Going Nowhere Fast: Stock Churning a Wall Street Tool; Buy the Dip, Sell the Rip

Denial is NOT a river in Egypt, but, those who wish to traverse their world wearing blinders, colored glasses or even virtual reality goggles have been observed in the general vicinity of Wall and Broad Streets in lower Manhattan and their numbers are growing.

Stocks staged a strong dead cat bounce rally after three straight days of losses, the largest being Tuesday's nearly 400-point loss on the Dow Industrials that had the world shaking on stories of disunity and anti-EU behavior coming out of Italy.

Of course, in the United States, Italy, despite being the world's ninth largest economy (hard to imagine that) is taken as something of an outlier, as in "not our problem," so stocks were sent skyward by idle speculators, offsetting the mechanical smart money distribution that has been a feature of the markets since late January.

Just in case the recovery narrative is not taken seriously, the stock jockeys still have plenty of equities to alternatively pump, dump or hold, depending on the circumstance of the day. The bulls are attempting to extend the long bull market to ten years when in fact it ended - almost to the day - at nine years and one month, on April 9, 2018.

Since then, the Dow (and largely the other major averages) have travelled in a pretty tight range. On April 9, the Dow closed at 23,979.10, going as low since then to 23,924.98 (May 2) and as high as 25,013.29 (May 21). That 1088 point range (roughly 4%) has persisted for some seven weeks and shows no sign of breaking out anytime soon.

With May looking like a good bet to produce positive returns in the range of 300-650 points (Thursday is the final trading day of the month), the players in this Broadway-stlyed farce should be patting each others backs vigorously for a job well done, the losses of February and March now overshadowed by the plus signs for April and May.

All the bad stuff - like Wednesday's lowered first quarter GDP estimate to 2.2% from 2.3% or the weak ADP payroll report (178,000 May jobs) is, according to the churning crowd, behind us and it's roses and unicorns from here to eternity.

Naturally, anyone with a handful of functioning brain cells knows that the government and media are conspiring to deliver all manner of propaganda - from Russian collusion and election interference to "tight" employment conditions when 93 million Americans do not work for a living - so any mention of good times should probably not be taken too seriously.

The truth is somewhere in between what the government and media spoon-feed and wha tone sees and hears with one's own eyes and ears. The economy isn't great, nor is it about to collapse, though, admittedly, it's been 10 years since the last recession, so "bad times" are pretty much overdue. Unless one is conditioned to a Pavlovian reaction to headlines, such as the algorithms that drive market activity are, seeing the markets bouncing in a tight range should be cause for at least some caution, especially since that range is well below the last market high (26,616.71, Jan. 26).

The last trading day of the month shouldn't be anything notable as far as volatility is concerned, unless May's non-farm payroll numbers (due out Friday, June 1) are not pleasant and leaked. Even then, the rangebound Dow will remain.

And the deniers of a bear market will still be in denial.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20
5/30/18	24,667.78	+306.33	+504.53

At the Close, Wednesday, May 30, 2018:
Dow Jones Industrial Average: 24,667.78, +306.33 (+1.26%)
NASDAQ: 7,462.45, +65.86 (+0.89%)
S&P 500: 2,724.01, +34.15 (+1.27%)
NYSE Composite: 12,625.87, +183.18 (+1.47%)

Will May End With A Bang Or A Thud? Italy And Tommy Robinson Creating European Chaos

Following a three-day weekend, US markets caught up to the panic that was gripping Europe, adding onto the global rout in stocks by sending the Dow Jones Industrials lower by nearly 400 points.

Tuesday's big fallout left the Dow's gains for the month at great risk. The Industrial Average was close to erasing all of May's gains before a late-stage rally brought the index back up by 147 points into the close.

With only two trading days left in the month, May looks to follow April with a gain of less than one percent. April's total gain was a mere 50 points, following massive losses in February (-1120.19) and March (-926.09). With Europe's problems far from over (Italy being the main culprit), selling in May could turn out to be the most prudent - if not cliched - advice as global events are continuing to tarnish the shine on America's nascent economic rebirth.

Italians, struggling with immigration issues, have seen their government devolve into autocracy, as president Sergio Mattarella unilaterally quashed the creation of a right-leaning government coalition.

Chaos in Italy has sparked a run on bonds and European banks, spreading to stocks. On Tuesday, most of the major national exchanges saw losses in excess of one percent, adding onto previous declines.

News out of Britain also contributed to the sea of madness, as authorities arrested activist Tommy Robinson and immediately sentenced him to 13 months in prison, adding a media ban on his arrest and the pedophile grooming trial on which he was attempting to report. The unjustified jailing of Robinson has sparked outrage and rallies for his release throughout Britain and some European capitals.

Overarching political events are merely masking the underlying weakness in global markets which still seem incapable of forgetting the Great Financial Crisis of 2008 and Europe's own mini-crisis in 2011. Since little to nothing was done to correct the issues which plagued the world's largest economies, the past appears to have risen from the crypt and threatens to plunge economics and nations into another depressing episode.

With the Dow taking its worst loss in over a month, January 23rd's all-time high of 26,616.71 is now four months off in the fading distance. Bear market dynamics continue to drive a stake into the heart of the "recovery" narrative.

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20

At the Close, Tuesday, May 29, 2018:
Dow Jones Industrial Average: 24,361.45, -391.64 (-1.58%)
NASDAQ: 7,396.59, -37.26 (-0.50%)
S&P 500: 2,689.86, -31.47 (-1.16%)
NYSE Composite: 12,442.69, -192.25 (-1.52%)

Weekend Wrap: Oil Slips Lower, Stocks Stagnate, Bond Yields Plunge

On Friday, the Dow Jones Industrial Average bottomed out at 2:45 pm EDT, down by 124 points on the day. From that point - with an hour and fifteen minutes remaining in the session - stocks magically rose by 68 points to end the day down marginally.

