Apple Tops $800 Billion Market Cap; NASDAQ Closes At All-Time High

Stocks were basically flat on Tuesday, but the NASDAQ finished at a new record high, paced, in large part by Apple (AAPL), which topped $800 billion in market cap on the day's gains.

Apple's most recent rise is likely due to two major investors, the Swiss National Bank (SNB) and Warren Buffett's Berkshire Hathaway, which has taken a major position in the world's richest company by market cap.

That's not surprising, given Buffett's record of success over the years, though it is hardly a genius pick. After all, if Buffet knows the Swiss National Bank is one of Apple's largest shareholders and continues to buy, why not join the party?

Buffet is well-connected and pretty bright, but owning Apple is pretty much a no-brainer in these days of central bank asset boosting.

At the Close, 5/9/17:
Dow: 20,975.78, -36.50 (-0.17%)
NASDAQ: 6,120.59, +17.93 (0.29%)
S&P 500: 2,396.92, -2.46 (-0.10%)
NYSE Composite: 11,567.52, -27.74 (-0.24%)

Stocks Rally As No Government Shutdown Seen; NASDAQ At Record High

Closing at as record high, the NASDAQ powered through the 6000 mark while the Dow and S&P 500 had their best back-to-back sessions of the year.

Investors appear to be pleased with the progress in Washington toward a peaceful resolution to the budget, in which the congress must fund the government by Friday night or be forced to close down parts of the federal apparatus.

Key to the negotiation has been President Trump's masterful handling of the situation, saying he can wait until later in the year to get congress to partially fund the building of the wall between Mexico and the United States on the US southern border. Democrats have already cried wolf over the measly $1.3 billion that would need to be appropriated to get the project into planning stage. Trump, knowing that a government shutdown would be blamed on Republicans, backed off his demands in order to attain at least a limited peace with the obstructionist Democrats.

This master stroke by Trump left investors giddy with confidence that the government will function without interruption. Also aiding the rally was a spate of earnings, notably by McDonald's, which suggested the economy is on a solid, growing footing.

Though the bull market which began in March of 2009 seems to be getting long in the tooth, the expansion due to Trump policies may just be starting.

At the Close, Tuesday, April 25, 2017:
Dow: 20,996.12, +232.23 (1.12%)
NASDAQ: 6,025.49, +41.67 (0.70%)
S&P 500: 2,388.61, +14.46 (0.61%)
NYSE Composite: 11,603.28, +71.49 (0.62%)

Stocks Up For Week In Aftermath Of Republican Failure On Capitol Hill

Other than the NASDAQ, which hit a new all-time high on Thursday, there was little to get excited about in stocks this week, as traders nervously weighed the failure of Republicans in congress to overturn Obamacare and waited for indications from President Trump and/or congress on plans for a budget in the near future.

Stocks were modestly higher, with gains for the major averages of between 0.30% (DJI) and 1.42% (NASDAQ).

Money Daily is back on camp schedule. More Monday.

At the Close, March 31, 2017:
Dow: 20,663.22, -65.27 (-0.31%)
NASDAQ: 5,911.74, -2.61 (-0.04%)
S&P 500: 2,362.72, -5.34 (-0.23%)
NYSE Composite: 11,492.85, -26.99 (-0.23%)

For the week:
Dow: +66.50 (0.32%)
NASDAQ: +83.00 (1.42%)
S&P 500: +18.74 (0.80%)
NYSE Composite: +73.96 (0.65%)

Dow Winning Streak Ends At 12, Should Resume Promptly

Stocks ended a historic run of 12 straight winning sessions on the Dow Jones Industrial Average, tying the mark set in January of 1987, finishing the month of February on a dour note, though overall, stocks were fantastic for the month and so far in 2017.

With a possible March rate hike still two weeks away, there's still plenty of time to jump upon the Wall Street bandwagon. Since stocks apparently have no downside, more money will be pumped into the market by the almighty algos, probably beginning on March 1.

The old adage, "don't fight the tape," is in play as fundamentals have been tossed to the curb in favor of momentum-chasing. Stocks should continue to climb until they don't.

