Saturday, July 22, 2017

What Could Be More Terrifying, China And AI Taking Over The World In The Future

Plan to put China in AI industry vanguard

China aims to build a 1 trillion yuan ($147.9 billion) artificial intelligence industry by 2030, as the country scrambles to lead the world in research and application of the cutting-edge technology, a new plan said on…

Well That Settles It, North Korea Is A Buy

North Korea economy undergoes rapid growth

North Korea’s economy grew at its fastest pace in 17 years in 2016 despite the isolated country facing international sanctions to curb its pursuit of nuclear weapons. The expansion, driven by mining and energy, marked the biggest rise since a 6.1 percent gain in 1999. The robust economic growth may also partly be due to the…

Thursday, July 20, 2017

Seems About Right

Calling for Market Top Within The Next Three Weeks

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Last week, I noted to members: “As long as last week’s low is not broken, the market still has a set up in place to rally up towards the 2500SPX region.”

And, as we saw, the market has rallied up towards our long-term target region. The high we struck on Friday is now only 24 points from the bottom of our long-term target box, which we set several years ago.

Since bottoming back in February of 2016, the S&P500 has rallied 38%. That is one of the best runs in the market’s history. But, were you prepared for it?

The truth is that most in the market were quite bearish back in February of 2016. As I have noted before, back on February 10, 2016, bearish sentiment, according to the AAII Investor Sentiment Survey, was at one of its highest readings, hitting 48.7% (with only 24% responding as bullish), whereas it has a historical average of 30.5% bears and over 40% bulls. The February 10th measurements are considered to be relatively extreme bearish numbers.

How many of you even reasonably considered that the market could attain 2500+ in the S&P 500 back in February of 2016, even after I continued to strongly suggest that potential? If you are honest with yourself, the answer is likely going to be an extremely small percentage. But, the potential was clearly on the chart for all those who knew where to look.
You see, the market does offer clues as to where and how it can move. In fact, back on the last days of 2015, I warned that the SPX could drop down to the 1800 region before it began its rally to 2500.

And, as we know, the drop we saw into February of 2016 just below the 1800SPX level provided us with sufficient bearishness to catapult us up towards our long-term rally targets which were viewed in disbelief by most.

And, this happens over and over in all different markets. Yet, because investors are looking for the next 2008-type of crash to happen at any time, they fail to understand that many of these fear-intensive drops are what sets the market up to rally just as strongly. Even this weekend, I have seen at least 3 other articles calling for the market to crash.

Another example of how markets fool most participants was seen around the time of the Presidential election. You see, as the market was dropping into our pullback target days before the election in early November, on November 5th, I wrote:

“once the market moves strongly through the 2098SPX level and is able to continue through 2125SPX, that is our initial indication that we could have a long-term low in place, and finally begin our run to 2350SPX next.”

Now, consider the general market expectation at the time. We were within days of the election, and the common expectation was that if Trump was going to win the election, the market was certainly going to crash. However, it did not matter who won the election in our analysis, as the market was set up to rally to 2300+ no matter who was in the White House. And, despite many scoffing at my perspective at the time, the market has certainly proven me correct, as Mr. Trump is now sitting in the White House, and the market is approaching our longer-term target regions.

This is simply another example of how most of the market is fooled by their expectations surrounding news, whereas it truly is market sentiment which “trumps” all other factors when it comes to the stock market. This was likely one of the most obvious recent examples of this perspective, and those who are willing to recognize it are much more wealthy for their willingness to open their minds.
Moreover, as our government continues to seem in disarray, the market does not seem to care. In fact, our government has been doing nothing other than dithering over this ridiculous Russian issue for months. But, again, none of this matters to the market, and it never will, as the market has simply continued to rally towards our long-term targets. Despite what many believe, it matters not who is in office, nor what they are doing. The market has a mind of its own, and if you have not learned that lesson over the last two years with Brexit, terrorism, Trump, Syria, rising interest rates, etc. being unable to derail this rally, then I am not sure you have been paying attention.

As the DOW and S&P500 hit new all-time highs this past week, and the NASDAQ has come back almost all the way from the “scary” drop we saw in June, many market participants are starting to believe this market may never come down again. Even though you have analysts coming out week after week calling for a market crash, many of them have been saying this weekly during this last 37% rally in the SPX. Oh, and don’t forget about all those Hindenburg Omens which were supposed to portend a market crash. At this point in time, investors may have begun to view these analysts as the little boy who cried wolf.

