PPT To The Rescue, But For What Purpose?

Prepare for lower lows and lower highs.

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

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

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

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

But they will.

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

Caveat Emptor.

Dow Jones Industrial Average December Scorecard:

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

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

Heads Up! Stocks Selling Off Worldwide; US Open Looking Ugly; Germany's DAX Nearing Bear Market

After an unscheduled day off for the Kumbayah TV presentation of George HW Bush's funeral Wednesday, the rest of the world's equity bourses took the day to vacillate, but Thursday looks to be a bloodbath of magnificent proportions.

Asian stocks were down broadly in Japan, Hong Won, China, and elsewhere, and European stocks opened lower and continued to descend. The DAX, Germany's main stock exchange, is approaching bear market status, down 19% from an all-time high of 13,478.86, reached on October 30, 2017. The DAX is currently trading around 10,940.

At this writing, Dow futures are off more than 450 points, S&P futures have fallen nearly 50, and NASDAQ futures are 115 points lower.

Money Daily will be monitoring events throughout the US session, as this current downdraft appears to be one without a bottom.

Stocks Rocked As Europe Burns, Political Skepticism Soars; Globalism Grips As Populism Rises

With all the good news that's been spreading of late, the magnitude of this most recent setback was, for some, a little overdone. Others, who see the planet for what it is, see populism on the rise and globalism fading into history.

Prepare for some over-the-top hyperbole in 3...2...1...

Besides wealth inequality reaching heights heretofore unseen, taxation of the general populace in developed nations has reached catastrophic proportions. As seen in the European protests, the civility of the average man and woman, having been grossly abused, has been stretched beyond the limits of many whose toils seem to barely keep pace with the endless panoply of regulations, fees, fines, taxes and penalties. This is how epochs end.

In France, Germany, Sweden, Belgium, Italy and elsewhere, the citizenry has had enough of misrepresentation by so-called officials, elected, selected, or otherwise, and they are seeking economic and social freedom. The forces of globalism have been resolute in obfuscating reality and distorting the obvious all the while raking in the spoils of their pernicious policies and decietful politics.

In the United States, the working class has seen through the flash narrative surrounding the demonization of the popularly-elected President Trump. Americans no longer want illegal migration across their borders, handouts to the poor or the rich, nor policies that do them no good. The entire planet is on the verge of an emotional and psychological breaking point. It has been many years in the making, but, every day that goes by is rife with lies, innuendo, untruths, double-talk. Within the next year or two, everything is going to go sideways. The politics have simply outpaced the usefulness of the ruling class. It's apparent to just about anybody who give a damn and the wisest of the monied class on Wall Street are running for the proverbial hills.

Who knows what causes stocks to zig-zag on a day-to-day basis, for the Dow to pick up 600 points one day and drop nearly 800 the next?

In any case, the point drop on the Dow was the fourth-largest in market history. The other three larger also occurred this year. For the NASDAQ, it was the sixth largest. All of the 11 largest point declines on the NASDAQ occurred in either 2000 or 2018.

The Dow transports (DJT, -4.39%) tumbled 476.37 points, or 4.4%, with all 20 components closing lower. The previous biggest-ever point decline was 445.16 points on Oct. 10. At its intraday worst, the index was down as much as 565.23 points, or 5.2%.

Analysis of the recent volatility is sure to take on obscene forms from a parade of wizened economists, generalists, and hobbyists. None of them will have it exactly right. One day, all the world's full of unicorns and honey. The next, it's going to hell in a hand basket.

Whatever your particular niche or trading style, the current offers a uniquely volatile and confounding proposition for traders, speculators, or even the casual investor.

For the coming months, expect more of the same.

Dow Jones Industrial Average December Scorecard:

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

At the Close, Tuesday, December 4, 2018:
Dow Jones Industrial Average: 25,027.07, -799.36 (-3.10%)
NASDAQ: 7,158.43, -283.09 (-3.80%)
S&P 500: 2,700.06, -90.31 (-3.24%)
NYSE Composite: 12,221.98, -355.56 (-2.83%)

WEEKEND WRAP: Black Friday or Blue Friday? Oil Down 34%, S&P, NASDAQ, NYSE In Correction

The beatings will continue until morale improves.

While the exact origin of the above phrase is clouded, it certainly applies to the current stock trading regimen that has sent world markets spinning downward and US stocks to levels comparable to nearly a year ago.

The sad situation for stocks continued even into the holiday season, when the traditionally upbeat and optimistic Black Friday half-day session turned into a savage selloff that lasted right through to the 1:00 pm ET close.

Following a brief respite on Wednesday that saw the Dow end down less than one point, and the Thanksgiving Day holiday, investors took their cues from overseas markets, which were sold off on Thursday, extending the dour moods in Europe and the Pacific Rim. Friday's trading in foreign markets was mixed, though the outlier was Brazil, where the Bovespa lost 1,247.21 points (-1.43%), confirming the theme of a global, rolling, slow-motion crash in equity values.

According to respected sources (ZeroHedge and ETF Daily News), the Dow suffered its worst Black Friday loss since 2010 and the S&P saw its worst performance for the day after Thanksgiving since the mid-1930s.

While the Dow has not yet caught down to its deepest depths of 2018, it is approaching the 2018 bottom from March 23 (23,533.20), promoting the idea that the worst of this round o selling is not quite over.

Friday's session concluded another in a series of poor performances for stocks, nearly equalling the declines seen in the week of October 8-12, sending all of the major indices below their respective 50, 200, and 40-week moving averages.

While shoppers in the US were out buying electronics, toys, appliances, clothes, and assorted trinkets, Wall Street traders were selling off assets, not an encouraging start to the holiday season. All of the major averages ended the week below where they started 2018. Without a significant Santa Claus rally, 2018 looks to be one of the worst for traders since 2008, when the S&P 500 lost 38.49%. Since then, only twice - in 2011 and 2015 - has the S&P closed lower than the close from the previous year. Currently, the S&P is down less than two percent on the year.

Friday's losses sent there S&P 500 into correction territory, ending down 10.17% from the September 20 all-time high (2930.75). The NASDAQ sank further into correction, and is approaching an outright bear market. The NASDAQ is down 14,44% from its August 29 high (8109.69).

On October 3rd, the Dow Industrials closed at an all-time high of 26,828.39. On Friday, it closed down 9.48% from that level.

The NYSE Composite, which peaked on January 25 at 13,637.02, is down 11.74%, and the Dow Jones Transportation Index is down 10.39 since closing at 11,570.84 on September 14.

