Dow Approaching Correction Territory; NASDAQ Smashed Lower Again

After calling yesterday's trading the "worst dead cat bounce ever", equity markets in the US clambered back into the high green on Wednesday morning. Running on nothing but day-trading and short-selling fumes, the markets turned dramatically just before noon and were in the red over the final two hours, led lower by the now-dead NASDAQ.

To say that the NASDAQ has nosedived recently would be putting it lightly, as the index has had only one winning session in the past five, and has shed some 336 points over that span, or, about 4.5% percent.

There has also been some pain over on the S&P 500, which really stalled out after making a double top around 2780 (2,782.00, June 11; 2779.66, June 15), is down a little more than three percent over the past two weeks.

While the Dow Industrials were down the least, percentage-wise, the point loss was the greatest among the various indices and the Dow also is leading the charge downhill, already well into the red for the year (-2.5%).

With today's closing price, the Dow is down 9.4% from the January 26 high (26,616.71), on the brink of making a second excursion into correction territory. Meanwhile, the S&P and NASDAQ are still clinging to gains YTD, but are off the January highs as well. The NASDAQ is down just a fraction from January, but the S&P is down six percent over the same span.

Today's Dow downdraft was the 10th session with a negative close in the past 12, as the Dow turned a 903-point gain in June into a 298-point loss, a rapid, 1200-point descent. Whatever can be said about the demise of the Dow over the past three weeks it certainly is not good and does not portend well for the remaining two trading days of the month. Avoiding another correction is probably at the top of the list for the bulls still standing, because this foray will likely be more lasting and also lead to further losses.

Bonds were being bought with both hands on the day, with the yield on the 10-year note down five basis points to 2.83%, the lowest yield since April 17. The 30-year bond lost six bips, closing below 3.00%, at 2.97. This is 13 basis points below the close of 3.10% on the date of the latest FOMC rate hike, June 13. That's quite significant, since the Fed is intent on pushing rates higher, but the market is steadfastly resisting.

This recent spree of bond buying is signaling some dire consequences ahead. If the economy is strong enough to raise rates - as the Fed believes - then why is the market heading in the opposite direction? It's obvious that somebody is wrong-footed, and in this case, the money's on the Fed, which is usually well behind the trend, but currently is seeking to create the trend, something that is pretty much impossible, regardless of how much weight and force the central bank wants to exert on markets.

A explosive, toxic condition is at hand. The Fed and financial media are pushing a narrative of "all's well," but the market is saying, "I don't think so." Something is about to give, and soon. Expect stocks to continue their summer swoon, along with the requisite bouts of euphoria (short covering), though the fear factor will eventually take strong hold of conditions.

As has been stated ad nauseum on these pages for months, "this is a bear market. Trade accordingly."

Dow Jones Industrial Average June Scorecard:

Date	Close	Gain/Loss	Cum. G/L
6/1/18	24,635.21	+219.37	+219.37
6/4/18	24,813.69	+178.48	+397.85
6/5/18	24,799.98	-13.71	+384.14
6/6/18	25,146.39	+346.41	+730.55
6/7/18	25,241.41	+95.02	+825.57
6/8/18	25,316.53	+75.12	+900.69
6/11/18	25,322.31	+5.78	+906.47
6/12/18	25,320.73	-1.58	+904.89
6/13/18	25,201.20	-119.53	+785.36
6/14/18	25,175.31	-25.89	+759.47
6/15/18	25,090.48	-84.83	+674.64
6/18/18	24,987.47	-103.01	+571.63
6/19/18	24,700.21	-287.26	+284.37
6/20/18	24,657.80	-42.41	+241.96
6/21/18	24,461.70	-196.10	+45.86
6/22/18	24,580.89	+119.19	+165.05
6/25/18	24,252.80	-328.09	-163.04
6/26/18	24,283.11	+30.31	-132.73
6/27/18	24,117.59	-165.52	-298.25

At the Close, Wednesday, June 27, 2018:
Dow Jones Industrial Average: 24,117.59, -165.52 (-0.68%)
NASDAQ: 7,445.08, -116.54 (-1.54%)
S&P 500: 2,699.63, -23.43 (-0.86%)
NYSE Composite: 12,412.06, -98.49 (-0.79%)

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%)

All-Time Highs Becoming the Norm on Wall Street

Even though a potential government shutdown and another rate hike by the Fed are just weeks away, stock investors don't seem to care.

All the major indices rocketed out of the gate to impressive gains on Tuesday, eviscerating previous records.

As Wednesday morning approaches the opening bell, news that third quarter GDP was revised higher in the second estimate, to 3.3%, has futures kicking higher.

While Bitcoin surpassed $10,000 per coin on Tuesday night, the Dow might one-up the cryptocurrency by hurtling past 24,000 on Wednesday. The Dow Industrials passed the 22,000 mark on September 11, and cruised above 23,000 on October 18, so, ripping through 24,000 in just over a month wouldn't be much of a surprise.

At the Close, Tuesday, November 28, 2017:
Dow: 23,836.71, +255.93 (+1.09%)
NASDAQ: 6,912.36, +33.84 (+0.49%)
S&P 500: 2,627.04, +25.62 (+0.98%)
NYSE Composite: 12,520.23, +129.45 (+1.04%)

Dow Continues to Careen Higher as Other Indices Lag

Maybe the markets are broken by HFTs, computer algorithms, program trading, bid stuffing, and an assortment of hype, funny fiat money, low interest rates and the hunt for yield.