But, are we approaching the time of day when those broken clocks will finally be right? I think so.
Last Tuesday evening, July 11, my evening update to my members at stated the following:

Market Will Be Tested Tomorrow

With the market pullback today, we have a completed i-ii, 1-2 in the bullish set up for wave 5 of (V) of (3). But, with that set up, it means the market is just about out of room to break out to the upside. In fact, I would need to see a strong confirmation as early as tomorrow, with a potential gap up over the downtrend line on the 60 minute chart.

The next day, we gapped up over the downtrend line, as the market tacked on a 20-point rally on Wednesday. It followed up with a further 20 points the next two days, and struck a new all-time high.
As you can see from the charts linked below, the market is now approaching our long-term target we set several years ago. In fact, we are now within the final “squiggles” of this segment of the rally.

And, I think we can strike a top to the market within the next 3 weeks. In fact, Luke Miller, who runs one of our proprietary timing models at, notes that there is a potential timing target around August 9th which can mark a larger degree top in the market. (Just so you know, Luke’s timing model called for this current rally in the SPX over a week ago).

While many will now turn bullish in disbelief of the action in the equity markets, I am now finally turning somewhat cautious, and will likely remain so until the fall. My expectation is for last week’s ascent to slow down in the SPX over the coming weeks, which will likely result in a multi-month top being struck, sending us back down to the 2300 region in the SPX in the coming months. (Click for larger image)

Following In Lock Step With China

Issues As Nigeria Prepares for First Sovereign Green Bonds

As Nigeria prepares to issue the first Sovereign Green Bonds by this third quarter, CHIKA OKEKE examines several inter-agency collaboration, benefits of the bonds and how it would green Nigerian economy. Prior to Nigeria's participation at the 22nd session of the Conference of the Parties (COP 22) to the United Nations Framework Convention on Climate Change…

The Demographic Earthquake Emerges

Starting in 2022, Social Security will pay out more than it takes in

According to the Social Security Board of Trustees, the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be depleted in 2034. When this happens, only 77 percent of benefits will be payable. That estimate is no change from last year’s estimate. In addition, the Disability Insurance trust fund will be depleted in 2028,…

Industry Majors And A Push Towards Sustainability

Nornickel Unveils Major Sustainability and Work Safety Advances for 2016

MMC Norilsk Nickel PJSC (Nornickel; MCX: GMKN, LSE: MNOD), the world’s largest nickel and palladium producer, released its annual Corporate Social Responsibility (CSR) report on Wednesday, detailing the company’s performance in 2016 and progress towards achieving environmental and social responsibility goals set for 2023. In 2016, Nornickel spent US $383 million on environment protection, up 8.9%…

Wednesday, July 19, 2017

Solar Cheaper Than Coal

Wind of change is blowing through energy sector

Two farmers on a tractor pass through a wind power farm in Inner Mongolia. [Photo by Su Weizhong/For China Daily] Coal mining has become a way of life for Inner Mongolia but a new wave of green energy is about to change that. Bu Xiaolin, chairman of North China's Inner Mongolia autonomous region, talked with pride…

Never Waste A Good Crisis, Even If Our Survival Is Threatened

Earth Is Getting Warmer And There’s A Reason To Worry

Climate change is real and it’s happening now. The data published Tuesday by the National Oceanic and Atmospheric Administration (NOAA) highlighted the first half of 2017 was the second warmest in 138 years. The global average temperature recorded between January and June was 1.48 F degrees above the 20th century average of 59.9 degrees. Besides, the…

Here We Go Again...Again

US Imposes New Sanctions on Iran

The United States has imposed new sanctions on 18 Iranian individuals and groups it accuses of backing Tehran's ballistic missile program. The State Department announced its sanctions Tuesday against two groups linked to Iran's elite Revolutionary Guards, saying they were involved in ballistic missile research and development. It further said that Iranian activities in the Middle…