Finally, the big loser for the week - which will eventually be a boon to consumers - was oil, which was once again crushed, as WTI crude lost more than seven percent, to $50.42/barrel. On October 3rd, coincidentally the game day the Dow peaked, WTI crude sold for $76.41 per barrel. That's a decline of 34.02% in just over seven weeks. Now, that's a crash.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27

At the Close, Friday, November 23, 2018:
Dow Jones Industrial Average: 24,285.95, -178.74 (-0.73%)
NASDAQ: 6,938.98, -33.27 (-0.48%)
S&P 500: 2,632.56, -17.37 (-0.66%)
NYSE Composite: 12,036.24, -87.10 (-0.72%)

For the Week:
Dow: -1,127.27 (-4.44%)
NASDAQ: -308.89 (-4.26%)
S&P 500: -103.71 (-3.79%)
NYSE Composite: -364.04 (-2.94%)

Thanksgiving Is Not For Giving Money To Brokers; Dow Slides Into Weakened Holiday Close

All the stocks you bought last year are worth less this year.

Big deal, right? You still have the same stocks and they'll come back. The stock market always goes higher.

That seems to be the common wisdom, or at least a salve for wounds incurred during the recent downturn, and such thinking is especially appropriate for the millions of small investors who have their money locked up in 401k plans, IRAs or other retirement or long-range investment vehicles. These folks aren't as nimble nor as knowledgeable as the pros on Wall Street or even their local corner store stock broker. They're stuck. They're what's known in the industry as bag-holders, and, as mentioned above, there are millions of them.

The way average consumers - as investors, per se - are treated by the large funds and brokerages who manage their money is tantamount to a skimming operation, not unlike the protection rackets made famous by mob bosses from the 20s, 30s and 40s.

You give the fund your money, and they make sure nothing bad happens to it, suggesting that they will invest it wisely, and, for that privilege, you pay them a fee. If things go wrong, and your money diminishes, your account balance declines, the fund is not held responsible. Too bad. Tough break. "We don't control the market," they'll tell you.

The willingness with which people turn over hard-earned money to managers to invest is a concept that has baffled and befuddled psychologists and entrepreneurs for time immemorial. The generations who were adults during the ravages of the Great Depression - though most of them have passed away - and anyone who lost money in the dotcom bust or the Great Financial Crisis (GFC) of 2007-09, have been rightfully skeptical of the suggestions and promises made by the hawkers of stocks and bonds, the skimmers of fees, the suit-and-tie, computer-aided experts who are allowed to handle everybody else's money.

Does the small investor ever ponder what the broker does with his money? Is he or she investing in the same stocks as the general public he or she is serving? That question is seldom asked, and even more infrequently, answered. And when stocks start to slide, what does the broker do? Is he or she holding steady, as the clients are told to do, or has he or she jumped ship, pulling all the profits out of the stocks he or she owns? These are interesting questions, which, unfortunately, are not required to be answered by individual brokers or their companies. The fiduciary aspects of the brokerage business leaves much to be desired in terms of consumer protection. In brief, consumers are NOT protected and never have been. When one hands over money to a broker, they also give the right for the broker to do whatever he or she wishes with those funds.

This is not an indictment of any broker or investment house. There are many good ones, more good than bad, by a long shot. However, they all share a few common traits: they routinely under-perform the general indices (the most-often quoted statistic being behind the S&P), and, they have zero accountability when they lose money for their clients.

So, this Thanksgiving, be thankful you have money that you can spread around for brokers to manage for you, because, apparently, you're not confident enough nor smart enough to manage it yourself. And then you pay taxes, if you have any gains.

Now, to those uppity markets...

Stocks were floating along a sugar high on the day before Thanksgiving until the rush of a dead-cat rally wore off around 2:00 pm ET., and in an especially large manner on the Dow in the final hour of trading (by this time, your broker was already over the river and through the woods, on his way to Grandmother's house).

The Dow dropped 200 points in those final two hours of trading, the bulk of it (185 points) in the final hour. The other indices lost ground, though not to the degree that the Dow Industrials slumped. A lot of the loss was in Apple, the stock that has been largely blamed for Tuesday's selling.

Finally, the Dow ended with a loss of less than one point. Ouch. Stocks will be on sale again on Black Friday, in a shortened session which ends at 1:00 pm ET.

Happy Thanksgiving!

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53

At the Close, Wednesday, November 21, 2018:
Dow Jones Industrial Average: 24,464.69, -0.95 (0.00%)
NASDAQ: 6,972.25, +63.43 (+0.92%)
S&P 500: 2,649.93, +8.04 (+0.30%)
NYSE Composite: 12,123.34, +74.69 (+0.62%)

Crash Much? All 2018 Gains Wiped Out In Global Stock Rout

Where to begin?

Today's stock market rout was worldwide, starting in Japan, as the NIKKEI fell 238 points, the Hong Kong's Hang Sent slid 531 points and China's SSE Composite Index closed at 2,645.85, down 57.66 points, or -2.13%.

Europe was next up on the hit list, as the Germany's DAX was off 178.13 points (-1.58%), closing in on a 20% decline for the year. Other European stock indices were down between one and one-and-a-half percent.

As markets opened in the Western Hemisphere, the selling accelerated, sending the Dow down more than 400 points at the open and other North and South American indices falling sharply. By the end of the day, it was absolute carnage, a veritable sea of red. Every equity index on Yahoo's Major World Indices page was lower, save Malaysia's KLCI, which managed a 4-point, 0.25% gain.

Seriously, though, today's crash began in the fall of 2008, when stocks were wiped out in the face of the Lehman Brothers collapse and the sub-prime housing crisis, and also had roots from April 9, 2009, when stocks finally bottomed out as the FASB loosened accounting rules, issuing an official update to rule 157, allowing companies to deviate from standard mark-to-market principles in valuing assets.

The Fed and its central bank cohorts had their dirty little fingers in the dikes as well, conjuring up trillions of dollars in liquidity, effectively bailing out financial institutions that were, essentially, bankrupt. That's what brought us here today, ten years and trillions of dollars later. The everything bubble has finally popped.

This is a rolling crash, not a hard one, like on Black Tuesday in 1929. There have been - in just the past eight trading days - losses on the Dow of 201, 602, 100, 206, 395 points and today's 552. There were gains of 201 and 124 points on Thursday and Friday of last week, but the cumulative effect comes to a loss of 1731 points since November 8, roughly a seven percent dribble.

Tuesday's losses sent the S&P 500 hurtling toward correction territory. From the close of 2,930.75 on September 20 to today's finish at 2,641.89 is a 9.86% loss. For those in the rounding up-or-down crowd, that's 10 percent, or, close enough for horseshoes or hand grenades.

For those keeping score, the Dow is down 8.81% from it's closing high on October 3 (26,828.39). The NASDAQ, which has been in and out and back into correction since October 24, is still up on the year... a whopping five points and change. The index is down 14.82% since August 29. Albeit marginally, the Dow Industrials, S&P, NYSE Composite and the Dow Transports are all lower for the year.

