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

Nine minutes. 108 points.

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

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

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

Here is just one article on the topic.

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

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

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

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

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

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

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

Dow Jones Industrial Average November Scorecard:

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

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

October Ends With Gains, But Still Marks Worst Month Of 2018 For Stocks

There was no spooking investors on the last day of October. Instead, stock buyers were treated to steady gains, especially on the beaten-down NASDAQ.

The gains from Tuesday and Wednesday took all the indices away fro the dreaded 10% correction space, though the NASDAQ is still hovering dangerously close, a mere 25 points atop the minus ten percent level (7281.20).

What didn't move much was the Dow Jones Transportation Index, up a mere 15 points and still down 12% from recent highs.

Even with the winnings of the last two sessions, October still turned out to be the worst month of the year for the Dow, which ended down some 1341.55 from the September 28 closing price. That topped the losses from February (-1120.19) and March (-926.09). The October declines left the Dow up just one percent on the year.

With the traditionally bad month of October fading into memory, the market welcomes November and December, two of the better months for stocks. Immediately ahead is the non-farm payroll data for October due out prior to the opening bell on Friday and looking to beat expectations after ADP reported on Wednesday a gain of 227,000 jobs for the month.

Stocks remain under pressure, however, as the recent volatility spread from techs and financials to the rest of the market. There are still questions on valuation and forward guidance that are keeping investors on their toes.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88
10/24/18	24,583.42	-608.01	-1,873.89
10/25/18	24,984.55	+401.13	-1,472.76
10/26/18	24,688.31	-296.24	-1,769.00
10/29/18	24,442.92	-245.39	-2,014.39
10/30/18	24,874.64	+431.72	-1582.67
10/31/18	25,115.76	+241.12	-1341.55

At the Close, Wednesday, October 31, 2018:
Dow Jones Industrial Average: 25,115.76, +241.12 (+0.97%)
NASDAQ: 7,305.90, +144.25 (+2.01%)
S&P 500: 2,711.74, +29.11 (+1.09%)
NYSE Composite: 12,208.06, +78.12 (+0.64%)

Dip-Buyers Step In, Send Stocks Soaring; ADP, Non-Farm Payrolls On Tap

Nothing says bear market like wild rallies from out of the blue and Tuesday's late afternoon jacking of stocks was right out of the market maker's textbook with buy the dip the mantra of the day.

At 1:30 pm ET, the Dow Industrials were up a mere 40 points, but bargain hunters stepped up their games, frantically buying up shares at reduced prices. The result was a big rise in all of the indices with the Dow leading the way higher.

Even though stocks avoided falling into official correction, at the end of the day the major indices were still well off their all-time highs, with the Dow nearly 2000 points lower than its close on October 3rd (26,828.39).

The day's action was similar to rallies on the 16th and 25th, when the Dow gained 547.87 and 401.13, respectively, only to meet larger declines in the days ahead.

What should buoy markets for the time being are a pair of employment reports, the first by ADP on Wednesday morning tracking private payrolls, followed by Friday's non-farm payroll data from the Bureau of Labor Statistics (BLS). Both are predicted to show job gains approaching 200,000 for October.

Another potential boost to markets could come from resumption of stock buybacks as the blackout period during earnings reports frees up shares to be repurchased by the companies that normally sell them to the public.

Analysts are calling the buybacks the backbone of the bull market, which begs the question of just how high a price are companies willing to pay for their own stock. While many in the investment community believe stock buybacks are good for companies and investors as they reduce the number of shares available and make earnings per share measurements easier to meet or beat, others point out that spending company money on own stock points up a paucity of creativity at the highest levels of corporate America as well as an unwillingness to expand a company's business.

In other words, if companies aren't interested in expansion of existing business or creation of new business units within the corporate structure, they must feel that their market penetration is fully saturated or that economic conditions are not conducive to growth.

Buybacks, in addition to massive injections of liquidity by the Fed has been the fluid of the nine-plus-year expansion. What is concerning to long-term investors is what happens when the well runs dry.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88
10/24/18	24,583.42	-608.01	-1,873.89
10/25/18	24,984.55	+401.13	-1,472.76
10/26/18	24,688.31	-296.24	-1,769.00
10/29/18	24,442.92	-245.39	-2,014.39
10/30/18	24,874.64	+431.72	-1,582.67

At the Close, Tuesday, October 30, 2018:
Dow Jones Industrial Average: 24,874.64, +431.72 (+1.77%)
NASDAQ: 7,161.65, +111.36 (+1.58%)
S&P 500: 2,682.63, +41.38 (+1.57%)
NYSE Composite: 12,129.94, +187.42 (+1.57%)