This pattern had been tested on both Wednesday and Thursday, as stocks took deep losses on both days, though Friday's low was much later in the session than it was the previous two days. Friday's low was also more shallow, the implication being that a major force (such as the - hush now - PPT) came to the market's aid in the nick of time.

That there might have been intervention on Friday, and indeed, on all three days, is not far-fetched. Nobody in positions of power were interested in a market crash just before the Memorial Day weekend. That is being saved for a more opportune time, such as just prior to the November mid-term elections.

If this is too much intrigue and conspiracy theory for you, dear reader, you can stop reading right here, though the naivety of burying one's head in a sand dune isn't going to make you any smarter, nor is it going to grant you immunity from market dynamics, be they either contrived or natural.

As seen in the scorecard and weekly data below, the Dow ended with a small 38-point gain and is lower than where it was two weeks ago, the bulk of May's advance made during an eight-day run starting on the 3rd and ending on the 14th, which was, notably a Monday. Tuesday the 15th saw the streak ended with a thud of -193 points. Since then, stocks have essentially gone nowhere and this week saw minor advances on the major indices with the notable exception of the NYSE Composite, which suffered a loss commensurate with the gain on the NASDAQ.

Confused? Not yet. Trading in stocks, always a risky business, is about to become something that defies quantification. Money is moving around markets at a dizzying rate, fueled by geo-politics and, in the main, a massive amount of misunderstanding of how markets are being distorted and defiled.

It's now more than three months since the waterfall effects of February which sent stocks into a state of bearish hibernation or paralysis from which they have yet to recover. The longer stocks fail to reflate towards their all-time highs the stronger the argument for a bear market becomes.

The problem with a bear market at this juncture is that stocks continue to underpin all manner of funds, especially public employee pensions, which are already massively underfunded. An extended market decline would push these funds further underwater and possibly trigger a liquidity trap which would make the 2008-09 financial crisis appear tame by comparison.

States like Illinois, California, Connecticut and New Jersey have the biggest underfunding problem and a bear market would blow out all of their actuarial projections. Not that these massive pension funds are going to go broke right away, rather they would see their future positions eroded to a point at which raising taxes, seeking higher employee contributions, reduction in services, or slashing payouts to retires will all be proposals on the table in an effort to salvage the failed over-promises of delinquent politicians.

A pension crisis might be just the tip of the proverbial iceberg that is the cumulative national debt shared by federal and state governments, businesses and individuals. Of the three, private businesses are most likely the best insulated from a market downturn and subsequent liquidity emergency, though they are by no means standing on safe ground. With the average American family or individual deeply indebted, businesses large and small will suffer from decreased volume and a general deterioration of business conditions. Such conditions are already well underway in small, rural communities lacking sufficiently large markets and audiences. Some largely Northeast and Midwest areas have never recovered from the Great Financial Crisis of a decade ago and another negative event could be potentially devastating. Government would be unable to collect taxes from an overburdened population and businesses would be faced with the indelicate choices of laying off employees, cutting back on goods or services or closing the doors for good.

The heavy reliance on stocks alone to lead the nation out of the deep depression of 2008 has set the stage for a rather unwelcome asset collapse and recent stock market activity is serving fair warning.

The only data this week that suggested a possible way out or easing of the tightening conditions (which the Fed is fueling with reckless abandon) were the decline in oil prices (from above $72 to below $68) and the crunching of yields in the treasury market. The 10-year note topped out at 3.11% before ending the week massively lower, at 2.93%, a huge move in a significant market.

What oil and bonds are foretelling is nothing less than a full-blown recession within six to eight months, signaling that consumers cannot sustain demand for energy and businesses and government cannot withstand rising borrowing costs.

All of these conditions are contributing to a very volatile situation which, thus far, has been contained by the Fed and the deep underground traders, attempting to keep equity prices at premiums. The chances of this lasting though the summer into the fall are Slim to None, and Slim has left town.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84

At the Close, Friday, May 25, 2018:
Dow Jones Industrial Average: 24,753.09, -58.67 (-0.24%)
NASDAQ: 7,433.8535, +9.42 (+0.13%)
S&P 500: 2,721.33, -6.43 (-0.24%)
NYSE Composite: 12,634.94, -61.75 (-0.49%)

For the Week:
Dow: +38.00 (+0.15%)
NASDAQ: +79.51 (+1.08%)
S&P 500: +8.36 (+0.31%)
NYSE Composite: -82.48 (-0.65%)

Sliding Oil, Spanish Crisis, Mid-Week Ramp-Fest May Produce A Dizzying Friday Plunge

Just for the heck of it, let's look at the markets from a trader's perspective as the entire US population prepares to end the work week and head off for a three-day, fun-in-the-sun weekend.

Now, this trader, call him Bob, yeah, Trader Bob, has to be looking at the charts from Wednesday and Thursday, seeing that the Dow took a deep dive on both days before recovering, but also that Thursday's dive was deeper than Wednesday's and the closing level significantly lower as well. So, Trader Bob may be thinking, "This looks suspiciously like the work of the PPT or maybe even short-covering."

Scanning the headlines for Friday morning on his Bloomberg terminal, Trader Bob takes interest in a story out of Spain that is saying Prime Minister Mariano Rajoy is facing a vote of no confidence in that country's parliament, meaning that an entire country could be soon plunged into a chaotic situation. Bob also recalls that part of Spain - Catalonia - tried, unsuccessfully, to secede from the nation last year.

Then, Trader Bob sees the price of oil dropping off the chart, and notes that Saudi and Russian oil officials are stating that crude supply increases are likely in the near future.

Trader Bob, considering how much he's made for clients by going long oil futures, produces the following thought bubble:

Amazing, isn't it, that even Saudi government people and those pesky Russians understand some of the principles of economics?

Whoda thunk that if gas prices go up from about $2.30 a gallon to roughly $3.00 a gallon (a 30% increase), some people might not have as much disposable income?