Maybe not, but, the week's look at the major indices indicates that only the Dow Jones Industrials posted solid gains (rising for the 9th straight session to another all-time high) while the other three major averages were essentially running in place, the NASDAQ actually posting a loss.

It's not unusual for one index to lead the market, but, since the 2008, stocks have made outsize gains and the darlings on the Dow have exceeded all expectations. Despite carrying some of the most obscenely-high P/E ratios in market history, traders continue to bang away at the McDonalds, Apples and Intels of the world, as though there is nothing other to buy.

These are the kinds of trading decisions which lead to apathy and eventual market convulsions. For now, however, there's nothing but the Dow Jones Industrial Average to prompt the cheerleading from everyone from the President of the United States on down.

Having a runaway stock market may be a sign of a strong economy, but, in this case, since it is so isolated, it should be viewed as a sign of imbalance.

At the Close, 8/4/17:
Dow: 22,092.81, +66.71 (0.30%)
NASDAQ 6,351.56, +11.22 (0.18%)
S&P 500 2,476.83, +4.67 (0.19%)
NYSE Composite: 11,984.89, +28.37 (0.24%)

For the Week:
Dow: +262.50 (1.20%)
NASDAQ: -23.11 (-0.36%)
S&P 500: +4.73 (0.19%)
NYSE Composite: +30.20 (0.25%)

Stormy Monday: Brexit Triggering Global Market Chaos

If the financial elites (we're looking at you Fed Governors, ECB ministers, central bankers worldwide) needed a rationale for triggering a cataclysmic collapse of global finance, they may have found their huckleberry in the British vote to leave the European Union, the Brexit, as it has become known.

Since Thursday's astonishing vote by the populace of Great Britain to exit what was once known as the European Common Merket and has morphed into a Hobbesian nightmare of Leviathan proportions known as the European Union, European Commission, European Central Bank and an amalgam of overlapping bureaucratic rules, regulations, guidelines, laws and edicts, a suddenly disunited Europe is making life miserable for masters of finance.

Stocks have been selling off at frantic paces since the verdict of the Brits, with uncertainty the keynote of the ongoing dialogue.

While the NIKKEI responded in heroic fashion on Monday, gaining 357 points, stock indices in Europe and the US were dragged down through the week's opening session, with more on the plate.

Whether Brexit is the absolute catalyst for systemic financial collapse is too early to tell, though it has certainly - to this point - served as an adequate warning shot.

Worth knowing is that the general financial condition of the world's developed and emerging economies has not been right since the first great financial shock of 2008, and efforts to repair what was broken then were akin to bandages applies to a severed artery, with the same result. The bleeding continued, and the patient never really recovered.

For eight years the global financial elites have tried to piece together a working economic narrative, to little avail and now they are faced with disintegration of their seminal project, the EU and the funny money known as euros.

Markets today were trembled by rabid selling, pushing the Dow well below its established range between 17,500 and 18,000, with the bottom falling out in dramatic fashion. All-time highs reached just over a year ago are now being viewed as unattainable, setting in motion the potential for first, a 10% correction, followed by the certainty of a full-blown bear market, which has been a long time coming.

Defining those two terms would be a matter of simplicity, if not for the vagaries of the financial lexicon. A correction may be said to be 10% of "recent" highs, and the same could be said of the bear market reading, but, if losses continue to mount, percentages may be the smallest of worries, since real dollars, euros, yen and yuan will be at stake.

With an already turbulent presidential election already underway, caution would be the preferred method of approaching finances over the following six to eight months. While many ordinary people will no doubt practice frugality and thrift in their affairs, there's some considerable doubt as to how governments and central bankers react to what are, no doubt, challenging times ahead.

Bad Bad Brits and Brexit:
S&P 500: 2,000.54, -36.87 (1.81%)
Dow: 17,140.24, -260.51 (1.50%)
NASDAQ: 4,594.44, -113.54 (2.41%)

Crude Oil 46.71 -1.95% Gold 1,329.90 +0.57% EUR/USD 1.1021 -0.19% 10-Yr Bond 1.46 -7.54% Corn 393.50 -0.19% Copper 2.13 +0.71% Silver 17.78 -0.02% Natural Gas 2.76 +2.41% Russell 2000 1,089.65 -3.36% VIX 23.43 -9.05% BATS 1000 20,677.17 0.00% GBP/USD 1.3218 -1.51% USD/JPY 102.0450 +0.25%

Dow Closes Above 18,000; SPX Within 15 Points Of All-Time High; Silver Rockets Over 17; Cruce Oil At 11-Month High

No commentary required.

S&P 500: 2,119.12, +6.99 (0.33%)
Dow: 18,005.05, +66.77 (0.37%)
NASDAQ: 4,974.64, +12.89 (0.26%)

Crude Oil 51.52 +0.57% Gold 1,266.90 +0.36% EUR/USD 1.1402 +0.02% 10-Yr Bond 1.71 -0.41% Corn 432.50 +1.11% Copper 2.07 +0.34% Silver 17.11 +0.77% Natural Gas 2.85 -0.28% Russell 2000 1,188.95 +0.76% VIX 14.08 +0.21% BATS 1000 20,677.17 0.00% GBP/USD 1.4522 +0.03% USD/JPY 106.8950 0.00%

Stocks Rally, Then Fall, In Late-Day Trading

Roughly 2:15 pm EDT, all of the major indices in the US began selling off, apparently for no reason.

Probably more to the point is that the Dow Jones Industrial Average poked above the magical and mysterious 18,000 mark a few times during the session, but could not sustain a rally beyond it.