The NYSE Composite which peaked at 13,637.02 on January 26 and never regained that height, is down 11.61%, reaching down to correction levels today, though, like the NASDAQ, it had breached the 10% down level on October 24 and since recovered.

Lastly, the Dow Jones Industrial Average finished today with a loss of 321.52 (-3.05%), at 10,212.94. That's an 11.74% drop from the all-time high close of 11,570.84, September 14.

In the commodity space, oil was crushed again today, as WTI crude futures ended at 53.22, down $3.98 per barrel (-6.94%). According to oilprice.com, that's the lowest price since mid-October of 2017.

Where do stocks go from here? That question almost answers itself.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58

At the Close, Tuesday, November 20, 2018:
Dow Jones Industrial Average: 24,465.64, -551.80 (-2.21%)
NASDAQ: 6,908.82, -119.65 (-1.70%)
S&P 500: 2,641.89, -48.84 (-1.82%)
NYSE Composite: 12,054.17, -226.74 (-1.85%)

Stocks Stumble Again, Dow Loses All November Gains; Germany's DAX Tumbling

After a while, one gets the impression that the bottom is going to fall out at some point, the only matter being one of when, and, maybe, by how much.

Stocks trended lower for a fourth straight day, with the Dow plunging by more than 350 points midway through the session, giving up all of its gains for November (some 1075 points). The NASDAQ led in percentage terms, down nine-tenths of a percent, with the S&P giving up early gains as well.

As usual, it could have been worse. The Dow slumped below 25,000 for the first time in two weeks, and while big, round numbers are flashy, the 25,000 level has no particular importance other than acting as a psychological figure.

Consumer prices rose by the most in nine months, as the October CPI came in with a "hot" 0.3% increase, fueling more concern that the Fed will continue raising interest rates at its December meeting, as planned. By now, the December federal funds increase should have been priced in, so, accusing inflation as the culprit de jour is probably a bit off the mark. What's really causing the continuation of the selling is more than likely a move by smart money out of stocks and into bonds or cash equivalents. With a 10-year treasury note offering well beyond three percent interest with no risk, some of the money leaving the market is surely headed that way, though corporate bonds are similarly attractive, albeit with a little more risk premia.

The major indices are still less than 10 percent off their all-time highs, making valuation a true issue. Post midterm elections, it appears that the federal government will be largely dysfunctional for the next two years, blunting any of President Trump's economic initiatives, and Maxine Waters proclamation that banking regulations will be tightened isn't winning any popularity contests on Wall Street. Waters is the chair-in-waiting of the House Financial Services Committee, which oversees banks and other financial institutions.

There's considerable concern over the smooth continuation of government, more even than there has been since the Gore-Bush election selection fiasco of 2000. Taken by any measure, Trump's policies in the first two years of his administration have been business-friendly, and the newly-elected Democrat majority in the House not only threatens to stop any progress that's been made, but actually reverse it by plunging Washington into chaos with investigations and special committees designed to strip the president of his power and possibly lead to impeachment.

Such an unstable environment gives pause to business expansion decisions while also worrying large investors. Thus, stocks are acting as a proxy for politics, which is not their best function, and the results could be devastating if the Democrats don't back down from their overly strident positions.

Given such a climate, is there any wonder stocks cannot gain traction, even with unemployment at historic lows?

Another concern is the state of foreign markets, which remain moribund at best, the DAX, Germany's main stock index has been falling in conjunction with US stocks, and it recently broke a key "neckline" in an obvious head-and-shoulders pattern according to analysts at FXEmpire.com. The German market could enter bear market territory in a matter of weeks, if not days, an important element in gauging world stock performance and a general indicator of economic health in the Eurozone.

These are just a few of the elements pushing hard against investors.

While the Dow is still 1000 points from an official correction, the NASDAQ re-entered the correction zone on Monday and the tech sector - which had been the driver of rallies - threatens to pull the entire stock complex down with it.

Amazon may be celebrating a coup in gaining sweet deals for its new HQ2 in Virginia and New York, but the rest of the tech world is not such a happy place.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72

At the Close, Wednesday, November 14, 2018
Dow Jones Industrial Average: 25,080.50, -205.99 (-0.81%)
NASDAQ: 7,136.39, -64.48 (-0.90%)
S&P 500: 2,701.58, -20.60 (-0.76%)
NYSE Composite: 12,280.73, -47.57 (-0.39%)

October Ends With Gains, But Still Marks Worst Month Of 2018 For Stocks

There was no spooking investors on the last day of October. Instead, stock buyers were treated to steady gains, especially on the beaten-down NASDAQ.

The gains from Tuesday and Wednesday took all the indices away fro the dreaded 10% correction space, though the NASDAQ is still hovering dangerously close, a mere 25 points atop the minus ten percent level (7281.20).

What didn't move much was the Dow Jones Transportation Index, up a mere 15 points and still down 12% from recent highs.

Even with the winnings of the last two sessions, October still turned out to be the worst month of the year for the Dow, which ended down some 1341.55 from the September 28 closing price. That topped the losses from February (-1120.19) and March (-926.09). The October declines left the Dow up just one percent on the year.

With the traditionally bad month of October fading into memory, the market welcomes November and December, two of the better months for stocks. Immediately ahead is the non-farm payroll data for October due out prior to the opening bell on Friday and looking to beat expectations after ADP reported on Wednesday a gain of 227,000 jobs for the month.

Stocks remain under pressure, however, as the recent volatility spread from techs and financials to the rest of the market. There are still questions on valuation and forward guidance that are keeping investors on their toes.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88
10/24/18	24,583.42	-608.01	-1,873.89
10/25/18	24,984.55	+401.13	-1,472.76
10/26/18	24,688.31	-296.24	-1,769.00
10/29/18	24,442.92	-245.39	-2,014.39
10/30/18	24,874.64	+431.72	-1582.67
10/31/18	25,115.76	+241.12	-1341.55

At the Close, Wednesday, October 31, 2018:
Dow Jones Industrial Average: 25,115.76, +241.12 (+0.97%)
NASDAQ: 7,305.90, +144.25 (+2.01%)
S&P 500: 2,711.74, +29.11 (+1.09%)
NYSE Composite: 12,208.06, +78.12 (+0.64%)

Dip-Buyers Step In, Send Stocks Soaring; ADP, Non-Farm Payrolls On Tap

Nothing says bear market like wild rallies from out of the blue and Tuesday's late afternoon jacking of stocks was right out of the market maker's textbook with buy the dip the mantra of the day.

