occur on both the Dow Jones Industrial Average and the Dow Jones Transportation Index (confirmation), and here's how it happened.

The Dow Jones Industrial Average made a new all-time high on January 26, 2018 (26,616.71).
On February 8, it closed at 23,860.46 (new low).
On February 26, it closed at 25,709.27 (interim high, lower than previous high).
On March 23, the Industrials closed at 23,533.20 (new low, lower than previous low).

For confirmation, the Dow Jones Transportation Index had made it's new high on January 12, 2018 (11,373.38).
On February 8, it closed at 10,136.61 (new low)
On February 26, it closed at 10,769.84 (interim high, lower than previous high)
On April 9, the Transportation Index closed at 10,119.36 (new low, lower than previous low = primary trend change, bull becomes bear).

Why is this good?

This is good because markets in a stable, trustworthy financial system must have a mechanism to clear mal-investment. Otherwise, stupid money must be purged from the system in order to create real value.

For instance, Facebook, Google, and many other stocks should not be trading as high as they currently are. They are overvalued, promoted by shysters and traded up by fools, one fool greater than the previous one. In other words, this is money chasing an unrealistic return. In order to get back to a realistic, fair, honest market, these stocks must lose value. Some companies will achieve their true value, which is zero. Others will lose 20, 30, maybe even more than 50%. The market will sort out the winners (there will be a few) from the losers (there will be many).

In the end, stocks will be properly valued, but when that time is to come, nobody knows. The perma-bulls out there can take heart that bear markets generally last 14-18 months, some like the one during the Great Depression which began with the stock market collapse in 1929, last much longer. How deep this one will be depends on how quickly stocks revert to an undervalued position, because the market always overshoots on the upside and the downside. There will be a bottom, when it will be wise to buy stocks. The only winning position presently is to sell stocks at a profit, park the money in bonds or money markets and wait for the bottom, which, just like the primary change from bull to bear, will be repeated - in reverse - according to Dow Theory.

For those wishing for the good old days of January 26, a return to those levels may take four to seven years, possibly longer, and, judging by the general insanity plaguing the human race presently, one should prepare for the much longer period. There are mountains of bad investments and onerous debts to be flushed from the system, since they were not flushed out in 2008-09, only papered over by TARP, QE, and ZIRP.

If you must, cry in your beer over the death of the bull. The rest of us will be having a cold one with the new-born bear.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35
4/9/18	23,979.10	+46.34	-134.01

At the Close, Monday, April 9, 2018:
Dow Jones Industrial Average: 23,979.10, +46.34 (+0.19%)
NASDAQ: 6,950.34, +35.23 (+0.51%)
S&P 500: 2,613.16, +8.69 (+0.33%)
NYSE Composite: 12,380.55, +31.44 (+0.25%)

Weekend Wrap: First Week of 2nd Quarter Losing, Just Like February and March

This edition of the weekend wrap begins with a comment to an article on ZeroHedge

One need not read the article in question, only question the conclusion.

• markets have started pricing in a Fed policy mistake, or 
• markets have started pricing in end-of-cycle dynamics.

BOTH, FTW, or, I'll take policy mistake and end-of-cycle dynamics for $1000, Alex.

​​​​​​​This article ignores the obvious.

The policy mistake was the March rate hike. It was either too soon, or completely mis-timed. One can assert, dependent upon where one is positioned, that any and all of the Fed's policies are mistakes, but that may be significantly overstating the case.

End-of-cycle dynamics? Give us all a break. The bull market began on March 9, 2009. It's now been nine years and one month, or 119 months, whichever you prefer. Nothing lasts forever, especially bull and/or bear markets.

The Dow Transportation Index (^DJT) is all one has to watch, since the Industrials have already broken below the Feb. 8 closing low.

According to Dow Theory - which, in matters of primary trends, has a track record approaching 100% - the transports need to confirm, and that number is 10,136.61 (yes, you should have that number memorized).

