Stocks Spurt On Tariff Truce; 3-5 Yield Curve Inverts

There was good news on the trade front, but bad news concerning a possible recession.

At the conclusion of the G20 meeting in Buenos Aires, President Trump and his Chinese counterpart, Xi Jinping, announced a 90-day moratorium on tariffs set to take effect on January 1, 2019. Some of the tariffs already in place were set to increase while new tariffs on a variety of goods were to take effect on the new year, but the leaders of the world's two largest economies decided on a cooling-off period and further talks before proceeding.

That good news sent futures soaring in pre-market trading, the euphoria spilling over into the regular session. Barely noticed - and un-noted by the financial press - was a minor inversion in interest rates, with the yield on the 5-year note (2.83%) falling below that of the 3-year treasury note (2.84%).

Though it's not the inversion that most economists are looking for in terms of portending a recession, the minor inversion is a warning shot. The 2-year and 10-year notes are the fear standard, with an inverted curve of those rates consistently preceding every recession since 1955. Currently the 2-year note stands at a yield of 2.83%, while the 10-year holds at 2.98%, notably below 3.00%, after Fed Chairman Jerome Powell softened his stance on rate hikes last week.

Thus, there's a split narrative that threatens to put a lid on gains in the near term. Trade wars have been postponed, for now, but 90 days isn't long enough to establish new guidelines between China and the USA. With the Fed set to raise and check, interest rates are going to give them some maneuverability, though not much, with the federal funds rate settling in somewhere between 2.25 and 2.50%.

Bond vigilantes brought the 10-year note down below the Maginot Line of 3.0% on the first trading day of December. That's more than enough speculation as to where interest rates are headed. In a word, nowhere. The ancillary note is on growth - both domestic and global - which has had a bit of a bump thanks to US strength, but pockets of malaise are popping up everywhere. There seems to be no smooth path heading into 2019, so, after a boost from the Fed and another from the international trading community, this early December rally may not have enough gusto to carry it past the FOMC meeting and through the holidays.

Much emphasis will be put on consumer spending, though with an early Thanksgiving, holiday spending might just peter out a week before Christmas.

It's not all doom and gloom. It's more like murky, with a light at the end of some tunnel.

Dow Jones Industrial Average December Scorecard:

Date	Close	Gain/Loss	Cum. G/L
12/3/18	25,826.43	+287.97	+287.97

At the Close, Monday, December 3, 2018:
Dow Jones Industrial Average: 25,826.43, +287.97 (+1.13%)
NASDAQ: 7,441.51, +110.98 (+1.51%)
S&P 500: 2,790.37, +30.20 (+1.09%)
NYSE Composite: 12,577.54, +120.00 (+0.96%)

WEEKEND WRAP: Powell Puts Positive Spin On Rates, Economy; Stocks Respond With Banner Gains

As much as stocks were flattened last week, they gained back this week, and then some, rebounding mainly off the lips of Fed Chairman Jerome Powell, who uttered two words which are sure to become ensconced within the annuls of great Fed Chairman one liners, such as Alan Greenspan's notorious "irrational exuberance."

Having a way with words, especially concise two-word constructs, Powell uttered, in a speech at the Economic Club of New York, that interest rates were "just below" neutral, sending stocks spiraling upwards on Wednesday.

Those gains followed two prior sessions with more pedestrian advances, the Wednesday push a 617-point blast on the Dow which sent the industrials into positive territory not only for the month, but for the year as well. The week's gains were capped off by a window-dressing close on Friday, with the Dow posting a nearly 200-point gain, all of which came after 1:30 pm ET.

Events of the week - from Powell's speech to Trump's dealings at the G20 in Buenos Aires - managed to put a positive spin on the outlook for stocks going into the final month of the year and the holiday shopping season.

Effectively, what Powell's statement on interest rates did was virtually assure a 25 basis point hike in the federal funds rate and then a pause at what would have been the next logical rate increase, at the March FOMC meeting, and beyond. Whether the Fed's members actually believes that an overnight rate of 2.25-2.50% neither hinders nor aids the US economy is a question open for debate, as most believed that more rate hikes were necessary per the minutes of the last FOMC meeting earlier in November.

That sentiment put a bit of a damper on the market when released on Thursday, but, as Wall Street memories seem exceedingly short these days, the flattish close didn't have any lasting effect.

Once into 2019, the Fed is likely to continue to spin positively, as Janet Yellen's honorable mention entry in the two-word scrabble that is Fedspeak, "data dependent" should be rolling off the lips of more than a few Fed officials in the cold months of winter.

Undeniably, a dovish Federal Reserve can be nothing but good for stocks, which are the de facto underpinning of the US economy. The Fed - and Powell in particular - may have been taking a sideways glance at the housing market as well, another pillar in the economic construct. Rising mortgage rates have shut down advances in new and existing home sales, punishing home builder stocks like Lennar (LEN), D.R. Horton (DHI), and KB Home (KBH). A stagnant housing market may have been instrumental in the formation of Powell's suddenly-accomodative stance.

Even with the rebound this week, stocks still have a pretty large slope to scale to get back to September or October's all-time highs. The NASDAQ still has issues with falling tech stocks and GM's announcement that it was shuttering five factories and laying off 14,000 workers had a chilling effect on what was an overwhelmingly positive week.

Elsewhere, oil continued to hover at the $50 level for WTI crude, precious metals remained flat to negative, but other global markets perked up a bit.

When the FOMC meets on December 18-19, there will be little doubt about their direction. A rate hike of 0.25% is practically baked into the cake. After that, however, it certainly appears the Fed will consider its work done, for now, at least. The next rate hike - and there is almost certainly to be one or two in the next 12-18 months - will probably come after some gaudy economic data or fresh highs in the stock market.