At 1:30 pm ET, the Dow Industrials were up a mere 40 points, but bargain hunters stepped up their games, frantically buying up shares at reduced prices. The result was a big rise in all of the indices with the Dow leading the way higher.

Even though stocks avoided falling into official correction, at the end of the day the major indices were still well off their all-time highs, with the Dow nearly 2000 points lower than its close on October 3rd (26,828.39).

The day's action was similar to rallies on the 16th and 25th, when the Dow gained 547.87 and 401.13, respectively, only to meet larger declines in the days ahead.

What should buoy markets for the time being are a pair of employment reports, the first by ADP on Wednesday morning tracking private payrolls, followed by Friday's non-farm payroll data from the Bureau of Labor Statistics (BLS). Both are predicted to show job gains approaching 200,000 for October.

Another potential boost to markets could come from resumption of stock buybacks as the blackout period during earnings reports frees up shares to be repurchased by the companies that normally sell them to the public.

Analysts are calling the buybacks the backbone of the bull market, which begs the question of just how high a price are companies willing to pay for their own stock. While many in the investment community believe stock buybacks are good for companies and investors as they reduce the number of shares available and make earnings per share measurements easier to meet or beat, others point out that spending company money on own stock points up a paucity of creativity at the highest levels of corporate America as well as an unwillingness to expand a company's business.

In other words, if companies aren't interested in expansion of existing business or creation of new business units within the corporate structure, they must feel that their market penetration is fully saturated or that economic conditions are not conducive to growth.

Buybacks, in addition to massive injections of liquidity by the Fed has been the fluid of the nine-plus-year expansion. What is concerning to long-term investors is what happens when the well runs dry.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88
10/24/18	24,583.42	-608.01	-1,873.89
10/25/18	24,984.55	+401.13	-1,472.76
10/26/18	24,688.31	-296.24	-1,769.00
10/29/18	24,442.92	-245.39	-2,014.39
10/30/18	24,874.64	+431.72	-1,582.67

At the Close, Tuesday, October 30, 2018:
Dow Jones Industrial Average: 24,874.64, +431.72 (+1.77%)
NASDAQ: 7,161.65, +111.36 (+1.58%)
S&P 500: 2,682.63, +41.38 (+1.57%)
NYSE Composite: 12,129.94, +187.42 (+1.57%)

Massive Market Crash Sends Dow Into Correction Before Last-Minute Save

Monday's rapid rise at the opening bell turned to a massive selloff as the session progressed, prompted by a self-fulfilling note from Morgan Stanley chief strategist, Michael Wilson, that emerged around 1:00 pm ET, calling the current market turmoil more secular in nature rather than the "cyclical" call that most Wall Street analysts have been making.

The Dow and other major averages were sent off like fireworks at the open, but stalled in early trading, beginning their descent just after 10:00 am ET. The Dow topped off at 25,040.58 and continued lower, finally bottoming out at 24,122.23, an intra-day loss of more than 900 points, top to bottom. With just 15 minutes left in the trading session, short-covering took the Dow up more than 300 points, eviscerating more than half of the day's losses.

As for percentages, the Dow today actually was sent down just over 10% on both a closing and intra-day basis form the October 3rd all-time high. Intra-day, the Dow topped out at 26,951.81 before closing at 26,828.39. That puts the 10% correction mark at 24,256.63, intra-day, and 24,145.55 on a closing basis, both of which were exceeded today, though the closing number avoided a clear-cut entry into correction.

As for the benchmark S&P 500, today's close was 9.8% lower than the September 20 closing high of 2930.75. For those who like round numbers, that would qualify as being close enough, especially since the S&P bottomed out at 2,603.54, well below the number necessary to call it a correction. That index was down more than 55 points prior to the late-day rescue, finishing with a modest 17-point decline.

The NASDAQ and Dow Jones Transportation Index, both already well into correction territory, suffered even more losses on the day.

In agreement with Morgan Stanley's Wilson, there's growing evidence that what stocks are undergoing is anything but cyclical in nature, despite Friday's advance reading of third quarter GDP coming in at a rosy 3.5%. It's worth noting that the most recent quarter's growth was less than the second quarter's 4.2%, and that the first estimate is often revised lower in subsequent months, as data becomes more well-defined. Additionally, the third quarter figures were goosed higher primarily by consumer spending rather than business capital expenditures (CapEx), which were moribund.

For those of bullish sentiment, one has to consider just where markets are supposed to go when unemployment is at historic lows and the stock market is at historic highs, more than nine years into the longest bull market expansion in stock market history.

Proponents of Dow Theory (and the Elliott Wave) need only to look at a one or three-month chart to surmise that the Dow and the Transports have signaled a primary trend change - bullish to bearish. The Dow fell sharply from October 3rd to the 11th, rallied meekly through the 16th and puked it all up (or down, as the case may be) to current levels. The transports had already completed the four-step top-bottom-recovery-lower bottom prior to today's disaster, although it's all-time high was back on August 29.

The not-so-wild cards in the current scenario are the Fed's relentless assault on the federal funds rate, furiously raising a quarter point per quarter, inflation fueling via Trump's trade tariffs, and the stubbornness of wages to do anything but stagnate. It's a potpourri of potential pitfalls that are hard to ignore.

Like housing prices prior to the sub-prime crash, stock valuations do not always go up. This time is not different, and, judging by the frantic closing activity today, tomorrow could be a fully-loaded house of pain.

Unless the Dow rallies over the next two days, Octobers cumulative loss is looking to exceed the February and March losses combined.

And so it goes. Markets are cyclical and sometimes, secular. The latest days of trading feel like sometime has arrived.

Incidentally, today is the anniversary of Black Tuesday, October 29, 1929. Could that wicked buying in the final fifteen minutes have been an attempt to prevent history repeating?

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88
10/24/18	24,583.42	-608.01	-1,873.89
10/25/18	24,984.55	+401.13	-1,472.76
10/26/18	24,688.31	-296.24	-1,769.00
10/29/18	24,442.92	-245.39	-2,014.39

At the Close, Monday, October 29, 2018:
Dow Jones Industrial Average: 24,442.92, -245.39 (-0.99%)
NASDAQ: 7,050.29, -116.92 (-1.63%)
S&P 500: 2,641.25, -17.44 (-0.66%)
NYSE Composite: 11,942.15, -34.79 (-0.29%)

WARNING: Stocks Tumble Again, Key Levels About To Be Tested; Corporate Bag-Holders

As noted in the most recent WEEKEND WRAP, major US indices have been stretched lower to plumb their 200-day moving averages, with the NYSE Composite already having broken well below its 200-day.

While Monday's declines were not extraordinary, they were - with the obvious defection of the NASDAQ - uniform. Lock-step movement of the majors is usually cause for alarm, either to the upside or down, and, in this case, the S&P, Dow and Composite have been displaying the kind of cascading losses indicative that the move is not contained within a few select sectors, but rather, is broadly-based.

