Tuesday, October 31, 2017

Guest Post: Wonder How Many Other People Notice This

The Dark Index (DIX) is a simple metric that tells us whether investors are using dark pools to buy or sell shares of S&P 500 component stocks. When it’s high, investors are buying. When it’s low, they’re selling.
The blue line is the DIX. The green line is the S&P 500.
Key point: This is the lowest the DIX has been in two years.

Huh? Dark Index?

Somewhere around a third of stock volume happens away from public, or “lit,” stock exchanges. Investors send their orders to dark pools when they want anonymity, better fills, or lower cost. If you’re a large investor, chances are good that you try to route your orders through dark pools before you go to the lit exchange.
The Dark Index looks at every S&P 500 component’s dark pool volume every day and algorithmically determines whether those dark trades were likely buyers or likely sellers. When all of this data gets mashed together, the big picture of dark pool traders’ sentiment takes shape—and we like to think it’s pretty interesting.

Proof, Pudding

Historically, if you’d bought the S&P 500 when DIX was at the high end of its range (dark pool buyers), you’d have done really well. To illustrate that point, take a peek at these scatterplots. On each plot, higher DIX is to the right of the x axis.
On a 1-day timeframe, you don’t see much, right? But as time marches on (look at the 60-day plot), the linear regression line shows a clear slope. To boot, a rather clear clustering of nice returns shows up when DIX is high. In fact, the best returns only happen after the DIX has been high—when there are a lot of stock buyers in dark pools.

Why the lag, though?

It’s conventional wisdom that when someone buys a lot of stock, the price goes up. So why, if there are so many investors buying shares in dark pools, does it take so long to see the resulting returns? It’s actually not too hard to understand, but go grab a coffee if you have to.
Alright. Remember how big investors like to use dark pools for anonymity and all that? Well, another reason to use a dark pool is to reduce market impact. Most dark pools fill orders at the midpoint between the bid and the ask. Which means that a whole lot of shares can trade with a long or short bias without actually touching or moving the bid or the ask.
In effect, this means that an investor who buys a bunch of shares in dark pools (say, over the course of several weeks), doesn’t actually move the price. Instead, there’s more often a lag as the effect of the demand filters through the market.
An extreme example of this is in Hertz (HTZ), which has had a 100%+ recovery in price since June. Nice, right?
But what you probably didn’t know is that dark pools were alight with eager buyers through nearly all of 2017. It just took time to work itself out. (The blue line below works exactly the same way it does for the DIX.)
Get the idea? OK, now there’s one more question to answer:

Will dark pool selling always foretell a downturn?

And the answer is: Often, but not always. The S&P 500 is a really robust index, and even if a lot of fundamental investors are selling their shares, the index can hang on for a long time.
But with that said, dark pool selling in S&P 500 components definitely increases the risk of correction. Hopefully we don’t have to explain why.
Now look at the 2-year chart of DIX again and tell us what you think.
Don’t know about you, but we’re ready for a correction.

Trying To Polish Venezuela's Economy, They Didn't Need Bad News

Venezuela state oil company announces $842 million bond payment

Venezuela's state oil company, which controls the world's largest crude reserves, said Friday it had begun paying $842 million in partial repayment of a debt bond maturing in 2020. A default for PDVSA would have been disastrous at a time when access to credit has already been severely curtailed, with refineries running at less than half of their capacity and oil output estimated at less than two million barrels a day.

Monday, October 30, 2017

Making Lemonade

London house-buyers get lift from Brexit

At 24, Londoner Kai Brader-Tan did not expect to become a property owner so soon in a city where rocketing prices in recent years have prevented many of his peers from getting onto the housing ladder.

Sharing Economy Continues To Advance

Investors fuel a multibillion-dollar ride-sharing frenzy

Investors including Japan's SoftBank and Google-parent Alphabet are fueling a drive to a ride-sharing future, betting on startups such as industry giants Uber and Lyft which have so far failed to deliver profits.

This Is Probably Why The NASDAQ Has Broken Out

US economy sees 3% growth, shrugging off hurricanes

The US economy continued to expand at a robust three percent clip in the third quarter despite back-to-back hurricanes, hitting President Donald Trump's growth target for the second time since he took office, official data showed Friday, GDP growth in the world's largest economy had its best six-month stretch since mid-2014, handily absorbing the shocks of Hurricanes Harvey, Irma and Maria, the US Commerce Department reported.

Bad News For Africa's Leading Economy

S.Africa economy in dire straits as political stakes rise

South Africa's finance minister received some faint praise last week -- not for the economy's performance, but for admitting the country is in a dire position that is set to get worse. Malusi Gigaba delivered a mid-term budget that laid bare South Africa's struggle with slow growth, tax income shortfalls, rising debt and high unemployment.

