Dow Industrials Travel 1,295 Points As Larry Kudlow Saves The World

Spooked at the open that China would impose a 25% tariff on soybeans (you can't make this stuff up), the Dow Jones Industrial Average slumped 510 points at the open, but immediately began to gain ground.

By noon, the index had nearly clawed itself all the way back to breakeven, and finally, after 2:00 pm EDT, began an ascent that would leave the blue chips up 230 points on the day.

What spurred the gigantic gain of nearly 800 points off the opening low was word from White House financial advisor, Larry Kudlow, that the tariffs were only outlines and that they may never even be put into effect.

It may be cynical to say, but when the greatest stock market in the world can be auto-tuned to move in massive fashion on the words of one man - and that man happens to be Larry Kudlow - anybody with a functioning brain would want to be far removed from it.

In a word, it's Bullshoot. Rubbish. Trash.

Another cynical outlook would suggest that anybody being short heading into first quarter earrings season is in dire need of a frontal lobotomy. Being anything but long at this juncture - particularly after the whacko Wednesday just witnessed - is tantamount to financial suicide, and suicide is still outlawed in most states.

April now looks to be a perfectly glorious month for pensioners trapped in an alternate reality of hopefulness and trust, and for stock manipulators who make money on both ends of the trade, the brokers, schemers, bankers...

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/3/18	24,033.36	+389.17	-69.75
4/4/18	24,264.30	+230.94	+161.19

At the Close, Wednesday, April 4, 2018:
Dow Jones Industrial Average: 24,264.30, +230.94 (+0.96%)
NASDAQ: 7,042.11, +100.83 (+1.45%)
S&P 500: 2,644.69, +30.24 (+1.16%)
NYSE Composite: 12,466.45, +99.38 (+0.80%)

Stocks Stage Rebound; Cat-and-Mouse Game Continues Between Bulls and Bears

Is it a bull market? Is it a bear market?

At this juncture, it's a good probability that neither the bull nor bear label is appropriate. At best, one could call the market transitional, or, at worst, confused.

The continuing tug-of-war escalated the past two days as the Dow took a 400-point ride in each direction, ending with a small, 70-point loss to kick off the second quarter.

If none of this makes sense, recall the oft-used quote:

The market can remain irrational longer than you can remain solvent.

Attributed to either legendary John Maynard Keynes or contemporary Gary Shilling, it's worth keeping in mind as markets gyrate. Here is an interesting discussion concerning the quote.

Perhaps John Pierpont Morgan said it best, when asked what the market would do:

It will fluctuate.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92
4/2/18	24,033.36	+389.17	-69.75

At the Close, Tuesday, April 3, 2018:
Dow Jones Industrial Average: 24,033.36, +389.17 (+1.65%)
NASDAQ: 6,941.28, +71.16 (+1.04%)
S&P 500: 2,614.45, +32.57 (+1.26%)
NYSE Composite: 12,367.07, +150.36 (+1.23%)

Stocks Pounded Again; Transports Drop 206 Points

Following a brutal February and March, equity investors could hardly be pleased with the first day of trading in April and the start of the second quarter.

A weak opening was followed shortly by indecision and then a descent back into the abyss, with all the major averages into the red for the year. Of particular interest was the Dow Jones Transportation Index, which spent much of the afternoon testing new lows below the February 9 bottom of 10,136.61. Only a late-day push kept the transports from finishing under the level that would signal a primary trend change.

The Dow Industrial Average was likewise saved from further embarrassment as it gained into the close after being down more than 750 points earlier. The push higher nearing the end of the session should be largely attributed to nothing other than day-trading short-covering by quants and large hands taking massive profits at the expense of the bulls still looking for some upside.

With stocks under serious pressure for nearly two months, some relief is almost guaranteed, though the duration of any improvement is a question for market-timers, chartists and wide-eyed speculators. Recent activity appears to be more reminiscent of the end of a bull market and the beginning of something worse than what should accompany a surging economy. The narrative of US strength is failing on many fronts and likely will not last more than a few more months, or possibly, even a few days.

This is a market made for traders using other people's money, not their own.