US stocks are not the only issues facing lower pricing. Stock indices around the world have been under severe pressure for most of October, extending back into August and September for most of Europe. Emerging markets, suffering losses most of the year - in the case of China, the decline began in 2015 - show no signs of recovering, their slide relentless and often violent.

Overnight, Hong Kong's Hang Send and Japan's NIKKEI indices were battered, the Hang Sent down, 3.06%, the NIKKEI off 2.67%. China's SSE Composite, already a basket case down more than 50% since 2015, fell another 2.26%.

Early on Tuesday, all European stock markets were lower. As has been the case for the past eight weeks, Germany's DAX was leading the way down.

When markets open in the US on Tuesday, the expectation if for further declines, as futures predict a very rough opening. S&P futures were off by as much as 37 points, NASDAQ futures were down more than 125 points, and Dow futures had fallen by more than 400 points by 8:00 am ET.

The immediate key levels for the major indices are obvious ones, as markets close in on the October 11 interim bottoms. The Dow is looking at its close of 25,051.55 on that date. Any intra-day move below that level would likely trigger even more selling pressure, as once again, Dow Theory rears its head, predicating a primary trend change from bullish to bearish.

Confirmation would come from the Transportation Index, which closed on October 11 at 10,397.23 and Monday at 10,435.76. Monday's loss of just three points on the transports was a shallow shadow of what's been an ugly performance since mid-September. Any close below 10,413 would put the index in correction territory, which was not reported on the October 11 flush.

As the S&P approaches its October 11 low of 2728.37, it is still three to four percentage points above correction (-10%), but the index has been hammered down of late with lower closing prices in 11 of the last 13 trading sessions.

The aforementioned NYSE Composite needs a close of 12,273 to qualify for correction mode. Its high dates all the way back to January 26, when it closed at an all-time high of 13,637.02. The composite is down more than nine percent from the highs and is down 3.6% year-to-date.

NASDAQ watchers will be eyeing the level of 7329.06, the October 11 closing low, after the index reached an all-time high of 8109.54 on August 31. A close of 7298 would be a 10% decline from that level.

Since October is traditionally the most volatile month, companies and investors will be seeking scapegoats and already some corporate types have singled out the threat or imposition of tariffs by President Trump as the primary cause for poor third quarter results.

Some analysts have touted the recent selloff as technical in nature, without important underlying rationale. Taking the case further afield, a recent note by JP Morgan analysts infers that the selling is not only technical in nature, but driven by the lack of corporate stock buybacks, typically halted or blacked out during earnings seasons.

The MarketWatch article which references the analysis is fascinating and full of charts and figures comparing the October breakdown to February's quickly-accelerating descent.

What the analysts fail to point out in their notes is that stocks rose dramatically during second quarter earnings season, from the end of June to near the end of July, putting the lie to their thesis. Stock buybacks have been the main driver of stocks since the aftermath of the 2008-09 crash, and are poised this year to reach a record above $900 billion.

At least, when stocks rebound near the end of the month (as the analysis suggests), we can finally proclaim to know just who those infamous buy the dip punters have been. If indications of a bear market continue to emerge, America's finest corporations, led by the best and brightest managers, will be the ultimate bag-holders, repurchasing their own stock at grossly elevated prices.

Only in America...

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90

At the Close, Monday, October 22, 2018:
Dow Jones Industrial Average: 25,317.41, -126.93 (-0.50%)
NASDAQ: 7,468.63, +19.60 (+0.26%)
S&P 500: 2,755.88: -11.90 (-0.43%)
NYSE Composite: 12,374.76, -82.51 (-0.66%)

Global Rout Continues; All 30 Dow Components Lower; China A 50% Loser Since 2015

Stocks took another beating on Thursday, though not quite as extensively on the tech side as was the case in Wednesday's rout. The Dow Industrials took another two percent hit, sending the 30 blue chips down another 546 points. The combined losses in the six sessions following the all-time high close of 26,828.39 on October 3rd at 1,775.56 or 6.69%, a figure that should not, in and of itself, inspire much fear, though the rapidity, persistency, and consistency of the losses are not exactly inspiring much in the way of investor confidence.

All 30 Dow stocks finished in the red. Spared from most of the carnage was Microsoft, which closed at 105.91, down a mere 0.25 points, or 0.24%. No other Dow issue reported a decline of less than one half percent. Leading the way down was Phizer, with a 3.82% loss. Other stocks finishing down three percent or more included JP Morgan Chase (3.00%), Traveler's (3.01%), Proctor and Gamble (3.16%), McDonald's (3.21%), Cisco Systems (3.31%), Chevron (3.40%) and Exxon Mobil (3.45%). The Dow's gain year-to-date is a now a mere 333 points, or less than two percent. There was nothing even approaching good news as third quarter reporting approaches.

The NASDAQ fared much better than the three percent decline it made on Wednesday, dropping less than 100 points, though that was hardly cause for optimism. Having reached a peak of 8102.04 on October 1, the index has shed some 673 points, putting it close to correction (-10%). NASDAQ shares are down a cumulative 8.3%.

On the S&P 500, the percentage decline was almost identical to that of the Dow, losing 57.31 points, down 2.06 percent. The losing streak of the S&P has now reached six straight days. It also closed at an all-time record of 2947.25 on October 1, but has since fallen 219 points, a 7.4% loss in just eight sessions.

Year-to-date, the S&P is up by only 55 points, a gain of just over two precent.

Stocks were also being sold off in droves on foreign exchanges. In Germany, the DAX continued its descent with a loss of 173.15, another 1.48% drop, sending it further into correction. Joining the DAX in the down 10 percent or more club was Britain's FTSE, losing 138.81 points (-1.94%). France's CAC 40 is teetering on the brink, down more than nine percent off recent highs.

On Pacific Rim exchanges, Japan's NIKKEI was down 3.89%, Hong Kong's Hang Seng lost 3.54%, but both were outdone by China, where the SSE Composite Index closed down 5.22%. China's stock market is the world's basket case, down a full 50% from its all-time high of 5,166.35 in June of 2015, the chart bearing a striking resemblance to the NASDAQ's dotcom bust of 2000. The SSE closed Thursday at 2,583.46.

What comes next for markets is anybody's guess. Analysts and economists range from complacency to panic and everything in between. The losses this week rival those from February of this year, when major US indices touched briefly into correction.

Bonds firmed on the day, with the 10-year note finishing with a yield of 3.13%. Oil was hit hard again, with WTI crude losing nearly three percent, closing just a shade under $71/barrel.

