Stocks Continue Rally, S&P 500 Reaches New All-Time High

There was cause for celebration on Wall Street and around America on Tuesday as the S&P 500 reached a new all-time record close, gaining 5.91 to finish the day at 2,862.96, four-and-a-half points beyond the previous high set just two weeks ago, on August 7th.

While the S&P and NASDAQ have surged to new records after the February correction, the Dow is still 800 points shy of its all-time mark, though, with the economy booming, there's little to no apprehension among investors. The widespread belief is that the Dow will push forward, despite the warnings from Dow Theorists who insist a bear market on the Dow Jones Industrial Average had commenced earlier in the year. Clearly, recent data disputes the veracity of any argument made by the venerable Dow Theory.

On Wednesday, stock pickers will be in a celebratory mood once again, marking the longest bull run in US market history, surpassing the dotcom run from 1990 to 2000. According to this LA Times story there is some disagreement, but there are few who argue that this bull run has been outstanding, starting on April 9, 2009, without as much as a 15% decline throughout the duration of the run.

Tomorrow it is, then. Another record.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79
8/20/18	25,758.69	+89.37	+351.16
8/21/18	25,822.29	+63.60	+414.76

At the Close, Tuesday, August 21, 2018:
Dow Jones Industrial Average: 25,822.29, +63.60 (+0.25%)
NASDAQ: 7,859.17, +38.17 (+0.49%)
S&P 500: 2,862.96, +5.91 (+0.21%)
NYSE Composite: 12,996.76, +31.66 (+0.24%)

Dow Reaches Higher, S&P Closing In On Record As Bull Market Extends

Same song, different day.

The Dow led the major indices higher on Monday, while the NASDAQ languished near the unchanged mark most of the session, finishing with a small gain. Meanwhile, the S&P 500 improved to within a point of its all-time closing high. The previous record was 2,858.45 on August 7.

Despite the ongoing, beneath-the-surface currency crisis in Turkey and a full-blow economic collapse in Venezuela, the high rollers on Wall Street seem to have little sympathy as the Dow now stands at its high-water mark since February 25th.

According to most metrics, the US economy is cruising right along, with low unemployment and only slight hints of inflation. America's prosperity may be coming at the expense of the emerging nations of the world, though that's not a concern for those seeking gains in equity markets.

The Dow Industrials are less than 1000 points from the January 26 all-time high of 26,616.71 and the general markets are one day from becoming the longest bull market in US history.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79
8/20/18	25,758.69	+89.37	+351.16

At the Close, Monday, August 20, 2018:
Dow Jones Industrial Average: 25,758.69, +89.37 (+0.35%)
NASDAQ: 7,821.01, +4.68 (+0.06%)
S&P 500: 2,857.05, +6.92 (+0.24%)
NYSE Composite: 12,965.10, +56.83 (+0.44%)

Change of Sentiment; Something Bad In Tech-land

As of a week ago, the leading index was the NASDAQ, up more than 11 percent on the year, as opposed to the Dow Industrials, which had been lagging. Prior to this week, the Dow was up less than four percent and it was down for the year much of the time between February and early July.

Something snapped in the minds of investors this week. Maybe it was the high valuations on some of the more speculative stocks sporting the NASDAQ. Perhaps, in the search for yield, investors sought the safety of dividend producers on the Dow. Whatever the case, the Dow, this past week, was up 1.41%, while the NASDAQ shed 0.29%. It was a radical shift that appeared, magically, Wednesday morning, when the Dow was trading below 24,000.

In a matter of less than three trading session, the Dow tacked on a whopping 687 points, much of it at the open on Thursday, when the Dow popped higher and stayed well into the green the rest of the day.

Skeptics of the market will point to the radical rise on Wednesday and Thursday as proof of manipulation, or even - everybody's favorite word this season - collusion, by central banks and their ancillary brokers, to boost the share prices of the staid and steady heavy industrials. Such speculation cannot be bought off easily in this environment. It's apparent to just about everybody that the Federal Reserve and their counterparts in Japan, China, and the European Union will not stomach a severe downturn, at least not at this time. The bull market is just a few trading days from becoming the longest in American history, something the head honchos at the Fed wish to pin on their beanies before they ride triumphantly into some economic sunset.

The shifting sentiment was stunning, however. As the Dow soared, the NASDAQ soured. Many of the grand tech bonanza stocks like Netflix (NFLX) and Telsa (TSLA) were down hard for the week. Netflix dropped nearly 10%, from 345 per share to 316 at the close of business Friday. From its peak just a month ago (July 11), Netflix is down more than 100 points.

Tesla is another story altogether. The darling little electric engine that could is rapidly approaching bear territory, down to 305 at the close Friday from 379 on August 7, a span of just nine trading sessions.

Facebook, everybody's favorite ranting and raving lunatic asylum, is already in bear territory, dropping from a high of 217.50 on July 25, to a close of 173.80 Friday afternoon. That's precisely a 20.1% decline. Be sure to post to your friends, family, and anybody who gives a hoot, rat's behind, or beaver dam.

None dare call is collusion, so maybe collision is the correct word for what happened on Wall Street this week. It was nothing short of a collision of rational thinking and emotional yield-chasing.

Next week may be more or less intriguing, but after Labor Day, this market is going to become very interesting indeed.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79

At the Close, Friday, August 17, 2018:
Dow Jones Industrial Average: 25,669.32, +110.59 (+0.43%)
NASDAQ: 7,816.33, +9.81 (+0.13%)
S&P 500: 2,850.13, +9.44 (+0.33%)
NYSE Composite: 12,908.26, +66.98 (+0.52%)

For the Week:
Dow: +356.18 (+1.41%)
NASDAQ: -22.78 (-0.29%)
S&P 500: +16.85 (+0.59%)
NYSE Composite: +64.77 (+0.50%)

Dow Surges Nearly 400 Points Even As Turkey Crisis Deepens

Apparently, those mystery buyers who emerged Wednesday after the Dow was down 360 points were not quite finished with their stock buying spree. On Thursday, blue chips were all the rage, with the Dow soaring nearly 400 points on the day, it's best one-day performance since a 428-point advance on April 10.

So, that's more than 750 points in less than two days. The message is clear: buy stocks. Buy stocks with dividends. Disregard the price you are paying.

Obviously, something is afoot, though it seems that these recent buys are wrong-footed, at the least.