The Excitement

Trump Panics On Twitter Ahead Of Mueller Indictment

The indictments are coming — and the president seems to be panicking. President Donald Trump on Sunday accused Democrats and federal investigators of conspiring against his agenda as the clock ticked on the first indictment from Special Counsel Robert Mueller, which is expected Monday.

Sunday, October 29, 2017

Oh Honey, We've All Fantasised About Doing That

Woman Flips Off Trump After Chasing Down Motorcade

She persisted. Donald Trump's motorcade departing from the Trump National Golf Club in Virginia had an extra add-on Saturday, after the president spent the 96th day of his presidency visiting one of his own properties.

Friday, October 27, 2017

Getting Ahead Of The Curve With Drone Cargo, Boeing Airbus To Catch Up

Large unmanned aircraft with ton-level capacity debuts

A worker checks the condition of an AT200 unmanned cargo aircraft in Pucheng, Shaanxi province, on Oct 26, 2017. [Photo by Zhang Zhihao/China Daily] The world's first unmanned freight aircraft with a ton-level capacity completed its first test flight, reported China News Service.

Ill Advised And Not Well Thought-Out, This May Be Why Shorting Treasuries Is Looking So Good

Donald Trump Wants to Raise Your Gas Prices

The Trump administration is floating a 40-percent hike in gas taxes to fund a $1 trillion infrastructure package, a regressive tax that would disproportionately hurt the low- and middle-income Americans who comprise the president's political base.

What's Another $1.5 Trillion? We Already Know Trump's Attitude Towards Debt

House Republicans pass GOP budget with $1.5 trillion deficit increase to fund Trump's tax cuts

WASHINGTON — House Republicans on Thursday gave final approval to a 2018 GOP budget resolution, allowing for a $1.5-trillion deficit increase that sets the stage for President Donald Trump's tax cuts.

Thursday, October 26, 2017

Seems Like A Pretty Sound Five Year Investment

Guest Post: Time To Bet Against Bonds
Tim Knight, SlopeofHope.com
Note the breakout for the triple-short ETF symbol TMV. Our nation is over $20 trillion in debt, and this fantasy that we’re somehow going to pay for it is a pipe dream. Interest rates are going to roll higher as the months and years proceed, destroying debt-holders.

Curious Timing Of Sell Signal With The Fed Meeting On November 1st

Guest Post: New "Sell" Signal Triggered On Weekly SPX:VIX Ratio
I last wrote about the SPX:VIX ratio in my post of October 17. At the time, volatility was creeping higher, as the SPX was making new highs.
As of 2:00 pm today (Wednesday), volatility has continued to rise, as the ratio dropped to just above the critical 200 “New Bull Market” level, as shown on the following SPX:VIX Monthly ratio chart.
The following 60-Day 60-minute ratio chart shows that, although one gap up has been filled, there are two unfilled gaps remaining, dating back to September 11.
A new “SELL” signal has just triggered on the Weekly ratio, as shown below.
The SPX nearly reached a potential target of 2600 on Monday, as shown on the following Daily chart, where it will encounter major resistance in the form of a +2 deviation level of a very long-term regression channel, as I outlined in my above-mentioned post.
Keep an eye on these charts, especially the 60-Day 60-minute, to see if the prior gaps are filled, and whether the ratio drops and holds below 200. If so, expect volatility to increase as weakness sets in on the SPX. If not, the SPX may try, again, to reach 2600, before such a scenario may develop.
In any event, the SPX may whipsaw until after the next Fed meeting concludes on November 1, before it, either continues to advance to new highs, or we see a pullback, and gap fills on the intraday ratio.

Wednesday, October 25, 2017

Possible Sign That International Trade Has Recovered

Shipbuilding sector continues its recovery

China's shipbuilding sector experienced a strong momentum in the first three quarters of this year with growth in both completed orders and new orders, according to data released by the China Association of the National Shipbuilding Industry.

Coup For Chinese Mass Transit In Africa

BYD bags mass transit order in Egypt

Electric vehicle maker BYD Co Ltd is planning to start trial runs of its SkyRail monorail mass transit solution in Egypt soon, making it the second overseas destination for the Chinese company after the Philippines.

Sunlight: Is There Anything It Can't Do?

Clean Water Lands in Puerto Rico Thanks to Solar-Powered Filtration

Since Hurricane Maria slammed into Puerto Rico back in September, the island nation has been struggling to recover – but though the process is slow and arduous, businesses and celebrities alike are offering up their own resources to help in the territory's healing.