And, if that lessened amount of disposable income is not spent on consumer goods, then whole industries might suffer?

And, if whole industries suffer, that might affect the greater economy?

It's not rocket science, it's the dismal science called economics.

So, what's Trader Bob likely to do Friday morning when the opening bell rings?

Well, for one thing, since he has 24-7 access to the futures market, he's dumping all his WTI crude futures calls. Fast. When the market opens, he's probably going to sell some stocks, just to get out in front of the herd, where he won't be trampled by the rush to the exits.

But, Trader Bob isn't actually convinced that a selloff is a done deal, so he's not going to get too far out in front, just enough to trim some of his more speculative positions. He doesn't want to be, as surfers call it, "hanging ten."

Trader Bob will be patient, with one eye on oil but a more focused eye on the US equity markets. If things go from bad to worse, he'll consider whether or not it's time to bail. 200 points down on the Dow would be a test of Thursday's low (24,605.40). Breaching that level might produce the stampede everyone on Wall Street fears.

An hour prior to the opening bell, at 8:30, Bob sees the Dow, S&P, and NASDAQ futures plunging into the red. He sells more oil futures. He looks around the trading floor. Some of the younger traders are looking a little queasy, green in the face. The older, more experienced guys are handling it better, having coffee and donuts while taking up substantial short positions is selected stocks, some of them whacking away at oil companies, others focused on Facebook (FB) and Apple (AAPL).

Trader Bob's hands are getting sweaty. He knows that he's prone to panic attacks, but so is all of Wall Street. He's not thinking about a three-day weekend. He's thinking about selling everything and moving to Maine.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51

At the Close, Thursday, May 24, 2018:
Dow Jones Industrial Average: 24,811.76, -75.05 (-0.30%)
NASDAQ: 7,424.43, -1.53 (-0.02%)
S&P 500: 2,727.76, -5.53 (-0.20%)
NYSE Composite: 12,696.69, -46.71 (-0.37%)

Dow Turns Positive With Just 10 Minutes Left In Session; Thanks to Fed Minutes?

OK, lemmings, your nightly stock market news byte tells you that the Dow was up a whopping 52 points.

That's all you need to know, unless you want to know that the Dow and the other indices were down most of the day, with the industrials turning positive with just 10 minutes left in the trading day.

No need to worry about that 167-point drop by midday. By 4:00 pm EDT, that was ancient history because - according to the official narrative - the stock gurus were thrilled by the Fed Minutes from the May 2nd FOMC meeting.

Somehow, broad approval of two percent inflation and continued hiking of the federal funds rate (the betting is for four rate increases this year; one already in January) is good for the economy.

Just for fun, try out this nifty inflation calculator. You might be surprised to find that the cumulative rate of inflation since 1990 (28 years ago) is 91.7%, meaning the value of your dollars have decreased by nearly half. A $20 item in 1990 would cost $38.34 today.

Convinced that 2% inflation (about what it's been for the last 30 years) is a good thing? Think again. The Fed's mandate was to maintain stable prices, not constantly increasing prices. They've failed.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56

At the Close, Wednesday, May 23, 2018:
Dow Jones Industrial Average: 24,886.81, +52.40 (+0.21%)
NASDAQ: 7,425.96, +47.50 (+0.64%)
S&P 500: 2,733.29, +8.85 (+0.32%)
NYSE Composite: 12,743.40, -23.25 (-0.18%)

No Follow-Through for Stocks After Monday's Fake Ramp-Fest

Stocks opened higher but quickly reversed direction, resulting in the second-largest one-day point drop on the Dow Industrials in May.

Coincidentally, the lower close occurred on a Tuesday, similar to last week's Tuesday trashing of 193 points.

The financial media attributed the quick turnaround to President Trump's wavering on China trade negotiations, just as Monday's advance was credited to Treasury Secretary Steven Mnuchin's announcement that the proposed tariffs on imports from China were "on hold."

For weeks, the public has been fed nauseating nonsense about stocks reacting to trade and tariff proposals from President Trump and his administration, particularly relating to China. The idea that a single event or series of events, which, in fact, should be positive for American businesses, affecting the entire stock market is ludicrous on the surface and either disingenuous or naive reportage by the financial press.

Stocks have been trading in fits and starts since early February due, not to tariffs or day-to-day events, but, to larger economic issues and obvious overvaluation foisted upon the investing public by Wall Street hucksters and the phony incentives and spurious mutterings from Federal Reserve officials.

There is nothing even remotely connected to tariffs and trade affecting the price levels of stocks, especially since the president's tariffs are only proposals and not in force. Besides the obvious benefit the United States would obtain from lowering its trade deficit with the Chinese, just what is it that is so ominous and wrong about the imposition of tariffs that would level the trade playing field?

The rhetoric surrounding the proposed tariffs reeks of the same kind of anti-Trump noise heard from the mainstream media for the past eighteen months.

Normally, in a free market, stocks rise and fall based upon fundamental valuation metrics and some degree of emotion-based trading from the Wall Street herd. The current environment, driven by computer algorithms which respond to news headlines in knee-jerk fashion, is neither normal nor free.

It's time for a reversion to the mean and a restoration of of sanity in markets and the larger economy. This implies a devaluation of stocks across the board, a quieting of the voices which drive speculation, and regulations designed to minimize the effect of computer-driven excesses.

At the Close, Tuesday, May 22, 2018:
Dow Jones Industrial Average: 24,834.41, -178.88 (-0.72%)
NASDAQ: 7,378.4551, -15.5811 (-0.21%)
S&P 500: 2,724.44, -8.57 (-0.31%)
NYSE Composite: 12,766.65, -37.36 (-0.29%)

Dow's Big Bear Market Rally Led Higher By Overvalued Boeing Shares

Monday's rally had everybody singing the praises of Treasury Secretary Mnuchin and the "on hold" status of trade negotiations with China. Supposedly, this gave the markets an "all clear" signal to buy more risk assets at elevated price levels (remember, the Dow is only off 6-7% from the all-time high of 26,616.71, January 26).