Sunday, July 16, 2017

Cycle Pattern Ending With A Current Rounding Pattern....Convenient

SPX Cycles, Fed Funds and Gold

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This “amateur cyclist’s” chart (I am anything but a cycles analyst) of the S&P 500 shows that the 12 month marker (C12) meant exactly nothing as the market remained firmly on trend, after brief pokes down in April and May. We noted that C12 was a lesser indicator than the 30 month cycle, which has coincided with some pretty significant changes (+/- a few months). That cycle (C30) is coming due at the end of the summer. Will it mean anything? Well, this market eats top callers for breakfast, lunch, dinner and midnight snacks. But it is worth knowing about to a lucid and well-armed market participant.
spx cycles
Here is the S&P 500 from another angle. The Fed Funds Rate (as of June 1) is now climbing in unison with the 2yr Treasury yield, and has even exceeded it. A problem for the stock market? Well, not quite yet when viewing historical context. The stock market has continued to climb in the short-term under conditions like this. But you will note that when the 2yr yield began to flatten and turn down, leaving the Fed in ‘overshoot’ territory, the major market tops of 2000 and 2007 were registered. Folks, I am not promoting an agenda, but simply reviewing history.
Indeed, NFTRH has been in bull mode in one way or another since the height of the Brexit hysteria and its low risk bullish signals (as global herds rushed to risk ‘off’ sovereign bonds amid the knock-on NIRP!!! hysteria). More recently we have been bullish but in ‘risk’ mode, which continues and if the above cycles and Fed Funds analysis means anything, will only intensify. High risk does not mean bearish; it means high risk which, especially if the mania intensifies, can go hand in hand with reward.

As for the gold sector, look no further than our Macrocosm picture to see why the sector cannot yet be called bullish. At best, there are better places to invest as long as stock markets and the economy are doing well checkand out performing gold check.
macrocosm, nftrh 363
As we go to print on Friday in US pre-market the CPI number came in flat and the gold sector is rightly celebrating the lack of inflation and the ‘dovish Fed’ implications. The positive reaction is news driven and can be filtered per the weekly charts below. Subscribers have been and will be updated on the parameters to unchaining the sector from its technical lock-down.

But there is a long way to go to undo the negatives. We’ll leave it to promoters and obsessives to micro-manage the sector in the meantime. There is no macro signal here for a real bull phase by the important element of ‘gold vs. stock markets’.
gold vs. stocks
Nor is there much positive going on in the sector’s nominal technical situation.
precious metals
However, when factoring in the S&P 500 analysis above, considering that the Fed Funds vs. the 2yr yield is nearing signals similar to 2000 and 2007, considering that the 10yr-2yr Treasury yield curve has recently made a move upward (a significant macro fundamental consideration in its own right) and in light of certain positive divergences in quality miners and royalties that we track, we will surely be on alert for coming opportunities in the counter-cyclical precious metals, because things could change at any time.

We cover the sector in detail (including stock charts) each week along with all other major markets (including stock charts) in NFTRH. But this article is intended to give a general view of what is bullish (i.e. bull trending) and what is not… along with some markers for potential changes. Meanwhile, trading can be done long and short in either broad stocks or the gold sector. But understanding current trends is important, until said trends change.

Subscribe to NFTRH Premium for your 40-55 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at and Also, you can follow via Twitter @BiiwiiNFTRH, StockTwits, RSS or sign up to receive posts directly by email (right sidebar).

Saturday, July 15, 2017

Which Is A Shame Because I Really Like Emerging Markets

Fourth Approach

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The emerging markets fund has soared almost 50% since the beginning of last year. That’s a pretty amazing performance for such a broad base of equities.

I would like to point out – – for what it’s worth (which isn’t necessarily that much in today’s QE-fueled world) this is the fourth time prices have approached the red trendline drawn below, each of which has carved out a slightly lower high. We shall see if a fourth descent begins, as before, or if at last this breaks above the resistance.

But I Think Success Belongs To Those Who Persevere

Ego Salieri

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All I wanted was to sing to God. He gave me that longing… and then made me mute. Why? Tell me that. If he didn’t want me to praise him with music, why implant the desire? Like a lust in my body! And then deny me the talent?

This will be the most personal post I’ve ever written in nearly thirteen years of doing this blog. Indeed, I’ve been debating with myself whether I should ever do this post. There are people I know will read it whom I’d prefer not be aware of these thoughts. It would be much easier, as well as risk-free, to simply yammer on about some stupid chart or something. For whatever reason, however, I feel compelled to express myself.

On occasion, I’ll encounter people that will tell me they enjoy my writing, and I secretly cringe upon hearing this. Working alone as I do, I prefer to pretend no one out there is reading what I write or listening to what I say. That’s very liberating for me, and although I have consistently tried to keep what I write and utter to adhere to some basic decorum – – and, importantly, while I have drawn a thick red line separately what I will or won’t talk about from my personal life – – there are times such as this where I get uncomfortably close to sharing thoughts that are deeply personal and, in some ways, painful. There are still broad areas of my personal life that I’ve never discussed here, and this post isn’t going to change that.