Putting A Price Tag And Cost Analysis To Environmentalism

Trump's inaction on climate change carries a big price tag, federal report finds

WASHINGTON — The Trump administration's reluctance to confront climate change threatens to create a massive burden on taxpayers, as a lack of planning by federal agencies leaves the government ill-equipped to deal with the fallout from rising temperatures, according to independent congressional investigators.

Game Changer

Can See-Through Solar Panels Replace Fossil Fuels?

A new generation of see-through solar cell technology could soon be used to harvest the massive energy potential of building and car windows, cell phones as well as other objects with a transparent surface.

Has China Weathered The Storm? For Now, But Overhanging Debt Is Still An Issue

China's home prices continue to stabilize

China's property market continued to cool as home prices faltered or posted slower growth in major cities amid tough policies to curb speculation, official data showed Monday.

Tuesday, October 24, 2017

Slap In The Face To Audi And Mercedes

Tesla to build wholly-owned Shanghai plant: WSJ

Tesla has reached an agreement with Shanghai authorities that would make it the first foreign automaker to build its own plant in China, putting it in the driver's seat in the world's biggest electric-vehicle market, the Wall Street Journal reported.

Oh How I Would Love To Believe This

As deficits grow, Trump says he won't touch Social Security, Medicare

Even with deficits ballooning, President Trump again ordered his budget team not to touch Social Security and Medicare as they scour the government for savings, the White House budget director said this weekend.

Bullish On eLearning

Online education new darling for investors

China's online education sector has been eyed by the capital market as emerging and promising, Securities Times reported Monday, citing multiple industry sources.

Of Course, They Told Him Not Too

Trump Blows Past Russia Sanctions Deadline

The Trump administration has failed to place new sanctions on Russia, further deepening allegations the president is soft on Russia. New sanctions resoundingly flew through both chambers of Congress in July, President Donald Trump signed the “Countering America’s Adversaries Through Sanctions Act” on August 2.

Monday, October 23, 2017

Swan Song For The U.S. Dollar?

Clive Maund: Gold Market Update

The dollar is getting ready for a sizable rally, and that means that gold and silver are going to be knocked back again. Longer-term however, the outlook for the Precious Metals could scarcely be better, as we will see.

In last weekend’s update it was pointed out that gold’s gap breakout from its steep downtrend shown on its latest 6-month chart below was probably false and that it was expected to drop back as the dollar advanced, which it duly did last week. Bearing in mind that the dollar has about completed its Head-and-Shoulders bottom, it is now clear that a parallel Head-and-Shoulders top is completing in gold as shown on the chart. This chart projects a breakdown beneath the nearby support level to be followed by a drop targeting the quite strong support in the $1200 - $1215 area.

Gold’s latest COT chart still looks more bearish than bullish, with a lot of room for improvement, such as would be occasioned by a drop to the $1200 - $1215 area…
Click on chart to popup a larger clearer version.
On gold’s 8-year chart it continues to look like it is in the late stages of a giant Head-and-Shoulders bottom pattern. The buildup in volume over the past 20 months certainly looks positive, especially over the past several months, all the more so because it has driven volume indicators higher, notably the Accum-Distrib line, which is not far off making new highs – exceeding its level at the 2011 peak. Once gold breaks above the resistance level approaching $1400 it will be on its way, although it will then have to contend with another important band of resistance in the $1510 - $1560 range. A near-term retreat by gold to the $1200 - $1215 area in the face of a dollar rally will not damage this long-term technical picture.

The Market Vectors Gold Miners, GDX, which functions as a gold stocks index, is marking out a giant Head-and-Shoulders bottom that roughly parallels the one completing in gold itself. A near-term decline to $20 - $21 in GDX will be viewed as presenting another important buying opportunity for the sector. The volume pattern during the build out of this base pattern is very bullish, with big volume on the rise out of the low (Head) of the pattern, tailing off steadily as the Right Shoulder has formed.

The latest 6-month chart for GDX shows an upsloping Head-and-Shoulders top completing which parallels the one completing in gold itself. This pattern targets strong support in the $20 - $21 area following the expected breakdown…

Over the past several weeks the dollar has behaved exactly as predicted in recent updates, as it has dropped back to complete the Right Shoulder of its Head-and-Shoulders bottom, and last week started to advance towards the upper boundary or “neckline” of the pattern in readiness for the upside breakout and advance. This Head-and-Shoulder bottom targets the 97 area as shown, near to the falling 200-day moving average…

Our prediction made many weeks ago that the dollar would rally off the lower boundary of its big bullhorn pattern shown on the 4-year chart below to break out above its restraining Dome has proven to be correct, and a projection has been drawn on this chart showing roughly what is expected to happen. As we saw above on the 8-month chart, the base pattern now approaching completion targets the 97 area approx. This is the “swansong rally” – the dollar’s last rally before it “hands in its dinner pail”, and should present a wonderful last opportunity to accumulate the better gold and silver stocks, before the dollar does an about face, and breaks down from the large Broadening Top pattern into a severe decline.

