Get A Haircut! (FXI,QQQ,DIA,USO,IYT)

Get A Haircut! (FXI,QQQ,DIA,USO,IYT)   Earlier this week, freewheeling Hugh L. O’Haynew over at our Wall Street Elite desk decided to push the toothless FAANG narrative.  He was keen on portraying them as no match for the traditionally more defensive sectors going forward.   Well, no sooner had the words spilled out of his Visconti fountain pen, than old Huey was once again proven King Solomon, wisest of all men. Our fellow Modern Bully got his timing wham-doggy perfect.  The market did a flip like a four egg omelet down at the Canary Restaurant on Cherry Street, splashing the butter and bacon fat this way and that, and scorching old Netflix by a greasy 6.5% on the day. There were signs over the weekend, of course (for those without crust on their eyelids – thick crusts like you find on the toast down at the Canary), that a selloff was in the making.  But Huey already laid it out here.   What remains for us to determine is whether the selling will continue or was just a one-off, bad hair day for the big tech NASDAQ honchos.   And the answer is…   A look at the chart of the…

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Behind the Scenes and Under the Radar (SO,NFLX,FXI)

Behind the Scenes and Under the Radar (SO,NFLX,FXI)   It’s a political world, friends.  Has been for a while.   Everything that’s done or said or written these days, it seems, is employed to further an agenda.   Truth be damned, is what it’s all about; let ‘the story’ carry the day, whatever it may be.   If it makes me look good, so be it.   If it makes him look bad, so be it.   If it makes my team more popular, so be it.   If it hides my wrongdoing, so be it.   All that matters is that it’s done artfully and remains undiscovered.   Because truth is relative.   And if I win, it means my truth is the real Truth. It has become so difficult today to discern between what’s real, what’s psy-ops, who’s the good guy and who’s the criminal behind the lines we’re being fed.  Even what’s at stake and who’s to profit from the stories we’re told is unclear.   And we’re not just talking the world of geopolitics, friends.  The markets are equally drenched with stories that don’t hold water. Take, for example, the following –   As we come…

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I’m Having An Attack! (AAPL,SPY,USO,FXI)

I’m Having An Attack! (AAPL,SPY,USO,FXI) Isn’t it always the case…? The news is horrible. The threats are palpable. The rhetoric and bombast are as hot as ever. Suspicion and anger are ubiquitous; finger-pointing; mud-slinging; muck-raking; belly-aching… For gawd’s sake, my meniscus has been twice herniated, my pylor valve is stuck, and I just burned the honey-garlic spaniel! The kids are gonna kill me… The Decibel Level Climbs When the news is not reporting the Mueller/Trump duel, it’s all about rising oil, with 1) Iran and the potential loss of three and a half million barrels of daily oil supply, or 2) Yemen trying to take out Saudi oil infrastructure, or 3) Israel gearing up for a takedown of Iran in Syria and Lebanon, or 4) Venezuela, whose oil production is veering toward zero, as funds to pay for the extraction of that country’s vast reserves go squandered or missing or who knows where. And now Warren! This week it was reported that Señor Buffett had his first losing quarter since 2009, reporting over a billion bucks lost for Q1. The damage is everywhere. And here’s what’s worse. From Wall Street we’re seeing growing concerns that the breadth of the market…

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Y’wanna Buy the PetroYuan!? (FXI,USO,MSFT,FB,XLK)

Y’wanna Buy the PetroYuan!? (FXI,USO,MSFT,FB,XLK) If we’re on the cusp of a new bull market in commodities, as we here at The Modern Bull believe, then the winners and losers will be clear cut and big. But when it comes to measuring the impact of rising energy, metals and foodstuffs prices, it’s very hard to determine how China will be affected. The reasons for this are manifold, and not least because that country is among the least transparent when it comes to all things economic – and, of course, because free markets don’t operate there as they do in many other parts of the developed world. China is among the world’s largest producers of farm produce – much of which ends up supplying domestic demand, though a great deal, too, is exported. At the same time, it’s the globe’s biggest importer of oil and gas, as well as many metals. So what’s the net effect on a country like China when, say, oil prices jack up sharply, as they have in the past few months? To put it in its most general terms, China’s markets and wealth are very closely correlated to global commodity prices, something that cannot be said…

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China Needs to Chill (FXI,DIA,QQQ,SPY)

China Needs to Chill (FXI,DIA,QQQ,SPY)   We’ve put ‘war’ on the backburner for a stretch of time now – what with the winter olympics and the market falling out of bed and shootings in Florida. But it may be time to return to the military theme now, as, apparently, the powers-that-be have not lost sight of looming martial conflicts for even a minute. Potentially the biggest news comes from the Chinese-North Korean border, where the world’s largest military has just deployed an additional 300,000 soldiers in preparation for a potential war.   The Chinese themselves have little interest in warring with the North Koreans, but every reason to want to control the territory after a potential conflict with the United States.   It’s noteworthy to point out that this has happened before. During the actual fighting between the North and South in the early 50’s, the Chinese deployed some two million soldiers along the same border to deal with the perceived American threat.   Times change, of course, and the Chinese military is far more advanced than it was 70 years ago, but it appears attitudes have remained steadfastly entrenched.   A Sprint to the Mountains   Many believe the…