Dow Jones Industrial Average April Scorecard:

Date	Close	Gain/Loss	Cum. G/L
4/2/18	23,644.19	-458.92	-458.92

At the Close, April 2, 2018:
Dow Jones Industrial Average: 23,644.19, -458.92 (-1.90%)
NASDAQ: 6,870.12, -193.33 (-2.74%)
S&P 500: 2,581.88, -58.99 (-2.23%)
NYSE Composite: 12,216.71, -235.35 (-1.89%)

Weekly Recap: Stocks Get a Boost to End Month, But Still Finish Down for March

Call it window dressing, because that's pretty much what the final trading day of March will amount to, being that the markets have been battered and buffeted up and down - mostly down - for the past two months, gains on the Thursday prior to a three-day weekend should be considered a non-event.

As the March scorecard below shows, the big losses on the 22nd and 23rd could not be recouped, despite a bounce-back on Monday, the 26th, of nearly 670 Dow points. Combining the February and March declines, the Dow lost more than 200 points in those two months, and ends March more than 2500 points off the January 26 all-time high (26,616.71).

Of particular focus now are the declines following the most recent federal funds rate hike from Wednesday, March 21. Just after the 2:00 pm EDT announcement that day, the Dow rose to 24,977.65, making the drop post-FOMC a full 874 points, despite the bounce-back Monday (26th) and the close-out dead-cat-like bounce on Thursday, the 29th.

Also, keeping the chartists busy is the Dow Jones Transportation Index (^DJT), which nearly signaled bear market conditions on Wednesday, the 28th, three times dipping below the magic mark indicated by the February 8 close of 10,136.61 before finishing up with a slight positive bent. Thursday's 200+ point gain on the transports was more window dressing, short covering or outright central bank dip buying, giving the market some degree of confidence, even though there realistically should be little.

Anybody with an eye on the chart of the Transportation Index sold be keenly aware of the intra-day low on February 8, an awe-inspiring bottom at 9,806.79. Likewise, the intra-day low on the Industrial side was a jaw-dropping 23,360.29, on February 9.

The Industrials have already surpassed the February closing low of 23,860.46, finishing March 23 at 23,533.20. Therefore, according to Dow Theory, the only element missing from calling this market a bear - signifying a primary directional change - is for the Transportation Index to close below it's recent low to confirm.

As arcane and confusing as that may sound, the rigors of Dow Theory are almost never wrong when it comes to indicating primary changes. One only need check the stats from 2000 and 2008 (and many times before that) to see how that this signal is very accurate.

Not to say that the Dow and even more so, individual stocks, can't continue to dive to lower and lower depths, but it would be hard to see such a scenario developing without a significant slide on the Transportation Index.

Putting March in perspective, the losses here are notable, as March is traditionally a strong month for investors, with an average gain on the S&P 500 - according to this calculator - of 1.11% from 1950 to the present, outdone only by the months of April (1.34%), November (1.39%) and December (1.53%). If equities continue to show weakness through April it might come as a surprise, but, even if it doesn't, the months of May through September are traditionally the weakest, with cumulative returns of just 0.22% over that 1950-2017 span. August and September are actually negative for that time period, posting losses of 0.27% and 0.64%, respectively.

While those figures are for the S&P, they serve as something of a proxy for the Dow, so if a bear market is to eventually emerge (and these things often take some time to develop), there's a high probability that the bull could hang on until August, significant, as the first estimate of Q2 GDP would print late July.

For the week, the NASDAQ was by far the weak performer, the only index incapable of exceeding a two percent gain over the four-day period. It wasn't even close, as the NASDAQ gained only 1.01%, unsurprising, since the NASDAQ had been significantly out-performing the other indices.

All of this number-churning should come as a relief for both bulls and bears. As April unfolds, there may be an easing up in volatility, and some gains to be had, but the ominous signs of an overpriced and subsequently weakening stock market are proliferating, the general economy notwithstanding. This offers some time to adjust strategies before what seems to be an obvious downdraft coming this summer.