Until then, the skies are blue and smooth sailing is ahead.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98
11/27/18	24,748.73	+108.49	-367.49
11/28/18	25,366.43	+617.70	+250.21
11/29/18	25,342.72	-23.71	+226.50
11/30/18	25,538.46, +199.62	-23.71	+426.12

At the Close, Friday, November 30, 2018:
Dow Jones Industrial Average: 25,538.46, +199.62 (+0.79%)
NASDAQ: 7,330.54, +57.45 (+0.79%)
S&P 500: 2,760.17, +22.41 (+0.82%)
NYSE Composite: 12,457.55, +68.18 (+0.55%)

FOR THE WEEK:
Dow: +1,252.51 (+5.16%)
NASDAQ: +391.55 (+5.64%)
S&P 500: +127.61 (+4.85%)
NYSE Composite: +421.31 (+3.%0%)

Stocks Flat after Fed Minutes; Dow Rally Ends At Three

Stocks were a bit tepid on Thursday, understandable after the huge Wednesday run-up on the back of Fed Chairman Jerome Powell's comments on interest rates.

Investors were moved to the downside by bad housing data and an uptick in unemployment claims announced prior to the opening bell, but moved forward throughout the session, though the closing half hour left much to be desired.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98
11/27/18	24,748.73	+108.49	-367.49
11/28/18	25,366.43	+617.70	+250.21
11/29/18	25,342.72	-23.71	+226.50

At the Close, Thursday, November 29, 2018:
Dow Jones Industrial Average: 25,342.72, -23.71 (-0.09%)
NASDAQ: 7,275.87, -15.73 (-0.22%)
S&P 500: 2,739.26, -4.53 (-0.17%)
NYSE Composite: 12,417.39, -0.24 (0.00%)

Fed Chair Powell Currys Favor With Wall Street: Rates "Just Below" Neutral

In what can only be considered an obvious and well-intentioned nod to Wall Street, Federal Reserve Chairman Jerome Powell, speaking at the prestigious Economic Club of New York, noted that the federal funds rate is "just below" the level that economists consider neutral, neither encouraging risk nor dissuading it.

Powell's remarks sparked a rally on Wall Street that was the best in eight months, and probably put to rest any ideas investors may have had of a bear market developing in stocks.

The Fed chairman is no doubt a stock picker and investor himself, so he's well aware of the kind of volatility that has been plaguing stocks in recent weeks. He also may have taken a bit of a queue from President Trump, who has been consistently complaining about the pace of recent Fed rate hikes.

What this means for interest rates is likely that the Fed will go ahead, as expected, and raise the federal funds and prime rates once more in December, and then take a wait-and-see approach going forward. The Fed had been expected to raise rates three more times in 2019, though that approach was largely nixed by Powell's dovish remarks today.

At the most, the Fed might raise rates twice in the coming year, though once or none at all might be closer to the mark. Fueled by easy money policies the past ten years, the stock market, being a key cog in the US economy, would be hard set if low lending rates were curtailed further.

While Wall Street cheered the development, the biggest winners should be consumers, who are addicted to credit and have seen credit card interest rates soar over the past two years as the Fed, like clockwork every quarter, raised rates to which many credit accounts are tied. A cessation of the rate hikes will come as a relief to anybody carrying a credit card balance.

Combined with gains from Monday and Tuesday, today's positive close pushed the Dow back into the green for the month, and the year.

Who said the Fed doesn't pay attention to the stock market?

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98
11/27/18	24,748.73	+108.49	-367.49
11/28/18	25,366.43	+617.70	+250.21

At the Close, Wednesday, November 28, 2018:
Dow Jones Industrial Average: 25,366.43, +617.70 (+2.50%)
NASDAQ: 7,291.59, +208.89 (+2.95%)
S&P 500: 2,743.79, +61.62 (+2.30%)
NYSE Composite: 12,417.63, +229.56 (+1.88%)

GM To Lay Off 14,000; Stocks Stumble To Gains

With news that General Motors (GM) would lay off 14,000 workers and shut down five plants, the mood on Wall Street at the opening bell was more than a little bit sour. It was just the kind of news that the market didn't want to hear, especially after some smashing numbers from Black Friday retail sales and even more good news from Cyber Monday's online commerce.

The Dow sank more than 200 points in the first half hour of trading, but from there took the path of least resistance, to the upside, extending Monday's rally with a little hiccup from some morning indigestion. While the Dow posted a fair gain, the other indices didn't do much, with the NASDAQ and NYSE Composite barely making it above unchanged. The S&P shook out some shorts for a third of a percent win.

Everything else was pretty ugly. Oil posted a minor gain, though there are few in the real world who believe the selloff in crude - as with stocks - is over. Precious metals were slammed close to recent lows and seem to have no ballast, the past three months nothing but a rollover and consolidation with a focus to the negative. The metals can't break to the upside as long as every other asset class is struggling; the current logic dictating that stocks must regain a positive footing and absent that, nothing else matters.

Today's trade was mostly noise. Nothing really moved the meter and it was a little bit of a surprise that stocks rallied as well as they did. Stocks remain week and investors weary. While that's a solid formula for further declines, the day-trading flogs and HFTs have managed to keep stocks from completely folding up their tents. That, and a healthy dose of holiday cheer should keep things stabilized... until they're not.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98
11/27/18	24,748.73	+108.49	-367.49

At the Close, Tuesday, November 27, 2018:
Dow Jones Industrial Average: 24,748.73, +108.49 (+0.44%)
NASDAQ: 7,082.70, +0.85 (+0.01%)
S&P 500: 2,682.20, +8.75 (+0.33%)
NYSE Composite: 12,188.06, +6.46 (+0.05%)

Monday's Big Bounce Sets Up For Extended Short-Term Rally, Continued Volatility

After last week's bloodletting, it was no surprise that bargain hunters emerged to open the week's trading, sending the markets through the roof right at the open and holding gains throughout the session.

