Something To Do While Awaiting Speaking By Janet Yellen

Stocks were briefly lower, then higher, but finished split, almost even, for the day.

This is part of the effect of having globalists like Janet Yellen and the Federal Reserve controlling global economics. ON Monday, all of Wall Street is apparently waiting for the Fed Chairwoman's speech before congress on Wednesday and Thursday, or the release of the Fed's Beige Book of economic conditions on Wednesday.

Or the market is waiting for something else. Earnings, CPI, Industrial Production. It's always something, and it seems that the market is always waiting.

Over the past eight years this strategy has worked out pretty well for stock investors. Waiting has resulted in massive market gains over time, even though data has been less-than-splendid and often outrightly bad. That's where the "bad news is good news" meme came about: even though economic conditions were seen as negative, it was good for stocks because interest rates would remain low (making sure that stocks were the only game in town) and the free money from the Fed fountainhead would continue to flow.

Seriously, nobody is actually waiting for anything, no matter how much the TV and newspaper financial pundits like to propound on the topic. Investment decisions aren't exactly made based on data, at least not since the GFC. Stocks, and to a large extent, central banks and the Federal Reserve, have become disconnected from reality.

By almost all generally-accepted measures, stocks are overvalued. However, they remain the principal product of the Wall Street hucksters in terms of return. Bonds are returning little, and, if there is any appreciable inflation, they will return nothing in nominal value.

Stocks go up. They also go down. Some do better than others, but, to believe that the entire market is making a conscious choice to wait until Janet Yellen drools and stutters her way through her annual congressional hearings, is a monumental fraud in thinking.

Those who are buying are buying. The sellers are selling. Mostly, it's computers doing all the work and there's no good reason, presently, to make any meaningful changes in any meaningful portfolio.

At least that's what it looks like, but we'll wait and see.

At the Close, 7/10/17:
Dow: 21,408.52, -5.82 (-0.03%)
NASDAQ: 6,176.39, +23.31 (0.38%)
S&P 500 2,427.43, +2.25 (0.09%)
NYSE Composite: 11,751.79, -1.19 (-0.01%)

Stocks Finish Week With Gains, Remain Range-Bound

If one were to view Friday's market action in a vacuum, without context, one would think everything is just peachy in Wall Street wonderland. The NFP jobs report for June was solid and the major indices put up strong gains to close out the week.

But, nothing exists in isolation.

Taking a little bit broader view, over the shortened, four-day week, all that Friday's gains managed to do was life all the major indices from red to green for the week, with the exception of the NYSE Composite, which finished just nine points underwater, but, not to worry, nobody pays attention to the "comp" anymore, even though it is the most diverse, broadest of the majors.

Fraud, manipulation, massive central bank intervention?

Yes, sure, of course. Since central banks have been the primary drivers of the eight year recovery since the GFC, why would anybody believe they have stopped their high-stakes involvement. Lowering interest rates - even to negative - didn't work. Massive injections of funny fiat money didn't work. Talking about how the labor market and the general economy was doing so great (it isn't) didn't work, so, why not resort to outright purchasing of equities in a vain attempt to create a "wealth effect?"

Of course, the Fed will never admit to such activity, but Switzerland (SNB), Japan (BOJ), and the European Central Bank (ECB) have all openly been buying stocks for the past few years, at least, and probably longer.

Therefore, the entire week of trading was a nonsensical, uneventful kabuki play, designed to give the impression that all is well and there's no reason to sell... anything... even though many did. As they say in the current newsspeak nomenclature, a major league nothing-burger.

Balderdash. You're being culled, cuckolded, marinated, stuffed, and baked by people who control your baseless currency when you could be using that same valueless "money" to purchase goods, food, machinery of trade, gold, silver (currently on sale, as it has been for four years running), land, land and more land, some with actual buildings erected.

But, no. Americans (not to the exclusion of Canadiens, Japanese, and Euroland dwellers) instead purchase garbage college educations for garbage jobs, cell phones, 70-inch TVs, overpriced cars (mainly on leases), and run up enormous amounts of credit card and other debt for baseball tickets and extraordinary "experiences."

With the US government $19.965 trillion in debt, something along the lines of 10,000 seniors retiring every day, underfunded pensions galore, and monstrous debt and unfunded liabilities under-and-overhanging nearly every developed nation...

Good luck with that.

At the Close, 7/7/17:
Dow: 21,414.34, +94.30 (0.44%)
NASDAQ: 6,153.08, +63.61 (1.04%)
S&P 500: 2,425.18, +15.43 (0.64%)
NYSE Composite: 11,752.98, +50.55 (0.43%)

For the week:
Dow: +64.71 (0.30%)
NASDAQ: +12.66 (0.21%)
S&P 500: +1.77 (0.07%)
NYSE Composite: -8.72 (-0.07)

More NASDAQ Losses Cause For Concern

There are those in the financial hinterlands who believe that the latest bout of indigestion in equities is simply another round of petty games played by central bank elitists who continue to exert extreme control, especially at times when it seems a correction may be at hand.

There are others who believe that the entire eight years of QE-and-ZIRP-inspired gains have been the exclusive province of the central banks and that they are preparing to pull the proverbial rug out from under markets via interest rate hikes and a general cessation of currency creation.

Both parties may be right, insofar as the central banks have been the epicenter of all financial activity, surreptitiously aiding the money center banks and primary dealers closest to the Fed's largesse.

Thus, the declines on the NASDAQ - not just today, but for the past three weeks - are sending signals to smaller market participants and there has been the beginning of a realignment of asset allocations, from tech to cash, from consumer staples and cyclicals to dividend-payers and utilities.