At The Close, 2.28.17:
Dow: 20,812.24, -25.20 (-0.12%)
NASDAQ: 5,825.44, -36.46 (-0.62%)
S&P 500: 2,363.64, -6.11 (-0.26%)
NYSE Composite: 11,512.39, -45.96 (-0.40%)

Stocks Ramp To All-Time Highs Again

More record closes for all major US indices.

At The Close, 2/21/17:
Dow: 20,743.00, +118.95 (0.58%)
NASDAQ: 5,865.95, +27.37 (0.47%)
S&P 500: 2,365.38, +14.22 (0.60%)
NYSE Composite: 11,578.25, +67.34 (0.59%)

NYSE, Dow, S&P 500, NASDAQ Close At All-Time Highs 3rd Straight Session

As the bubble grows what can be said of the current political and economic conditions except that we are in uncharted territory?

Just a week or so ago, many were still wondering if the Dow could reach and hold 20,000. 500 points later, on some of the weakest volume in stock market history, we have an answer, as troubling as it may seem.

With the politicians tied up with what increasingly appears to abe an overt attempt to oust recently-installed President Donald J. Trump, the markets do not seem to care one whit whether the myriad problems of the United States and the world are solver, much less addressed.

For now, the world watches as Washington, DC self-destructs. Stocks continue to soar. This could go on for an extended period, but the system is strained if not outright rigged for massive Wall Street gains during one of the most turbulent periods in the country's history.

It could all come crashing down tomorrow, though that scenario is equally improbable, if not downright frightening.

For the most part, the market is being plied by professionals more than ever before, a condition that obtains from a variety of sources, one of them a well-seated distrust of the financial markets by individuals, the other, unbridled greed.

There may be opportunities, but one would be hard-pressed to delineate any of them with stocks ramping higher day after day after day.

The overarching theme of markets over time has been to buy low, sell high, and stay in the game. Obviously, this is not a game everyone wishes to be playing.

At the Close, Tuesday, February 13, 2017:
Dow: 20,504.41, +92.25 (0.45%)
NASDAQ: 5,782.57, +18.62 (0.32%)
S&P 500: 2,337.58, +9.33 (0.40%)
NYSE Composite: 11,468.88, +34.94 (0.31%)

Bubble Superfecta: Dow, NASDAQ, S&P 500, NYSE Composite All Close At New Records

As the week comes to a stunning close, it's official, every market in America is officially in deep into bubble territory.

Consider that the major indices all closed at all-time highs today and that the Dow Jones Industrial Average is up a whopping 2200 points since election day, November 8, 2016. That amounts to a gain of just over 12% in three months. At that rate of ascent, 22,000 on the Dow should be a no-brainer by the end of 2017.

Nothing other than stupidity, other people's money, greed, and momentum were needed to foment one of the most rapid rises in the history of the Dow. The other indices have surely been along for the ride; even the broad measure of the entire NYSE Composite cracked to a record close today.

Not to suggest that a reversal is imminent (been that way for 6 years at least), but for some perspective, let's examine where these markets were at the depths of the Great Financial Crisis (GFC), on March 9, 2009.

Dow: 6,547.05
NASDAQ: 1,268.64
S&P 500: 676.53
NYSE Composite: 4,226.31

In the span of eight years, during what has ostensibly been the weakest recovery after a recession since the Great Depression, the Dow and S&P have more than tripled, the NASDAQ has more than quadrupled, and the poor old NYSE Comp. is just short of tripling.

So, if you missed it you missed it, but there still may be time to get in. Nobody knows where this is going to end, but we can all thank Ben Bernanke and Janet Yellen for oodles of free cash injections worldwide (QE), zero interest rate policy (ZIRP) and the most reckless economic policies the world has ever witnessed.

It's still ongoing, though. The ECB and BOJ are still pumping money into their markets, and, unless you missed it, none other than the Swiss National Bank holds more than $64 billion in US equities.

Who said these central bankers don't know what they're doing?

Enjoy the weekend!