Where did the transportation Index close on Friday? 10,146.37. 10 points is all there is separating this market from turning bull to bear.

After Friday's mini-crash, stocks ended the week with a significant loss from where it started the week, the month, and the quarter, predictably, the NASDAQ being the worst performer.

Forget articles, commentary, and mainstream analysis. It's all noise. The Fed has made one policy error after another (keeping rates too low, too long, and, trying to raise rates in a weakened economy) and the bull market is ending. The close on the transports below 10,136.61 will tell you exactly when the market has turned, but it's not quite there yet. It could make the move on Monday, the 9th of April, but keen minds are looking at late may or June for the turn. Either way, the bull will be dead.

While there may be a bounce in the aftermath, it will not last and there is a good likelihood of a corollary recession 6-12 months beyond the turn.

That's all one needs to know.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11
4/6/18	23,932.76	-572.46	-170.35

At the Close, Friday, April 6, 2018:
Dow Jones Industrial Average: 23,932.76, -572.46 (-2.34%)
NASDAQ: 6,915.11, -161.44 (-2.28%)
S&P 500: 2,604.47, -58.37 (-2.19%)
NYSE Composite: 12,349.11, -222.83 (-1.77%)

For the Week:
Dow: -170.35 (-0.71%)
NASDAQ: -148.33 (-2.10%)
S&P 500: -36.40 (-1.38%)
NYSE Composite: -102.95 (-0.83%)

Trade War Madness Continues As Non-Farm Payrolls Slip

Stocks gained again on Thursday as fears of a widespread trade war between the United States and China eased a bit, though the rhetoric has become thicker and more belligerent as the saga unfolds.

The escalation of tariff-building between the world's two largest economies appears to be evolving into a major spat, keeping traders on Wall Street jumping, though not out of windows, yet.

Whatever is going down, it's going to continue and no amount of speculation is going to ease the volatility in stocks.

Traders' fears will not be assuaged on Friday morning by the non-farm payroll report for March, which showed job gains of only 103,000, far below estimates of 185,000.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19
4/5/18	24,505.22	+240.92	+402.11

At the Close, Thursday, April 5, 2018:
Dow Jones Industrial Average: 24,505.22, +240.92 (+0.99%)
NASDAQ: 7,076.55, +34.44 (+0.49%)
S&P 500: 2,662.84, +18.15 (+0.69%)
NYSE Composite: 12,571.94, +105.49 (+0.85%)

Dow Industrials Travel 1,295 Points As Larry Kudlow Saves The World

Spooked at the open that China would impose a 25% tariff on soybeans (you can't make this stuff up), the Dow Jones Industrial Average slumped 510 points at the open, but immediately began to gain ground.

By noon, the index had nearly clawed itself all the way back to breakeven, and finally, after 2:00 pm EDT, began an ascent that would leave the blue chips up 230 points on the day.

What spurred the gigantic gain of nearly 800 points off the opening low was word from White House financial advisor, Larry Kudlow, that the tariffs were only outlines and that they may never even be put into effect.

It may be cynical to say, but when the greatest stock market in the world can be auto-tuned to move in massive fashion on the words of one man - and that man happens to be Larry Kudlow - anybody with a functioning brain would want to be far removed from it.

In a word, it's Bullshoot. Rubbish. Trash.

Another cynical outlook would suggest that anybody being short heading into first quarter earrings season is in dire need of a frontal lobotomy. Being anything but long at this juncture - particularly after the whacko Wednesday just witnessed - is tantamount to financial suicide, and suicide is still outlawed in most states.

April now looks to be a perfectly glorious month for pensioners trapped in an alternate reality of hopefulness and trust, and for stock manipulators who make money on both ends of the trade, the brokers, schemers, bankers...