Friday will open lower, though there's no telling where stocks will go after that. Turkey's currency crisis is not going to improve in a day or two, or even in a few weeks or months. The economy of the crossroads nation is going to be a basket case for years. The same is true of Argentina, which is suffering through another crisis, something that occurs on a regular basis in South America. Venezuela's economy is dead, Brazil is devolving into widespread chaos, and the rest of the so-called EM (Emerging Market) economies are being clubbed to death by a strong US dollar.

Now, perhaps the rest of the world suffering is good for the advanced nations such as the US and in Europe, but that should be viewed as a short-sighted point of view in the long run.

Eventually, between their currencies deteriorating and President Trump piling on tariffs and sanctions, most of the world's emerging market nations will not be very emergent at all. Rather, their economies will suffer, their populations will grow increasingly restive, and trade with them will decline.

The silver lining for the United States is that such conditions should drive more domestic innovation and jobs. Eventually, the smaller nations will adjust to the new normal and maybe the US will muddle through. However, this is not the kind of environment that necessitates massive investment in well-entrenched industries.

Or, maybe it is. Maybe these dip-buying professional traders really do know it all.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20

At the Close, Thursday, August 16, 2017:
Dow Jones Industrial Average: 25,558.73, +396.32 (+1.58%)
NASDAQ: 7,806.52, +32.41 (+0.42%)
S&P 500: 2,840.69, +22.32 (+0.79%)
NYSE Composite: 12,841.28, +118.19 (+0.93%)

Stocks Down Sharply Before Mystery Buyers Catch Falling Knife

The Dow was down 335 point early in the day, but some investors who apparently know more than anybody else stepped in and cut those losses by nearly 200 points by the close of trading.

Let that sink in for a moment.

Who are these savvy speculators? Why did they choose to buy this particular dip at this moment in time. Surely there have been better buying opportunities in the recent past.

Central banks run the markets and can ruin the markets at their own whim.

Keep that in mind always, but especially on days when losses are trimmed inter-day.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12

At the Close, Wednesday, August 15, 2018:
Dow Jones Industrial Average: 25,162.41, -137.51 (-0.54%)
NASDAQ: 7,774.12, -96.78 (-1.23%)
S&P 500: 2,818.37, -21.59 (-0.76%)
NYSE Composite: 12,723.09, -112.22 (-0.87%)

Stocks Post Gains As Turkey Currency Crisis Moves Off Front Page

Stocks rebounded sharply on Tuesday, ending a series of lower closes which saw the Dow drop four straight sessions.

Gains were made in response to the Turkey story moving off page one and onto the list of disturbing problems in the global economy. For what it's worth, thanks to the widespread use of computer algorithms, 21st century stock markets have become more a kind of knee-jerk referendum on current financial and political news, as opposed to the 20th century model with discounted future earnings.

Thus, measurements such as p/e ratios are shunned in favor of more momentum-style observations and manipulations and old models for valuations are routinely disregarded as old hat. In conjunction with the dominant 24-hour news cycle, trading in robust markets such as are available in the US and other developed countries has become a day-to-day operation for many of the greater brokerages.

No longer content with 10-20% annual returns, the proliferation of options, futures, ETFs and other market-distorting, derivative opportunities offer potential for hedging, pair trades, and a myriad of other exotic strategies, schemes, and systems.

Thus, when a currency fails, such as happened in Venezuela and is currently underway in Turkey, markets are prone to react with immediacy before returning to the status quo.

That's the story with today's gains, though the larger issue remains unresolved. The markets have had their say and now move on to the next big thing. This manner of shoulder-shrugging complacency is what makes markets more and more fragile, as, with each big event that has an initial response but no resolution, the underlying morass of problematic financial issues piles higher and higher.

Since the financial crisis of 2008-09, markets have increasingly operated inside a vacuum, fitted with appropriate blinders to geo-political changes and financial disruptions. It's assumed that central banks, which now control almost all of global finance, can handle any issues that may pop up, either with massive buying, interest rate adjusting, or soothing words from the top-most chiefs.

It's an odd way to make a buck, but that's the norm, for now.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61

At the Close, Tuesday, August 14, 2018:
Dow Jones Industrial Average: 25,299.92, +112.22 (+0.45%)
NASDAQ: 7,870.89, +51.19 (+0.65%)
S&P 500: 2,839.96, +18.03 (+0.64%)
NYSE Composite: 12,835.31, +71.65 (+0.56%)

Stocks Extend Losses on Stormy Monday

As severe thunderstorms raged across parts of the Northeast causing flooding, Wall Street had a storm of its own brewing as stocks stumbled, the Dow losing ground for the fourth consecutive day.

What has caused most of the recent turmoil in stocks emanates from half a world away from the US financial center, as Turkey's lira has crashed, panicking banks with investments in the nation of 80 million, disrupting markets globally.

The Dow Industrials' four-day losing streak has ripped 440 points off the index, turning an August gain of 221 points into a 219-point loss for the month.

While the move has not been large by percentage terms, Turkey's problems are far from being resolved. In addition to the currency failure, Turkey's stock market (^XU100) has also fallen sharply (down more than 25% since late January) and US tariffs imposed by President Trump are exacerbating the unruly conditions.

Treasury yields have bounced around, with the 10-year note hitting three percent on August 1, but has backed down 12 basis points, quoted at 2.88% Monday. The 30-year bond peaked at 3.13% on the first of August and has since fallen to 3.05%, leaving the spread between 10s and 30s at 17 basis points, a widening of four bips since August 1.

With the two-year note yield dropping from 2.67 to 2.61 in the month, the yield curve seems to be better behaved than in the early months of 2018. The spread on 2s-30s has remained somewhat steady. The latest quote showed a 44 basis point spread.

The remainder of the week may prove costly to bullish speculation. July was a banner month for stocks, the best since January, but the euphoria has faded.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83

At the Close, Monday, August 13, 2018:
Dow Jones Industrial Average: 25,187.70, -125.44 (-0.50%)
NASDAQ: 7,819.71, -19.40 (-0.25%)
S&P 500: 2,821.93, -11.35 (-0.40%)
NYSE Composite: 12,763.66, -79.83 (-0.62%)

Weekend Wrap: Dow Slammed, Wiping Out August Gains

Against the backdrop of news that Turkey's lira was crashing against foreign currencies, stocks were hammered lower in nearly every market around the world Friday, the hardest hit regionally being Germany's DAX (-1.99%), Brazil's Ibovesta (-2.86%), and Japan's NIKKEI 255 (-1.33%).

The lira, Turkey's official currency fell 20% on Friday, a dramatic move seldom seen in FX markets.