As has been often suggested and sometimes proven, if the stock market is made up more of psychology than fundamental reality, 18,000 is a price too far to pay for the Dow, even for the most bullish bulls in the china shop that is the NYSE and the NASDAQ.

In any case, stocks closed well off their highs and only a little closer to all-time highs, last seen more than a year ago.

This doesn't appear to be a positive sign for stocks; the truth is that stocks are selling at historically high valuations, a condition that normally precedes a sharp selloff. With the Fed heavily "invested" in stocks, today's sudden reversal of fortune does not bode well, either for the Fed's monetary gimmickry nor for rate increases any time this year.

Those who believe that stocks are the only game in town - and, there's an acronym for that: TINA (There Is No Alternative) - hang on to your hats, gents. The drop may be sudden and deep.

Ouch! That Might Leave A Mark:
S&P 500: 2,112.13, +2.72 (0.13%)
Dow: 17,938.28, +17.95 (0.10%)
NASDAQ: 4,961.75, -6.96 (0.14%)

Crude Oil 50.38 +0.04% Gold 1,247.30 +0.02% EUR/USD 1.1358 +0.04% 10-Yr Bond 1.71 -0.58% Corn 427.00 -0.06% Copper 2.05 +0.17% Silver 16.41 +0.07% Natural Gas 2.86 +1.82% Russell 2000 1,179.97 +0.26% VIX 14.05 +2.93% BATS 1000 20,677.17 0.00% GBP/USD 1.4540 +0.02% USD/JPY 107.3025 -0.03%

Dow Ends Day In Green for 2016

Call it the luck of the Irish, or maybe the magic of Janet Yellen's Fed, but the Dow Jones Industrials ended the day up large, and in the green for 2016. The S&P is just five points away from a positive close for the year.

The NASDAQ needs to get closer to 5000 for breakeven for the year.

That's it. Funny money.

Today's closing quotes:
S&P 500: 2,040.59, +13.37 (0.66%)
Dow: 17,481.49, +155.73 (0.90%)
NASDAQ: 4,774.99, +11.02 (0.23%)

Crude Oil 41.67 +4.17% Gold 1,258.60 +2.34% EUR/USD 1.1318 +0.94% 10-Yr Bond 1.9030 -1.81% Corn 367.75 -0.14% Copper 2.29 +2.44% Silver 15.94 +4.70% Natural Gas 1.93 +3.59% Russell 2000 1,091.25 +1.56% VIX 14.44 -3.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4473 +1.59% USD/JPY 111.3950 -1.23%

Crooked Markets Will Remain At or Above Key Levels Until the End

Pretty much within a few percent either way, the key levels for economic fraud remain at DJIA, 16,000; S&P 500, 1,800; NASDAQ, 4,500.

Global equity markets are being bought by central banks. Eight years ago, Money Daily told you to move your money out of retirement accounts, 401k and IRAs into cash, precious metals and useful machinery. It's still not too late.

DJIA: 16,196.41, +222.57
S&P 500: 1,895.58, +30.80
NASDAQ: 4,435.95, +98.44

Crude Oil 28.91 -1.80% Gold 1,204.30 -2.83% EUR/USD 1.1144 -0.16% 10-Yr Bond 1.7780 +1.72% Corn 361.50 +0.77% Copper 2.05 +1.03% Silver 15.27 -3.29% Natural Gas 1.90 -3.10% Russell 2000 995.80 +2.45% VIX 24.11 -5.08% BATS 1000 20,426.37 +1.68% GBP/USD 1.4304 -0.91% USD/JPY 114.0750 -0.35%

Stocks Massacred Again; S&P Below 1900; Dow Sheds Over 1200 Points in 2016

Another day, another 350+ point loss on the Dow.

There isn't much to say about this kind of result except that it isn't showing any sign of abating. It's what happens when you throw trillions of dollars for speculators to over-leverage on risk assets of all manner and then shut off the free money supply tap.

That's exactly what the Fed did on December 16, when they decided that the economy was strong enough - and gaining momentum - to withstand a rate hike. Dismissing the fact that it was only 25 basis points, the Fed, which has been wrong on everything from the effects of QE and ZIRP to employment, housing and growth, moved at the wrong time. The business cycle had already turned negative; it was exhausted and the consumer had been tapped out.

Not that the consequent decline in stocks was solely the fault of the Federal Reserve, no, the government, spending and taxing and taxing and spending the United States into 19 trillion dollars of unpayable debt, has had an equal hand in the destruction of American business enterprise.

Of course, the demise of the industrial giant wasn't all done overnight. It's taken decades of mismanagement to destroy the American dream and the destroyers aren't done yet. Stock market declines aren't the end of the road, either. Rather, they're just a symptom of the underlying malaise that will be unleashed full force as this election year unwinds.

Stocks are just the visible part of the credit bubble. The other parts consist of moving parts of underfunded pensions, bankrupt trust funds, the fraud of Obamacare, the welfare system, the education complex, military overspending, and a plethora of other wasteful programs funded by the unaware, eyes-shut, American public.

So, the start of 2016 isn't going to be anything monumental, despite the Dow losing 1273.62 in just the first eight trading sessions of the year. Bear in mind that the Dow has to lose roughly another 1500 points (to 14,679) before it's officially a bear market, and there's little doubt that this decline will eventually become a bear market with further downside from there.

No, the first few weeks of January, 2016 will likely be referred to as the "good old days," before the tsunami of deflation finally took hold of the global economy and would not let go. These will be recalled as the time before government fraud and waste was still acceptable, before we realized that unemployment wasn't really five percent, but 15%, or 20%, or more.