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If People Won’t Die, Will Bulls…? (KOL,FXI)

If People Won’t Die, Will Bulls…? (KOL,FXI)   We were intrigued by a recent NBC News piece that pushed the notion that eternal life was actually available in the here and now world as we know it.  Or, rather, that it soon will be.  You can read the article yourself here, but the kernel of the piece is that technologies currently under development, including those that involve artificial intelligence and prosthetic bodies, will somehow, eventually, be able to absorb our finite human selves and allow us to be perpetuated in perpetuity!   There’s even one fellow named Kurzweil who claims the process, which he terms ‘singularity’, is already underway and should be near completion by 2029.   Whew!   Will that make us better stock pickers, we ask?  Will it allow us the better to pull a dust speck out of our eye, or scratch an arse-itch?   Those are the kinds of probing questions we’re asking here at Normandy Research. OUCH!  Bruno!  You’re so rough!   Well, eternal life in a chipped-out body with synthetic skin is not exactly our idea of heaven.  We’re more inclined toward the old fashioned world of flesh and blood, even if it does…

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When the Bystander Wins (FXI,GWW,FCX,BUD)

When the Bystander Wins (FXI,GWW,FCX,BUD)   A brief word to our friends and fellow citizens caught in the belly of the whale down in Houston – stay brave, dear brothers, and be good to each other.  You’re a tough bunch, and you’ll pull through.  We’re thinking and praying for you.   And speaking of a hard rain falling, how about Pretty Boy Nukey, North Korea’s dictator du jour, who looks to be begging for a whooping?   Now, even we understand the need to flex some muscle once in a while, and to assert one’s independence, but this looks a little exaggerated.  Sending missiles over the Japanese mainland is either a rookie mistake, or an outright request for a confrontation.   In any event, we’ll have more to say on the matter in a moment – including a trade founded on the chubby one’s latest adventures – but first a little business.   Two for the Record Books   We’ve got three trades to address today, two of which brought worthy profits.   We’ll kick off with our July 20th initiative, from a letter called Breaking Bulletin Bids Buyers Beware!, in which we recommended you buy the GWW December 15th…

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Sell the Market (CBOE,FXI)

Sell the Market (CBOE,FXI)   Here at Normandy, one of the means we employ to determine the health of the market is to examine the shares of the world’s major stock exchanges.   The thinking is straightforward.   When the markets themselves are profitable and their shares are rising, it’s a sign of good things to come.  When they start to spin their wheels or outright decline, we take it as an ominous signal that weakness likely lies ahead for the major averages, as well.   So how do things look today, with the Dow and NASDAQ and various other world indices at all-time highs? Let’s have a look at the equities behind several of the world’s largest stock exchanges to gain a better understanding of the state of our market.   We’ll start with the largest of them all, the Intercontinental Exchange Inc. (NYSE:ICE), a company with a market cap of nearly $40 billion that owns the New York Stock Exchange as well as another eight futures and derivatives exchanges worldwide.   The stock carries a nominal 1.20% dividend yield and trades with a P/E of 25.64.   Here’s a look at her daily chart for the last three…

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From Rio to Shanghai! (FXI,NOC,AAPL?)

From Rio to Shanghai! (FXI,NOC,AAPL?)   It’s always surprising to us just how much dissonance can exist between the news on a stock or sector, on the one hand, and the actual price moves for the security, on the other.   It can be outrageous.   So, for example, when you see the financial press go to town on Brazil or Twitter or the auto industry, it behooves you as a clever investor to take a look under the hood, kick the tires and offer a good long gaze at the nearest Brazilian Twitters you can find.   For the results are bound to surprise. We bring this to your attention because the current sound and fury surrounding the financial picture in China is one of awesome dread.  The Chinese banking system, you’ll read, is weak in the face of both credit and asset bubbles; the recent investment downgrade by Moody’s will gut the desire for Chinese securities; the rejigging of the currency peg – a move that took everyone by surprise – should scare the beJesuits out of you; the commodities glut… in fact, nearly every reason to avoid, flee, short or outright assassinate your Shanghai investments, is now…

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RETAIL GYP! (LOW,JCP,FXI)

Some worrying statistics just crossed our desk, which may or may not be fateful for the rally, but that we feel duty bound to share with you either way.   ‘May or may not’?   That’s right.  Remember, we’re now dealing with a market that has come unhinged, for lack of a better term.  Unhinged it is from most of the fundamental markers that Wall Street employs, as well as the majority of technical tools that nearly all traders have become accustomed to.   And so, in the end, there may be nothing to what follows.  The indexes now appear to have a mind of their own, and are following their own, inscrutable logic, and will likely continue to do so, just as we said they would as the final blowoff top begins. In the coming months, the zigs and zags will come at a steeper, more tempestuous pace and will careen and dive with a quickness heretofore unknown to this generation of investors.  And it will all transpire because waves of cash will enter and exit the market FOR NO APPARENT REASON!  That is, reasons will be offered, but they won’t be predicated on the traditional indications we’ve grown…

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