On the surface, a 300-point gain on the Dow provides a reason to cheer the market and the economy. Underneath the hood, however, the gears are grinding, sparks are coming from various frayed electrical components and the engine is sputtering and coughing. Any description of the US economy as anything better than sputtering should be viewed with resolute skepticism.

The big move on the Dow was fueled mostly by a rise in Boeing (BA), which was up 3.61% and is trading at the nosebleed level of 363 per share. For perspective, two years ago Boeing was trading at 127 per share. So, that's a triple for a company that is one of the more mature companies in America. Absurdly, Boeing is carrying a simple PE ratio of 27, a number normally reserved for high-growth companies.

Meanwhile, the seeming were out in force, disregarding the reality of a slowing, or, at best, sputtering economy (despite what you're reading or hearing) and stocks still well below the previous highs earlier in the year.

Monday's rally was nothing more than a media-inspired bear market rally. It had all the elements: only a few stocks led the way, the media was cheerleading all along, it was on a Monday.

Whatever your perspective of the market, there is little evidence that it is not massively overbought at any level above Dow 20,000. Trade wisely.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04

At the Close, Monday, May 21, 2018:
Dow Jones Industrial Average: 25,013.29, +298.20 (+1.21%)
NASDAQ: 7,394.04, +39.70 (+0.54%)
S&P 500: 2,733.01, +20.04 (+0.74%)
NYSE Composite: 12,804.01, +86.59 (+0.68%)

Weekend Wrap: Stocks Stuck In Limbo As Rise In Yields and Oil is Relentless

Anybody looking for volatility on Friday's options expiry was sorely disappointed with the rangebound markets and little change as a dull week came to an even duller finish.

What did move dramatically for the week was bond yields and oil, both of which spiked at the expense of the equity markets, all quite predictable.

As the case for a bear market in stocks continues to grow every day the January 26 high on the Dow of 26,616.71 gets further and further away, so the denial of the Wall Street crowd and pension fund maniacs which know nothing other than stocks, stocks, and more stocks, all the time, everywhere.

As the Money Daily Dow Scorecard below clearly shows, the 30 blue chip stocks were down for the week, though the losses were contained. None of the indices fell by more than one percent, the nearest to that the NASDAQ, with a loss of 0.66%.

Since the early February selloff, stocks have gone exactly nowhere, a point of emphasis for the bears who contend that despite the narrative of "full employment," a growing economy (2-3% is barely keeping pace with inflation; real growth is somewhere in the range of -3 to -5 percent), tax breaks and a strong dollar, undermining the false bravado of the bulls is oil soaring over $71/barrel for WTI crude and notching above $89/barrel this week for Brent crude, plus the 10-year note spiking to 3.11%.

Rising bond yields - which compete with stocks in the relative risk paradigm - and rising fuel prices make a very challenging environment for stock holders, especially those trying to beat the indices, which shouldn't be a tough job, though it has become so as everything is falling and the component parts are falling faster.

Stock pickers may find their task all the more challenging by crowded trades in favored sectors. Tech and consumer non-durables have been hammered recently, but the energy sector has fared much better, up something on the order of 8% on the year. Basic materials have been a disappointment for the most part, and dividend-carrying stocks are, again, barely keeping up with inflation.

It's a no-win market just about everywhere for those who only can go long, so the bears once again have the upper hand.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84

At the Close, Friday, May 18, 2018:
Dow Jones Industrial Average: 24,715.09, +1.11 (0.00%)
NASDAQ: 7,354.34, -28.13 (-0.38%)
S&P 500: 2,712.97, -7.16 (-0.26%)
NYSE Composite: 12,717.42, -30.41 (-0.24%)

For the Week:
Dow: -116.08 (-0.47%)
NASDAQ: -48.54 (-0.66%)
S&P 500: -14.75 (-0.54%)
NYSE Composite: -44.40 (-0.35%)

Stocks Stalled As Bull-Bear Debate Intensifies

Equities traded in tight ranges on the main exchanges Thursday, with the bears winning the day, albeit marginally.

The small boost from retail stocks earlier in the week failed to extend to the general market. Cisco Sytems (CSCO) and Wal-Mart (WMT) each weighed heavily on the market despite both companies meeting analyst exceptions for first quarter earnings.

Current market mood is jaded, as companies that have reported acceptable earnings for the first quarter have been routinely punished by the market, with immediate selloffs the norm on receipt of news, whether good or bad. That kind of action is a pretty good indicator of distribution, an otherwise gentler term for profit-taking.

Heading into the tail end of the week, the Dow is looking considerably weaker than at the start, with Monday, May 14, the culmination of an eight-day winning streak, possibly marking the high-point of the month.

Friday is an options expiration day, so, some volatility is to be expected, though it's equally likely that many punters have already closed out their positions, which could leave the market with little upside. As odds go, the day looks very much like a toss-up, though a move of more than 150 points either way on the Dow is unlikely unless the herd gets a signal to scramble.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73

At the Close, Thursday, May 17, 2018:
Dow Jones Industrial Average: 24,713.98, -54.95 (-0.22%)
NASDAQ: 7,382.47, -15.82 (-0.21%)
S&P 500: 2,720.13, -2.33 (-0.09%)
NYSE Composite: 12,747.83, +4.03 (+0.03%)

How To Deal With A Bully: Retailers Gang Up On Amazon

Wednesday, it was Macy's (M) reporting solid sales growth in the first quarter, fueling some interest in retail stocks overall.

Thursday morning, Wal-Mart is reporting 33% growth in online sales for the first quarter, proving that Americans will go where service and price are balanced, as the nation's largest retailer continues to roll out its innovative "ship-to-store" option and discounted shipping (free two-day delivery).