At the Close, Friday, February 10, 2017:
Dow: 20,269.37, +96.97 (0.48%)
NASDAQ: 5,734.13, +18.95 (0.33%)
S&P 500: 2,316.10, +8.23 (0.36%)
NYSE Composite: 11,377.72, +50.04 (0.44%)

For the Week:
Dow: +197.91 (0.99%)
NASDAQ: +67.36 (1.19%)
S&P 500: +18.68 (0.81%)
NYSE Composite: +50.04 (0.44%)

Bubble Trifecta! Dow, S&P, NASDAQ Close At All Time Highs

Was there any justification to today's push to new all time highs on the Dow, S&P, and NASDAQ (the NYSE Comp. fell just short of the previous closing high, 11,339.05, January 25)?

Probably not, because, as has been suggested by many in the know, this is a bubble, and bobbles don't need rational thought, fundamental investment concepts or sound judgement. All they need is momentum and most of that is supplied by robotic, HFT-fueled algorithms.

That's all one needs to know about whether it would be wise to buy into this market.

The most basic concept in investing is to buy low and sell high, not the converse of that simple dictum. Stocks are tremendously overvalued and today, they became even more so.

Tread into this casino with extreme caution. While gains may still be available to many, losses, which could come from any variety of sources, could be decisive. Trying to time this is a fool's errand, one that should not be undertaken if risk aversion is guiding.

At the Close, Thursday, February 9, 2017:
Dow: 20,172.40, +118.06 (0.59%)
NASDAQ: 5,715.18, +32.73 (0.58%)
S&P 500: 2,307.87, +13.20 (0.58%)
NYSE Composite: 11,327.68, +75.88 (0.67%)

Stocks Close Friday Flat Ending Wild Week As Trump's Immigration Ban May Kill The Rally

Stocks cautiously ended the first full week of the Donald Trump presidency just as Mr. Trump unveiled his most audacious edict via executive order, barring immigration from countries embroiled in the throes of radical Islam such as Syria, Iraq, Yemen and four others.

While market participants have been somewhat encouraged by a number of first-week moves made by the new president, the promised immigration shutdown may have more implication globally than anybody may have wished. Stocks finished mixed in a week which witness a number of new all-time highs, particularly the Dow, which surpassed and held above the 20,000 level for the first time ever.

At the Close 1.27.16:
Dow: 20,093.78, -7.13 (-0.04%)
NASDAQ: 5,660.78, +5.61 (0.10%)
S&P 500: 2,294.69, -1.99 (-0.09%)
NYSE Composite: 11,283.19, -29.93 (-0.26)

On the week, all major indices sported gains, led by the NASDAQ and Dow Industrials, though the ramifications from the immigration ban were yet to be fully appreciated. As markets set to open in the US on Monday, futures indicated a negative open while markets around the world were suffering significant losses despite China and Hong Kong markets being closed all week for the Lunar New Year holiday. The tenor of trading suggests that markets may not be going along for the protectionist ride that the Trump administration has in mind. "America First" may well turn out to be the death knell for globalization, but the results of such radical policy changes is sure to increase market volatility, which, to this point has been benign.

For the week:
Dow: +266.53 (+1.34%)
NASDAQ: +105.45 (+1.90%)
S&P 500: +23.38 (+1.03%)
NYSE Composite: +90.39 (+0.81%)

At Last! Dow Shatters 20,000 Mark; S&P 500, NASDAQ Also At Record Highs

No comment necessary since the topic of the Dow Jones Industrial Average breaking beyond 20,000 has been predicted, speculated upon, and beaten to death for more than a month running.

Incidentally, the S&P and NASDAQ also closed at record all-time highs.

The only question: will it hold?

Those of us who remember Dow 10,000 may recall that level being crossed some 57 times before finally moving on, so some back-and-forth is to be expected.

At the Close 1.25.17:
Dow: 20,068.51, +155.80 (0.78%)
NASDAQ: 5,656.34, +55.38 (0.99%)
S&P 500: 2,298.37, +18.30 (0.80%)
NYSE Composite: 11,342.70, +93.42 (0.83%)

Yo-yo Stock Trading Continues; Dow Trading In Worst Rut Of 115 Years

Spurred by Democrat proposals for a $1 Trillion infrastructure spending bill, stocks took the high road, with the S&P 500 and NASDAQ each making new all-time highs. As has been the case of late, the Dow Industrials proved the laggards, not making new highs, but once again closing in on the mythical 20,000 level.