The P-Kit

When I was a kid, I liked going to the Radio Shack store. We didn’t have much money, but from time to time, I’d be able to buy one of the inexpensive “P Kits” they sold, which was basically a small breadboard with a few resistors, LEDs, and such, and there was some ready-made project like a noise maker or radio. A typical complete P Kit would look like this:
My attempts to put them together never worked out, though. For one thing, I was lousy at soldering – – absolutely terrible – – and many a P Kit went unfinished. I didn’t know what I was doing, and I never took the time to try to learn. I just didn’t have it in me.

A little later on, I got one of those “100 in 1” sets, which were more suitable for retards like myself. There was no soldering – – there were just little springs you could insert wires into, and there was a manual with a bunch of easy projects. I was able to get these to work (any moron could), but I confess I didn’t really study as to why it worked the way it did. I just wanted to get it to function, and then I was through. I never really learned anything at all about electronics.
After that, Radio Shack came out with their so-called Digital Computer Kit (about which I wrote a very extensive post a few years ago). This, too, was a total failure on my part. It was complicated, and I didn’t have the dexterity or patience to assemble it right. I didn’t complete it, and obviously I never got it to do anything.
So why all this talk about my failed attempts with simple electronics? I’ll come back to that.
Starting Yahoo

Fast forward many years. It is the late 1990s. My parents are visiting me and my wife. During dinner, out of the middle of nowhere, my mother looks at me and says, “Tim, don’t you wish you had founded Yahoo?”

On the surface, the question is preposterous. It’s like asking someone if they wish they had been the first man on the moon or had been a founding father of the United States. We can all fantasize about how great it would be to be some esteemed person or role, but I had honestly never been asked a question like that by anyone.

It was also a hurtful question to hear. It was infused with motherly disappointment, and although I was well into adulthood, it still stung. It stings to this day, even though it’s been many years since it happened.

I can somewhat understand that, from her naive (very naive) point of view, if someone had any ambition at all in the Silicon Valley, they would naturally start something successful. I, alas, was not among them, in spite of being very early on in the world of computers. Little did she realize the odds of making it big in this valley are equal to the odds of one of the hundreds of thousands of aspiring actors that show up in Hollywood becoming Tom Hanks.

What she didn’t understand is how badly I had wanted to be part of something great like that. Ever since the early 1980s, when I eagerly read about the stories of all the early computer entrepreneurs, I craved to be one of them. Adam Osborne, Nolan Bushnell, Steve Jobs, Bill Millard – – I read all their stories, and I ached with every part of my body to be in that club. It was my only dream, and a very powerful driving force.
What you might find hard to believe is that it had almost nothing to do with money. It had to do, for lack of a better term, with a desire to be swept up by something. It all seemed like it would be so thrilling to be caught up in the chaos, fervor, and excitement of a new idea that was growing fast and grabbing the world’s attention. Long hours. Late nights. That was for me.

Of course, I didn’t start Yahoo, Google, America Online, or anything else of import. The only company I ever started was tiny little Prophet, which never got bigger than 25 people. It had its little successes here and there, and its share of camaraderie, but whereas I wanted to enjoy a gigantic bundt cake, I found myself trying to be content with a couple of stale crumbs.
Neither a Failure Nor Success

As the years passed, I used to torment myself for my lack of success. I wondered what was wrong with me, what opportunities I had overlooked, or where I had gone wrong.

Sure, I wasn’t a complete washout. I had a beautiful family, enough money to get by, and a decent house. However, my childhood dreams of being someone big never materialized, and my mother’s needling question stayed at the back of my mind, tormenting me.

Having dwelled on it for a very long time, it occurred to me not that terribly long ago the truth of the situation, and it is this: I should never have been a success in the first place. I didn’t deserve it. Period.

And this isn’t a moral judgment. It is simple a statement of fact: there was very little that was special about me.

Think back to to the P Kit, and the 100-in-1 set, and the Digital Computer. Think also back, although I haven’t described it here, to all the computer languages I tried to learn, all the code I tried to write, and all the programs I tried to create. None of them were very good. It was all a struggle. None of it came naturally. The only thing I could do was write, and even that wasn’t particularly special.
In short, I just didn’t have the talent. I didn’t have the intellect. I didn’t have the natural gifts.
And that understanding……….the acceptance of my own shortcomings and inadequacies……was more liberating than anything else before. Because  I finally realized the actual truth: I never had the talent to merit success in the first place. In short, meritocracy had actually worked.