The American bourses being the last to finish out the week, the results were expectably negative, though not nearly approaching the levels seen in Europe and Asia.

The decline was, however, significant enough to send three of the four major US indices to weekly losses. For the Dow, S&P, and NASDAQ Composite, this week ended a string of five consecutive winners. The NASDAQ posted its fourth gain in the past six weeks. Even though Friday's 52-point loss on the NAZ was harrowing, the tech-laden index still closed within 100 points of its all-time high.

The issue of Turkey's lira crashing is made all the more intriguing by its geographical location, at the nexus of Europe, Asia, and the Middle East. With a population of 80 million, the diverse ethnicity of its population has trended more toward Islam in recent years, troubling to the visionaries of the greater world's economies, especially since it is a NATO ally and member of the European Union, though it does not share the common euro currency.

Some European banks with heavy exposure may be at risk from the turmoil in the crossroads nation, though the financial concerns run side by side with political and military issues.

While stocks took a hit, the US dollar was bolstered, rising to 96.27, its highest level in over a year. That reaction translated to lower prices for crude oil. Gold and silver, along with other commodities, trended lower. Gold closed out the week at 1,219.20. Silver ended at 15.28, trending at levels not seen in two years.

In a general sense, the week served as a reminder to traders that despite optimistic sentiment, troubling, nettlesome issues are bubbling up just beneath the superficial veneer of global economies.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39

At the Close, Friday, August 10, 2018:
Dow Jones Industrial Average: 25,313.14, -196.09 (-0.77%)
NASDAQ: 7,839.11, -52.67 (-0.67%)
S&P 500: 2,833.28, -20.30 (-0.71%)
NYSE Composite: 12,843.49, -113.17 (-0.87%)

For the Week:
Dow: -149.44 (-0.59%)
NASDAQ: +27.10 (+0.35%)
S&P 500: -7.07 (-0.25%)
NYSE Composite: -109.85 (-0.85%)

Stocks Stall Out, Dow Down Second Straight Day; Turkey Sparks Global Sell-Off

Things began turning ugly late on Thursday as the Dow - for the second day in a row - fell sharply nearing the close of the session.

Stocks had been trading nearly unchanged heading into the final hour, but dropped deep into the red to end the day down nearly 75 points. While the drop is hardly more than a rounding error (0.29%), the pattern of losing ground at the end of the session is troubling.

Notice has been taken by market participants. As of Friday morning, Asian bourses closed lower and European indices were off significantly, with the German DAX off by two percent.

In the US, futures are pointing to a large sell-off at the opening bell. The culprit appears to be the currency crisis in Turkey, where the Lira was down more than 12% on the day against the US dollar and is down 66% on the year.

It appears that Turkey is on the verge of a major collapse as President Erdogan defies his critics by refusing to raise interest rates in order to stave off incipient inflation.

The Dow is up just over 40 points for the week. A negative close could end a streak of five straight winning weeks for the 30 blue chip stocks.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70

At the Close, Thursday, August 9, 2018:
Dow Jones Industrial Average: 25,509.23, -74.52 (-0.29%)
NASDAQ: 7,891.78, +3.46 (+0.04%)
S&P 500 2,853.58, -4.12 (-0.14%)
NYSE Composite: 12,956.66, -31.25 (-0.24%)

A Glitch In the Bull Matrix; Crude Dives To Six-Week Low

If anyone can call today's range of 70 points - top to bottom on the Dow - trading, they'd need to be making it up on volume, as the old misnomer suggests. Today's market saw neither opportunity nor volume, so, the traders made the day up. After a quick dip to the lows of the day just after the first hour of trading (10:40 am EDT), the Dow and other indices went choppy, but without significant movement (welcome to late summer).

Nearing the end of the session, the Dow stood almost where it ended the previous day and made all of the losses into the close in the final half hour (welcome to day-trading).

Most of the action was inconsequential, as it has been the past few weeks.

Taking a quick look at the past four weeks (20 sessions) on the Dow Jones Industrial Average, 11 of the 20 saw gains or losses of less than 100 points. For perspective, a move of roughly 125 points would equate to 1/2 percentage. In other words, more than half of the sessions in the past month have been mostly range-bound and more noise than substance.

Today was no exception. Even though the Dow was the biggest percentage mover of the major indices, it only registered a move of -0.18%. The others closed at less than one tenth of a percent from where they started.

So trading? Hardly.

The only people making money in this market are the brokers, and they aren't making that much.

Commodities are perplexed. Crude futures fell dramatically.

Investing.com - WTI crude oil prices settled at six-week lows Wednesday after data showed U.S. crude stockpiles fell less than expected and U.S.-China trade tensions intensified.

On the New York Mercantile Exchange crude futures for September delivery fell 3.2% to settle at $66.94 a barrel, while on London's Intercontinental Exchange, Brent fell 3.26% to trade at $72.22 barrel.

Precious metals have become an afterthought for now. Gold and silver have been trading below where they were two years ago, trending in a tight range and looking likely to collapse into an even deeper abyss. An ounce of gold today will not even purchase a high end cell phone. It's looking pretty dismal for the gold and silver bugs, who have managed to hold onto the most abused financial assets for far too long. Their day may come, but that day may be a long way off.

Trading baseball cards or comic books might be more exciting and profitable than the current regime of stocks, bonds, and commodities. Those markets are too well-known and over-saturated. However, they are the backbone of global commerce, and, as such, will not be discarded lightly.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22

At the Close, Wednesday, August 8, 2018:
Dow Jones Industrial Average: 25,583.75, -45.16 (-0.18%)
NASDAQ: 7,888.33, +4.66 (+0.06%)
S&P 500: 2,857.70, -0.75 (-0.03%)
NYSE Composite: 12,987.91, -11.68 (-0.09%)

Stocks Charge Ahead; Dow At Highest Level Since February

With the bull market less than three weeks from being the longest ever in US financial history stocks moved forward as the main indices ramped higher in tandem.

The S&P 500 closed at its highest level since January while the Dow finished the session at a six-month high. The last time the Dow was higher was February 26 (25,709.27) as the industrials snapped back from a wicked decline earlier in the month.

The NASDAQ, which recently has taken on losses due to companies like Facebook (FB) and Tesla (TSLA), gained to within 50 points of its all-time high, set on July 26, at 7932.34.

All of this is happening against a backdrop of a vacationing congress, a booming economy, low unemployment, and the third rate hike of the year by the Federal Reserve on schedule for late September. The FOMC meets September 25-26, and is widely anticipated to raise the federal funds rate by another 25 basis points, to 2-2.25%.