Today's trading was nothing short of a waterfall event. The main indices were up at the open, and in a classic bear market pattern, sold off and were negative within the first hour of the session. The Dow, which lost nearly 365 points, wasn't even the worst of it. In fact, on a percentage basis, it was the best of the three. The S&P lopped off 2.5%, the NASDAQ withstood a whopping 3.41% decline.

The 10-year note traded down to 2.05% and will be sporting a one-handle soon, possibly by the end of this week.

This isn't pretty. If you haven't gotten out of the way and out of stocks by now, and into cash or gold or silver, you have nobody to blame but your own greedy self.

Good luck winning the lottery, because your equity holdings are about to be wiped from the face of the earth.

Today's Sad Story
S&P 500: 1,890.28, -48.40 (2.50%)
Dow: 16,151.41, -364.81 (2.21%)
NASDAQ: 4,526.06, -159.85 (3.41%)

Crude Oil 30.40 -0.13% Gold 1,093.80 +0.79% EUR/USD 1.0881 +0.30% 10-Yr Bond 2.0660 -1.71% Corn 358.75 +0.56% Copper 1.95 -0.26% Silver 14.15 +2.90% Natural Gas 2.28 +1.20% Russell 2000 1,010.19 -3.30% VIX 25.22 +12.24% BATS 1000 20,143.62 -2.36% GBP/USD 1.4413 -0.15% USD/JPY 117.7130
1273.62

It's Not China; Dow Dumps 1000 Points in First Week of 2016

Thursday night in the US - Friday morning in the People's Republic of China - all eyes were glued to the Shanghai Stock Exchange (SSE), to see whether Chinese authorities' plan to suspend their rules on circuit breakers - a fifteen minute pause on a 5% loss, and closing for the day should a 7% loss occur - would hold stocks up or allow massive dumping of overpriced equities.

Disappointing many who would relish the thought of a worldwide collapse of the global stock Ponzi scheme, Chinese traders showed great restraint and state-owned companies bought equities on a wholesale basis, averting a rout in the market by posting a gain of nearly two percent.

It didn't do much good to support the overwhelming narrative of the mainstream press in Europe and the United States, as shares across the continent fell by 1.5% on average across the largest bourses, and the FTSE 100 in Great Britain shedding 0.70%.

In the US, hopes were high when the BLS announced a non-farm payroll increase of 292,000 jobs for December, above even the most aggressive estimates.

The markets didn't care.

Stocks showed modest gains across the three major averages at the open, but the narrative - and the indices - failed to produce positive results. By the end of Friday's session, the S&P joined the Dow and NASDAQ in correction territory, with the Dow Jones Industrial Average showing one of the worst weekly performances of all time, mirroring the collapse in August by shedding over 1000 points.

It was a horrific start to the new year, with the major averages shedding more than 6% on the week, the Dow posting triple-digit losses on four of the five days, the NASDAQ dropping by more than 7%.

The results for the week were downright depressing, the worst weekly start to a new year in the history of US exchanges:

S&P 500: -121.94 (-5.97)
Dow: -1079.12 (-6.19)
NASDAQ: -363.78 (-7.26)

On the day:
S&P 500: 1,922.02, -21.07 (1.08%)
Dow: 16,346.18, -167.92 (1.02%)
NASDAQ: 4,643.63, -45.79 (0.98%)

Crude Oil 33.09 -0.54% Gold 1,102.30 -0.50% EUR/USD 1.0921 -0.01% 10-Yr Bond 2.13 -1.07% Corn 356.25 +0.92% Copper 2.02 -0.25% Silver 13.94 -2.82% Natural Gas 2.49 +4.53% Russell 2000 1,048.78 -1.48% VIX 26.08 +4.36% BATS 1000 20,550.58 -1.01% GBP/USD 1.4524 -0.69% USD/JPY 117.51 -0.12%
 

Yellen's Rate Hike Timing Might Be A Little Off... Like Five, Six Or Seven Years

Now that the Fed has restored its own venerable credibility, the markets seem to think, "well, yeah, the fed is credible, but still wrong." Fed Chairwoman, Janet Yellen, will go down in history as the worst chairperson in the 102-year history of the Federal Reserve, followed closely by her predecessor, Ben Bernanke.

Hiking the federal funds rate even a measly 1/4%, as they did on Wednesday, seems to be anathema to all kinds of markets, except maybe the dollar index, which, unlike just about everything else, rallied today.

Stocks erased all of yesterday's gains and then some, sending the Dow Jones Industrials and S&P 500 into the red for the year. For investors of all stripes (and most importantly, hedge fund managers, who have gotten murdered this year), what's worse is that the year is almost over and there doesn't seem to be a catalyst available to overcome what damage the Fed has done with its unmistakable policy error.

Anybody with brain cells saw this coming well in advance. The global economy is virtually on its knees and the Fed thought it was time for a hike in interest rates. The hike amounted to the political equivalent of a punt. There was nowhere else to go, so they went through the only door open. Bad mistake, especially since that door had been open since 2009.

What were they thinking? Maybe the question should be "what were they not thinking?" because they ignored the obvious signs of slowing, not only in emerging markets, but in commodities, high yield bonds, corporate profits, sales, housing, and a plethora of other indicators that were signaling recession ahead rather than recovery accomplished.

The Federal Reserve is comprised of some of the worst thinkers on the planet, whose sole interest is in keeping their credibility intact, and they are quickly losing control over that. They've managed, in the short span of seven years - thanks to their dual policies of zero interest rate policy (ZIRP) and quantitative easing (QE) to completely dismantle the fabric of capitalism, enriching only the upper, upper crust of wealthy individuals while dashing the hopes and savings of millions of would-be retirees.