Amazon, the king of online retailing, may have succeeded in killing off and/or absorbing some smaller chain store retailers and accelerating the demise of dinosaurs like Sears, but they're certainly not going to mash down the biggest companies, such as Macy's, JC Penney, and Wal-Mart. While Seattle-based Amazon can build as many warehouses and fulfillment centers to facilitate faster, more efficient delivery, it is still hampered by its lack of bona fide retail locations, though its recent acquisition of Whole Foods will change that to varying degrees in different sectors and geographical locations.

Wal-Mart, which has a significant footprint in the retail food space, probably isn't worried about the emergence of Whole Foods poaching its customers, because Whole Foods is largely a near-luxury brand, selling organics and other higher-priced goods, while Wal-Mart customers are accustomed to low-priced, competitive products.

The recent resurgence of retail in the face of the Amazon effect should buoy some stocks and create an environment that will only become increasingly competitive, both online and in the real, brick-and-mortar world. As retailing evolves into 21st-century standards, don't expect first-mover Amazon to extend its gains, though its presence will certainly be dominant. Innovation by those playin catch-up with the newer technology should prove to level the playing field somewhat in coming years.

Macy's earnings beat managed to squeeze some upside out of stocks on Wednesday. Thursday's rise or fall will have much to do with Was-Mart's success story, though it may not provide enough of a catalyst to pull the entire market higher.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78

At the Close, Wednesday, May 16, 2018:
Dow Jones Industrial Average: 24,768.93, +62.52 (+0.25%)
NASDAQ: 7,398.30, +46.67 (+0.63%)
S&P 500: 2,722.46, +11.01 (+0.41%)
NYSE Composite: 12,743.80, +39.17 (+0.31%)

Dow's 8-Day Rally Ends Abruptly; Bonds,Technicals The Likely Causes

Naming retailers as culprits for ending the recent uptick in stocks on Tuesday probably doesn't quite hit the mark, even though stock futures continued to slide after April retail sales data was produced at 8:30 am EDT, prior to the market opening.

Overall, retail sales improved by 0.3% over the month, matching lowered expectations after a surprise gain of 0.8% in March. Whether traders were somewhat disappointed in the number is a matter of some speculation, better left with a question mark than a definitive answer.

What did likely spook the markets was the abrupt rise in bond yields, as the 10-year-note zapped higher to yield 3.07% during the day, a number not seen since 2011. The 2-year yield saw 2.60%, its highest level since 2008.

These are concerning numbers to stock hawkers because they are considered fairly risk free methods of making money, whereas stocks - even those offering dividends - imply risk, as stock prices rise and fall.

With the February's recent turn in markets still fresh in the mind, there are more than a few traders taking money off the equity table and moving it toward the relative safety of bonds. Besides, after eight days of gains, the market was pretty well priced out, so profit-taking commenced. The herd being what it is, the selling turned into a small stampede.

Another concern is the continued high price of crude oil. WTI crude held steady at 71.17 in New York, though pockets of $3.00+ per gallon regular gas began to appear across the filling stations of America. The national average stands at $2.87/gallon, which is beginning to squeeze middle class budgets, especially those with long commutes and larger, less-fuel-economiic vehicles.

Unless bond yields and the price of gas come down quickly, today's 197-point decline could turn worse in coming days and weeks.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26

At the Close, Tuesday, May 15, 2018:
Dow Jones Industrial Average: 24,706.41, -193.00 (-0.78%)
NASDAQ: 7,351.63, -59.69 (-0.81%)
S&P 500: 2,711.45, -18.68 (-0.68%)
NYSE Composite: 12,704.56, -67.47 (-0.53%)

Dow Gains For 8th Straight Day; Tuesday Data Reads Important

Stocks started the week on a strong note, only to see the rally fade as the session wore on, leaving the indices with marginal gains, led by the Dow Industrials with a 0.27% rise, the eighth straight trading day in which the Dow has recorded a positive close.

Higher by 163 points in the 11:00 am hour, Dow stocks gave back nearly 100 points, or roughly two-fifths of their value by the end of the day.

With most major companies having already reported first quarter earnings, this may turn into a rather dull week, though Tuesday's trifecta of economic data releases - NY Fed Manufacturing, Retail Sales, and Durable Goods - may provide suitable trading fodder.

On Wednesday, Macy's (M) reports prior to the market open, while Cisco Systems (CSCO) reports after the close.

Thursday may be the most impactful session, as retailers Wal-Mart (WMT), Nordstrom (JWN), and JC Penney (JCP) each report before the opening bell.

Thus far, nearly at the halfway point of the month, "sell in May" has not been the preferred trading regimen. Rather, a family strong counter-rally has been tearing along, leaving the Dow at its best level in nearly two months.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26

At the Close, Monday, May 14, 2018:
Dow Jones Industrial Average: 24,899.41, +68.24 (+0.27%)
NASDAQ: 7,411.32, +8.43 (+0.11%)
S&P 500: 2,730.13, +2.41 (+0.09%)
NYSE Composite: 12,772.04, +10.22 (+0.08%)

Week In Review: Roadblocks or Flagmen? Dow Rocks Higher 7th Straight Session

Finishing out the week with a lackluster session that had the Dw up nearly another 100 points, the rally that began on May 26 - and which Money Daily then predicted would run 1000 points - is, as of Friday, good for a cool 747 points, rising, with a few bumps and grinds along the way, from 24,083.83 (April 25 close), to the current closing price of 24,831.17.

Unlike the NASDAQ (which finished lower on Friday), the S&P (which has seen two down days in the past seven), and the NYSE Composite (up six straight days) the Dow has risen each of the past seven sessions, although two of those sessions - the first and the fourth, which respectively saw gains of just five, and two points - have not been considered very inspirational nor insightful.

