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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



Bear in mind: 26,616.71.

Dow Jones Industrial Average May Scorecard:

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

PPI Moderates, Stocks Rise On Hope, Noise

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

Indecisive Market Flatlines On Slow News Day

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

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

When The Bottom Falls Out The Media Might Tell You

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

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

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

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

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

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

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

Those days are long gone.

Look out below.

Dow Jones Industrial Average May Scorecard:

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

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

Federal Reserve FOMC Meeting EPIC FAIL; Stocks Battered

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average May Scorecard:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Get out, reallocate, or die.

Dow Jones Industrial Average April Scorecard:

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

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

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

Is this a bear market?

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

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

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

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

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

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

Does anybody in their right mind see that happening?

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

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

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

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

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

Forewarned is forearmed.

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

Stocks Tumble As Investors Flee Overvalued Stocks

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

Stocks Slide As Commodities Hold Gains

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

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

Dow Jones Industrial Average April Scorecard:

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

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

Oil, Silver Lead Commodity Charge As Stocks Languish

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

Retail Sales Improve In March, Stocks Respond

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

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

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

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

Presently, this is the proverbial calm before the storm.

Dow Jones Industrial Average April Scorecard:

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

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

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

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

26,616.71

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

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

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

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

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

But, how likely is that?

Not very.

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

Stocks Continue See-Saw Movement After Outrageously Mindless Fed Minutes

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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

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

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



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

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

Good question.

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

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

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

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

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

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

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

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

Why is this good?

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

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

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

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

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

Dow Jones Industrial Average April Scorecard:

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

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