You can understand now perhaps why I wasn’t eager to share these feelings. I don’t like to trumpet my own inadequacy. I still want so badly to be perceived as someone who is at least a little beyond normal. But, one evening during a swim, this entire confession came to me, and I felt driven to share it, for better or worse. Probably worse.

I am thus content to live out the rest of my life as the most incidental of success stories. I’m never going to be a great entrepreneur. I’m never going to be a great fund manager. At best, I’ll be a productive, occasionally innovative blogger who tries his best to take care of his readers and his family.

Perhaps my offspring will instead do great things with their own lives. Or maybe not. That’s up to them. For myself, I accept that my lack of innate greatness has led to a just consequence.

Your merciful God. He destroyed his own beloved, rather than let a mediocrity share in the smallest part of his glory. He killed Mozart and kept me alive to torture! Thirty-two years of torture! Thirty-two years of slowly watching myself become extinct. My music growing fainter, all the fainter till no one plays it at all, and his…………..

Thursday, July 13, 2017

Why Now And Not Four Years Ago?

Growth in money supply scaled down

Central bank: Economy's needs met during deleveraging Growth in a broad measurement of China's money supply dropped to a record low in June as regulators worked to reduce leverage in the nation's economy. The M2 money supply grew 9.4 percent from a year earlier, after a 9.6 percent growth rate…

Interesting Synopsis Of Yesterday's Fed

An Extraordinary Statement

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Today and tomorrow, Yellen will be treating the world to her Congressional testimony. Her remarks have been released, and the summation of her entire disposition was boiled down to this one sentence:
“I see roughly equal odds that the U.S. economy’s performance will be somewhat stronger or somewhat less strong than we currently project…”

So has Janet joined the Elliott Wave brigade? Honestly, just take a look at that. She’s saying that, based upon the projections – – the projections, remember, of a building full of economics PhDs and luminaries – – that there is a 50% chance things could be better or a 50% chance that things could be worse. In other words………
The one thing the market “knows”, however, is that in spite of the endless – ENDLESS – press lately about how the Fed has taken away the punch bowl, and how people better get used to a non-accommodative Fed – – not a goddamned thing has changed.

Real Estate Putting In A Rounding Top Pattern?

Real Estate Busted Trendline

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I’m noticing a terribly-interesting breakdown happening place in real estate, encapsulated nicely with the sector fund shown below. Take note of how the long-term trendline is already broken, and as I’ve shown in the inset, we’ve got a nice little breakdown taking place on a short-term basis as well.

Tuesday, July 11, 2017

Convenient Time For The Tesla Model 3 To Be Shown

France wants to stop sales of gas and diesel cars by 2040

PARIS — No more gasoline or diesel cars sold in France by 2040-that's the ambitious goal set on Thursday by France's environment minister as part of far-reaching efforts to wean the world's…

Colonialism v2.0: Closer Links To Garment Industry

China Invests U.S.$600 Million in Kano's Textile Industry

A Chinese multinational company, Shandong Ruyi Technology Group is set to invest $600 million in the textile and garment industry in Kano State. Already, talks between officials of the company and the Kano State Investment Promotion Agency have reached advanced stage, and it is expected that a memorandum will be signed in the next few months.…

Wish They'd Do This In Canada

China cancels charges on bank services to support real economy

A bank clerk tells a customer how to use the mobile banking services at a bank in Nantong, Jiangsu province. [Photo/VCG] BEIJING - China's top economic planner announced Monday the country's lenders will cancel or suspend charges on some financial services to support the development of the real economy. The move will reduce the financial burden…

Monday, July 10, 2017

Colonialism v2.0: Awards, Acclaim For China

Chinese company wins acclaim in Ethiopia's construction sector

The logo of China State Construction Engineering Corporation (CSCEC)is seen at a construction site in Beijing. [Photo/VCG] ADDIS ABABA - Celebrating the structural completion of a landmark building in Ethiopia on Friday, China State Construction Engineering Corporation (CSCEC) has received praise for its effective handling of construction projects in the east African country. CSCEC, together with…

Buying At The Top, No?

China's overseas acquisitions rebound strongly in recent months

A pedestrian walks past skyscrapers in London. [Photo/Agencies] WASHINGTON - Chinese companies have been speeding up their overseas acquisitions since March after a sharp slowdown in the beginning of the year, a report from a US consultancy showed. A new report by Rhodium Group, a consultancy famous for its tracking of China's overseas investments, found that…