Investors are taking an approach to stocks that is largely ignoring high valuations on the back of impressive recent returns.

While warnings that stocks are overpriced have been circulating since mid-2014, the market seems content to add to gains relentlessly, without regard to underlying fundamentals.

The wild card for stocks is the political front. On the one hand, President Trump's policies seem to have ushered in a fresh era of confidence in the US economy, while on the other, his opponents on the left continue to harass and harangue his administration.

To his credit, Mr. Trump has continued to implement policies he promised during his 2016 campaign of "Make America Great Again," while his Democrat opposition has largely been engaged in pure obstructionism against his positive message.

Where markets go from here are, naturally, unpredictable, though there's little doubt that most of the betting is on higher equity prices in the near term.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38

At the Close, Tuesday, August 7, 2018:
Dow Jones Industrial Average: 25,628.91, +126.73 (+0.50%)
NASDAQ: 7,883.66, +23.99 (+0.31%)
S&P 500: 2,858.45, +8.05 (+0.28%)
NYSE Composite: 12,999.59, +35.32 (+0.27%)

Bull Market Lulling Investors To Sleep; Set to Be Longest in US History

All the major averages posted gains on Monday.

Boy, is this getting boring.

The bull market, which began on March 9, 2009, has lasted longer than all but one long term rally in US economic history. In less than three weeks, the bull market will become the longest ever.

Ho-hum. Money. It's so easy.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65

At the Close, Monday, August 6, 2018:
Dow Jones Industrial Average: 25,502.18, +39.60 (+0.16%)
NASDAQ: 7,859.68, +47.66 (+0.61%)
S&P 500: 2,850.40, +10.05 (+0.35%)
NYSE Composite: 12,964.27, +10.93 (+0.08%)

Weekend Wrap: Dow Goes Positive For Week On Friday Ramp

Logicians need not apply.

Following the disappointment of the BLS August Non-Farm Payroll data, the general assumption was that stocks would sour, as also presaged by the index futures on the Dow Mini, et. al..

Such was not the case. Stocks rose throughout the day, based upon algorithms interpreting all news as positive, giving the Dow Industrials its best gain since July 25th.

The NASDAQ ended the week with both the best point and percentage gains, +74.60, and +0.96%, respectively.

One very prescient observation is that while volume has all but dried up the past few weeks, it's much easier for stocks to find bids than otherwise.

A resumption of the more serious selling seen in February and March is unlikely to occur until after Labor Day.

These are certainly dog days, a period in which short-side players should exercise extreme caution.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05

At the Close, Friday, August 3, 2018:
Dow Jones Industrial Average, 25,462.58, +136.42 (+0.54%)
NASDAQ: 7,812.01, +9.33 (+0.12%)
S&P 500: 2,840.35, +13.13 (+0.46%)
NYSE Composite: 12,953.34, +55.27 (+0.43%)

For the Week:
Dow: +11.52 (+0.05%)
NASDAQ: +74.60 (+0.96%)
S&P 500: +21.53 (+0.76%)
NYSE Composite +32.00 (+0.25%)

Stocks Split As NASDAQ Soars; Jobs Report Disappoints

Stocks shrugged off a slow start on Thursday after Wednesday's sluggish session and finished split for the second straight day, with the NASDAQ and S&P posting gains while the Dow and NYSE Composite were held to small losses.

With the US congress mostly out of town for the month and earnings season winding down, the market is prone to swings in either direction at the slightest rumor or data dump.

The Dow has fallen back into the trading range that was prevalent after the February and March drop-off, while the NASDAQ gravitates near recent record closes.

The big news for Friday is the July non-farm payroll report from the BLS. Analysts were expecting 191,000 new jobs per the data, but had to settle for 157,000, well below the estimate. The unemployment rate fell one tenth of a percent to 3.9%.

Released at 8:30 am EDT, the jobs report comes as a disappointment for the bullish case. Stock futures had been strong and trending higher until the release, but fell sharply leading into the opening bell.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03

At the Close, Thursday, August 2, 2018:
Dow Jones Industrial Average: 25,326.16, -7.66 (-0.03%)
NASDAQ: 7,802.69, +95.40 (+1.24%)
S&P 500: 2,827.22, +13.86 (+0.49%)
NYSE Composite: 12,898.07, -4.32 (-0.03%)

Dow Backtracks As Fed Holds Rates Steady

The two probably aren't related, but the Federal Reserve held the federal funds rate steady at 1.75-2.00 percent and the Dow lost 81 points.

On the other hand, the NASDAQ gained 35 points, also likely unrelated to anything.

With the FOMC set to meet again September 25-26, there's nearly two months for the market to grasp what's happening in the global scheme of things. There's nearly unanimous opinion that the Fed will increase rates another 25 basis points at that time.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37

At the Close, Wednesday, August 1, 2018:
Dow Jones Industrial Average: 25,333.82, -81.37 (-0.32%)
NASDAQ: 7,707.29, +35.50 (+0.46%)
S&P 500: 2,813.36, -2.93 (-0.10%)
NYSE Composite: 12,902.39, -60.89 (-0.47%)

July Best Month Since January for Dow Industrials

Ending the month of July with a spirited, sugar-coated, window dressing rally, the Dow Jones Industrial Average posted the best month of gains (+1143.78) since January (+1430.17).

While that number may be pleasing to the buyers of stocks in much of 2018, longer term holders will note with interest that the close on July 31 is lower than the close on January 31 and significantly lower than the all-time high reached on January 26, 2018 (26.616.71). It is 1201.52 points lower than that January 26 close, or nearly four percent off the high point.

Five percent may not sound like much, but, in the perspective of a six month time frame, it's impact become clearer. From February to June, stocks languished in what could be seen as equity limbo. They were worth less than they were in January and still are.

In real terms, a $100,000 portfolio in January would be worth about $95,000 today. Optimists might see the glass as half full, adding that the very same January $100,000 portfolio was worth only about $90,000, when the Dow bottomed out at 23,533.20, on March 23, a dip of more than 10% from the all-time high.

Year-to-date, the Dow has gained 695.97 points, or, less than three percent. In monthly terms, that's a gain of less than one-half of one percent. Nobody's calling their mother to tell her how great they're doing in the market. Neither is anybody crying in their beer over any loss.