The Dow is now in a trading rut that happens to be the longest, smallest trading range since 1990. That's a long time, so it's going to break one way or the other. Tomorrow may prove to be the day it goes over 20,000, or not. As long as President Trump and congress continue to lay groundwork on a vast variety of programs and possible legislative agendas, the stock markets (which, as we've been told, hate uncertainty) will likely continue to bob and weave like lightweights.

The move higher today for the indices was led by basic material and energy stocks, in sympathy for President Trump's executive action to resume work on the troubled Keystone pipeline, a project that figures to be bullish for companies such as ExxonMobil and Chevron.

Still, since mid-December, the Dow has gone... nowhere, a condition that should not be able to persist much longer.

Or can it?

At the Close 1.24.17:
Dow: 19,912.71, +112.86 (0.57%)
NASDAQ: 5,600.96, +48.01 (0.86%)
S&P 500: 2,280.07, +14.87 (0.66%)
NYSE Composite: 11,249.29, +78.67 (0.70%)

The Dow 20,000 Ceiling

After the release of the non-farm payroll data for December, futures rose on the news that the nation created 156,000 net new jobs in the month, just shy of consensus estimates for 170,000. What may have been the cause for optimism was the 0.4% increase in wages carried in the report. The unemployment rate rose a notch to 4.7%, but that was at 8:30 am ET, an hour before the market open.

The bigger event began hours later as the Dow Jones Industrial Average - with the other major indices in tow - powered higher, eventually getting to within 0.37 points of the mystical, magic mark of Dow 20,000. The stall occurred at 19,999,63, the high for the day, right around noon.

For roughly the next four hours, the Dow tantalized and amused traders and spectators alike, hovering just below 20,000, reaching to within single points on various occasions.

But it never made it, as though somebody had placed a lid on the market right at the 20,000 mark. The index struggled and failed, over and over again throughout the afternoon, to no avail. Finally, with less than ten minutes remianing in the trading day, all the stops apparently run, the ghost was given up and the Dow closed not only short of 20,000 but also shy of a new record, at 19,963.80, a few ticks short of the all-time high close made on December 20 of last year, 19,974.62.

Explanations abound as to why the Dow cannot break through this hysterical, purely-psychological number, the best of them probably involving program trading, as computer algos have been set to sell as the number is approached. If that is the case, there's more than a few sharpies on Wall Street thinking that stocks are severely overvalued, or that even if Dow 20,000 is pierced, it will not hold.

Stocks are severely overvalued, boosted over the past eight years by cheap funding courtesy of the Federal Reserve, whose pockets are being emptied, replaced by promises to pay in the form of treasury and mortgage bonds, many of them losing value.

This was a close call for sure, but the 20,000 mark still stands triumphant over a market that continues to show weakness and an unwillingness to carry through to even higher figures.

With this in mind, the question to be answered over the weekend is, will it do it on Monday? Tuesday? Ever?

From all appearances, with markets stretched to the breaking point, it's not a very good bet, no matter how close it gets.

Thus, the first trading week of the new year ends in tears, though it was a profitable one for stocks with the notable exception of the NYSE Composite, which closed down for the day. Gains were made on all major indices, but perhaps people should be paying more attention to interest rates, which, after an initial surge in yield following last month's 25 basis point hike in the federal funds rate, have fallen hard. The 10-year note yielded 2.418%, but closed Thursday at 2.368%, the lowest yield in a month. While the apparent reversal from the Fed's induced yield above 2.50% is not set in concrete, it is surely something which bears close inspection. Spreads have narrowed since the rate hike, an ominous sign of rough times ahead. If stocks falter, the stampede into bonds will be overwhelming, but possibly the move has already begun in anticipation of a stock market correction or reversal into a bear market.

However, elite traders can pat themselves on the back as they head home for the weekend. So far, January 2017 is looking good for equities, despite the obvious failure at Dow 20,000.

At the Close 1.6.16:
Dow: 19,963.80, +64.51 (0.32%)
NASDAQ: 5,521.06, +33.12 (0.60%)
S&P 500: 2,276.98, +7.98 (0.35%)
NYSE Composite: 11,237.63, -10.06 (-0.09%)

For the Week:
Dow: +201.20 (1.02%)
NASDAQ: +137.94 (2.56%)
S&P 500: +38.15 (1.70%)
NYSE Composite: +180.73 (1.63%)

As 2016 Winds Down With Stocks Up, What's In Store For 2017?