The Hedgers chart has been warning for weeks that the dollar will reverse and rally, as has been pointed out repeatedly. The latest chart shows that the rally is still ahead of us – which is congruent with the dollar having completed a valid Head-and-Shoulders bottom.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com
Finally, it is a matter of conjecture what will drive a dollar rally over the medium-term, but one possibility is an escalation of the Catalonia crisis, with the Madrid government attempting fascist style repression of the Catalonian’s drive for independence leading to conflict. Both Madrid and the European Union have an interest in crushing the Catalonians, since both profit from centralization of power. Thus to whatever extent the Catalonians are successful, it will inspire other would be breakaway regions across Europe, further undermining the European Union and thus putting pressure on the euro, hence a dollar index rally, as the dollar index is made up approximately 57% of the euro.

End of update.

U.S. Dollar Bounce Coinciding With Yield Curve Bottom?

Great Rotation Ahead: Inflationary Or Deflationary
Update: This article ultimately leans toward the view that the reasons for a rising curve will be inflationary. But I woke up in the middle of the night and my thoughts drifted to the components of the article (yeah, that’s pretty sad, I know), and with further consideration I am leaning toward neutral or even a bit into the deflationary camp. The reasons will be the stuff of another article.
Think back to the blaring headlines about the Great Promotion  Rotation in the financial media in 2013. Perhaps the media circus started in January of that year when The Economist asked the question of whether the rise in bond yields signaled a “flight” out bonds and into equities. It was probably an earnest and right minded question asked by The Economist, but you know our friends in the greater financial media; get a good story and flog the hell out of it to harvest eyeballs. Reality be damned, man, it’s the eyeballs that matter!
As the mini hysteria grew that year we called it a “Great Promotion” (by the financial media) in expectation that the Continuum’s limiter (the red monthly EMA 100 on the 30 year bond yield chart below) would hold once again, just as it had during Bill Gross’s inflation hysterics that signaled a top in inflationary angst in early 2011. By the end of 2013, our ears were ringing with the media buzz and drone about the “Great Rotation”.
Then? Poof! The ‘limiter’ limited, yields went back down, stocks got rocky over the following 2 years and Goldilocks eventually took over once again amid the Brexit/NIRP buying opportunity that developed in mid-2016 (Ref. AMAT Chirps, B2B Ramps, Yellen Hawks and Gold’s Fundamentals Erode from May 30, 2016).
30 year yield
So that was the sordid history of the original “Great Rotation” media promo. But the actionable ‘career maker’ rotation that may lay ahead is one focused on a would-be bottoming and steepening of the yield curve as opposed to the flattening that has been in place ever since the Fed’s maniacal and brilliant Operation Twist forced it to decline impulsively in 2011.
To review, Op/Twist manipulated the curve by buying up long-term bonds and selling short-term bonds, thus enforcing by decree the official view that inflation must be “sanitized” (Fed’s word, not mine) out of the picture. Here’s a chart with a message from John Lee Hooker for equity and asset market bears: “Boom boom boom boom, I’m gonna shoot you right down”
yield curve
That was 6 years ago and everyone is on that trade in the form ‘long equities’, ‘short volatility’, ‘long junk bonds’ and a host of other risk ‘on’ vehicles. What’s best about it from a contrary view is that it is firming up confidence in the average market participant that an all-powerful Fed will never let the market drop. Well, we’ve heard stories like that before (anyone recall the famous “Greenspan put” that made the rounds during Boom #1?).
We’ve talked at length about the implications of a bottom and trend reversal in the curve but importantly, also about how a trend is a trend until it changes. Simple, I know. But all too often people let their intellect overrule their patience. The trend in the yield curve is down (flattening). That is Goldilocks’ ideal situation with the Fed seen as in control and the stock market in full compliance.
Yet for a well laid out case for a yield curve “steepener” play, see this post by Kevin Muir of the Macro Tourist
Sorry Kevin, the best I can do with your question is draw the trend line above from boom tops (yield curve bottoms) 1 & 2 and project it will come at or above that line (it need not invert). The other hunch I have is that the end of the US dollar bounce (I’ve been nursing the USD rally view since mid-summer at least) may coincide with the timing of a yield curve bottom.
Here’s Uncle Buck in a bottoming pattern, looking for the SMA 200 (currently 97.12 and declining). I don’t really have a fundamental answer as to why this may coincide with a yield curve bottom other than they would both be important signals of macro changes. For instance, if the dollar were to fail at around 97 as expected, a long-term bear phase would go well with an inflationary macro scenario. If it breaks through and bulls, it would go well with a deflationary macro scenario.
usd
So what would be the preferred methods of playing such a dramatic change in yield dynamics? Well again, first you’d have to determine if the curve steepening is inflationary or deflationary. That should be pretty easy because if the move is inflationary you’d see nominal interest rates rising (with the key being the red ‘limiter’ on the first chart above (30yr yield) as the bond market adjusts for years of unmitigated inflationary monetary policy (that has benefited equities on this cycle). If it is deflationary, the play would be similar to 2008’s unwinding of the Greenspan era excesses.
There is a reason you hear Fed officials talk so much about getting inflation up to 2% and that is because the system they oversee literally runs on inflation. Deflation takes apart the game, plain and simple. Why again did Bernanke’s Fed go so balls out with the monetary fire hoses in 2008 and then keep the pedal to the inflationary metal for years after? I think you know why.
But the Fed wants just the right amount of inflation, just as Goldilocks likes her porridge “just right”. A coming rise in the yield curve (timing notwithstanding) will work against their “just right” goals. It will imply either inflation getting out of the barn or deflation making a return to try to finish what it started in 2007/2008. Like Kevin Muir linked above, I think the move will be inflationary. In that case there will literally be a world full of assets to invest in, but also many to avoid. In the case of a deflationary episode, it gets trickier because liquidity would drain so fast it would make your head spin. But after the initial drainage, the gold sector would likely bottom first and lead the next macro cycle (ref. 2001 and dramatically, Q4 2008).
So the bottom line is, a yield curve bottom and a rotation to a steepening environment is out there somewhere on the horizon. It will either be inflationary or deflationary. But whatever it is, it will not favor many of the best performing items of the post 2011, post-Op/Twist Goldilocks era. I am nimbly long the current asset market party (with a boat load of USD bull fund UUP and cash) and with the mature trend. But for the few looking ahead to trade dynamic changes in the yield curve and possibly even nominal long-term bond yields (again, see 1st chart above) the real party has not yet begun.
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Sunday, October 22, 2017