That may be a huge speculation, but that's what makes a market.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08
3/7/18	24,801.36	-82.76	-227.84
3/8/18	24,895.21	+93.85	-133.99
3/9/18	25,335.74	+440.53	+306.54
3/12/18	25,178.61	-157.13	+149.41
3/13/18	25,007.03,	-171.58	-22.17
3/14/18	24,758.12	-248.91	-271.08
3/15/18	24,873.66	+115.54	-155.54
3/16/18	24,946.51	+72.85	-82.69
3/19/18	24,610.91	-335.60	-418.29
3/20/18	24,727.27	+116.36	-301.93
3/21/18	24,682.31	-44.96	-346.89
3/22/18	23,957.89	-724.42	-1071.31
3/23/18	23,533.20	-424.69	-1496.00
3/26/18	24,202.60	+669.40	-826.60
3/27/18	23,857.71	-344.89	-1171.49
3/28/18	23,848.42	-9.29	-1180.78
3/29/18	24,103.11	+254.69	-926.09

At the Close, Thursday, March 29, 2018:
Dow Jones Industrial Average: 24,103.11, +254.69 (+1.07%)
NASDAQ: 7,063.44, +114.22 (+1.64%)
S&P 500: 2,640.87, +35.87 (+1.38%)
NYSE Composite: 12,452.06, +143.17 (+1.16%)

For the Week:
Dow: +569.91 (+2.42%)
NASDAQ: +70.78 (+1.01%)
S&P 500: +52.61 (+2.03%)
NYSE Composite: +274.36 (+2.25%)

Stocks Little Changed As Dow Transports Flirt With Bear Market Confirmation

As outlined in yesterday's special note, the bull market has come perilously close to rolling over into a vicious bear market, or, in Dow Theory terminology, the primary trend is about to change.

Key to this chartist theory is the 20-component Dow Jones Transportation Index, which has been falling in price right along with the other major indices, but needs one more little push to the downside to confirm the change in primary change, that being the point at which the transportation index closes below its previous closing low of 10,136.61.

Twice, early in Wednesday's session, the transports slipped below the magic mark, and approached it again in the final hour, falling to 10,136,26, before the short-covering crowd came in to rescue the bulls and prolong the agony of waiting for what will someday be known as the "turning point."

While there are all manner of economic and geopolitical risks extant, it's impossible to know exactly what will trigger the final cascade into bear-market-land, though investors need not necessarily be concerned unless one's time horizon is relatively short. That's because, according to experts, who are uniformly almost always wrong, bear markets last, on average, about 16 months, and the time taken to recover all of the losses back to the "turning point," is roughly three years.

Regardless of one's position or opinion on finance and economy, one thing is certain: February and March have been different from the 106 previous months of this long-in-the-tooth bull market. They have been outright losers, changing the prevailing sentiment from buy the dip to sell the rip.

Collectively, the 30 stocks comprising the Dow Jones Industrial Average are nearly 2800 points from their all-time-high from January 26, and that's a wall of worry that may be too high to climb.

Trading for March concludes on Thursday, as Good Friday is a recognized holiday.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08
3/7/18	24,801.36	-82.76	-227.84
3/8/18	24,895.21	+93.85	-133.99
3/9/18	25,335.74	+440.53	+306.54
3/12/18	25,178.61	-157.13	+149.41
3/13/18	25,007.03,	-171.58	-22.17
3/14/18	24,758.12	-248.91	-271.08
3/15/18	24,873.66	+115.54	-155.54
3/16/18	24,946.51	+72.85	-82.69
3/19/18	24,610.91	-335.60	-418.29
3/20/18	24,727.27	+116.36	-301.93
3/21/18	24,682.31	-44.96	-346.89
3/22/18	23,957.89	-724.42	-1071.31
3/23/18	23,533.20	-424.69	-1496.00
3/26/18	24,202.60	+669.40	-826.60
3/27/18	23,857.71	-344.89	-1171.49
3/28/18	23,848.42	-9.29	-1180.78

At the Close, Wednesday, March 28, 2018:
Dow Jones Industrial Average: 23,848.42, -9.29 (-0.04%)
NASDAQ: 6,949.23, -59.58 (-0.85%)
S&P 500 2,605.00: -7.62 (-0.29%)
NYSE Composite: 12,308.90, +6.36 (+0.05%)