With any luck, the Fed's failed policies will lead to outright rejection of the currency, not just around the world, but right here in the United States as well. These are control freaks, and they've lost control, implying simply that worse decisions are already in the making.

In case anybody's paying attention, the Federal Reserve is busy wrecking what's left of the global economy by bringing the US economy into line with the rest of the world, which, if one would like to take a look at Argentina, Brazil, and Mexico, is already suffering deeply.

Global depression and a debt jubilee are on the plate for 2016. You can have it served directly or order it to go. Zombie banks, which should have gone out of business in 2008, don't deserve to be repaid again, as they've already stolen so much taxpayer money that they've bankrupted the US government.

It's a good thing there's only a few weeks left in the year, because the losses for 2015 will stop suddenly on December 31.

Sadly, those losses will resume promptly, when markets reopen on January 4, 2016.

In advance, Happy New Year (if we make it).

19 CENT CHEESEBURGERS, Ted Cruz and a Dow Mystery

We have a bad monetary system. A shaky one at the very least, but, probably just plain bad.

McDonald's menu, circa 1965

It would take a tome longer than Adam Smith's The Wealth of Nations to explain why. However, in today's world, we have technology, which is, by most accounts, an improvement to the general welfare and happiness of the people of the world, or so we think.

This technology allows us to share images such as the one shown in this simple blog posting.

The point, or points, as there are many diverse levels to this discussion, is that our monetary system is based upon, in no particular order, debt currency, inflation and death.

Ponder, if you will, the fact that the Dow Jones Industrial Average fell roughly 50 points in the final minutes of trading today, and the price of a cheeseburger, roughly 50 years ago, was 19 cents. The question is why did the Dow fall so precipitously at the close and what does that have to do with the price of cheeseburgers?

Yes, 19 cents. Your editor ate many of them, as there was a McDonald's and competing burger joints near his high school.

19 cents, people. Grow up.

Dow 18,116.04, -11.61 (-0.06%)
S&P 500 2,104.42, -3.68 (-0.17%)
NASDAQ 5,010.97, -15.44 (-0.31%)

Sub-note: Consider this: today Ted Cruz, a first term senator from Texas, announced his candidacy for president, officially kicking off the campaign season for the 2016 presidential election. This election is, as of today, 19 months away. In't it time we put limits on when politicians can campaign? Isn't 19 months prior to an election just a tad too early to start thinking about who will be the next president? Mind you, a presidential term lasts four years. Must we spend half of one president's term deciding who should be his or her replacement?

Today, sadly, we have more questions than answers. If we had the answers, assumably, we would probably not be spending time asking questions on a blog.

And Now Comes the Crash

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Writing this morning as Dow futures are down around 275-300 points, market participants are reacting negatively to any number of factors, not the least of which was the truly ugly print of December durable goods orders, which came in at -3.4% against expectations of +0.3%.

Also revised lower were November's durable figures, from an already disappointing -0.7% to a dismal -2.1%.

The stock market crash, yes, the one that's been delayed since 2009 thanks to QE from the Fed, then Japan, and now, supposedly, from the European Union (EU), is upon us. The bull market that began when mark-t-market became mark-to-fantasy in March of 2009 has overstayed its welcome, and those who have not already jumped ship on tech stocks, income stocks, growth stocks (there's a real laugher for you; most companies' earnings for 2014 were lower than 2013 and 2015 will be lower still), or blue chip stocks, are about to get creamed, rapidly, starting today, but, when the Dow Industrials close below 17,068.87 (the close on December 16, 2014), for certain.

One only has to look at a recent chart of the Dow Jones Industrial Average and have a cursory understanding of Dow Theory to realize that the primary trend is about to change. Now, if it doesn't - if the Dow doesn't close below 17,068.87 and subsequently makes new highs, or, if it does close below that level and then makes new highs - then the market is being purposefully and blatantly manipulated. Besides the fact that most, if not all, markets have been manipulated since the crash of 2008, and probably well before that, a massive nosedive in stocks should come as little surprise to anybody, save those who hold out hope against hope that the Federal Reserve and the federal government, in all their wisdom, will save markets no matter what, which, in fact, is the core of manipulation itself.

Bull markets do not last forever. Lying and misguiding the public does not work forever. The public, that nebulous, unintelligible mass of humanity that follows blindly like sheep led to shearing or slaughter, will understand little of this, if any of it, but, we've collectively been led down a garden path to economic slavery and destruction by lying lawyers, bankers, CEOs, media and politicians, whose only concerns are their own, and against sound public policy.

Globally, economies are in a shambles. A raging currency war is merely pretext for a coming deep depression. While the United States may be the "cleanest shirt in a dirty laundry basket" it is no doubt still dirty, and a cleansing is overdue.

For too long, the American public has listened to the media, bankers and politicians who promised what they could not deliver: economic prosperity for everybody. It's a pipe dream, a facade, a fallacy, a Fugazy. The reckoning is upon us, just in time for the Super Bowl.

Just wait for the number: 17,068.87. When the Dow closes below that, it's game over, and no jawboning by Federal Reserve governors, or politicians, or media mouthpieces, can change that. A long, painful bear market will take the Dow and other averages to places nobody can imagine. At first, it will be called a correction (unless it absolutely crashes - like down 1000 points - today), but, make no doubt, it will be a bear market, followed by a recession, and then a depression (which, many will claim we are already in, since 2008).