Still, stocks continue to ramp higher. They'll keep doing this until the herd of traders, lemming-like, will turn away for a few days or decide that they'd rather hold onto art or comic books or Beanie Babies or baseball cards, vintage cars, or oil futures while their favored pieces of dingy, junky corporate paper wither away over a longer period of time and get revalued at more appropriate prices.

That's the way Wall Street has always worked, and, despite all the howling from pundits, idiots and idiosyncratic voices one may value or disavow, it is the way it will always work.

Until it changes, the world is stuck with Wall Street and its various iterations in London, Berlin, Tokyo, Hong Kong, Shanghai and the various bourses of the civilized world, trading in debt and equity instruments of which the average investor knows little, expects much, and is happy to pump money into over vast swatches of time.

This kind of activity, viewed from an outside perspective, might seem odd. People make money from their various endeavors, only to pay bills, build up debt (mortgages, college funds, credit cards), and give the rest to some known or unknown entity to purchase partial shares of megalithic international corporations, giving said corporations vast amounts of money and power to invest, divest, spend, grow, or waste.

How much money is eventually a waste by corporations never enters the equation, though it's likely to be an enormous sum of money, which is probably why it's never mentioned.

For certain, some corporations do some good, but others are merely there for the taking, the tops of them skimmed by the ubermeisters of the investing world, the whales, the one-percenters, the government and probably some reckless speculators. The rest is left to the proletariat, the pensioners, the poor people.

A good question to ask a professional financial advisor is whether it would be wise to sell off a large portion of one's money in stocks and pay off all of one's debt, including the voracious eater of happiness, the 30-year mortgage. The stock answer is "no," followed by "no," and "oh, no."

Paying off one's mortgage would put banks out of business (it wouldn't really), and without banks, well, we wouldn't have, um, well... you see where this is going.

A long, long time ago, men and women owned land, raised their own crops, husbanded their own animals, taught their own children and bore whatever good or evil the earth, sun, and nature would bestow upon them. That was before the rise of the predator class of bankers, insurers, financiers, and governments. Now we outsource everything, starting with our own existence, the food we eat, to our children, which we send to schools where they are taught shoddily the ways of good citizenship and nothing about good survival and the difference between existence and prolonged suicide.

Your 401k or pension plan may give you comfort, but only indirectly. It's a promise to pay, over time. And promises are often broken. Just look at the divorce rate in developed countries or listen to a politician over a period longer than two years and you might detect that promises and words do not necessitate a brighter future.

Being bound to the whims and fantasies of corporate CEOs, government officials and generally, people whose wealth and power far exceeds your own may be some consolation that you have done well, but, in the end, all you really have is yourself and the land on which you stand, and some of you don't even own that.

Some things to think about, brought to you by music from the 60s.



Bear in mind: 26,616.71.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02

At the Close, Friday, May 11, 2018:
Dow Jones Industrial Average: 24,831.17, +91.64 (+0.37%)
NASDAQ: 7,402.88, -2.0913 (-0.03%)
S&P 500: 2,727.72, +4.65 (+0.17%)
NYSE Composite: 12,761.82, +30.18 (+0.24%)

For the Week:
Dow: +568.66 (+2.34%)
NASDAQ: +193.27 (+2.68%)
S&P 500: +64.30 (+2.41%)
NYSE Composite: +268.47 (+2.15%)

Dow Gains 6th Straight Session; Oil Rises; Yield Curve Flattens

With a gain of nearly 200 points, the Dow Jones Industrial Average posted its sixth straight winning day, adding 875 points over that span.

Leading the charge higher were Apple (AAPL), which reached a new all-time high, at 190.04, and ExxonMobil (XOM), which gained 1.79 to close the session at 81.72. ExxonMobil's rise was attributed largely to the soaring price of oil. At 71.43 per barrel of WTI crude, oil is at its highest in four years, causing pain at the pump for commuters and drivers, but profits galore for energy companies.

While the immediate market euphoria may be tied somewhat to the rally in crude, it is likely to be short-lived if higher gasoline prices persist, as consumers will likely cut demand for other retail products, having to spend more to fill their tanks.

Another worrisome sign is the flattening treasury yield curve. The difference in yield spread between the five-year note and the 30-year bond fell to its lowest since 2007, a mere 29 basis points, with the five at 2.83 and the 30 at 3.12.

Flattening the curve, as at present, tightens banks' ability to lend at profit and is often a sign of a nearby recession. Should the curve invert - with fives' yield higher than 10's perhaps, it's an almost certain sign of recession, as all recessions over the past 50 years have been presaged by an inverted curve.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38

At the Close, Thursday, May 10, 2018:
Dow Jones Industrial Average: 24,739.53, +196.99 (+0.80%)
NASDAQ: 7,404.97, +65.07 (+0.89%)
S&P 500: 2,723.07, +25.28 (+0.94%)
NYSE Composite: 12,731.64, +99.15 (+0.78%)

PPI Moderates, Stocks Rise On Hope, Noise

With today's gains, the Dow Jones Industrial Average has nearly doubled - in one day - all of its monthly gains from the previous six trading days.

Hardly a notable event, it overshadowed two days (5/3 and 5/8) in which the general averages barely budged at all.

In a market that is supposed to be highly volatile, what are flat sessions doing in there? They are showing something which many may have missed: the volatility from February and March certainly waned in April and is is petering out in May, with the VIX standing at a 16-handle presently.

This being a highly fluid situation, and one in which there remains the narrative of "recovery" or "expansion" getting people to sell their stocks isn't going to be an easy deal, thus, the zig-zag patterning of the past six weeks may maintain for a few weeks or months more before there's a true selloff.

About two weeks ago, Money Daily was of the opinion that the next rally (the one we're currently experiencing) should be good for 1000 points on the Dow. We're not even half way there, so more upside, complete with unicorns and rainbows are to be expected in the near term.