With a four percent loss booked for the prior week, Monday's 1.5-2.0% gains amount to little more than a technical snap-back rally off some very fresh and very dangerous new lows. Early indications from brisk Black Friday weekend sales were the most likely catalyst for Cyber Monday buying, a reflection of what may be considered a robust economy backed by consumers with full wallets and plenty of room to spare on credit cards.

While the Fed has been tightening over the past two years, banks, credit card operations, and shadow banking entities have been cranking up the credit spigots, loosening lending standards and making more money available via an array of personal loans, small business offerings, refinancing, consolidations and other assorted credit vehicles. There certainly is no shortage of easy money in the consumer and small business space, nor in the higher levels of corporate finance.

Add to the consumer and business conditions wide-open spending by governments at all levels and the US economy appears robust, dynamic and unflinching. Never mind that the Fed is threatening to take away the punch bowl. There are more than enough willing participants and suppliers of easy money, many of them spring the mix with added enticements.

There are crosswinds in the capital markets which lead to wild swings in every manner of asset. The flavor of the day may change, but the underlying theme of easy money has not yet left the room. America is in a period that rivals the roaring twenties, the nifty sixties and even the greed-is-good nineties.

The party goes on until the elixir of fast, easy money is taken away, and that's not happening any time soon. Expect even more volatility through the holidays and into the new year.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27
11/14/18	25,080.50	-205.99	-35.72
11/15/18	25,289.27	+208.77	+173.05
11/16/18	25,413.22	+123.95	+297.00
11/19/18	25,017.44	-395.78	-98.78
11/20/18	24,465.64	-551.80	-650.58
11/21/18	24,464.69	-0.95	-651.53
11/23/18	24,285.95	-178.74	-830.27
11/26/18	24,640.24	+354.29	-475.98

At the Close, Monday, December 26, 2018:
Dow Jones Industrial Average: 24,640.24, +354.29 (+1.46%)
NASDAQ: 7,081.85, +142.87 (+2.06%)
S&P 500: 2,673.45, +40.89 (+1.55%)
NYSE Composite: 12,181.60, +145.36 (+1.21%)

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

The beatings will continue until morale improves.

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

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

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

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

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

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

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

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

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

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

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

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

Now, to those uppity markets...

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

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

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

Happy Thanksgiving!

Dow Jones Industrial Average November Scorecard:

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

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

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

Where to begin?

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

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

Another Blue Monday As Stocks Slammed Hard All Day; Techs Lead Losers

Whew!

This is becoming serious. Last week, when stock traders had a day off for observance of Veterans Day, the week opened with a 600-point loss. Today, the start of a new week, sees stocks tank to the tune of nearly 400 points.

It's not just the start of the week that's been bad of late, it's a recurring trend for the Dow and NASDAQ to slide by triple digits over the course of one session. The down days are beginning to add up, suggesting that something bigger is on the immediate horizon, and it's happening at a time which is usually a good one for stocks. November and December are among the better months for stock gains, though that doesn't look to be the case this season (Is it too early to say "Happy Holidays?").

Most of the selling on Monday came early. Shortly after noon in New York, the Dow had already shed more than 60 points. For the remainder of the session the blue chip index bounced around in a 100-point range, as some tepid buying emerged, though there was not wide enough commitment to keep stocks from near the lows of the day.

Faring even worse was the NASDAQ, which lost more than 100 points for the eighth time in the past seven weeks. In for particular harsh treatment are, and have been, tech stocks. It seems as though any company with a CEO under 40 or with any connection to computers or the internet has been targeted for extermination.

Here are some of the more notable Silicon Valley names on the Wall Street hit list:

• Facebook: hit a high of 217 in July, closed today at 131.55.
• Alphabet (Google): August 29: 1,249.30; Today: 1,020.00
• Netflix: August 30: 370.98; Today: 270.60
• Apple: September 4: 227.57; Today: 185.86
• Nvidia: September 4: 283.70; Today: 144.70
• Amazon: August 31: 2,012.71; Today: 1,512.29

These stocks were among the leaders during the long run-up from 2016 and prior. Now they are the loss-leaders. Amazon's peak is of interest because that was also the day the NASDAQ finished what looks like a pretty solid double top. It closed on August 29 at 8109.69 and on the 31st at 8109.54. It's been downhill since, the NASDAQ sporting a 13% decline since then.

Nobody knows exactly where this is all going, but, from recent market action, it looks to be headed to a not very nice place.

Dow Jones Industrial Average November Scorecard:

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

At the Close, Monday, November 19, 2018:
Dow Jones Industrial Average: 25,017.44, -395.78 (-1.56%)
NASDAQ: 7,028.48, -219.40 (-3.03%)
S&P 500: 2,690.73, -45.54 (-1.66%)
NYSE Composite: 12,280.91, -119.37 (-0.96%)

Weekend Wrap: Myopic Markets Ignoring Broader, Global Issues

Extending declines from last Friday, stocks took a severe nose-dive on Monday and the carnage continued through to Wednesday, with the first three days of the week wiping out most, if not all market gains from earlier in the month.

The Dow Industrials were hit hardest. Even with winning sessions on Thursday and Friday to close out the week, the blue chips ended with one of the more serious declines of the year, a solid 2.22% rip. Though tech stocks were blamed for most of the drop, the price declines in oil and most of the other components contributed to send Dow stocks lower, as the price of WTI crude hit a year-old bottom on Wednesday before recovering the final two days of the trading week.