Reinventing Altruism And Peer To Peer Lending

Cryptocurrency Loans Are Reinventing Credit

Do you want to help people in Puerto Rico rebuild yet feel skeptical about indirect donations? In a few months, you could use cryptocurrency to offer a peer-to-peer loan for a stranger in need. Thanks to the security of blockchain systems, trust issues are no longer a nonstarter for P2P lending between strangers.

Ascending Triangle And Opportunity In Metals And Mining (XME)

I've been watching Metals And Mining ETF XME and a nice ascending triangle is being put in which has some bullish implications. I noticed an initial buy single was made in the second week of October when the stochastic indicator dipped below 20 and then again a week later when a momentum indicator turned positive. You could play this now depending on your appetite for risk or after it breaks support at $33.20

Landslide For Abe

Abe eyes big win as Japan votes under N. Korea threats

Japanese voters braved torrential rain and driving winds for a snap election Sunday expected to hand Prime Minister Shinzo Abe a fresh mandate for his hawkish North Korea policy and efforts to reinvigorate the world's number-three economy.

A Very Important First For China's Industry

First China-made regional jet delivered to Chengdu Airlines

China's first homegrown regional jetliner ARJ21-700 was delivered on Thursday after its mass production was certified in July, an indication that the jetliner manufacturing industry in China is moving steadily towards the mass production stage.

Let Me Guess, They're Going To Blame Foreigners

FRANCE - Global appetite for croissants leaves French short of butter

French pastries, like croissants and pains au chocolat, along with their core ingredient – butter - have taken the world by storm to the point that France is now experiencing a shortage of the dairy product, leaving bakers and consumers worried.

Saturday, October 21, 2017

Wind Energy Capture In Remote Locations Now A Possibility

First floating wind farm starts operation in Scotland

The world's first floating wind farm started operations off the coast of Scotland on Wednesday, opening up the possibility of turbines at sea depths that would avoid spoiling views from the shore. The 30MW Hywind farm, operated by Norwegian oil group Statoil in partnership with Abu Dhabi's renewable energy company Masdar, is located 25 kilometres (16 miles) off the Aberdeenshire coast.

Friday, October 20, 2017

Tax Cuts: Needing To Succeed Where Others Haven't

Why tax cuts won't generate as much economic growth as Trump hopes

WASHINGTON — President Donald Trump and congressional Republicans talk about their tax overhaul plan as if it's a sure-fire bet for the economy. Far from it. There's little historical evidence that tax cuts actually pay off in boosting economic growth long-term.