The only bright spots were in precious metals. Gold had its best day in months, gaining $34 to $1,227.70 per troy ounce. Silver followed along dutifully, picking up 28 cents per troy ounce, at $14.61.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1405.48

At the Close, Thursday, October 11, 2018:
Dow Jones Industrial Average: 25,052.83, -545.91 (-2.13%)
NASDAQ: 7,329.06, -92.99 (-1.25%)
S&P 500: 2,728.37, -57.31 (-2.06%)
NYSE Composite: 12,349.53, -272.61 (-2.16%)

Dow Closes With Losses; Is This 2007 All Over Again?

The Dow spent the day criss-crossing the unchanged line - 20 times to be exact - before finally capitulating late in the day, closing lower for the third time in four days, the losing sessions outweighing the sole winner by a margin of some 398 points.

Among the various reasons for the recent declines are the usual suspects: trade and tariffs, emerging market weakness, soaring bond yields, and widespread political unrest, not only in the United States, but elsewhere in the world, particularly Europe, where nationalism is on the rise in opposition to hard-line European Union bureaucracy and technocrats.

Italy is the most recent focal point, where the latest government consists of parties warring within themselves, with each other, and with the political apparatus that overarches all things European from Brussels. The Italian government, like most modern nations, is saddled with largely unplayable debt, seeking solutions that preclude involvement from either the ECB or the IMF, a task for only the brave or the foolhardy.

As much as can be said for the political turmoil within the Eurozone, it remains cobbled together by an overtaxed citizenry, ripe for revolt from the constraints upon income and general freedom. As was the case with Greece a few years back, the EU intends imposition of austerity upon the Italians and is facing stiff resistance from the general population and government officials alike.

Political sentiment aside, the canary in the US equity coal mine is the downfall of the treasury market, which has seen rising yields almost on a daily basis since the last FOMC meeting concluded September 26, the well-placed fear that the Fed has reached too far in implementing its own brand of monetary austerity by flooding markets with their own overpriced securities. The resultant condition is the most basic of economics: oversupply causes prices to fall, yields to rise.

Adding to investor skittishness are upcoming third quarter corporate reports, which promise to be a bagful of not-well-hidden disappointment, given the strength of the dollar versus other currencies and corporate struggles to balance their domestic books with those outside the US. Any corporation with large exposure to China or other emerging markets is likely to have felt some currency pressure during a third quarter which saw rapid acceleration in the dollar complex. Most corporations are simply not nimble enough to adjust to quick changes in currency valuations, leading to losses on the international side of the ledger book.

Valuations could also matter once again. Since the economy in the US is seen as quite robust and strong at the present, investors may want to question their portfolio allocations. Good things do not last forever, and while the current rally under President Trump has been impressive, it has come at the end of a long, albeit often sluggish, recovery period.






All of this brings up the point of today's headline, the eerie similarity to the market of 2007, which presaged not only a massive recession, but a stock market collapse of mammoth proportions, a real estate bust, and vocal recriminations directed at the banking cartel, which, as we all know, came to naught.

In 2007, the Dow peaked on July 11, closing at 14,000.41, but was promptly beaten down to 12,845.78 at the close on August 16. It bounced all the way back to 14,164.53, on October 16, but was spent. By November 26, the day after Thanksgiving, the industrials closed at 12,743.44 and continued to flounder from there until the final catastrophic month of October 2008.

The chart reads similarly, though more compressed in 2018. The Dow made a fresh all-time high on September 20 (26,656.98) and closed higher the following day. On October 3, a new record close was put in, at 26,828.39, but the index has come off that number by nearly 400 points as of Tuesday's close.

It is surely too soon to call for a trend change, but, if 2018 is anything like 2007, the most recent highs could be all she wrote, the proof not available for maybe another month or two, but the Dow bears watching if it cannot continue the long bull run.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74

At the Close, Tuesday, October 9, 2018:
Dow Jones Industrial Average: 26,430.57, -56.21 (-0.21%)
NASDAQ: 7,738.02, +2.07 (+0.03%)
S&P 500: 2,880.34, -4.09 (-0.14%)
NYSE Composite: 12,960.57, -39.56 (-0.30%)

Stocks Split As Dow, Led By Consumer Stocks, Rallies

Having plunged 224 points just before noon, the Dow Jones Industrials seemed destined for a third consecutive losing session on Monday.

Instead, investors sensed opportunity, buying up shares of mostly consumer stocks. Walgreens (WBA, 74.15, +1.64, +2.26%, Walmart (WMT, 94.69 +1.38, +1.48%), and Coca-Cola (KO, 46.48, 0.60, +1.31%) emerged the big gainers on the day as the Dow marched ahead more than 240 points to close marginally in the green.

Following along were the NASDAQ and S&P 500, though neither of those indices were able to punch above the unchanged line. Particularly hard hit was the tech-laden NASDAQ, which, inducing Monday's losses, had shed nearly five percent of its value top to bottom over the past three trading sessions.

With stocks floating close to all-time highs, the buying stint today seems to be of questionable quality. Globally, markets were stunned to open the week, with European bourses losing more than one percent, the German and Belgian markets dipping further below correction levels. To say the least, afternoon trading in US markets was built on shaky ground.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47

At the Close, Monday, September 8, 2018:
Dow Jones Industrial Average: 26,486.78, +39.73 (+0.15%)
NASDAQ: 7,735.95, -52.50 (-0.67%)
S&P 500: 2,884.43, -1.14 (-0.04%)
NYSE Composite: 13,000.13, +8.19 (+0.06%)

Weekend Wrap: Stocks Whacked At Week's End, NASDAQ Suffering Most; Global Condition Questionable

Back-to-back down sessions left the Dow Jones Industrial Average lower for the week and month, though only by 11 points, the dual declines amounting to a 380-point loss after the Dow had recorded three-straight all-time highs, so a pullback was not only likely, but probably helpful in the long term.

Stocks have been soaring due to strong economic data, but, at some point, valuation becomes an issue, and that point may have been reached this week. By far, the NASDAQ suffered more than the other indices as investors fled speculative positions in favor of more defensive ones, especially as treasury bond prices tumbled, sending yields on the 10-year note to their highest point since 2011.

The 10-year note closed out the week yielding 3.23, while the 30-year bond offered a yield of 3.40. Better yet, spreads widened, as the 2-year bill finished at 2.88, widening the spread on 2s-10s to 35 basis points, allaying some of the fears for an inversion in the curve, a condition that normally precedes a recession.

Friday's September non-farm payroll data from the BLS came in below expectations of 180,000, at 134,000 new jobs, adding to the shifting sentiment late in Wall Street's week. Unemployment ticked lower, however, from 3.9% to 3.7%, keeping the jobs picture still very much a positive one.