Stocks, and the global economy, remain at a significant crossroads.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53
7/25/18	25,414.10	+172.16	+1142.69
7/26/18	25,527.07	+112.97	+1255.66
7/27/18	25,451.06	-76.01	+1179.65
7/30/18	25,306.83	-144.23	+1035.42
7/31/18	25,415.19	+108.36	+1143.78

At the Close, Tuesday, July 31, 2018:
Dow Jones Industrial Average: 25,415.19, +108.36 (+0.43%)
NASDAQ: 7,671.79, +41.78 (+0.55%)
S&P 500: 2,816.29, +13.69 (+0.49%)
NYSE Composite: 12,963.28, +59.85 (+0.46%)

Stocks Fall

Stocks opened flat on Monday and losses accelerated throughout the session.

There was no apparent catalyst spurring the decline, so it can safely be assumed that any selling was prompted by valuation measures as the major indices remain close to all-time highs.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53
7/25/18	25,414.10	+172.16	+1142.69
7/26/18	25,527.07	+112.97	+1255.66
7/27/18	25,451.06	-76.01	+1179.65
7/30/18	25,306.83	-144.23	+1035.42

At the Close, Monday, July 30, 2018:
Dow Jones Industrial Average: 25,306.83, -144.23 (-0.57%)
NASDAQ: 7,630.00, -107.42 (-1.39%)
S&P 500: 2,802.60, -16.22 (-0.58%)
NYSE Composite: 12,903.43, -17.91 (-0.14%)

Weekend Wrap: Economy Improved, News Priced Into Stocks

Predictably, second quarter GDP in the US came in at 4.1% according to the government's first estimate.

Because the number was so widely bandied about and dissected prior to Friday's official release, it was also predictable that Wall Street was going to sell the news. That's exactly what happened in a broad selloff to close out the week, though the movement hardly resolves any of the directional disputes currently afflicting the various major indices.

As usual, the question on the street is still "buy or sell?" On Friday, with the NASDAQ and Dow in agreement for a change, the knee-jerk reaction would be to hit the proverbial sell button and head for safer ground. With bond yields improving (the 10-year note closed out the week at 2.96%) and the dollar strong, prudence may indeed prompt a trade into safety or retreat into cash.

President Trump touted the the growth in the economy as terrific, though Wall Street may be viewing the larger picture through a much different lens. Expansion by individual companies remains difficult and challenging, and stocks remain near record high levels.

After all the hoopla surrounding the robust GDP figures, the week of trading resolved nothing, other than skeptics' fears that the stock market is running on fumes.

Sideways with a slight tilt to the upside seems the dominant direction, for now. The market is extremely vulnerable to sudden shocks, which could come from a variety of sources, especially Europe or emerging markets (China). While US conditions may indeed be improving, the rest of the world may have to pay a price.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53
7/25/18	25,414.10	+172.16	+1142.69
7/26/18	25,527.07	+112.97	+1255.66
7/27/18	25,451.06	-76.01	+1179.65

At the Close, Friday, July 27, 2018:
Dow Jones Industrial Average: 25,451.06, -76.01 (-0.30%)
NASDAQ: 7,737.42, -114.77 (-1.46%)
S&P 500: 2,818.82, -18.62 (-0.66%)
NYSE Composite: 12,921.34, -32.05 (-0.25%)

For the Week:
Dow: +392.94 (+1.57%)
NASDAQ: -82.78 (-1.06%)
S&P 500: +16.99 (+0.61%)
NYSE Composite: +131.43 (+1.03%)

Stocks Split As Dow Gains, NASDAQ Falls On Facebook Flop

A day after President Trump worked out some concessions and a working trade framework with the EU, it was up, up and away for the Dow Industrials.

At the same time, a dour mood ensconced the NASDAQ, as Facebook led a strong decline.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53
7/25/18	25,414.10	+172.16	+1142.69
7/26/18	25,527.07	+112.97	+1255.66

At the Close, Thursday, July 26, 2018:
Dow Jones Industrial Average: 25,527.07, +112.97 (+0.44%)
NASDAQ: 7,852.18, -80.05 (-1.01%)
S&P 500: 2,837.44, -8.63 (-0.30%)
NYSE Composite: 12,953.39, +19.76 (+0.15%)

Which Way Is Up? Markets Careen As Trump Makes Deal With EU, Facebook Falls From Grace

It's too early to call it a trend, but the Dow broke out of the trading range in which it had been ensconced for over four months after President Trump met with European Commission president Claude Junker and announced a breakthrough on trade and tariff negotiations between the European Union and the United States, forestalling what many feared would become a trade war.

The Dow, which had been lumbering below the unchanged line most of the session, broke above it shortly after 3:00 pm EDT, and then rocketed higher, gaining over 150 points in the final half hour of trading.

The other indices responded in similar manner, though after hours, Facebook (FB) took a severe lashing, losing 24% at one point, after its second quarter earnings failed to meet expectations. Facebook's fall sent NASDAQ futures into a 1.5% nosedive, though they're recovering prior to Thursday's opening bell.

What is most important to note about these developments is the movement in the Dow. According to Dow Theory, the index entered bear market conditions on April 9, when the Dow Jones Transportation Index confirmed the Industrial Average's February-March double-dip off January highs. Besides the reliability of Dow Theory in gauging market movement and primary trends, stocks have not readily behaved as they would in an ordinary bear market, with both the NASDAQ and S&P recovering to make all-time highs, the most recent, just Wednesday, as the NASDAQ set a new, high-water mark at the close.

The current episode of market mania is being driven by forces both unforeseen and unseen, most of it emanating from Washington, D.C., where, on one hand, President Trump's audacious approach to governance and world politics has thus far returned positive results, including Wednesday's breakthrough with the EC.

Thus, the number that bears watching continues to be the January 23 all-time closing high on the Dow of 26,616.71. While the index has broken above what was considerable resistance, it still has a wall of worry - and about 1200 points - to climb before the existence of bearish conditions can be eliminated.

On the other side of the coin, Facebook's woes may only be the beginning for the tech sector, the NASDAQ and the market as a whole. Next up on the chopping block appears to be Tesla (TSLA), whose CEO, Elon Musk, has been raising concerns about the company as a whole by his strange and possibly bi-polar behavior. Tesla is under considerable pressure to produce positive results after months of scrutiny over its cars exploding, production questions, quality concerns and the general mental well-being of its founder and CEO.

Tech stocks have largely been the driver behind the rise of the NASDAQ, whereas President Trump has been generally holding down the Dow. Now those two elements appear to be working in reverse, and the result could be a shock to both the upside on the Dow and the downside on the NASDAQ.