Chevron (CVX) and ExxonMobil (XOM), the two energy components in the Dow 30, took it on the chin early in the week, but Chevron actually finished the week about where it started and ExxonMobil ended the week down just two points, or, about 2.5%.

Apple (AAPL) was a big driver to the downside, down nearly five percent at week's end, though it was off about nine percent at the close on Wednesday. The early part of the week saw selling contributions from most of the component stocks and slight recoveries in the latter stages.

Once again, volatility was notable and seems not to be slacking. The widely-watched VIX popped well over 20 as the week progressed, but settled back in the high teems, closing at 18.14 on Friday. That is still an elevated level over the complacency of the past few years, which saw the VIX hanging solidly in the 10-13 range for extended periods.

On the international front, the usual knee-jerking on every utterance, press release, or rumor surrounding a trade deal-or-no-deal between the US and China continued. It's being set up as a foil to be used by the financial press to explain every up-and-down in markets, when in fact, trade with China is much less an issue than say, the Fed's relentless interest rate increases or the possibility of a looming Eurozone-wide recession.

Industrial production in Europe was anemic in the third quarter, with increases of 0.3, 1.1, and 0.9 for July, August and September. As compared to the same quarter in the prior year, the average of 0.77 is dwarfed by 2017's average of four percent. Such a huge decline cannot be taken lightly, though it is rarely - if ever - mentioned in US financial coverage. Contributing to the growing concerns in Europe is the recent Brexit proposal put up by Prime Minister Theresa May's administration. The deal was met with considerable resistance in the House of Commons and prompted some high-level resignations from May's cabinet. Chances of a deal being worked out for an orderly exit from the European Union are being viewed as iffy at best.

While Europe will live or die largely by its own restrictive and stifling internal policies, China and the United States should continue to roll right along, regardless of whether a deal is struck between the two countries. The next meeting between President Trump and china's president, Xi Jinping, is upcoming soon. The two leaders are reportedly planning to discuss trade as a side event at the next G20 meeting in Buenos Aires on November 30, but the two largest national economies in the world aren't about to be sidetracked by tariffs. China's growth is already slowing, but they have broad international initiatives beyond the United States. Ditto for the US, as President Trump extricates the country from one-sided trade deals that were the result of globalization efforts from previous administrations.

Putting the week into perspective, US equity markets are still generally myopic, ignorant of issues elsewhere in the world, though that may be changing. Many US companies are dynamic and have global footprints, so that, if other parts of the planet are suffering, the US, while somewhat insulated, is not completely immune. US expansion has been long, though not deep, but the housing market has peaked and is slowing and unemployment cannot stay at its current sweet spot indefinitely. Tech appears the weakest link presently, though its weakness is not pronounced. Stocks continue to vacillate, but are closer to recent lows than highs.

Recent trends have seen selling into rallies and quick rises off obvious inflection points. Even with what are still somewhat easy credit conditions and stock buybacks at elevated levels, stocks are failing to reach higher, the condition looking more like exhaustion rather than capitulation. Such a condition may take more than a few weeks or months to resolve. In the meantime, traders aren't seriously committed to positions.

Sentiment remains neutral with a slight downside bias.

Dow Jones Industrial Average November Scorecard:

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

At the Close, Friday, November 16, 2018:
Dow Jones Industrial Average: 25,413.22, +123.95 (+0.49%)
NASDAQ: 7,247.87, -11.16 (-0.15%)
S&P 500: 2,736.27, +6.07 (+0.22%)
NYSE Composite: 12,400.28, +38.76 (+0.31%)

For the Week:
Dow: -576.08 (-2.22%)
NASDAQ: -159.03 (-2.15%)
S&P 500: -44.74 (-1.61%)
NYSE Composite: -137.25 (-1.09%)

Dip-Buyers Send Stocks Off Fresh Lows; Cory Booker, Poster Boy For Peak Stupidity

As stocks touched down on some key support levels, investors took the initiative to load up on what they perceived as undervalued shares, sending stocks off morning lows to afternoon highs, with NASDAQ dumb money leading the charge higher.

The major indices were under pressure early in the session, dropping to levels at which the year began, wiping out nearly all of the gains since last December. Call it coincidence or a propensity for chart-watching dip-buying, but there was no other catalyst to Thursday's mini-rally other than valuations.

On the downside, Britain seems to be completely flummoxed by ongoing Brexit negotiations, with resignations in Prime Minister Theresa May's cabinet over the compromise deal presented to the House of Commons this week. Rumors of a no confidence vote are circulating as the Brexit issue continues to derail any progress England can make in extricating itself from the European Union. The referendum, passed in early 2016, called for an exit by March of 2019, though that date now appears less certain. The issues are complex and threaten to tear the country apart.

In a completely unrelated note, America has finally achieved PEAK STUPIDITY, and its poster boy is the senator from New Jersey, Cory Booker.

Booker's proposal for "Baby Bonds" as a way to shrink the wealth gap is about as far left an approach as could be considered... without laughing.

Booker's idea is to give every newborn $1000 at birth and up to another $2000 every year thereafter - based on the parents' income, of course - until that child reaches the age of 18, or, in other words, just in time to take out a government-funded student loan, or, pay for maybe a few years of college themselves.

It's just this kind of insanity that American citizens have to endure from its government that causes angst, apathy, or confrontation between liberals and conservatives. The US has had a massive welfare program in place - that rewards having more children with higher benefits - for more than 50 years, and it's done nothing to reduce poverty or improve living conditions for chronically poor people.

With people like Booker being elected and re-elected to high government positions of power, is there any wonder why the United States are so disunited?

Despite the higher close on Thursday, investors should not be enthusiastic about an extension to the short-term rally which was likely the result more of short-covering and corporate buybacks than the actual taking of new positions in stocks. Sentiment remains murky with a bias to the downside.