Chinese Trains Direct To Africa And Europe

China's railway investment to exceed $121b yuan in 2017

This year's fixed investment in the railway sector might exceed 800 billion yuan ($121.04 billion), a target set by China Railway at the beginning of 2017, Economic Information Daily reported Wednesday, citing unnamed industry source.

And This On Top Of Tax Cuts

Rand Paul's attempt to cut defense spending defeated

The Senate on Thursday soundly rejected Sen. Rand Paul's attempt to cut $43 billion out of the 2018 budget plan, after he had said lawmakers were simply using a technicality to get around spending caps and plus up defense funding.

China To Europe In A Single Train Ride

700 China-Europe freight trains expected to depart Xinjiang in 2017

URUMQI - A total of 700 China-Europe freight trains are expected to depart from Urumqi, Xinjiang Uygur autonomous region, by the end of 2017, the regional logistic center said Thursday. Over 500 China-Europe freight trains have already headed westwards from the city this year, far more than the total number last year.

I'm Not Suprised They Got The Contract, They Were Kinda Behind The Second Invasion Of Iraq So They Should Know Their Way Around

Iraq seeks BP help in developing recovered Kirkuk oil fields

Iraqi Oil Minister Jabbar al-Luaybi called on British energy giant BP on Wednesday to help develop fields in the northern province of Kirkuk recovered from Kurdish forces this week. Luaybi appealed to the firm, whose origins lie in the development of oil in then British-ruled Iraq nearly a century ago, to "quickly make plans to develop the Kirkuk oil fields".

I Have A Feeling It's Not Going To Work Out That Way Either

Slope Of Hope: As If Thursday Couldn't Get Any Lamer
As if Thursday couldn’t get any lamer……….
Last night, the ES and NQ both tumbled double digits (see yellow tint below) thanks to a brief case of the Hong Kong flu. It looked like it actually might be the first decent down day since President Benjamin Harris was in office. However, as federal law requires, this modest drop was totally destroyed (and then some) as highlighted by the green tint.
Now, on Thursday evening, the Senate passed a $4 trillion budget resolution for 2018 (by a single vote), which has aroused algos everywhere into believing that massive tax reform is going to be a reality (cough cough health care repeal failure cough cough) and that these cuts will make equities much more valuable than their already sky-high prices. The result above (magenta tint) was instantaneous.
The longer-term picture on the ES remains the same, as the daily chart below shows: a resolute march higher, day after day, with recent weeks having virtually no volatility whatever.
Of course, if there was any symmetry in this market, these overnight gains for the bulls would be laid waste by Friday’s close, just as Thursday’s drop was eliminated by the terminus of the 10/19 day session. However, something tells me that it isn’t going to work out quite that way.

Wednesday, October 18, 2017

Undermining Trump In The Most Environmentally Friendly Way Possible

Norway solar firm signs 2.5 bn-euro deal with Iran

Just days after US President Donald Trump called for further isolation of Iran, a Norwegian solar company signed a deal to invest 2.5 billion euros in the country over the next five years. "Norway is fully committed to the JCPOA (nuclear deal) and this is proof that we have taken the opening very seriously, and we will see more investment very soon," Norwegian ambassador Lars Nordrum told AFP.

For A Country Addicted To Growth Rates Above 7%, This Might Be A Hard Sell

'Cutting debt does not mean cutting growth'

Tuo Zhen, spokesman for the 19th National Congress of the Communist Party of China, said on Tuesday that reducing debt and stabilizing economic growth are not contradictory policies. "In the long run, deleveraging will help remove hidden risks that will affect steady and healthy economic development and strengthen medium- and long-term economic resilience," Tuo said.

China Leading Way For Autonomous Vehicles

Baidu to hit the road with self-driving bus

Baidu chief executive Robin Li on Tuesday said the Chinese internet giant will have a self-driving bus on the road soon as it races for a lead in autonomous vehicles. Baidu is collaborating with an array of companies on autonomous cars, and is working with a large bus maker in China to have a self-driving bus running a route by next year, Li said in an on-stage interview late Tuesday at The Wall Street Journal D.Live conference in Laguna Beach, California.

Good Riddance, Because It's Not Like The U.S. Perpetuated This Standoff

Doubts Growing US Will Always Defend Asian Allies

In South Korea and Japan there is increasing support for the deployment of nuclear weapons to defend against the growing North Korean threat, and due to public concern that the U.S. may no longer be counted on to aid allies with extended nuclear deterrence.