It's hard to imagine the two indices diverging for very long, but the future is unknowable. With Trump "winning" on many fronts, he still faces a massive horde of opposition in Washington, not only from Democrats and the so-called "deep state," but from members of his own party as well.

Add the Fed's unwinding of its balance sheet and relentless quarter-by-quarter raising of interest rates and you have an imperfect storm through which stock and bond speculators and investors must navigate.

Rough seas ahead, for certain, but in which direction? With so much on the deck and cross-currents blowing in every direction, trading should become volatile and choppy until November, when the midterm elections will likely determine the ultimate direction of not just the stock market but of the US and global economy as well.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53
7/25/18	25,414.10	+172.16	+1142.69

At the Close, Wednesday, July 25, 2018:
Dow Jones Industrial Average: 25,414.10, +172.16 (+0.68%)
NASDAQ: 7,932.24, +91.47 (+1.17%)
S&P 500: 2,846.07, +25.67 (+0.91%)
NYSE Composite: 12,933.63, +86.14 (+0.67%)

Stubborn Dow Remains Range-Bound; NASDAQ Dips

Since March 9, the Dow has traded in a fairly tight range - considering the time elapsed (nearly six months) - of just more than 1400 points, or less than six percent of total market value.

Recently, it has been trading near the upper end of this range, but has repeatedly failed to surpass the previous interim high and is still another 1400-1500 points away from January's all-time high of 26,616.71.

The range, 23,924.98 - 25,335.74, has been wide enough to offer hope to both bulls and bears, though neither a breakout nor a breakdown has occurred, with much of the betting money on the latter. Current and prior sentiment sees a second half slowdown, with the Trump tax cuts already measured in, inflation becoming more of an issue, and the tariff tug-fo-war on the world stage only in the early stages.

Thus, seasoned investors are wary of sudden impulse moves such as today's and also have an eye toward the political spectrum, midterm elections and what now appears to be a runaway federal budget-busting deficit for the current fiscal year. These are the factors contributing to the skeptical view, while the more subdued bull case rests largely on the employment picture. Americans are well-employed at present, even though labor force participation remains near record lows.

Inside the demographics of the United States, there exists a virtuous cycle, in which retiring baby boomers give up jobs to millennials and Generation Xers, while spending their retirement incomes without a care. There's plenty of money to go around, though, with a country as large and diverse as the US, it's difficult to pigeonhole any particular stocks that should benefit the greatest.

Consumer staples are and have been the safest bets along with energy, tech, and basic materials, but the gains have been paltry outside the smoking tech sector. A diversified portfolio is probably the best insurance against a market rout, but being in the right stocks can prove tricky, if not altogether impossible to attain anything better than the average index fund.

On the day, the Dow and NASDAQ diverged, a sign that everything is not in sync, and that issues remain unresolved, though that is a normal case and not anything about which to be overly pessimistic.

With crosswinds at the crossroads of prosperity and desperation, there's more than ample rationale for either argument.

This remains a sit-tight-and-hold-cash condition.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88
7/24/18	25,241.94	+197.65	+970.53

At the Close, Tuesday, July 24, 2018:
Dow Jones Industrial Average: 25,241.94, +197.65 (+0.79%)
NASDAQ: 7,840.77, -1.10 (-0.01%)
S&P 500: 2,820.40, +13.42 (+0.48%)
NYSE Composite: 12,847.49, +53.44 (+0.42%)

Stocks Stagnate Prior To Google's Blowout Report

Stocks continued to loll around the unchanged mark to open the week's trading. The major indices have not moved much at all in the past week, though there could be a sudden lift after Alphabet, parent of Google (GOOG), reported second quarter earnings that smashed expectations.

The $5 billion fine leveled against Google the for antitrust violations by the European Union will barely dent the company's reported $100+ billion in cash and marketable securities.

While Google may stand alone atop the tech heap, it may need help lifting the rest of the market off the mark. Investors appear to be awaiting the report on second quarter GDP before making definitive decisions regarding stock purchases or sales.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71
7/23/18	25,044.29	-13.83	+772.88

At the Close, Monday, July 23, 2018:
Dow Jones Industrial Average: 25,044.29, -13.83 (-0.06%)
NASDAQ: 7,841.87, +21.67 (+0.28%)
S&P 500: 2,806.98, +5.15 (+0.18%)
NYSE Composite: 12,794.05, +4.14 (+0.03%)

Weekend Wrap: Friday's Pathetic Finish Prelude To Sell The News Fireworks

Stocks ended the week in a rather disturbing manner, with all the major indices limping home nearly unchanged for the day. That such a disappointment would occur on what's normally an options expiration day (it was), the lack of interest and volatility can be seen as a sign that either a) everybody who is anybody is on vacation, or, b) the market has reached saturation levels and is about to make a short term reversal.

None of the four averages followed at Money Daily closed more than one tenth of one percent from the previous day's finish. Trading was akin to a grandparent's canasta tournament. Nothing was risked. Nothing was lost. Nothing was gained.

Friday's trading can also be seen as an thumbnail sketch for the week. Within narrow ranges, the majors all finished up the week not far from where they had begun. It was simply one of the dullest weeks of trading in recent memory.

As expressed in Thursday's post, "Crossroads," there appears to be a stopping point for everything, especially the Dow Industrials at the level of 25,000- 25,300. The Dow was weakened materially in February, and, despite glowing employment and unemployment figures, plus an expected second quarter GDP estimate of over four percent to be made public this coming week (8:30 am EDT, Friday) the industrial average has yet to re-approach the previous all-time high (26,616.71, January 23, 2018).

With such a well-telegraphed number expected, a 4% GDP for the second quarter is likely already well-baked into most portfolio cakes, thus it may be wise to sit out this particular glowing government data headline release.

That the new high event continues to fade into memory without the Dow making a significant rally attempt tells a great deal about current market conditions. It signals that there is something seriously damaged in the economy, and it's probably not confined to the United States, since the central banks have acted as first-movers and lenders of last resort since 2008-09.

Change is afoot, and with change there are usually winners and a good share of casualties along the way. A major shakeout in the market is long overdue, despite the united forces of central banks forestalling such a watershed event. This has been the overriding theme of the past decade. While it may not end this week or next, it will end, and the result will be a general decline of 30-50 percent in major stock indices.

Otherwise, all the math in the world can be throw out the nearest window.