Dow Jones Industrial Average November Scorecard:

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

At the Close, Thursday, November 15, 2018:
Dow Jones Industrial Average: 25,289.27, +208.77 (+0.83%)
NASDAQ: 7,259.03, +122.64 (+1.72%)
S&P 500: 2,730.20, +28.62 (+1.06%)
NYSE Composite: 12,361.52, +86.03 (+0.70%)

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

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

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

Dow Down 100, NASDAQ Up 0.01; Crude Oil the Culprit

From the You Can't Make This Stuff Up Department:

The Dow was down 100 points (and 69 cents, but who's counting), while the NASDAQ finished a hectic day of trading with a gain of 0.01. All told, this was a losing session, as both the S&P 500 and NYSE Composite ended the day underwater.

One might have assumed that Tuesday's losses were an extension from Monday, with Apple leading stocks lower, but, even though the Cupertino computer colossus did finish lower by an even one percent, the biggest losers on the Dow were energy companies ExxonMobil and Chevron, which bracketed Boeing (BA), a 2.11% loser. XOM lost 2.29%. CVX was down 1.74%.

Volatility in stocks is making everybody crazy. The Dow was up 1075 points over the first six sessions in November, but has given back 905 in the past three sessions, leaving it up a mere 170 points for the month, one which traditionally is among the best for long players.

Thus, the answer to the question of what moved markets today is simple: the price of oil, as WTI crude lost ground for the 12th straight day. At $55.19, it's at the lowest level since November last year. Tuesday's decline was also the largest during the recent rout, down nearly eight percent.

Saudi Arabia reduced its estimate for global demand from two million barrels per day to 1.29 million, sending the price sharply lower. Oil peaked on October 3rd, above $76/barrel, and has been on a diagonal course lower since, now officially in a bear market.

While the Saudi's may be fretting over demand and promising production cuts in the near future, the real villain in the oil patch is supply. There's been a glut of oil forever, and the only movement in price was due to artificial crises, forced production cuts, and pure speculation. In June of 2017, WTI crude oil was going for $46/barrel, but was bumped up continuously over the next 16 months before the recent setback. From all indications, reduced demand and oversupply could push prices down below $50/barrel before Thanksgiving and further declines might be a welcome Christmas present for drivers and those who heat their homes with oil.

A lower price for oil, and, consequently, for gasoline and other derivatives, should act to boost the general economy, allowing consumers more disposable income to spend on necessities and/or holiday splurges, all of which should be positive for markets. However, the math isn't quite so simple, as Americans, beset with record credit card and other debt, might tighten their collective belts and pay down some of those nasty, recurring, monthly bills on credit cards with interest rates well beyond what used to be considered usury.

For the pair traders out there, that would mean shorting oil stocks and financials while buying consumer staples and cyclicals.

Fun for everyone.

Dow Jones Industrial Average November Scorecard:

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

At the Close, Tuesday, November 13, 2018:
Dow Jones Industrial Average: 25,286.49, -100.69 (-0.40%)
NASDAQ: 7,200.88, +0.01 (0.00%)
S&P 500: 2,722.18, -4.04 (-0.15%)
NYSE Composite: 12,328.23, -15.28 (-0.12%)

Algos Plus Momentum, Herd Behavior Equals Wipeout In Stocks

Monday came as quite a surprise for many investors, as stocks sent a strong message of dislike about something, though nobody is certain just what sparked such a massive selling spree.

For the NASDAQ, it was complete wipeout of last week's gains, minus another 160 points. The other indices were down nearly as much as they were up all of last week.

As noted in Money Daily's Weekend Wrap, technical analysis, showing divergent positions amongst the major indices, was suggesting an imminent breakout in one direction or another. It seems that the market decided to make down the dominant direction... for now.

One might expect these divergences to be resolved in short order, though markets today are guided so much by programmatic trading and headline-chasing algorithms, it's difficult to pinpoint where the breaks are actually occurring and in just what direction they are going to move.

Volatility, as persisted throughout October, appears not to have abated, more than likely the result of many diverse factors, rather than just one. The increased employment of computer algorithms, combined with the market's distinctive her behavior, manifested as "momentum," produced another of 2018's banner sessions to the downside.

The Dow's 602-point drop was the 15th biggest in market history, but also the seventh largest of 2018, a distinction that will not be lost on market observers. 2018 figures to already be the most volatile year in market history.

All that can be said going into the holiday season is to be guardedly guarded. This time does appear to be different. America is beset by warring political parties in Washington and Wall Street is unhappy, at a time in which stocks are already overvalued and due for a mean reversion.

While this one-day event was a scary sight, it almost certainly will not be the last.

Dow Jones Industrial Average November Scorecard:

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

At the Close, Monday, November 12, 2018:
Dow Jones Industrial Average: 25,387.18, -602.12 (-2.32%)
NASDAQ: 7,200.87, -206.03 (-2.78%)
S&P 500: 2,726.22, -54.79 (-1.97%)
NYSE Composite: 12,343.51, -194.02 (-1.55%)

WEEKEND WRAP: TA (Technical Analysis) Shows Split Indices, Preferences

By most accounts, the week past was very solid. Midterm elections went to a split decision, the Fed Held firm on interest rates and stocks generally responded with gains. Apparently, Wall Street is perfectly satisfied with Donald J. Trump in the White House, Republicans in control of the Senate, and Democrats holding sway in the House of Representatives. The Dow, in particular, was the big winner, posting its second straight week on the upside, leading the majors with a gain of 2.84%, suggesting that big business is still the motif of the Republican party.

On the slightly more moribund side of the ledger, the NASDAQ, thanks largely to a selloff in tech equities, fared the worst, though still registering a gain of two-thirds of a percent.