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19

At the Close, Wednesday, April 4, 2018:
Dow Jones Industrial Average: 24,264.30, +230.94 (+0.96%)
NASDAQ: 7,042.11, +100.83 (+1.45%)
S&P 500: 2,644.69, +30.24 (+1.16%)
NYSE Composite: 12,466.45, +99.38 (+0.80%)

Stocks Stage Rebound; Cat-and-Mouse Game Continues Between Bulls and Bears

Is it a bull market? Is it a bear market?

At this juncture, it's a good probability that neither the bull nor bear label is appropriate. At best, one could call the market transitional, or, at worst, confused.

The continuing tug-of-war escalated the past two days as the Dow took a 400-point ride in each direction, ending with a small, 70-point loss to kick off the second quarter.

If none of this makes sense, recall the oft-used quote:

The market can remain irrational longer than you can remain solvent.

Attributed to either legendary John Maynard Keynes or contemporary Gary Shilling, it's worth keeping in mind as markets gyrate. Here is an interesting discussion concerning the quote.

Perhaps John Pierpont Morgan said it best, when asked what the market would do:

It will fluctuate.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/2/18	24,033.36	+389.17	-69.75

At the Close, Tuesday, April 3, 2018:
Dow Jones Industrial Average: 24,033.36, +389.17 (+1.65%)
NASDAQ: 6,941.28, +71.16 (+1.04%)
S&P 500: 2,614.45, +32.57 (+1.26%)
NYSE Composite: 12,367.07, +150.36 (+1.23%)

Stocks Pounded Again; Transports Drop 206 Points

Following a brutal February and March, equity investors could hardly be pleased with the first day of trading in April and the start of the second quarter.

A weak opening was followed shortly by indecision and then a descent back into the abyss, with all the major averages into the red for the year. Of particular interest was the Dow Jones Transportation Index, which spent much of the afternoon testing new lows below the February 9 bottom of 10,136.61. Only a late-day push kept the transports from finishing under the level that would signal a primary trend change.

The Dow Industrial Average was likewise saved from further embarrassment as it gained into the close after being down more than 750 points earlier. The push higher nearing the end of the session should be largely attributed to nothing other than day-trading short-covering by quants and large hands taking massive profits at the expense of the bulls still looking for some upside.

With stocks under serious pressure for nearly two months, some relief is almost guaranteed, though the duration of any improvement is a question for market-timers, chartists and wide-eyed speculators. Recent activity appears to be more reminiscent of the end of a bull market and the beginning of something worse than what should accompany a surging economy. The narrative of US strength is failing on many fronts and likely will not last more than a few more months, or possibly, even a few days.

This is a market made for traders using other people's money, not their own.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92

At the Close, April 2, 2018:
Dow Jones Industrial Average: 23,644.19, -458.92 (-1.90%)
NASDAQ: 6,870.12, -193.33 (-2.74%)
S&P 500: 2,581.88, -58.99 (-2.23%)
NYSE Composite: 12,216.71, -235.35 (-1.89%)

Weekly Recap: Stocks Get a Boost to End Month, But Still Finish Down for March

Call it window dressing, because that's pretty much what the final trading day of March will amount to, being that the markets have been battered and buffeted up and down - mostly down - for the past two months, gains on the Thursday prior to a three-day weekend should be considered a non-event.

As the March scorecard below shows, the big losses on the 22nd and 23rd could not be recouped, despite a bounce-back on Monday, the 26th, of nearly 670 Dow points. Combining the February and March declines, the Dow lost more than 200 points in those two months, and ends March more than 2500 points off the January 26 all-time high (26,616.71).

Of particular focus now are the declines following the most recent federal funds rate hike from Wednesday, March 21. Just after the 2:00 pm EDT announcement that day, the Dow rose to 24,977.65, making the drop post-FOMC a full 874 points, despite the bounce-back Monday (26th) and the close-out dead-cat-like bounce on Thursday, the 29th.

Also, keeping the chartists busy is the Dow Jones Transportation Index (^DJT), which nearly signaled bear market conditions on Wednesday, the 28th, three times dipping below the magic mark indicated by the February 8 close of 10,136.61 before finishing up with a slight positive bent. Thursday's 200+ point gain on the transports was more window dressing, short covering or outright central bank dip buying, giving the market some degree of confidence, even though there realistically should be little.