In the meantime, trade cautiously with an eye on fundamentals, which eventually will guide the way.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09
7/20/18	25,058.12	-6.38	+786.71

At the Close, Friday, July 20, 2018:
Dow Jones Industrial Average: 25,058.12, -6.38 (-0.03%)
NASDAQ: 7,820.20, -5.10 (-0.07%)
S&P 500: 2,801.83, -2.66 (-0.09%)
NYSE Composite: 12,789.91, +3.43 (+0.03%)

For the Week:
Dow: +38.71 (+0.15%)
NASDAQ: -5.78 (-0.07%)
S&P 500: +0.52 (+0.02%)
NYSE Composite: +20.41 (+0.16%)

Crossroads

The best version of the Cream´s Classic ´´Crossroads´´ from the 1968 Album ´´Wheels of Fire´´ even though the video is from the live concert at Winterland.

Simply put, if the Dow cannot close above 25,335.74 (March 9, 2018) the existence of a bear market will be on full display.

Granted, that number is more than 1300 points below the January 23 high of 26,616.71, but the point is this secondary high has yet to be exceeded, despite at least four (probably five) attempts.

Assuredly, the US economy is currently healthy and robust, but so are the warts and wounds, the result of many years of mismanagement. The Fed, working against expansion via its selfish balance sheet reduction scheme and relentless interest rate hikes, adds fuel to the eventual deflationary fire.

Today's nosedive - only the third negative close in 13 trading days this month - may have been nothing more than consolidation (profit taking), but the trading level is suspiciously bearish, considering the failed highs of the past four months.

Keep eyes on the numbers. The have been, and will continue to provide significant market signals.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88
7/19/18	25,064.50	-134.79	+793.09

At the Close, Thursday, July 19, 2018:
Dow Jones Industrial Average: 25,064.50, -134.79 (-0.53%)
NASDAQ: 7,825.30, -29.15 (-0.37%)
S&P 500: 2,804.49, -11.13 (-0.40%)
NYSE Composite: 12,786.48, -36.75 (-0.29%)

Dow Rally Continues Through Fifth Straight Session

The beat goes on...

For the month of July, the Dow Industrials have closed to the upside on 10 of the 12 trading sessions (five in a row) and is up nearly 1000 points over that span.

Conventional wisdom would suggest that this kind of winning cannot be sustained over the near term.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48
7/18/18	25,199.29	+79.40	+927.88

At the Close, Wednesday, July 18, 2018:
Dow Jones Industrial Average: 25,199.29, +79.40 (+0.32%)
NASDAQ: 7,854.44, -0.67 (-0.01%)
S&P 500: 2,815.62, +6.07 (+0.22%)
NYSE Composite: 12,823.23, +44.01 (+0.34%)

Fed Chairman Powell Mastering Greenspan-speak; Some Investors Pleased, Others Confused

Fed Chairman Jerome Powell was grilled today by members of the Senate Banking Committee, and was asked by senator Pat Toomey of Pennsylvania about the flattening (or tightening) of the yield curve.

Toomey expressed his question to the Chairman, thusly:
“Some people are concerned that a flattening curve or inverted curve correlates with economic recession. Here’s my question: does a dramatic change in the shape of the yield curve in any way influence the trajectory you guys [the Fed] are on with respect to normalizing interest rates and the balance sheet?”

Quoting Chairman Powell's answer from the story:

“I think what really matters [about the yield curve] is what the neutral rate of interest is,” Powell said.

“And I think people look at the shape of the curve because they think that there’s a message in longer-run rates — which reflect many things — but that longer-run rates also tell us something, along with other things, about what the longer-run neutral rate is. That’s really, I think, why the slope of the yield curve matters. So I look directly at that.”

Literally, Powell did not answer the question, taking a page from the master of obscurity, mumbling, and ambiguity, former Fed Chairman, Alan Greenspan, who was notorious for answering questions and outlining positions in such an arcane and circuitous manner that it took the likes of William Safire to figure out just what he was saying, and even then, nobody was absolutely certain their analysis was correct.

Powell's rhetoric appeared to be pleasing to stock jockeys on Wall Street, who bid up prices a bit on the day, closing at its best level since June 14 (25,175.31). Perhaps Powell is embarking on a back-to-the-future nomenclature for the Federal Reserve, wherein the general public is to stand in awe of the special powers of the central bank and not question its motives.

That's how it was before and during Greenspan's reign as Chairman and maybe it might not be such a bad thing for the Fed to be less engaging and transparent today.

After all, nobody really understands what the Fed is talking about, including the Fed governors and presidents of the regional Fed banks, so why bother to try to explain it all to ordinary plebes, whose only wishes are to be left alone and offered a reasonable return on their investments?

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95
7/17/18	25,119.89	+55.53	+848.48

At the Close, Tuesday, July 17, 2018:
Dow Jones Industrial Average: 25,119.89, +55.53 (+0.22%)
NASDAQ: 7,855.12, +49.40 (+0.63%)
S&P 500: 2,809.55, +11.12 (+0.40%)
NYSE Composite: 12,779.22, +30.44 (+0.24%)

Summer Trading Is Typically Slow; Precious Metals Hammered Of Late

Low volume and tight ranges on all the indices are telling the obvious. It's summer, many large traders are off to vacation spots, investors are sitting pat, and, despite it being the heart of second quarter earnings season, there simply isn't anything to get truly excited about, either on the bull or the bear side.

The Dow spent the entire session within a 90-point range, never falling more than 40 points from the pervious close, finishing the day with a modest gain. The Dow has finished higher eight of the 10 trading days in July.

There's more action in commodities of late, especially in the precious metals, which have been sliding for the past month after peaking short-term in mid-June. Silver slipped below $15 per ounce last week and has been trading in a tight range between $15.70 and $15.95. It appears that hopes for a rebound in real money have been dashed once again and gold also is trading at a one-year low, $1240 per troy ounce.

The price of crude took a hit today as well, with WTI finishing below $68 per barrel for the first time since June 25. The market is fully saturated and demand is flat, so prices should move down gradually for raw crude as well as gas at the pump.

This is really one of the more disinterested or distracted markets in some time. Likely, it's best to sit and wait for some indicator to signal direction.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00
7/16/18	25,064.36	+44.95	+792.95

At the Close, Monday, July 16, 2018:
Dow Jones Industrial Average: 25,064.36, +44.95 (+0.18%)
NASDAQ: 7,805.72, -20.26 (-0.26%)
S&P 500: 2,798.43, -2.88 (-0.10%)
NYSE Composite: 12,748.78, -20.73 (-0.16%)

Weekend Wrap: Stocks Got A Good Rip This Week For No Apparent Reason

In the grand scheme of things, this past week was a victory for normalcy bias.