Recently, Americans and observes worldwide have been subjected to overreaction by lawmakers and media types over the "Russian hacking" of the recently-resolved US presidential elections and the possibility that certain electors in the electoral collage would bolt from the Trump camp in enough numbers to deny Donald Trump the needed 270 votes to certify him as America's 45th president.

As of 4:30 pm ET Monday, the electoral college did its job, giving Trump 306 votes, confirming his November victory and assuring the American public that all politics would proceed normally (we believe) for the foreseeable future.

Additionally, the over-hyped media and intelligence frenzy was revealed to have been yet another case of sour grapes and/or fake news fomented by the losers in the Democrat party and what appears to be rogue elements of the intelligence community. The good news is that Mr. Trump, once inaugurated on January 20, will be able to remove such rogue elements via his appointees to the CIA, FBI and other agencies. The bad news is that the sore loser Democrats and their media whores will remain, and they will likely continue to harass and object every effort Trump makes to "make America great again."

While almost nobody can reasonably oppose efforts to improve conditions for Americans, the Democrats will couch their objections in the most mealy-mouthed manners, with references to diversity, unfairness and vague commentaries on power and elitism.

Fortunately, the investor class has ignored most of the political squabbling and has moved on to increasing its wealth, with stocks up tremendously since election day. The bond markets have expressed acceptance of the Fed's minuscule rate hike of last week and have stabilized. Everything seems in place for a nice, year-end Santa Claus rally which will take the Dow Jones Industrial Average over the mythical 20,000 plateau.

The question to be asked at this juncture is, will the markets remain ebullient and bubbly into the New Year? With stocks hovering at or near all-time highs, and the bull run which began in 2009 extending into a ninth year, the answer should be obvious. Markets do not work one way (up) and corrections and bear markets often occur at what seems to be the most inopportune moments. With investor sentiment bullish to the extreme, the probability of a major correction in the first quarter of 2017 should be quite high, unless one adheres to the well-founded theory that the Fed has backstopped equity markets for years and will continue to do so. Doing otherwise, so the conventional wisdom tells, would be catastrophic, as though fair and open markets are inherently evil.

They are not, and it may be nigh on the eve of major changes in fiscal and monetary policy. On the fiscal side, Mr. Trump - a businessman with many years experience in all matters financial - the message is clear: he will do what it takes to get America on a path to prosperity for all levels of income, not just the crony capitalists and heavily financialized major corporations, but for individuals up and down the income ladder.

As for the Fed, one's guess is as good as another, but the genii inside the Fed seem intent on raising interest rates gradually in order to keep the US economy from overheating. As usual, they will be late to the party, but perhaps they can salve their damaged egos by reducing their bloated balance sheet in 2017 and leaving the number of interest rate hikes below three, ending the year around one percent, which, while traditionally absurdly low, would count as a major accomplishment since the Great Financial Crisis of the recent past.

Geopolitical events may overtake the Fed's view, however, as Japan and the Eurozone are well upon the road to financial ruin, and a crisis in either market (plus China) may cause extreme disruption to an orderly return to what is commonly referred to as "normalization."

A new administration hell-bent on returning America to greatness and leveling the playing field in international trade set against a backdrop of unelected financial and political operatives worldwide should make for an interesting, exciting, volatile year ahead.

As 2016 winds down, 2017 should present unique and various opportunities in all markets, requiring astute evaluation of not just balance sheets and P/E ratios, but insight into the political influence which has been and will continue to be exerted upon trade and commerce, globally.

At the Close: 12/19/2016
Dow: 19,883.06, +39.65 (0.20%)
NASDAQ: 5,457.44, +20.28 (0.37%)
S&P 500: 2,262.53, +4.46 (0.20%)
NYSE Composite: 11,128.54, +3.32 (0.03%)

Mid-August Monday; Who Cares? More All-Time Highs

Your editor has been feverishly putting together a couple of boffo posts for later this week... maybe next week, so today is just a place-holder for markets which continue to set new all-time highs.

Yippie! Life can't get any better than this, can it?