Anybody with an eye on the chart of the Transportation Index sold be keenly aware of the intra-day low on February 8, an awe-inspiring bottom at 9,806.79. Likewise, the intra-day low on the Industrial side was a jaw-dropping 23,360.29, on February 9.

The Industrials have already surpassed the February closing low of 23,860.46, finishing March 23 at 23,533.20. Therefore, according to Dow Theory, the only element missing from calling this market a bear - signifying a primary directional change - is for the Transportation Index to close below it's recent low to confirm.

As arcane and confusing as that may sound, the rigors of Dow Theory are almost never wrong when it comes to indicating primary changes. One only need check the stats from 2000 and 2008 (and many times before that) to see how that this signal is very accurate.

Not to say that the Dow and even more so, individual stocks, can't continue to dive to lower and lower depths, but it would be hard to see such a scenario developing without a significant slide on the Transportation Index.

Putting March in perspective, the losses here are notable, as March is traditionally a strong month for investors, with an average gain on the S&P 500 - according to this calculator - of 1.11% from 1950 to the present, outdone only by the months of April (1.34%), November (1.39%) and December (1.53%). If equities continue to show weakness through April it might come as a surprise, but, even if it doesn't, the months of May through September are traditionally the weakest, with cumulative returns of just 0.22% over that 1950-2017 span. August and September are actually negative for that time period, posting losses of 0.27% and 0.64%, respectively.

While those figures are for the S&P, they serve as something of a proxy for the Dow, so if a bear market is to eventually emerge (and these things often take some time to develop), there's a high probability that the bull could hang on until August, significant, as the first estimate of Q2 GDP would print late July.

For the week, the NASDAQ was by far the weak performer, the only index incapable of exceeding a two percent gain over the four-day period. It wasn't even close, as the NASDAQ gained only 1.01%, unsurprising, since the NASDAQ had been significantly out-performing the other indices.

All of this number-churning should come as a relief for both bulls and bears. As April unfolds, there may be an easing up in volatility, and some gains to be had, but the ominous signs of an overpriced and subsequently weakening stock market are proliferating, the general economy notwithstanding. This offers some time to adjust strategies before what seems to be an obvious downdraft coming this summer.

That may be a huge speculation, but that's what makes a market.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08
3/7/18	24,801.36	-82.76	-227.84
3/8/18	24,895.21	+93.85	-133.99
3/9/18	25,335.74	+440.53	+306.54
3/12/18	25,178.61	-157.13	+149.41
3/13/18	25,007.03,	-171.58	-22.17
3/14/18	24,758.12	-248.91	-271.08
3/15/18	24,873.66	+115.54	-155.54
3/16/18	24,946.51	+72.85	-82.69
3/19/18	24,610.91	-335.60	-418.29
3/20/18	24,727.27	+116.36	-301.93
3/21/18	24,682.31	-44.96	-346.89
3/22/18	23,957.89	-724.42	-1071.31
3/23/18	23,533.20	-424.69	-1496.00
3/26/18	24,202.60	+669.40	-826.60
3/27/18	23,857.71	-344.89	-1171.49
3/28/18	23,848.42	-9.29	-1180.78
3/29/18	24,103.11	+254.69	-926.09

At the Close, Thursday, March 29, 2018:
Dow Jones Industrial Average: 24,103.11, +254.69 (+1.07%)
NASDAQ: 7,063.44, +114.22 (+1.64%)
S&P 500: 2,640.87, +35.87 (+1.38%)
NYSE Composite: 12,452.06, +143.17 (+1.16%)

For the Week:
Dow: +569.91 (+2.42%)
NASDAQ: +70.78 (+1.01%)
S&P 500: +52.61 (+2.03%)
NYSE Composite: +274.36 (+2.25%)