Trust your own judgement, but, if you have not prepared for the worst of times, you are certain to live through them. Your portfolio allocations should look something like this: 20% Precious Metals; 60% cash; 20% survival/tradable/salable goods.

Best wishes to all.

The Biggest Bubble of All Time is About to Be Popped

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

The handwriting, so to speak, is all over Wall Street. What has been the biggest financial bubble in the history of the world is on the verge of busting, or, what could be better still, slowly deflating.

After the crash of 2008-09, the Federal Reserve, in conjunction with central banks around the globe, injected massive amounts of liquidity into the fiat world currency markets, bolstering everything from junk bonds to consumer credit, but especially equities, otherwise known as stocks.

Since March 9, 2009, the major equity indices in the US - and, to a large degree, around the world - have rebounded on the strength of the Fed's largesse, nothing else. Now that the Fed has begun unwinding QE, the "juice" is being withdrawn. There will be no backstop for equities in the guise of unlimited liquidity from the Fed. The plan - already underway - is to reduce the amount of asset (bond) purchases by the Fed from their high of $85 billion per month, to zero. While it is unlikely the Fed will ever get to zero without reversing course or, at least, slowing the pace of their withdrawal, the March FOMC meeting will mark the third consecutive lowering of the monthly purchase level, timed in accordance with the 10-per-year FOMC schedule.

The Fed first announced in December, 2013 that it would be reducing purchases in January, 2014, and did the same in their first meeting of 2014, in January, lowering their purchase level to $65 billion in February. Since there was no meeting in February, they are expected to announce another $10 billion reduction at the March meeting next week (March 18-19). If they carry through with this expected drop to $55 billion, the market cracks which first occurred in January of this year, may turn into wholesale breaks, sending index levels below their recent lows, highlighted by the January 31 selloff.

With the S&P recovering all of its January and February losses and making new all-time highs earlier this month (the NASDAQ also made new 14-year highs), the Dow Jones Industrials did not, setting up the scenario for a bear market, according to strict Dow Theory.

If the Dow, having fallen short of its most recent high (16,588.25), continues on its path lower, exceeding the interim low of 15,340.69 (Feb. 4), this will confirm that a change in the primary tend has occurred, and a secular bear market is underway. This bear market could last anywhere from five to 20 years, possibly longer, because the recent, primary bull market - the second longest in market history - was built upon a foundation of incredibly easy money, low interest rates and global fiat currencies, unprecedented in financial history.

The fallout could be severe, popping the biggest financial asset bubble of all time, in stocks, affecting everything from individual stocks to your pension, IRA or 401k to muni bonds. In other words, be prepared for the biggest financial collapse of all time, because the last five years have been nothing but pure financial fantasy, and it's all about to come crashing to an end.

There are sure signs that the global economy is shrieking and straining to remain relevant and above water, but after blowing bubbles recently in dotcom stocks (1997-2001) and real estate (2003-2007), the Fed has reflated the economy with trillions of paper dollars, augmented by similarly spurious activities in Europe, China and Japan. The financial bubble created by central banks is of a magnitude much larger - possibly four to six times larger - than the sub-prime-induced housing meltdown, putting the figure of financial assets seriously at risk somewhere between $20 and $40 trillion dollars, an amount so unfathomable that nothing short of pure currency collapses can sufficiently make account.

(As this post is being composed (March 13, 2014, 1:10 pm EDT), the Dow Jones Industrial average has broken through its 50-day-moving average, down 194 points on the day.)

Beyond just charts and the scary finances of the central banks, China is the linchpin by which the financial dam may be breached. For the past two to three months, data out of the world's second-largest economy has been trending lower, especially in the areas of industrial production and exporting. In fact, China actually released data that showed it suffered a current account deficit, with imports exceeding exports, a very frightening development for one of the world's few export economies and a major trading partner with the US and Europe.

What the China data underscores is the overall weakness in US and European (developed) markets. The fraud of financialization has finally produced a result incompatible with the ponzi-scheme-like mantra of the central bankers. Consumers have been and are strapped for cash, a result of over-exuberant government spending, massive income disparity between the rich and poor and stagnant or declining wages in the middle of a labor shortfall crisis.

There are signs everywhere that the global economy is about to be brought back to reality, including, but by no means limited to, recent poor US unemployment data, a false housing recovery (inundated with cash buyers, flippers and speculation), inability of the government to prosecute bankers and financial operatives for mortgage and other frauds, declining adherence to the constitution and the trampling of civil rights, bogus car sales data with channel stuffing rampant, blaming the weather for poor economic results (seriously, the holiday shopping season was a complete bust), and overvaluation of speculative IPOs, tech stocks and other momentum stocks, enterprise valuations of stocks in the billions of dollars, based on nothing but pure speculation.

Nothing will stop the wreckage that the Fed and global central banks working in collusion have set in motion. The numbers are ghastly and overwhelming and the warnings have been written about for years. The time to prepare was yesterday, though there is still time, but thought processes must change. Status and wealth should not be measured by the size of one's McMansion, the price of one's car or the depth of one's stock portfolio. True wealth consists of something along these lines: a fully-paid-for home on five or more acres of land, two-thirds of it arable, food and water storage to last at least a year, a horde of cash, gold and/or silver, absolutely ZERO DEBT, and the ability and weaponry to defend it all.

Ask yourself, who among you can make claim to that, because that is real wealth, not the paper promises from Wall Street or Washington.

It's coming. And it may be approaching even faster than anyone wants to consider (think Ukraine).

Good luck.