Here's to hoping that previous statement isn't true, because there's a sneaking suspicion that, with $13.4 trillion worth of negative-yielding bonds now infecting the global investment landscape, somethng really, really bad is going to pop and there won't be any upside, for anybody.

So, keep wishing.

Monday Muddle:
Dow Jones Industrial Average
18,636.05, +59.58 (0.32%)

NASDAQ
5,262.02, +29.12 (0.56%)

S&P 500
2,190.15, +6.10 (0.28%)

NYSE Composite
10,858.50, +36.08 (0.33)

S&P Rocks To Hew All-Time Highs; Oil Ramps Higher

So much for the doldrums of August.

Stocks soared to some of their highest levels ever, with the S&P 500 index closing at an all-time-high, achieving a new intra-day high (2,188.45) in the process.

There was little in the way of financial data to support the sudden spurt higher, so let it just be said that it was a decidedly rick-on session.

Macy's announced reasonably good quarterly results and pledged to close 100 stores. The stock soared by more than 17% on the day. It's getting so insane on Wall Street that even an expected earnings beat is cause for a massive uptick in share price.

S&P stocks are trading at a trailing P/E of roughly 25, approximately a 65% premium over traditional fair value.

This is truly a market only for the brave, the knave, or the naive.

Thursday's Closing Quotes:
Dow Jones Industrial Average
18,613.52, +117.86 (0.64%)

NASDAQ
5,228.40, +23.81 (0.46%)

S&P 500
2,185.79, +10.30 (0.47%)

NYSE Composite
10,843.10, +68.12 (0.63%)

The Most Dangerous Market Of Your Lifetime

Investors in equities - those imaginary certificates that signify ownership of a portion of a company or corporation - are giddy.

Stocks are near all-time highs with prosperity and class envy writ large on every tick higher.

Sure enough, these investors are shrewd operators of finance and business, many having earned their degrees from the highest academic schools in the world, the diplomas proudly displayed on the walls of their hedge fund offices and trading areas.

So, why would they possibly be worried about anything, particularly, the value of their holdings?

Simply put, there just aren't enough of them partaking at the font of wealth pouring out of Wall Street. Making matters more complicated and distressed is that the executives of the companies in which their wealth is concentrated have been buying back their shares at an unprecedented rate, making the shares of stock available smaller and smaller, but also boosting the price of those available, traded shares.

It's an easy supply and demand formula: fewer shares available makes them more valuable. In effect, if companies are inclined to take back their shares at inflated prices (a de-issuance, if you will), those remaining shares have to represent the entire value of the company.

Thus, a company could theoretically buy back all the shares but one, leaving that one share of stock to account for the full value of the company. In the case of an Apple or Google or any of the thousands of billion-dollar market cap companies, that one share would be "valued" at some absurd number, like $285 billion.

In such a hypothetical case, the problem arises when the owner of that $285 billion share of stock wished to unload it, convert it to cash or some other assets. Who would be the buyer? And would they actually pay the offered price (the ask) in such an illiquid market?

Obviously, the seller of that massive share of stock might have to offer a discount, and a big one. Instead of $285 billion, the seller might be forced to accept $140 billion, or less, in event of a liquidity crisis, which, incidentally, is what stock buybacks are creating. Since there hasn't been adequate demand for shares since the financial crisis of 2008-09, companies have resorted to buybacks just to keep their companies afloat, many of them becoming less and less profitable over time, making the price of their stock even more ridiculously valued.

When the rush for the exits begins in earnest, the big-time hedgies and fund managers will be bidding directly against each other, each with the same goal, to dump corporate paper assets in exchange for something more sturdy, ostensibly government bonds or hard, cold cash.

The markdowns, margin calls and defaults will be spectacular and this market, this unsustainable fantasy created by zero and negative interest rates, central bank stimulus, and government dumbness and numbness will be exposed to real supply and demand economics in a swan song for greed, manipulation, and wealth concentration.

That this will occur is unmistakable. Everything does not go up in price all the time, forever. The business cycle has not been abolished, neither here in the US, nor in Japan, China, the Eurozone or anywhere else.

Central banks are currently backstopping the entire Ponzi scheme of the stock market with interest rate swaps, repos, direct investment, and options manipulation.