What is striking to those steeped in charting discipline is the variegated construction of the major indices. In the interest of brevity and clarity, a table serves best to understand where stock indices are currently residing.

The table below shows where each of the major indices stand in relation to their various moving averages.

Index	50-day MA	200-Day MA	40-Week MA
Dow	Above	Above	Above
NASDAQ	Below	Below	Below
S&P 500	Below	Above	Above
NYSE COMP.	Below	Below	Below
Dow Trans.	Below	Below	Below

Obviously, the Dow is presently the favored index, having cleared all the hurdles which allow it to be pointed for more success. On the other hand, the NASDAQ, NYSE Composite and Dow Transportation Index are all trending negatively, offering signals in broad swathes that all is not as well as the Dow would have us believe.

The S&P hovers in no-man's land, below the 50-day, but above the 200-day. The 500 major stocks represented cumulatively are offering value, though direction is far from assured.

The Dow Transports have been included because of its unique relationship to the Industrials. Transportation issues are largely overlooked by the financial media, though their importance in general markets should not be undersold. If the companies that move goods, services and people are struggling - even in the face of dramatic declines in fuel prices - something is not right.

What should this suggest to the investor?

Perhaps it is nothing more than big money preferring to buy well-known names with solid track records (the 30 Dow stocks) while shunning the lesser-known companies represented in the broader indices. The S&P probably offered the best indication: that, according to current sentiment, stocks are somewhat fairly valued. Continued divergences such as are showing in the table cannot last for long. Either the positive vibe from the Dow will serve to lift other areas and sectors, or the broadly-defined mid and small-cap stocks in the composite indices (and the transports) will pull all boats crashing into the shoals.

One might expect these divergences to be resolved in short order, though markets today are guided so much by programmatic trading and headline-chasing algorithms, it's difficult to pinpoint where the breaks are actually occurring and in just what direction they are going to move.

A related article by Bernie Schaeffer of Schaeffers Research offers some insight into how well the Dow Industrials and Transports perform under various conditions. The article references November, 2016, and readers should know well what happened in the weeks and months following the general presidential election. Stocks soared, with numerous record highs met and broken.

Should this period - after a midterm election - respond similarly? Technical analysis would say yes, though, as the wizards of Wall Street are always keen to remind: past performance in no indication of future results.

Caveat Emptor indeed.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54

At the Close, Friday, November 9, 2018:
Dow Jones Industrial Average: 25,989.30, -201.92 (-0.77%)
NASDAQ: 7,406.90, -123.98 (-1.65%)
S&P 500: 2,781.01, -25.82 (-0.92%)
NYSE Composite: 12,537.53, -84.51 (-0.67%)

For the Week:
Dow: +718.47 (+2.84%)
NASDAQ: +49.91 (+0.68%)
S&P 500: +57.95 (+2.13%)
NYSE Composite: +215.73 (+1.75%)

Fed Signals More Rate Increases; Market Dynamics Favor Investment Diversity

In what can be characterized as more of a sigh than a panicked scream, stocks sold off Thursday afternoon when the Fed wrapped up its November FOMC meeting, announcing that they had no intention of changing plans for a fourth federal funds rate increase this year and at least three more in 2019.

Of the four major insides, only the Dow managed to post a gain, though it was minuscule, at a mere 10 points.

Fears that the Fed might put some kind of kibosh on the Trump expansion have been stocked by the president himself, who would prefer lower interest rates in order to keep the punch bowl of cheap money full. It's unlikely President Trump will get his wish, because the Fed plan has been in place for years, is currently being executed and seems - despite pullbacks in stocks in February and again in October - to be working as well as can be expected.

The US economy has roared back to life over the past year, thanks in part to Trump's individual and corporate tax cuts, repatriation of foreign funds by companies, and still fairly easy policy by the Fed.

While the stock market does not provide complete portfolio of the US economy, it does act as a kind of proxy. Stocks generally gain when the economy is doing well, and falls when recessions hit or external events cause disruptions to the usual flow of funds into equities.

Buybacks have been providing an inordinate amount of upside for the general markets. 2018 is on pace to set a record for corporate stock buybacks, which has an immediate effect on valuations by reducing the number of shares outstanding. To the general public, stock buybacks look like regular buying, as they operate in the background and the actual buyers are not disclosed. It's assumed that as companies buy their own stock rather than reinvest in equipment, facilities, workers, or expansion of their businesses, the sellers are funds and/or large stakeholders, reaping profits and moving on to the next apple ripe for picking.

Generally seen as good practice, stock buybacks don't actually add value, though in terms of shareholder value, they do return more profits in higher share price and, often, increased dividends. It's a great panacea for stockholders, who merely have to hold shares and profit. This scenario has been unprecedented, but has lasted since the Great Financial Crisis of 2008-09 and continues to provide a backstop to stocks. When the buybacks stop, so will the easy money for shareholders, but, the practice still appears to have more to run, though the pace has slowed over the past three to six months.

All of this has created a very dynamic and fluid market, in which all manner of investment strategies can produce solid results. With wild swings on nearly a daily basis, individual stocks or sectors (via ETFs) can be either held, sold short or bought. The current environment is likely a major boon to brokers such as Merrill Lynch, Schwab, eTrade and others in the game, who undoubtably will be seeing increased trading in an active, unbridled market.

Thus, the answer to the age-old question, "Buy, sell, or hold?" might today be answered correctly by responding, "all of the above."