Stocks gained.

Bonds held steady.

The government continued to operate as a complete farce.

Nothing really changed at all.

Even Money Daily, the grand encapsulator of financial media, began its commentary with the same opening line twice on consecutive days. For purposes only serving to further the case for degeneracy and laziness, the line was, "So much for summer doldrums."

Feel free to look it up, but, presently, the editors of Money Daily have no intention of clicking on any more links or checking anything for accuracy.

It's a shoot and miss environment. Six months from now, nothing that happened this week will be of any relevance.

For what it's worth, the Dow is up exactly 748 points in July. Numerologists may point out that this number reduces to 19, or 1, both of which are prime numbers. At least in the case of "1" the signal is for newness, birth, rebirth, a fresh start.

Sounds good.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48
7/13/18	25,019.41	+94.52	+748.00

At the Close, Friday, July 13, 2108:
Dow Jones Industrial Average: 25,019.41, +94.52 (+0.38%)
NASDAQ: 7,825.98, +2.06 (+0.03%)
S&P 500: 2,801.31, +3.02 (+0.11%)
NYSE Composite: 12,769.50, +8.04 (+0.06%)

For the week:
Dow: +562.93 (+2.30%)
NASDAQ: +137.59 (+1.79%)
S&P 500: +41.49 (1.50%)
NYSE Composite: +104.62 (+0.83%)

Stocks Gain, Dow Approaching Resistance Around 25,000

Stocks ramped higher on Thursday, taking back all of the losses from the prior day and advancing to its highest level since June 18. What lay ahead for the industrials is a trading areas that has proven to offer some resistance around and above 25,000.

In mid-June, at the tail end of a four-day rally, the Dow topped out at 25,322.31 (June 11), then stalled, sending the index tumbling more than 1200 points to 24,117.59 by June 27.

Will the pattern repeat? Obviously, it's too early to tell, but charts are suggesting that there will be some selling in this area. What may prompt any trading action are the emerging second quarter earnings reports, especially those on Friday from major banks.

Prior to Friday's open, the nation's largest bank by assets ($2.6 trillion), JP Morgan Chase (JPM) reported adjusted revenue of $28.39 billion, beating estimates of $27.34 billion and EPS of $2.29, also topping expectations of $2.2. Net income rose 18%, to $8.3 billion.

Citigroup (C) reported higher EPS, but missed on the revenue line. Shares were selling off slightly in pre-market trading.

Wells-Fargo (WFC) was down sharply prior to the opening bell after reporting a decline in net income applicable to common stock, which dipped to $4.79 billion, or 98 cents per share, in the quarter ended June 30, from $5.45 billion, or $1.08 per share a year ago. Analysts expected $1.12 per share.

Mixed results from the financial sector come as no surprise. Squeezed margins from the flattening yield curve has put pressure on bank stocks for some months. The financial sector has been one of the weakest through the second quarter and the pressure does not appear to be relenting any time soon.

Friday should be full of fireworks.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04
7/12/18	24,924.89	+224.44	+653.48

At the Close, Thursday, July 12, 2018:
Dow Jones Industrial Average: 24,924.89, +224.44 (+0.91%)
NASDAQ: 7,823.92, +107.30 (+1.39%)
S&P 500: 2,798.29, +24.27 (+0.87%)
NYSE Composite: 12,761.46, +79.87 (+0.63%)

Stock Selling Pressures Emerge As Bonds Present A Developing Skeptical Outlook

So much for summer doldrums.

Yes, that was the opening line of yesterday's post.

It's that kind of market, one that can turn on a dime, or a tweet, or, maybe even a look, a glance, a suggestion.

This is not for market neophytes, who will get skewered royally if they attempt to play and are not prepared to suffer small losses should positions prove unfavorable. Because small losses, left unaddressed, usually lead to larger losses, it's important to monitor all trades closely. Similarly, profits may be fleeting and momentary. It may be better to take short term gains under these conditions, than wait out months of bumps and grinds in expectation of sustained profits.

Current market conditions are strung out like an addict needing a fix. Any twitch can set it off, as evidenced on Wednesday, as short term euphoria faded into tight panic overnight.

Call it Trump-enomics, trade sabre-rattling, currency collapse, kind dollar, or whatever you like, what is underway is nothing less than a massive reordering of priorities. From individual well-being to international survival, nothing is off the table.

While stocks continue to zig-zag - the Dow fell once again into negative territory for the year - bonds seemingly know only one direction, toward the middle, as yield spreads on treasuries keep tightening.

Since the Fed has raised rates six times since December 2015, the yield on longer-dated maturities has not moved in tandem. In a growing, vibrant economy, yields on 10-year and 30-year bonds would be spiking higher in reaction to higher short-term rates, but presently, they are resistant. Thus, short-term rates are rising faster than longer-term, making it difficult for financial institutions to make money since they depend on the spread, i.e., borrowing short-term to lend long-term.

Simply put, it's tough to make much profit on a one percent (or less) margin.

This dynamic has and will continue to scare equity market participants, whose fear is that their investments will rise only very gradually, if at all. The longer-dated treasuries serve as a hedge against the inherent risk in stocks. Even though they may not keep pace with inflation, the risk of losing money is nearly nil.

There are, of course, many more forces at play, including devastated markets in Japan and Europe, which recently (and presently) toyed with negative interest rates, forcing all yields lower. Thus, the US yields look generous by comparison with limited risk exposure.

For a more detailed analysis of interest rates and the dangers of an inverted yield curve, Investopedia offers a reasonable explanation, here.

A simplified approach may be developing as a new norm: minimize risk, accept lower returns, preserve capital rather than seeking bold - and thus, risky - profits.

The bond market, which is much larger than the equity market, often serves as a lid on runaway speculation in stocks. Currently, the lid is being lowered, slowly, but steadily.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59
7/5/18	24,345.44	+181.92	+85.33
7/6/18	24,456.48	+99.74	+185.07
7/9/18	24,776.59	+320.11	+505.18
7/10/18	24,919.66	+143.07	+648.25
7/11/18	24,700.45	-219.21	+429.04

At the Close, Wednesday, July 11, 2018:
Dow Jones Industrial Average: 24,700.45, -219.21 (-0.88%)
NASDAQ: 7,716.61, -42.59 (-0.55%)
S&P 500: 2,774.02, -19.82 (-0.71%)
NYSE Composite: 12,681.59, -133.05 (-1.04%)