It can't continue forever, though it can continue for a long time. It's a deadly and dangerous game, putting at risk the entire economy of the planet, or, at least that portion of the planet that wants to play along.

Increasingly, the as the musical chairs are being removed one by one, players are opting out and moving elsewhere. Largely, the lower and middle classes aren't playing at all. They're invested in necessities, cash, maybe collectibles, precious metals, and real estate.

Eventually, the sheer volume of trade by the 99% not in the stock market and incensed by government policies which seek to impoverish them further, will outweigh the phony prices for stocks listed on the NYSE and NASDAQ.

The stock market will suffer a severe breakdown at some point. The trick is not to know when that breakdown will occur, but to continue to prepare for its inevitability.

Most will not be prepared. Those who have prepared may or may not proper at the expense of everyone else, because the chaos - political, economic, social - will be astonishing.

The Boy Scouts of America issued their motto many years ago and it applies today: Be Prepared.

Be a Boy Scout.

Wednesday's Washout:
Dow Jones Industrial Average
18,495.66, -37.39 (-0.20%)

NASDAQ
5,204.58, -20.90 (-0.40%)

S&P 500
2,175.49, -6.25 (-0.29%)

NYSE Composite
10,774.98, -29.53 (-0.27%)

Dow Ends 7-Day Losing Streak, But Who's Watching The Transports And NYSE Composite?

Markets can seem exuberant, sometimes, even over-exuberant, as has lately been the case, without reason.

The current environment is one of those times by which market movements cannot be rationally explained, or as the Maestro himself - former Fed Chairman, Alan Greenspan - so aptly put it, the markets seem to be suffering from irrational exuberance.

This needs to be pointed out in the current context of manipulation and high-stakes politics between the Nah! Brexit vote and the very real threat that Donald Trump might somehow wrangle himself into the Oval Office come November... to the absolute terror of the elite status quo, including everyone from Warren Buffet to Mark Cuban to Janet Yellen and just about every member of congress and Wall Street hedge fund slickster.

Money Daily has recently been pointing out that the any positive developments by Mr. Trump are and have been met with scurrying, rat-like selling of shares on the equity markets by those with very thin, lizard-like skins, probably your average congressional insider and self-important hedge fund managers.

On the other side of the coin, there's the relentless marauding of the Fed, the central bank which is prohibited from buying or selling of equities (unlike the Bank of Japan, which is now a top 10 holder of 90% of the stocks listed on the NIKKEI 225), but which has ample resources by which to funnel money into stocks via proxies such as Goldman Sachs, JP Morgan Chase, and Merrill Lynch, the investment arm of Bank of America, or even the Bank of Japan, which, having run out of luck in the Nikkei, is probably more than willing to buy US stocks.

It's a safe bet that the Fed and their cronies halted and reversed the post-Brexit decline, sending the Dow and S&P 500 to all-time highs via options trading and positions on the VIX, the volatility index, widely parlayed by those in the hedging business.

In fact, days before the Brexit vote, heads of the Swiss, Canadian, US and Japanese central banks were already in collusion to overcome any nasty "turbulence" in the markets, as openly reported by none other than Bloomberg.

So, it shouldn't come as any stretch of the imagination that the same types who distort presidential polls and have the mainstream media wrapped around their little fingers should also keep stocks artificially high as long as it appears that Hillary Clinton will be elected president come November 8.

Once stocks got to extreme levels, a bell went off in the heads of the big traders, telling them to take profits, resulting in a seven-day sell-off (otherwise known as consolidation), culminating in Tuesday's near-100-point decline on the Dow.

Wednesday, the Dow just barely hung on for a small gain, as did the other indices, however, the recent highs achieved by the Dow can be seen as absolute phonies, when referenced to the Dow Jones Transportation Average (DJTA), which sold-off and rebounded like other indexes post-Brexit, but did not attain new all-time highs (for the record, neither did the NASDAQ, nor the NYSE Composite, the broadest index of US stocks).

The Transports had a good run of it, topping out at 8048.09, but were 100 points shy of the all-time record, set back in April, 2015, at 8149.00.

The same is true on the NYSE Composite (NYA), which topped out recently at 10815.43, a far cry from May 2015, when the index stood proudly at 11254.87.