Once the Dow gets beyond 25,000, gains may become more difficult to rationalize. The market will no longer be oversold and approaching the January 26 high (26,616.71) will have traders on their toes and the early departures feeling a little bit queasy, though, being early is not the same as being wrong.

Whether or not the machinations of the algorithms and AI computers will undo 100+ years of Dow theory remains to be seen.

BTW: Oil is going out of sight, again. That is not a good sign for a buoyant, expansive economy, but rather one that is tightening up and about to relapse into melancholy and the doldrums of stagflation.

For now, most of what's moving stocks is noise, and it is not very loud.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39

At the Close, Wednesday, May 9, 2018:
Dow Jones Industrial Average: 24,542.54, +182.33 (+0.75%)
NASDAQ: 7,339.91, +73.00 (+1.00%)
S&P 500: 2,697.79, +25.87 (+0.97%)
NYSE Composite: 12,632.53, +112.29 (+0.90%)

Indecisive Market Flatlines On Slow News Day

Even with President Trump officially pulling out of the multi-nation Iran deal, stocks found no reason to go anywhere but sideways.

The Dow fell 146 points to the downside directly following the president's announcements, but a furious late-session rally brought it to a positive close.

Closing the book on the Obama administration's failed agreement with Iran, Trump plans to re-impose sanctions on Iran while working toward a more complete and lasting solution. while some panicky sellers showed their weak hands, short-covering picked up the pieces and left the markets just about where they started.

Outside of venal day-traders with some well-honed timing skills, nobody makes much on days like this, with volume hitting extremely low levels.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06

At the Close, Tuesday, May 8, 2018:
Dow Jones Industrial Average: 24,360.21, +2.89 (+0.01%)
NASDAQ: 7,266.90, +1.69 (+0.02%)
S&P 500 2,671.92, -0.71 (-0.03%)
NYSE Composite: 12,520.25, +0.50 (0.00%)

Peaks, Valleys and Trading Ranges: Stocks Stuck In Trader's Paradise

Another day, another volatile session with a 216-point trading range on the Dow has investors concerned, but traders - those commission-or-volume-based entities that make markets - ebullient.

The range of trade on the day was nothing of concern to anybody, since the levels are far from the extremes. Those extremes on the Dow, since February 8 include a February 26 high of 25,709 and a March 23 low of 23,533 and are dignified on charts as significant peaks and valleys. With the Dow closing somewhere betwixt and between is indicative of a market that simply cannot make up its own mind, since there are roughly equal parts sellers and buyers, but barely any conviction on either side.

Stocks will continue to trade in this 2100-point range until there is some decisive catalyst to lead them either higher or lower. Presently, there is nothing to encourage the bulls nor the bears that a breakout or breakdown is about to occur. What happens during these volatile but rangebound periods are fairly discernable patterns of behavior, most notably stocks bouncing higher off the 200-day moving averages of the various major indices, or correcting lower off the 50-day moving averages.

Stocks being tied to computers and the computers run by algorithms, programmatic trading is ensured.

There isn't much to be said or inferred from this sideways pattern, except that the range continues to be on the low side, with all-time highs from January 26 (26,616.71) becoming a smaller and smaller object in the rear view mirror of the stock market race car.

Nothing is likely to change this pattern until either the peak or valley is breached, though the odds are good that the valley breach will be the eventual winner, leading to a more vicious, faster-paced downturn.

That's not to say that the Dow could not add significantly from its current level. It's a distinct possibility, but one that would probably fail as the index approaches that February 26 peak.

Throw away all the fundamentals, dismiss all the geopolitical news, ignore all data and just focus on the chart. Sometimes - and now is one of those times - it is really that simple.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17

At the Close, Monday, May 7, 2018:
Dow Jones Industrial Average: 24,357.32, +94.81 (+0.39%)
NASDAQ: 7,265.21, +55.60 (+0.77%)
S&P 500: 2,672.63, +9.21 (+0.35%)
NYSE Composite: 12,519.75, +26.40 (+0.21%)

Index Divergence Not A Pretty Sight; Higher Dollar, Oil, Gas Prices To Kill Economy

Friday's across the board gains in stocks managed to get the Dow into positive territory for the month, but paradoxically, not the week, which included the last day of April, a 148-point decline.

Thus, three of the major indices took it on the collective chins, with only the NASDAQ allowing for gains on a weekly basis. This kind of divergence - often seen in bear markets - is just another signal to astute investors that all is not well in the land of unicorns and lollipops otherwise known as Wall Street.

There's a significant amount of panic on display if one know where to look for it, one the best locations being the dollar index, which has been staging a rather relentless rally since mid-April, rising from 89.42 to 92.89, which may not seem like much on the surface, but in real terms, it's a huge matter to international trade. Companies not nimble enough to adjust to sudden currency movements may be caught flat-footed, on the wrong sides of trades, with losses in capital amounting to staggering sums if not accordingly hedged.

A rising dollar does rather damaging things to trading partners and to the US itself. Most obvious is that a strong dollar makes imports cheaper, dampens commodity prices should cause oil prices to decline, but, since the United States has become the world's largest producer of crude, perversely, oil is rising in tandem with the dollar (by Monday morning it had crested above $70/barrel), a condition which is going to cause some considerable pain to Americans who use more distilled products (gasoline) than any other nation.

If there's anything that will put a lid on economic expansion, it's high fuel prices, and the current level, if it remains so, primarily threatens the budgets of small businesses and individuals, acting as an up-front tax on production and consumption.

Practically every recession in modern history has been tied to the price of oil and/or gas. The current runaway price surge, if not contained and reversed, is likely to send the economy into a vicious tailspin. Since consumer credit is at an all-time high, the average driver cannot afford to spend more on fuel, be it to power an automobile, heat a home, or run a small business.