Stocks Down Again, Failing at Second 2014 Benchmark

Amid economic cross-currents, the major indices failed at the second benchmark for the year, that being the first five days of trading, which turned out to be negative and indicative of a sub-par performance for stocks throughout 2014. The first benchmark was also negative, as stocks were sharply lower on the first trading day of the new year.

After the banner year that was 2103, in which the indices were ahead by anywhere from 26-30%, a pullback is, however, more likely than not.

Putting numbers to the reality, here's the performance for the first five trading days of 2014:
Dow: -114 points
S&P: -11 points
NASDAQ: -11 points
NYSE: -79 points

While these figures aren't anything dramatic, they are negative, suggesting that investors are taking a very cautious approach to stocks even as financial data appears to point toward a strengthening of the general economy.

ADP reported that 238,000 jobs were created in December, ahead of forecasts and predictive of an equally-strong number from the BLS when they report Friday on December non-farm payrolls.

On the flip side, retail traffic for the just-ended holiday shopping season was down 14%, though sales were still ahead by 2.7%, and, just ater the bell, Macy's (M) reported same-store sales gains in the 3.6% range but announced that they would be laying off 2500 employees and closing five stores. Shares of the company were up sharply on the news in after-hours trading.

Overall, markets were down throughout most of the day, especially the Dow Jones Industrials, which suffered the most. The NASDAQ was higher through most of the session and hit the unchanged mark with just about 20 minutes left in the trading day, but returned to slightly positive territory at the close.

Tomorrow, the first earnings report will be come to the markets as Alcoa (AA), a former Dow component, reports full-year and fourth quarter results.

DOW 16,462.74, -68.20 (-0.41%)
NASDAQ 4,165.61, +12.43 (+0.30%)
S&P 1,837.49, -0.39 (-0.02%)
10-Yr Note 97.94, -0.17 (-0.18%) Yield: 2.99%
NASDAQ Volume 2.20 Bil
NYSE Volume 3.47 Bil
Combined NYSE & NASDAQ Advance - Decline: 2585-3071
Combined NYSE & NASDAQ New highs - New lows: 336-29
WTI crude oil: 92.33, -1.34
Gold: 1,225.50, -4.10
Silver: 19.54 , -0.248
Corn: 417.00, -9.00

Fed Tapers Bond Purchases, Loosens Policy Guidance; Markets Love It

In a masterstroke of monetary legerdemain, outgoing Federal Reserve chairman Ben Bernanke delivered a final, resonant chord to his easy money policy of the past five years, announcing a reduction in the level of MBS and treasury bond purchases while simultaneously changing the guidance for rate policy going forward.

What the Fed has decided to do was to strike a delicate balance between the two policy initiatives currently employed. Bond purchases will henceforth be reduced from $85 billion to $75 Billion per month, shaving $5 billion from MBS and $5 billion from treasury purchases.

In its policy statement, however, the Fed took a different direction, emphasizing that the federal funds rate would remain at zero to 0.25% beyond the time at which unemployment falls below 6.5%. In other words, the Fed, as is their usual mode of operation, changed the game or moved the goal posts in terms of policy in order to accommodate a lower amount of bond purchases, in effect, maintaining equilibrium.

What the Fed is saying, somewhat tongue in cheek, is that their bond purchasing program (QE) has not quite brought about the desired results. The economy is not improving as rapidly as they anticipated, if at all, but, in order to not upset capital and equity markets with their bond purchase "tapering," they decided to loosen the language surrounding any future decision to raise interest rates.

It was quite the nifty move by the hands at the Fed, and both bond and stock markets behaved well along the lines anticipated by the manipulators of the world's money supply.

Stocks rose gratuitously, with the Dow and S&P closing at all-time highs; bonds remained distinctly calm. It was the perfect end to a reign of easy money that Bernanke has overseen, and gave the next man up, Janet Yellen, direction in which to pursue the Fed's policy directives.

The long and short of all the hype and hoopla over this final Fed meeting of the year and the last press conference by Mr. Bernanke is that the status quo was maintained and will be maintained for the foreseeable future. During his presser, the Chairman spoke of low inflation through 2016, with unemployment coming down gradually over a similar time period.

While the inflation expectations are well below what the Fed desires (2-2 1/2%), the 6.5% unemployment threshold has essentially been removed from all future Fed calculus.

When the world completes a couple more trips around the sun, at this time two years from now, it's expected that the Fed will no longer be purchasing bonds to the excessive degree it is today, and that unemployment will be much closer to "normalcy" at or near five percent.

In the real world, should everything proceed as the Fed anticipates, the economy, with interest rates still moored at zero, with 5% unemployment, the economy would be growing at a ripping rate so rapid that inflation would once again become a real problem.

Would it be so. The chances of everything working in straight lines toward a normalized economy is nothing more than a Fed fantasy. There will be disruptions and distortions and quite possibly another recession. Additionally, believing that pressures and changes from other parts of the planet would not be disruptive, is the purest height of folly.

The Fed hasn't really changed much at all. Reducing bond purchases by $10 billion per month is nothing more than a rounding error in the larger scheme of things. The punchbowl of free fiat has been left at the Wall Street party. Nothing has changed other than possibly, perception, and the person sitting in the Fed chair will be different.

The monetary can just got kicked down the road quite a stretch further. The new normal gets extended until something breaks.