Taking away from this divergence in major markets is the idea that central banks and their friends can only influence so much. They often (make that, ALWAYS) leave bits and pieces of evidence of foul play scattered about. 100 or so points on the Transportation Average and over 400 points on the Composite shows just how sloppy and misguided their adventures into manipulation of not just stocks, but perceptions, have become.

Everybody watches the Dow and S&P. The transports and composite indices, not so much, or so they believe.

Dow Jones Industrial Average
18,355.00, +41.23 (0.23%)

NASDAQ
5,159.74, +22.00 (0.43%)

S&P 500
2,163.79, +6.76 (0.31%)

NYSE Composite
10,695.14, +34.01 (0.32%)

Stocks Pause; Good Entry Point?

After setting new all-time highs for what seems to be the better part of the past two weeks, stocks finally cooled off on Thursday as somebody, ostensibly, took profits.

But, was that a wise move, or with the Republican National Convention winding down, might this not be a wise time to double down, knowing that the status quo will want to put the best lipstick on its little piggies, making every effort to make Hillary Rodham Clinton the 45th president of the United States of America.

Hillary is obviously the choice of rich bankers and well-oiled politicians who wish for nothing more than another four years of free money from the Fed, insane public policy from the politicians, and more fleecing of the soon-to-be-defunct middle class.

It would appear that with the presidency in her sights, Mrs. Clinton, for all her obvious faults, may be the best thing for equity investors since the FASB eliminated mark-to-market accounting back in 2009.

At least until late October or whenever it appears that nothing can or will stop Mr. Trump from elevating his posture into the White House, the Fed and its many backers will want to keep stocks flying high in hopes that Mrs. Clinton can lay claim to a vigorous economy (which, of course, is pure fiction, and which she had absolutely nothing to do with making it so).

Back up the truck and buy this dip. We could be looking at Dow 20,000 before long.

Dow Jones Industrial Average
18,517.23, -77.80 (-0.42%)

NASDAQ
5,073.90, -16.03 (-0.31%)

S&P 500
2,165.17, -7.85 (-0.36%)

NYSE Composite
10,758.62, -34.48 (-0.32%)

Dow, S&P Post New Highs Again, But, Who's Doing The Buying?

In a market that more often resembles a three-ring circus than an amalgamation of the best corporate entities vying for favoritism among investors via increased earnings, revenue and expectations, the recent melt-up in US equities has more than just a few analysts scratching their quickly-balding heads.

It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.

So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.

For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"

The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.

Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.

Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.

What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.

Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.

Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.

Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.

Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.

The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.

New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.

Enjoy it while it lasts.

-- Fearless Rick

New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)

NASDAQ
5,034.06, +28.33 (0.57%)

S&P 500
2,163.75, +11.32 (0.53%)

NYSE Composite
10,786.63, +52.43 (0.49%)

How Now, Dow? New All-Time Highs on DJIA, SPX

The Dow Jones Industrial Average (DJIA) added 120.74 points, or 0.7%, to close at 18,347.67, making a fresh closing all-time high, surpassing the previous closing high when it finished at 18,312.39 on May 19, 2015. The blue-chip gauge briefly hit an intra-day top at 18,371.95.

Additionally, the S&P tacked on nearly 15 points, setting another record closing high.

Continued strength in the markets may be a sow's ear, however, since the Fed might choose to tap on the brakes with a rate hike if such outlandish behavior continues. On the other hand, since the Fed is a major buyer of equities these days, the FOMC may just back away from the rate hike mania and allow markets to simply go where they will with super low interest rates backstopped by a shaky core economy and a presidential election.

There has been no sense in fighting the Fed, since they have unlimited power to print as much as they like, though the natural questions have to be "where will it end, when does it end, how does it end?"

Nobody has the answers, and nearly the same amount is asking. There's too much money sloshing around for anybody to take a step back and take a critical view of fundamental valuations, which are becoming expensive.

Signals have been shown by the markets, but, as has happened throughout history, the signals are being ignored as long as the champagne and money are flowing.

S&P 500: 2,152.14, +14.98 (0.70%)
Dow: 18,347.67, +120.74 (0.66%)
NASDAQ: 5,022.82, +34.18 (0.69%)