Losses on the NASDAQ (-3.21%) were the worst since March. Such a large loss, especially in the leadership group, may cause investors to reconsider their allocations, especially since October is normally a very volatile time. Besides the risk of further declines on valuation, many speculative tech stocks offer no dividends, an important element for stability in any portfolio.

Globally, markets were lower, with Europe suffering steep declines. The stock index of Europe's leading economy, Germany's DAX, is already in correction territory. Tremors from Italy's burgeoning funding crisis have caused concern in European bourses as the runaway Italian government continues to criticize the European Central Bank's (ECB) practices.

While Italy is unlikely to withdraw from the EU, there is mounting pressure on recently-elected leaders for more autonomy, citing the disastrous condition in Greece, following years of bailouts and forced austerity by EU leaders.

Emerging markets, including behemoths China and India, have been suffering from banking and regulatory malaise, and from a growing suspicion that the official data cited by governments is often fudged to appear better than reality.

The dollar eased late in the week against some currencies, a relief to those emerging markets, though not enough to avoid wholesale capitulation of home currencies, especially in Turkey and Argentina, two basket-case economies on the verge of inflationary and solvency collapses.

Those are the leading factors which has prompted investor flight to US equities and bonds, considered a global safety net, though the crowding of those markets has led to what currently is the condition of overvaluation in some sectors.

Gold and silver were bid slightly through the week, though the precious metals still remain close to there-year lows with no bottom having been found.

While general economic news in the US is good and should continue to be so, global conditions are far from rosy, which is leading to some shift in sentiment and flights to safety.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26

At the Close, Friday, October 5, 2018:
Dow Jones Industrial Average: 26,447.05, -180.43 (-0.68%)
NASDAQ: 7,788.45, -91.06 (-1.16%)
S&P 500: 2,885.57, -16.04 (-0.55%)
NYSE Composite: 12,991.95, -50.35 (-0.39%)

For the Week:
Dow: -11.26, (-0.04%)
NASDAQ: -257.91 (-3.21%)
S&P 500: -28.41 (-0.97%)
NYSR Composite: -90.67 (-0.59%)

Why Does the Dow Go Up When Everything Else Goes Down?

Divergence between the NASDAQ and the Dow Industrials has been a persistent feature over the past year, although recently, the up versus down daily routine has taken on nw dimensions, with the 30 Dow stocks outperforming all other indices routinely.

Tuesday was a case in point as all major indices, including the S&P 500, NASDAQ, Dow Transportation Index, and the Russell 2000 all ended in the red, while the Dow rose majestically to a new all-time closing high. Additionally, almost all foreign markets finished lower on the day.

While there has been no rationale to sufficiently explain the phenomenon, one might easily conclude that the Dow stocks are more stable than the more speculative offerings on other indices, or that Dow stocks, in addition to steady appreciation, offer regular dividends and are generally regarded as the best behemoth companies in the American market.

None of this can fully explain why the Dow gains while other stocks fall, but the pattern has been so obvious and consistent for so long, it merits further investigation.

Conspiracy theorists can claim manipulation in order to keep the unsuspecting masses complacent, as the Dow Jones Industrial Average is the most-widely watched index on the planet. Such an explanation would be difficult, if not impossible, to prove.

Others rightly point out that the Dow is unique in that it is not a weighted average, and gains or losses by the highest-priced offerings can send the index up or down in rather large ways.

In any case, the Dow keeps going up, no matter what other markets or indices are doing.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63

At the Close, Tuesday, October 2, 2018:
Dow Jones Industrial Average: 26,773.94, +122.73 (+0.46%)
NASDAQ: 7,999.55, -37.76 (-0.47%)
S&P 500: 2,923.43, -1.16 (-0.04%)
NYSE Composite: 13,106.01, -19.34 (-0.15%)

Stocks Gain On Positive Economic Data; Elon Musk, Tesla Sued By SEC

The Dow Jones Industrial Average snapped a three-day losing streak and the S&P ended its own four-day skein as positive economic numbers boosted confidence, leading to spirited buying early in the session.

Euphoria faded as the day wore on, however. The Dow was up nearly 170 points close to 1:00 pm EDT, but sold off through the afternoon into the close, losing two-thirds of the day's gains. Similar patters were noted on the S&P and the NYSE Composite. The NASDAQ lost some value, though the afternoon swoon was not nearly as severe as on other indices.

The good news came prior to the opening bell. The third estimate of second quarter GDP held steady at 4.2% and durable goods orders for August soared by 4.5%. Upon further review, the durable goods number appeared much weaker than the headline, as much of the increase was supplied by non-defense aircraft orders, which were up 69% and defense capital goods order were up 44%.

Late in the day, word circulated that Elon Musk, CEO of Tesla Motors (TSLA) was being sued for fraud by the SEC.

The SEC alleged that Musk made "false and misleading statements" when he casually stated and tweeted that he could take the company private at $420 a share and also alleged that Musk's tweets caused market chaos, harming investors.

If the SEC's claims hold water, Musk could be stripped of his position and barred from ever running a publicly-traded company. He would also face stiff fines.

The news came too late in the day to affect trading on Thursday, though the stock was down between 10 and 13 percent in pre-market trading Friday morning.

Musk has been a controversial leader of the company he founded, but seems to be beset by psychological demons and may be bi-polar. In addition to his frequent affronts to sensibility, the company has never turned a profit and is deeply in debt. Additionally, Tesla autos have been known to burst into flames upon impact and its auto-pilot feature has been cited by some as a cause for lack of control, leading to a high rate of accidents.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23
9/25/18	26,492.21	-69.84	+527.39
9/26/18	26,385.28	-106.93	+420.46
9/27/18	26,439.93	+54.65	+475.11

At the Close, Thursday, September 27, 2018:
Dow Jones Industrial Average: 26,439.93, +54.65 (+0.21%)
NASDAQ: 8,041.97, +51.60 (+0.65%)
S&P 500: 2,914.00, +8.03 (+0.28%)
NYSE Composite: 13,105.72, +3.77 (+0.03%)

Dow Losses Tied To Nothing Other Than Profit-Taking

There's almost no chance - as Yahoo! News blared in a headline late Monday afternoon - that Brett Kavenaugh's Supreme Court nomination had anything to do with the 181-point drop on the Dow.

The continuing false narrative foisted by the financial media is about as fake as fake news can get. Every day, there has to be a reason for stocks rising or falling, there just has to be. Otherwise, how would the 24-hour squawking about stocks, finance, and your money justify its existence.

Sure enough, there are days that movements in stocks is correlated to some economic event, data drop, or newsworthy story, but most of the time trading actions are the result of some analysis, some emotion, and largely, some advance planning. Big firms don't just jump in and out of positions on the news of the day, their positions, and the allocation of their capital, is guided by profit and loss, gauging risk and reward, greed and fear.