Muscling In On The Worlds Largest Electrical Vehicle Market

Tesla modifies models for China

US carmaker will retrofit charging network, adapting to local standards BEIJING-Tesla Inc is modifying new cars delivered to China and retrofitting the charging network in the country to comply with domestic norms, a move that could boost its sales in the world's largest electric...

Tuesday, October 17, 2017

Contrarian Analysis Of The Gold Market, But It Looks Like The Gold Rally Will Have To Wait

Gold Market Update

By: Clive Maund

We’ve all had people come up to us and say “Do you want the good news first or the bad news?” I always opt for the bad news first, to get it out of way and end on a lighter note. The bad news is that the dollar looks set to stage a significant “swansong” rally in coming weeks, which will probably result in gold being beaten down again. The good news is that once that’s done its toast – and that’s when the big gold and silver bullmarket that longer-term charts are calling for will really get underway.

The last update called for the dollar to drop down to mark out the Right Shoulder of a Head-and-Shoulders bottom pattern, and for gold to break out of its rather steep intermediate downtrend and rally, and that is exactly what has since happened. On its latest 8-month chart, we can see how the dollar has backed off to the vicinity of its flattened out 50-day moving average and the vicinity of the Left Shoulder low of the base pattern, in order to mark out the Right Shoulder low. Three bullish developments to be noted that result from the dollar rising out of the Head of the pattern are the breakout from the downtrend, the break clear above the 50-day moving average, and the big improvement in momentum (MACD), which is swinging positive. If our interpretation that this is a genuine Head-and-Shoulders bottom is proven valid, the pattern targets the 97 area in coming weeks, probably by early November. Needless to say, this will not be good news for gold and silver prices.
Our prediction made many weeks ago that the dollar would rally off the lower boundary of its big bullhorn pattern shown on the 4-year chart below to break out above its restraining Dome has proven to be correct, and a projection has been drawn on this chart showing roughly what is expected to happen. As we saw above on the 8-month chart, the base pattern now approaching completion targets the 97 area approx. This is the “swansong rally” – the dollar’s last rally before it “hands in its dinner pail”, and should present a wonderful last opportunity to accumulate the better gold and silver stocks, before the dollar does an about face, and breaks down from the large Broadening Top pattern into a severe decline.
The Hedgers chart has been warning for weeks that the dollar will reverse and rally, as has been pointed out repeatedly. The latest chart shows the rally is still ahead of us – which is congruent with the dollar being at the Right Shoulder low of its Head-and-Shoulders bottom.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com
In light of the above it is logical to expect gold’s plucky little breakout from the steep downtrend channel shown on its 6-month chart below to abort, and if the dollar advances towards the 97 area on the index, we would expect gold to react back, probably to the $1200 - $1215 area.
Such a reaction back by gold accords with its latest COT chart, which still looks more bearish than bullish, since gold’s COT structure improved but little on its recent downtrend. There is still a lot of room for improvement on this chart – and that probably means lower gold prices dead ahead…
Click on chart to popup a larger clearer version.

On gold’s 8-year chart it continues to look like it is in the late stages of a giant Head-and-Shoulders bottom pattern. The buildup in volume over the past 20 months certainly looks positive, especially over the past several months, all the more so because it has driven volume indicators higher, notably the Accum-Distrib line, which is not far off making new highs – exceeding its level at the 2011 peak. Once gold breaks above the resistance level approaching $1400 it will be on its way, although it will then have to contend with another important band of resistance in the $1510 - $1560 range. A near-term retreat by gold to the $1200 - $1215 area in the face of a dollar rally will not damage this long-term technical picture.
The Market Vectors Gold Miners, GDX, which functions as a gold stocks index, is marking out a giant Head-and-Shoulders bottom that roughly parallels the one completing in gold itself. A near-term decline to $20 - $21 in GDX will be viewed as presenting another important buying opportunity for the sector. The volume pattern during the build out of this base pattern is very bullish, with big volume on the rise out of the low (Head) of the pattern, tailing off steadily as the Right Shoulder has formed.