The issue at present, as was the case in 2008-09 and most other major market corrections or reversals from bull to bear, is that nowhere is there a safe place to hide, though the usual standouts are cash, precious metals and treasuries. On the latter, the 10-year note continued its ascent, finishing the day at 2.37, a multi-month high. That's a notable move, signifying that money may be indeed becoming tighter, even though that is a relative term, heading north from a real rate approaching zero.

At this juncture, it's still too early to raise the alarm bells, though the heavily-leveraged may be getting margin calls in short order. The NAZ is closing in on a five percent decline from the June 9 high of 6341.70, currently at a level of -3.98%. The even one percent loss on the NASDAQ today was followed in close order by the other major indices.

Caution is advised. Do NOT buy this dip as there are far too many worrying factors in the mix.

At the Close, 7/6/17:
Dow: 21,320.04, -158.13 (-0.74%)
NASDAQ: 6,089.46, -61.39 (-1.00%)
S&P 500: 2,409.75, -22.79 (-0.94%)
NYSE Composite: 11,702.42, -107.07 (-0.91%)

Stocks Split, NASDAQ Gains, Dow Flat

There is a definite surreal feel to stocks these early days of summer. While the NASDAQ has generally been the whipping boy through the latter stages of June and into July, the reverse was true on Wednesday as traders returned from a truncated long weekend.

The NASDAQ tacked on 40 points, but the other broad measure, the NYSE Composite, fell 26. The Dow was off by one point, while the S&P added three-and-a-half.

While this appears to be sector rotation and stock picking, the unruly movements may portend something more sinister in the near future. It could be nothing, but split decisions on the major indices usually indicate market turmoil, not the calm, placid environment with low VIX which has been a feature of the long bull run since March of 2009.

The VIX has been elevated of late and spiked recently, but hovering around the 11-12 region is nothing alarming. Should the VIX begin to rise day-over-day, worries may emerge and turn reluctant buyers into outright sellers.

Whatever the financial pundits insist about the strength of the economy, there are troubles, as indicated by the FOMC minutes from June which were released on Wednesday. The members were split over inflation and increases in the federal funds rate, a strong indication that the Fed - which has been relied upon excessively to control the economy - may not have the tools with which to battle a recessionary environment, which many believe is overdue.

In any case, this shortened week may not be enough to develop any kind of trend, other than extending the weird trading patterns which are becoming more and more confounding to fundamental analysts.

At the Close, 7/5/17:
Dow: 21,478.17, -1.10 (-0.01%)
NASDAQ: 6,150.86, +40.80 (0.67%)
S&P 500: 2,432.54, +3.53 (0.15%)
NYSE Composite: 11,809.49, -26.23 (-0.22%)

NASDAQ Continues Short-Term Slide; Bond Yields Soar

Happy Independence Day!

While plenty of Americans were celebrating the founding of their nation, drinking cold ones and grilling hot ones, the elitist scum that wants to control everybody's lives couldn't take the hint - and a four-day weekend - returning to the trading desks Monday for another round of Sell That Tech Stock.

The major indices were all rising, with the notable exception of the NASDAQ, upon which the most speculative stocks are traded, closing down just shy of 1/2 percent on the day.

Closing below its 50-day moving average for the third straight session, the NASDAQ is exhibiting a unitary weakness, unshared by its cohorts. The last time the NASDAQ made such a breach was at the very end of December, 2016. Six months have passed since the end-of-year scare, so it is notable, but the index is only down 3.66% since the 6341.70 top on June 9.

The selling seems to not be abating any time soon. The NASDAQ has closed lower 11 of the last 17 sessions, inclusive of the June 9 FAANG debacle.

Obviously, a multi-day decline of less than four percent is alarming to almost nobody, though closer analysis does give one reason to pause and possibly for many to liquidate out of high-multiple, overpriced equities into the safety of dividend-paying plays such as those readily found on the Dow or within the higher echelons of the S&P.

Divergence of the NASDAQ from its close peers bears notice, as has been mentioned here at Money Daily on a number of occasions over the past few weeks. Since it is easily the most bloated of the indices, it is most vulnerable to sprees of selling, or, as may be the case, cyclical rotation.

With that in mind, it may be amusing to some that the Dow posted an all-time intra-day high on Monday, but closed below the record closing high, though that mark may be surpassed on Wednesday, with traders flush with renewed animal spirits.

Otherwise, the eight-year-old bull market seems to be running on fumes, badly in need of something other than fresh fiat from central banks, which has been the primary fuel for the record rise over the long span.

Also worthy of notice is the continued sell-off in the 10-year note, sending yields as high as 2.35. The condition has prevailed since just after the latest interest rate hike on June 14, putting the federal funds rate at a multi-year high of 1.00-1.25%. It's also a marvel that the FOMC of the Fed has changed the game somewhat, targeting the rate in a range rather than offering a solid number. It gives the fakery some wiggle room, though bond brokers seem to be reacting as the Fed would wish, even though rising rates in a declining economy - of which the signs of are lurking everywhere - is a classic misalignment.

Hang on, diversify, or get off. Those are the current choices, though for specs, the last of those choices seems to currently be the most favored plan.

At the Close, 7/3/17:
Dow: 21,479.27, +129.64 (0.61%)
NASDAQ: 6,110.06, -30.36 (-0.49%)
S&P 500: 2,429.01, +5.60 (0.23%)
NYSE Composite: 11,835.72, +74.02 (0.63%)