There are times in which herd mentality takes over and swings sectors or even entire markets one way or the other, but, by and large, such huge swings are already programmed by the big trading firms, which almost never leave their positions vulnerable to unforeseen events. They are protected by covered calls or puts or any of a variety of risk-reducing strategies. Nobody with any experience trading stocks is rushing to their terminals to buy or sell on whatever nonsense is being cooked up by the crooks running the federal government in Washington, DC, because what happens on Capitol Hill usually has little to nothing to do with real capital being flung far and wide from Wall Street.

Firm in the knowledge that big positions were not being liquidated by major traders, what did cause the dip on the Dow Monday?

Chalk it up to profit-taking on short-term positions. Of the 30 Dow stocks, only seven were winners on the day, leaving 23 in the loss column. Two of the winner - ExxonMobil and Chevron - were tied almost directly to oil prices, which were up not just on the day, but for the past few weeks, as WTI crude hit a four-year high above $72/barrel on Monday. Three were chip or computer-related, as Apple, Microsoft and Intel were up, and the other two, Disney and United Health, were based on some perceived valuation play.

The rest of the stocks were lower, and it's probably a good idea to discount it as nothing more than random noise. The Dow just reached all-time highs this past Thursday and was even higher on Friday, so traders had plenty of time over the weekend to figure their positions, their profits, and how to take them. Since the move was less than one percent there's reason to believe that many traders - who, via groupthink, share many of the same strategies, knowledge, and objectives - saw an opportunity to book profits and move on to the next big thing, whatever that might be.

And, when they discover the next profitable trade, it's a safe bet that you won't be privy to it, but that many of the bigger traders on the street will know. It will have nothing to do with the news, politics, the soybean crop report, or the color of Lady Gaga's hair. You can bet on that.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23

At the Close, Monday, September 24, 2018:
Dow Jones Industrial Average: 26,562.05, -181.45 (-0.68%)
NASDAQ: 7,993.25, +6.29 (+0.08%)
S&P 500: 2,919.37, -10.30 (-0.35%)
NYSE Composite: 13,162.05, -74.39 (-0.56%)

Dow Theory Thwarted; Bulls Back In Charge As Industrials Register New All-Time High

In what has to be regarded as a false signal from the Dow Theory tracking primary trends, the Dow Jones Industrial Average posted a new all-time closing high on Thursday, finishing the session at 26,656.98, eclipsing the previous record close of 26,616.71 reached on January 26, 2108.

In the interim, the Dow suffered through a shallow correction in February and March, gradually regaining its momentum in the second quarter, gaining 158.97 points for all of April, May, and June. During that period, however, other indices were exhibiting strength, especially the NASDAQ, which soared to record highs in June, followed by more all-time highs in July and August.

The S&P 500 took longer to recover, finally reaching a new apex on August 24, though the index showed considerable resilience and strength from April though the summer. It too finished at a record, gaining 22.80 points, it's best single-day gain in nearly two months.

The bear market, primary trend reversal signal sent via Dow Theory was initially triggered when the industrial average made a new short-term low on March 23, at 23,533.20, and confirmed on April 9, when the Transportation Index also closed at a new recent low of 10,119.35.

Skeptics noted that the transports, immediately after reaching that critical low, immediately rebounded with a 650-point rally over the next seven sessions. The aftermath from the signal forward didn't appear to be anything even remotely resembling a bear market, and if it was, the signal was too late and not useful for trading purposes. In fact, had one paid heed to the primary trend signal, one would have missed out on some sizable gains from April though the present.

The transportation index made a fresh record close at 11,436.35, on August 21 and has since finished higher than that on a tuber of occasions. The new high close on the Dow Jones Transportation Index was the first signal that the primary market trend was about to reverse again. It was just a matter of time and playing catch-up for the Dow to achieve a new record.

Whatever the market rationale - be it the Trump effect, animal spirits, or simply the general attractiveness of US markets caused by the recent strong dollar - stocks continue to be the best investments available to the general public and the larger institutional investing community.

Where the market goes from here is, as always, an open question, though it appears that the longest bull market in history will continue apace. Nothing, not even regular, quarterly interest rate increases by the Federal Reserve, has been able to slow down the US equity express.

On the heels of solid performances in July and August, the Dow is poised to post the best quarterly results of the year when the third quarter concludes in just one week, September 28. The Dow added 1143.78 points in July, 557.29 in August, and has racked up a gain of 692.16 in September.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16

At the Close, Thursday, September 20, 2018:
Dow Jones Industrial Average: 26,656.98, +251.22 (+0.95%)
NASDAQ: 8,028.23, +78.19 (+0.98%)
S&P 500: 2,930.75, +22.80 (+0.78%)
NYSE Composite: 13,225.11, +103.14 (+0.79%)

Blue Chips Gain, Dow, S&P Closing In On Records

As the Dow zipped ahead Wednesday, tech stocks on the NASDAQ were shunned and the S&P 500 was nearly flat, though approaching its all-time high (2,914.04, August 29).

The highly-anticipated trade wars touted by the Trump-hating press have yet to materialize, and multi-national corporations are adjusting to the new world of tariffs as opposed to the falsely-defined "free trade" policies of the past three decades.

With President Trump rewriting the parameters of global commerce, US companies are, as they should, making adjustments to currency distortions and disputes arising from the sudden departure from the past. That being the case, Dow stocks are performing favorably, while tech vacillates. The key to direction seems to be headed by the banking and financial sectors, which underpin all commercial activity.

Seeking to normalize interest rates, the Fed is set to raise the federal funds rate again in less than a week, at their September 25-26 FOMC meeting. Bank stocks have been largely untouched by any kind of organized selling pressure, which leads to complacency on trading desks and within investor portfolios. Passive index funds continue to perform well, despite perceived distress over presidential policies and political hijinks.

There's so much bullishness apparent that contrary practitioners have toes in the water, many of them already burned by bounces in the market structure. This is not an environment in which one would readily short stocks, as the bull market rages on without so much as a five percent pullback since the lows of February and March.

The money is out there, most funds fully invested without a worry in the world. That's a condition that usually leads to disaster, though this time looks to be truly different. If President Trump MAGA promise can be gauged at all, the stock market might be a proxy for the health of the American economy and it is doing quite well.

The Dow has posted gains in six of the last seven sessions, adding nearly 550 points over that span.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94

At the Close, Wednesday, September 19, 2018:
Dow Jones Industrial Average: 26,405.76, +158.80 (+0.61%)
NASDAQ: 7,950.04, -6.07 (-0.08%)
S&P 500: 2,907.95, +3.64 (+0.13%)
NYSE Composite: 13,121.97, +29.99 (+0.23%)