A mistake commonly made by gold and silver bugs, especially those close to or involved in the mining industry is to become “wed” to the sector to the exclusion of most everything else. This habit has ruined a good many investors in the Precious Metals sector in recent years. Investing should be regarded as an “opportunity cost game”, where you seek always to maximize your returns within a given timeframe consistent with an acceptable level of risk. This is the philosophy on clivemaund.com which is why we made a detour into the marijuana sector last year ahead of the legalization votes, when it boomed, and why we have invested in a variety of different sectors and stocks this year, notably the Biotech and Medical sector. There is no need to wait around on the Precious Metals sector to start a major uptrend, when, apart from individual outstanding opportunities in the sector than can occur at any time, it is possible to go with whatever is performing in the here and now.
We have had a number of outstanding successes in recent months and weeks where we traded on the basis of some very clear and useful chart patterns and signals, and a number of our stocks have produced some classic examples of chart patterns involving different types of candlesticks and price and volume patterns, often in combination, in the recent past. There is one in particular that I would like to draw your attention to in CHART SCHOOL – Gravestone Doji and Parabolic Blowoff calls a top, where just on the one chart going back 4-months we see a dramatic confluence of different factors – candlesticks, parabolic slingshot, various oscillators and the volume pattern all calling a top RIGHT NOW for a particular stock, and this also provides examples of breakaway gaps and a Flag. We sold this stock on Friday. To take a look at its chart, all you have to do is click on the link above, and for a good measure a couple of other interesting chart examples that we traded are included in this article, which is intended to be educational.
Hope you like what you see…

End of update. 

Monday, October 16, 2017

My Stars!! (Monocle Pops Out)

Kobe Steel, Nissan scandals tarnish image of Japan Inc

Embarrassing scandals at Kobe Steel and Nissan have tarnished the reputation of Japan Inc for quality, as once-mighty industrial world-beaters battle fierce global competition and shrinking profit margins.

The U.S. And Ongoing Global De-Integration

US-world divide spills out at IMF-World Bank meetings

The growing split between the United States and the rest of the world spilled into the annual meetings of the International Monetary Fund and World Bank in Washington this week. The US administration showed a diminished view of the Bretton Woods institutions that shaped a US-led order after World War II, rejecting efforts to expand their activities, and defending its attack on free trade pacts as part of President Donald Trump's "America First" agenda.

Rounding Top Patterns, Peaking, And Low Volatility....Oh My!!

Sunday Stroll Through The Index Park
Based on what I saw during my visit last night, Disneyland’s newest ride is the Leap Over an Opioid Addict attraction just outside the park. They were all white males around thirty years old or so, sprawled out on the ground. At least it was more engaging than the boring Monsters Inc. ride inside the park itself.
But that’s not why we’re here. It’s a Sunday morning, and I’m out of posts (except for one waiting in the wings for the appropriate afternoon), so I’ll cobble one together. It isn’t easy, though. See, here’s what a normal market looks like:
Volatile. Opportunity-rich. A roller coaster of price discovery. The above chart is the ETF for the small caps, symbol IWM. Here’s the exact same market recently:
Ummm. I don’t think “boring” is strong enough a word.
Of course, about a month ago, it seemed things wouldn’t be boring anymore, what with the excitement around yet another war and possibly nuclear missiles flying around. And where was Ground Zero for all this potential glassing of the earth? South Korea! And how terrified is South Korea about such a catastrophe? See for yourself!
Looks awfully bullish to me, wouldn’t you say? The above is the Kospi 200 Index, and as it leaps from lifetime high to lifetime high, it sounds like the equity markets (around the world, actually) are declaring Kim Jung Un to be full of pudding and rib eye, but little else of note.
Sticking around that Asian neighborhood, however, it seems to me that Jakarta’s own equity market is looking awfully terminal vis a vis its triangle.
And, looking northward to Hong Kong, its broad equity market has already broken its long-term trendline. The importance of this trendline is affirmed by the creepily obedient price behavior beneath the now-broken trendline, as its role has switched from support to resistance.
OK, let’s fly thousands of miles westward to Europe. Check out the Amsterdam Index (thank you, SlopeCharts!) As with Jakarta, the pattern is well-formed and extremely high in the context of its long-term behavior.
OK, enough of these zany markets none of us trade. I’m far more interested in the MidCap 400, against which I have March 2018 puts. I would submit to you that the resisting trendline is red, having held for so long, is a formidable foe to further upside.

Looking closer, you can see there’s easily 100 points of downside even without breaking medium-range support, let alone actually getting hit with a true trend change.
It would seem poetic to me if, in the broadest of views, the markets adhered to the Fibonacci retracements that I’ve been watching. Admittedly, the S&P 500 has exceeded my 161.8% target, but not by much………three-tenths of a single percent right now. The Dow, on the other hand, hasn’t crossed its line yet, and observing the prior two bull market peaks, it would seem fitting, as I just suggested, so this third bubble (which is the “everything” bubble) to terminate at this newest and highest of horizontals.

The Communist Ideal That Still Persists In China, Self Sufficiency

China retains No 1 spot in renewable energy

China continues to be the world's most favorable market for renewable energy development and investment, according to a new study. The Renewable Energy Country Attractiveness Index, which is compiled twice a year by London-based financial services firm EY - formerly known as Ernst and Young - highlighted the large quantities of public and private funds pouring into renewable power projects in China, as well as several energy-efficiency policies.