DOW 16,167.97, +292.71 (+1.84%)
NASDAQ 4,070.06, +46.38 (+1.15%)
S&P 1,810.65, +29.65 (+1.66%)
10-Yr Note 98.78, -0.29 (-0.29%) Yield: 2.89%
NASDAQ Volume 1.83 Bil
NYSE Volume 3.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 4252-1467
Combined NYSE & NASDAQ New highs - New lows: 311-112
WTI crude oil: 97.80, +0.58
Gold: 1,235.00, +4.90
Silver: 20.06, +0.219
Corn: 425.00, -1.75

Stocks Pounded Lower Again; December a Month of Not-so-Happy Holidays

Declines in equity prices are beginning to get a little bit serious, with the Dow Jones Industrials taking another 100+ point hit on Thursday after retail sales for November came in strong, but were unable to inspire confidence in the consumer sector, and unemployment claims shot up beyond expectations, to 368,000, not the kind of number expected during what is supposed to be the "busy" holiday shopping season.

Since the peak of 16,097.33, reached the day before Thanksgiving (November 27), the Dow is off 357 points, putting in a new interim low today. Still, that's a loss of just over two percent, not anything to get excited over, but the trend since Black Friday has been pronounced, with just two up days in the past 10 sessions.

Worse, new lows have taken a huge edge over new highs as of today, portending further losses should the trend extend.

The selling spilled over into precious metals, with gold and silver reversing gains made yesterday. Selling off of the metals may be a precursor of more asset depreciation, or, it could be just more of the constant discrediting of gold and silver as stores of value. It's a preposterous argument, made manifest by the fact that precious metal prices are derived from paper trading, which has nothing whatsoever to do with the intrinsic value proposition which only physical objects hold.

Overall, it's just getting a little too ugly for speculators with the year-end arriving in just 12 trading days.

DOW 15,739.43, -104.10 (-0.66%)
NASDAQ 3,998.40, -5.41 (-0.14%)
S&P 1,775.50, -6.72 (-0.38%)
10-Yr Note 98.86 -0.15 (-0.15%) Yield: 2.88%
NASDAQ Volume 1.75 Bil
NYSE Volume 3.28 Bil
Combined NYSE & NASDAQ Advance - Decline: 2513-3135
Combined NYSE & NASDAQ New highs - New lows: 66-314
WTI crude oil: 97.50, +0.06
Gold: 1,224.90, -32.30
Silver: 19.45, -0.903
Corn: 434.25, -5.00

Stocks Little Changed on Veteran's Day

With bond markets closed and many traders enjoying a three-day weekend by virtue of the Veteran's Day holiday, there was little to get excited about in equity markets or elsewhere.

The day's smallish gains were led by Consumer Cyclicals, Healthcare and Technology, counterbalanced by downside moves in Basic Materials and Telecoms, which lagged the market.

Volume was noticeably in short supply as was volatility, reverting back to levels seen this past summer. Despite the lack of interest, the Dow Jones Industrial Average closed at a new all-time high, with the NASDAQ and S&P sporting smaller gains.

New highs continued to outnumber new lows, though not as substantially as in recent weeks. The advance-decline line was nearly static, with winners beating losers by less than a hundred issues.

Commodities were largely flat-lining, though corn got a bit of a bid off recent 52-week lows.

Unless there's some earth-shaking development on Tuesday, tomorrow could be just as listless, as there are no meaningful economic data releases until Wednesday, and even then, those are hardly impacting.

Dow 15,783.10, +21.32 (0.14%)
Nasdaq 3,919.79, +1.67 (0.04%)
S&P 500 1,771.89, +1.28 (0.07%)
10-Yr Bond 2.75% 0.00
NYSE Volume 2,507,799,000
Nasdaq Volume 1,538,911,625
Combined NYSE & NASDAQ Advance - Decline: 2840-2754
Combined NYSE & NASDAQ New highs - New lows: 238-56
WTI crude oil: 95.14, +0.54
Gold: 1,281.10, -3.50
Silver: 21.28, -0.035
Corn: 434.75, +8.00

Wall Street Weirdness as Dow Makes New Record, NASDAQ Falls

Maybe it's the weather, but investor taste for speculation may be turning, just a day before the hoopla over the Twitter IPO is set to take place. The 142-character internet darling will open tomorrow at a very overpriced $27-30 per share. It could be that some big players in the tech investing (gambling) space just freed up money to get into the hottest IPO since... um, Facebook, though the memory of that magnificent failure is still fresh.

Still, winners just barely edged losers on the day, while the place to be in Dow stocks was in Chevron (CVX), IBM (IBM) and Microsoft (MSFT), an odd grouping there.

The MBA Mortgage Index slumped sadly prior to the open, with weekly applications off seven percent, even as 30-year rates fell to 4.32%.

Crude inventories showed only a modest uptick, which helped oil stage a rally off of five-month lows.

With bond yields settling lower, gold and silver up moderately, it was very tough to get a read on the overall market. Corn made fresh 52-week lows, which is bearish for beef, but bullish for carnivores in general, with beef prices stable and possibly set to decline. Overall, however, falling corn prices is about as good a deflation indicator as one can find, especially priced in silver.

Steady as she goes, though, especially on those safety plays in the Dow, which should consider to out-perform in a flight to dividend comfort.

Tweet that.

Dow 15,746.88, +128.66 (0.82%)
Nasdaq 3,931.95, -7.92 (0.20%)
S&P 500 1,770.49, +7.52 (0.43%)
10-Yr Bond 2.64%, -0.02
NYSE Volume 3,298,818,000
Nasdaq Volume 1,989,898,000
Combined NYSE & NASDAQ Advance - Decline: 2851-2753
Combined NYSE & NASDAQ New highs - New lows: 317-79
WTI crude oil: 94.80, +1.43
Gold: 1,317.80, +9.70
Silver: 21.77, +0.132
Corn: 421.25, -3.75