Once again, nefarious forces are at work, spiking the dollar and the price of crude simultaneously, when there is oil sloshing around everywhere and dollars returning to their US home thanks to congress and the president's tax reforms.

Those dollars, upon return, are being used by corporations for more stock buybacks, boosting - temporarily - stock prices, and are not reaching the consumption level, keeping inflation somewhat in check. The good news is that consumer goods will not skyrocket in price, though getting to the stores (what few of them remain) to buy such will cost more and more.

Greed will go where greed wants, and it always seems to manifest itself most profoundly in the price of a gallon of gas. Thank Larry Kudlow for this windfall for the Exxons and Chevrons of the world as his "king dollar" theory will be tested on the world stage.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36

At the Close, Friday, May 4, 2018:
Dow Jones Industrial Average: 24,262.51, +332.36 (+1.39%)
NASDAQ: 7,209.62, +121.47 (+1.71%)
S&P 500: 2,663.42, +33.69 (+1.28%)
NYSE Composite: 12,493.35, +100.84 (+0.81%)

For the Week:
Dow: -48.68 (-0.20%)
NASDAQ: +89.92 (+1.26%)
S&P 500: -6.49 (-0.24%)
NYSE Composite: -100.68 (-0.80%)

When The Bottom Falls Out The Media Might Tell You

Most people who are invested in stocks via an employer-supplied pension plan of 401k don't watch the stock market very closely. Many of them don't even know the stocks in which their fund has invested their money.

Thus, most of these people - which is a rather large segment of the market as a whole, and a very important one - will never know that the Dow Industrials were down nearly 400 points on Thursday, or that the NASDAQ and S&P had similar, scary declines.

Rather, some of these people will note that the Dow gained five points and the other indices were down very little at the end of the day. They will get this information from the nightly network news, which is such an overrated form of communication, largely composed of liars telling lies, that it ought to be banned.

When the bottom finally does fall out of the market, as it nearly did in February, these same idiot non-savants on the television will bleat out doom and gloom and warn that all is not well because our precious corporations are today not worth what we thought they were yesterday, or the day before that.

These people, these casual observers of market mechanics, have only themselves to blame for not taking better care of their money. What kind of country is this that fosters the belief that men in suits from downtown Manhattan are better stewards of our wealth than the people who made the money in the first place?

There's an answer to that somewhat rhetorical question, and it is simply this: a gullible, trusting country, full of good-hearted people who routinely get taken to the cleaners by investment advisors, bankers, and their loving government. And then the press lies to them about it.

It's too bad, because there was once a time these advisors, bankers, and people from government could be trusted to do the right thing. There was a time when the press was free and honest.

Those days are long gone.

Look out below.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00

At the Close, Thursday, May 3, 2018:
Dow Jones Industrial Average: 23,930.15, +5.17 (+0.02%)
NASDAQ: 7,088.15, -12.75 (-0.18%)
S&P 500: 2,629.73, -5.94 (-0.23%)
NYSE Composite: 12,392.50, -25.56 (-0.21%)

Federal Reserve FOMC Meeting EPIC FAIL; Stocks Battered

The Federal Reserve - yes, those people who made what in 1968 was a hamburger and french fries for about $1.50, today $7.95 on average - snuck in another FOMC rate policy meeting, doing nothing, but suggesting that there will be absolutely three and probably four rate hikes this year.

Market reaction: Initial happiness, followed by a shocking reality. "We're screwed!" was the soundbite of the day from those well-tailored gentlemen and women who trade stocks with your money for a living.

Since - like the eTrade advertisements say - your stockbroker's new car isn't going to pay for itself, the buyers and holders of stocks have once again been taken to the proverbial cleaners.

As we can clearly see from the Money Daily handy Dow scoreboard, "sell in May" is already in play.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17

At the Close, Wednesday, May 2, 2018:
Dow Jones Industrial Average: 23,924.98, -174.07 (-0.72%)
NASDAQ: 7,100.90, -29.81 (-0.42%)
S&P 500: 2,635.67, -19.13 (-0.72%)
NYSE Composite: 12,418.06, -74.96 (-0.60%)

Stocks Ripped Lower In Early Trade Before Miracle Rally; Signs Of Decline Ominous

After closing out April with the first positive result in three months - a paltry gain of 50.81 points - the Dow Jones Industrial Average began the month of May with a bad stumble, falling by as many as 350 points before rallying miraculously in the afternoon to end the session with a minor loss of just 64 points.

While the first day of May could have been - and probably should have been - a worse result than what the nightly news reports, signs for a continued decline in stocks overall are ominous.

The Dow remains far from all-time highs set in January, and, with earnings season winding down, traders will have a difficult time conjuring up reasons to have faith in equities over the near term.

With many stocks wickedly overvalued, the short-covering rally of Tuesday is likely to be short-lived, though the market still appears to be slightly oversold in the very short term.

April showed the market trading in a sideways direction, though the tilt to the downside is evident and wearing on Wall Street's general optimism. Any little thing could set off a panic, exacerbated by programmed trading and those silly algorithms and ETFs that bounce stocks around like rubber balls on concrete.

After the bell on Tuesday, Apple (AAPL) reported earnings for the most recent quarter that beat analyst estimates.

The company posted earnings of $2.73 per share on $61.1 billion of revenue. Analysts were looking for $2.64 per share on $60.9 billion of revenue, so, it wasn't exactly a blowout quarter, something that will surely be a cause for concern going forward. Apple is supposed to beat every quarter, and usually by leaps and bounds, but the company - which hasn't produced a new product in years - seems to be living more on reputation, and record stock buybacks, than innovation.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10

At the Close, Tuesday, May 1, 2018:
Dow Jones Industrial Average: 24,099.05, -64.10 (-0.27%)
NASDAQ: 7,130.70, +64.44 (+0.91%)
S&P 500: 2,654.80, +6.75 (+0.25%)
NYSE Composite: 12,493.02, -22.34 (-0.18%)