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46

At the Close, Thursday, November 8, 2018:
Dow Jones Industrial Average: 26,191.22, +10.92 (+0.04%)
NASDAQ: 7,530.88, -39.87 (-0.53%)
S&P 500: 2,806.83, -7.06 (-0.25%)
NYSE Composite: 12,622.04, -57.06 (-0.45%)

Wall Street Gives Election Results Thumbs Up

Gridlock assured as Democrats took control of the House of Representatives and Republicans held sway in the Senate, Wall Street roared with approval sending stocks to their best levels in nearly a month, October's declines a fading memory with major indices posting solid two percent-plus gains across the board.

Out of the election results, there was no blue wave or red dawn but rather a kind of purple haze hanging over Washington, with the usual noise an rancor interrupted only temporarily on Tuesday night into Wednesday morning. By 11:30, President Trump was at the podium, singing his own praises and sending congratulatory messages to the politicians he helped get elected to federal positions.

It didn't take long for the news media to begin hectoring the president over immigration, dealings with Democrats, the Mueller probe, and various other needling, needless issues. Trump was at his usual boisterous best, telling some reporters to sit down and lambasting others.

Shortly after Trump left the press gaggle, news that Jeff Sessions would step down as US Attorney General broke across the wires, and stocks continued their march higher. Sessions' letter of resignation began with the words, "At your request..." signaling that Trump had planned for the removal of Sessions in advance of the midterms and timed his resignation for immediately following results of the elections.

Trump quickly named Matthew Whitaker, Sessions' chief of staff, as acting Attorney General. Whitaker has been openly critical of the Mueller probe into Russian meddling in the 2016 presidential election, echoing Trump's oft-repeated message that the entire investigation amounts to nothing more than a "witch hunt."

With the path ahead for President Trump more clearly defined, Wall Street can look forward to something resembling sanity in Washington. With Whitaker now in charge of the DoJ, the Mueller probe will likely be reigned in and shortly concluded, ending one of the lengthiest politically-inspired goose chases in American history.

The midterms past, Trump will aggressively advance his agenda, though the rancor from the opposite side of the aisle is likely to become even more manic, illogical, and contrived. Trump has made no friends in the media, and, with the Democrats in control of the House, the politicking leading up to the 2020 presidential election will become more pronounced than ever.

In the meantime, President Trump and his team will plow ahead with initiatives on trade, jobs, infrastructure, and regulatory reform, and there's little the Democrats can do about any of the administrative functions guided by the chief executive. With control of the Senate, Trump also can find smooth sailing for appointees, the Republican majority assuring confirmation of just about anybody he sends up for approval.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54

At the Close, Wednesday, November 7, 2018:
Dow Jones Industrial Average: 26,180.30, +545.29 (+2.13%)
NASDAQ: 7,570.75, +194.79 (+2.64%)
S&P 500: 2,813.89, +58.44 (+2.12%)
NYSE Composite: 12,678.17, +198.10 (+1.59%)

Dow's Recent Gains Are Adding Up

With the midterm election turmoil nearly out of the way, stocks have begun the month of November in grand, year-ending fashion, the Dow Jones Industrial Average posting gains in three of the last four sessions, and, extending back into the final days of October, five of the last six were winners.

This string of positives has managed to erase much of the pain that accompanied October, which registered as the worst month of 2018 for stocks. In the past seven sessions, the Dow has advanced nearly 1200 points, an impressive performance, and should continue the path forward since there are few impediments ahead.

The Fed's FOMC meeting this Wednesday and Thursday should prove a non-event, as the committee is almost certain to stand pat on interest rates until the December meeting, when a 25 basis point hike in the federal funds rate is a virtual lock.

The overall outlook is strong for stocks presently, though headwinds could still emerge, October's declines still fresh in the mind, but, sentiment seems to have shifted from selling into rallies to buying on dips once again, and the Dow has regained roughly half of the losses incurred since marking an all-time high on October 3rd.

Other indices have followed suit, though the NASDAQ continues to lag, with many of the tech leaders now laggards, representing, to some, buying opportunities. To others, these tech firms have become no-go zones, appealing only to the most speculative of investing types.

Markets prefer stability, and November appears to offer plenty in the way of complacency and compliant data readings. With holidays straight ahead, it would not be a surprise to stocks exceed their previous highs.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25

At the Close, Tuesday, October 6, 2018:
Dow Jones Industrial Average: 25,635.01, +173.31 (+0.68%)
NASDAQ: 7,375.96, +47.11 (+0.64%)
S&P 500: 2,755.45, +17.14 (+0.63%)
NYSE Composite: 12,480.06, +55.75 (+0.45%)

History Repeats: "When The President Does It, It's Not A Crime"

Nine minutes. 108 points.

That's what happened when the Dow slipped into the red at 10:23 am ET on Monday. Instead of continuing lower, the market simply changed direction, suddenly, without reason or cause and was on its way to a better day, a brighter future, a higher close.

Richard Nixon once famously said, "when the president does it, it's not a crime." Apparently, the same twisted logic applies to central bank and/or government meddling in markets. For now, the meddlers want to keep markets up, and, if one were to ask the common man or woman's opinion on this type of activity, they might think that it's OK, so long as they are putting money into the market to keep it from crashing... or some other variant of pretzel logic, or the absence of logic altogether.

Lest one is not familiar with the President's Working Group on Financial Markets, often referred to as the PPT or Plunge Protection Team, there is verifiable proof of its existence. In case one is not convinced that the "Working Group" is "working," a little research will reveal some of the more stunning, rapid advances on entire stock indices over the past 30 years which will make Monday's nine minute, 108 Dow points pale in comparison.

Here is just one article on the topic.

The problem with a mechanism such as the Working Group is that it causes distortions in markets, creates unreasonable values in individual stocks, and eventually is a losing gambit fueled by counterfeit money created by the Fed out of thin air. With that kind of magic at their disposal, is it any coincidence that stocks are still aiming at highs amidst the longest bull market ever, or are current stock valuations a true reflection of the strength of the corporatist economy?

The second, larger problem, lay in the circumstance when the Working Group decides to take a day off, like when they decided to allow Lehman Brothers to fail in 2008. All they need do is stand by and watch stocks vaporize, which they did back then and will again, when it pleases their purposes.

Maybe this is not what you came here to read, but, it's never a bad idea to consider what's behind the curtain, lurking in the shadows, unseen and mostly unknown.

Tuesday is election day, so get out there and vote, because, as we're told every two or four years, this is the most important election in our lifetimes.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94

At the Close, Monday, November 5, 2018:
Dow Jones Industrial Average: 25,461.70, +190.87 (+0.76%)
NASDAQ: 7,328.85, -28.14 (-0.38%)
S&P 500: 2,738.31, +15.25 (+0.56%)
NYSE Composite: 12,424.31, +102.51 (+0.83%)

WEEKEND WRAP: As Mid-Terms Approach, Stocks Gain, Volatility Remains

As October turned to November, volatility persisted with markets gyrating wildly, even as non-farm payroll data came in ahead of expectations and the US mid-term elections (Tuesday, November 6) approached.

Things looked like they were slipping away Friday afternoon, as the Dow registered a loss of 292 points approaching 2:30 pm ET. Near the lows of the day, out of the blue, buyers appeared suddenly, boosting the Dow 198 points in three minutes from 2:26 pm to 2:29 pm ET. A move like that had to be courtesy of the PPT, or, possibly massive, coordinated central bank buying (pretty much the same thing), because all the indices leapt higher at precisely the same time.

In case you think that's fishy, consider what would have happened if the Fed and their central bank cronies had NOT done such things over the past ten years. The world would be a far different place and stocks like Apple wouldn't have the absurd valuation of nearly a trillion dollars. The market's been rigged for a long time, and it's not going to change anytime soon.

Whether or not one ascribes to conspiracy theories, the undeniable truth lies in the nearly ten years of market gains and the week past was another example of how Wall Street manages to play the numbers like Vladimir Horowitz on a Steinway grand piano.

The week began and ended with losses, bracketing three days of upside moves, the result a winning week for stocks, led by a 2.88% move on the NYSE Composite. The other indices were all higher by more than two percent. The week was the second of the last six in which stocks have ended positively.

While the moves were dramatic, only the Dow Industrials managed to close above their 200-day moving average and the 40-week moving average. The other majors remain below key levels and still appear vulnerable. The mid-term elections may trigger a knee-jerk reaction by Wall Street, though any such move is unlikely to be long-lasting. What is apparent is that some big money is moving out of stocks, as distribution has been an obvious element on any upside move. Dip-buyers may have moved markets higher this week, but every rally has been met with selling, indicating a trimming of positions.

Amid the whipsawing of stocks, bonds were selling off, with the 10-year note ending the week at 3.21 and the 30-year long bond yielding 3.46%, the highest in more than five years (June 2014).

The until story is in oil. Both Brent and WTI crude have been losing pricing power for the last six weeks, with WTI settling in the low $60s. The persistent declines and current price of $62.78/barrel is resulting in lower prices at the pump, with the US national average below $2.75/gallon, the lowest level since April of this year.

Lower oil and gas prices are usually a boost for the general economy, as consumers end up with more disposable cash after filling up their vehicles. It's also a boon for homeowners, who see lower fuel costs during heating months.

The big event this week will be Tuesday's mid-term elections. The general thinking is that if Republicans can hold the House and Senate, it will be seen as a referendum on President Trump's first two years in office. The Democrats are counting on a change in the House, with as many as 100 races in the toss-up category. A win in the House for Dems would be seen as a win, though their chances of taking control of the Senate are seen as slim. If such a scenario occurs, the result will be nothing but gridlock in Washington, which is usually a good thing for Wall Street.

Politics aside, the current conditions call for caution. There has been no sign of volatility easing, so the triple-digit daily moves on the Dow and NASDAQ are likely to continue until Thanksgiving at least.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07

At the Close, Friday, November 2, 2018:
Dow Jones Industrial Average: 25,270.83, -109.91 (-0.43%)
NASDAQ: 7,356.99, -77.06 (-1.04%)
S&P 500: 2,723.06, -17.31 (-0.63%)
NYSE Composite: 12,321.80, -34.70 (-0.28%)

For the Week:
Dow: +582.52 (+2.36%)
NASDAQ: +189.78 (+2.65%)
S&P 500: +64.37 (+2.42%)
NYSE Composite: +344.85 (+2.88%)

Buyers Emerge, Sending Stock Rally To Third Straight Day Of Gains; World Markets Higher

Experts had been saying that once the earnings reporting blackout ended, many companies would begin share repurchases, and that seems to be exactly what has occurred, as stocks extended their rally to three days, opening the month of November with a rip higher on all the major exchanges.

This factoid does nothing to explain the rise in stocks around the world, other than perhaps they are following the US lead. Overnight the Hang Seng jumped by more than four percent in Hong Kong and Japan's NIKKEI posted a 2.50% gain, boosting the index by 556 points.

Early trading in Europe has all the major indices higher as well, with Germany's DAX and France's CAC 40 leading the move.

With non-farm payroll data due to roll out at 8:30 am ET, stocks are poised for another big move up at the open. Expectations are for a jobs gain of more than 200,000 in October.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98

At there Close, Thursday, November 1, 2018:
Dow Jones Industrial Average: 25,380.74, +264.98 (+1.06%)
NASDAQ: 7,434.06, +128.16 (+1.75%)
S&P 500: 2,740.37, +28.63 (+1.06%)
NYSE Composite: 12,356.50, +148.44 (+1.22%)