Monster Chiller Horror Market! (QQQ,DIA,USO,IYT,GLD,SLV)

Monster Chiller Horror Market! (QQQ,DIA,USO,IYT,GLD,SLV)   There’s a point in every horror movie in which the terror and gore can get no worse.  And then, as if the gods had collectively reached into their cruel joke handbag, it manages to do just that.   It gets much worse.   The freight train has just leveled the town, the bodies are strewn everywhere, widows and orphans and crying babies, fires burning, carnage, mayhem, bubonic sores and pus galore … and whaddaya know, that neo-Viking motorcycle gang from Peoria arrives, thirsting for a good mead-induced blood-letting and plump, diabetic children to sacrifice to Odin. It’s precisely at that point that the fright turns almost comic.  Sure, there are those who get up and leave because they can’t handle what they know is going to be barbarism for the most barbaric.  But for others, it’s hard to contain; the giggle is on, and it’s gathering strength, because the whole affair has been transformed into some sort of ‘surreal state of cognition’ – a dreamlike situation where you’re watching the horror, still somewhat involved, but you know it’s a dream.   Welcome to the Stock Market!   The current market set-up bears a striking…

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Long Wash Cycle (TLT,SLV,XLB,XLK)

Long Wash Cycle (TLT,SLV,XLB,XLK) Intermarket analysis is a helpful tool for the technical trader attempting to anticipate the next big move in the investment universe. What is it, exactly? Well, over time, certain cycles are evidenced in the movement of stocks, bonds, commodities and the dollar, with associated relationships also seen between Emerging Market debt and equity, as well as in the play between large and small cap stocks. In general, however, the main body of evidence points to 1) rising commodities (and a falling dollar) preceding 2) a turn lower in the bond market, followed by 3) a retreat in stocks. That is, when inflation is driving the cost of raw materials higher, interest rates are eventually forced upward, pushing investors out of their fixed income holdings and ultimately equities. It should be noted that the process is anything but clean, meaning it takes place over the long term, and is accompanied by rolls and rises in each asset class, such that it can best be seen only with a wide angle lens and often only after a significant time span has elapsed. Attempting to time one’s investment shift decisively out of one asset class and into another with…

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Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)

Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)   The local authorities in my city have just notified me that my newborn son’s name is  not acceptable to them, and that I’m going to have to change it.   If ever there were a case of government overreach, this is it.   They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.   If, of course, the judge agrees. In this day and I age, there’s no shortage of asininity in the world.  I can be a Satanist.  I can have a sex reassignment.  I can purchase and cohabit with a robot.  But I can’t call my kid what I want to call him?!   What the hell is going on!?   People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.   That’s right, Dander.   My wife’s great uncle from Denmark, who passed away nearly…

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High Yield Meat (HYG,SLV)

High Yield Meat (HYG,SLV)   Some assumptions are safer to make than others.   Until recently, for example, it was assumed that the financial markets would automatically be backstopped by the Federal Reserve and Treasury at the first sign of distress.  After all, we went through several rounds of Quantitative Easing, state-initiated bond purchases, government directed corporate bailouts and more over the last seven years, so why shouldn’t the process continue?   Why, indeed?   Well, it seems some at the Fed and in Washington now believe that the stimulus has to end.  With interest rates projected to bump higher several times in 2018 and the gradual reduction of the Fed’s balance sheet already commenced, all indications are militating against the type of intervention we’ve become accustomed to since the bull market began.   And the result is a market that’s showing increasing signs of worry that we’ve entered risky waters.   We, too, have begun to ask of late if the financial world has grown a wee too complacent, or if, in fact, the current worry will only serve as a distracting backdrop for further screaming gains into the New Year. And it led us to the following.  …

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Bitcoin and the Irony of “Real” Money (SLV)

Bitcoin and the Irony of “Real” Money (SLV)   One of the most fascinating aspects of the Bitcoin phenomenon is its ability to deflect investor attention from weightier matters and create such a frothy interest in something that, we feel, will ultimately lead to oblivion.   That’s a fully packed sentence, we know.  So let’s offer a little exegesis.   First, why call Bitcoin a ‘phenomenon’?  After all, its promoters and staunchest believers tell us it’s real money, not the phony fiat fraudulence we’ve grown accustomed to.   And because there’s a limit to how much of it can be made and the speed at which it can be produced, there are effective controls in place with cryptocurrencies that would never permit the kind of free-for-all money printing excesses of central banks that we’ve witnessed over the last two decades.   And we say, fine.  On that count, hurray for Bitcoin. But as we’ll explain in a moment, it’s not enough.   We also said ‘deflect attention’ and ‘create frothy interest’ – as if this were some kind of tulip craze.  But from exactly what is it deflecting attention, and why can’t it last?   The stuff is already being used,…

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The Wages of SIN! (BF.B,QQQ,SLV)

The Wages of SIN! (BF.B,QQQ,SLV)   There’s not enough time in the day to catalog all the possible sources of information, all the data series and analytics that Wall Street produces on the broad market and specific asset classes and stocks – let alone read them.   One has to focus on the macro if one wants to be a generalist.  Or specialize, if one prefers to be a niche player.   But here at Normandy, we attempt to do both.  We have our advisory group that meets once a month to discuss longer term trends and possible near term surprises.  And we have our in-house analysts and interns who crunch the numbers and scan the full array of charts on a daily basis.  Between the two groups, we admit to setting our sights high, but it’s all worthwhile when the numbers come back positive, and we can treat ourselves to a friendly game of backgammon and a chilly little bourbon at day’s end. Speaking of a chilly little bourbon, it turns out that the distillers are right now due for a pop – as we read the tea leaves.   An Invitation to Sin   Truth is, sin stocks…

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New Leg Afoot (HYG,DIA,QQQ,SLV)

New Leg Afoot (HYG,DIA,QQQ,SLV)   When you start dreaming that you’re a close associate and friend of former presidents and various other statesmen it’s very likely something’s wrong.   Now, that’s not to say that all who mucky-muck about with the bigshots have mental problems; certainly not.  But we ham and eggers have to keep our feet on the ground.   After all, if we’ve never even met or seen these fellers in person, what could there possibly be to dream about?   It was with that in mind that we assured the Mrs. our next visit to Dr. Ludmilla would settle the matter; we’d tell her the whole story, purge ourselves of our nonsense and come away cleansed. Oh dear, Doctor, yes!  Yes, yes!  Flesh it.  Fleshitgrasp.   Ahem.   The point of the matter is that a fellow should never get too big for his britches.  He should know his place, more or less, if he wants to have a good, safe and meaningful life.  After all, the search for fame and glory nearly always ends – unfortunately – in either death or jail.   That’s what Dr. Ludmilla was trying to explain to me when I finished…

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Gold is History (GLD,SLV)

Gold is History (GLD,SLV)   Despite the latest dipsy-doodle in the precious metals market, with silver diving almost fifteen percent in under a month, the outlook for the money metals still looks reasonably good.   We’ll get to the proof and the charts in just a moment, but first a little history.   Silver topped out back in the spring of 2011, losing three quarters of its value in a grinding, torturous bear market that spanned a full five years.   Gold, on the other hand, began its bear later that year, plateauing in September of 2011 and bottoming alongside her cheapskate sister as the bells of New Year’s, 2016 were still pealing.   The whole rollup took some two years to play out – as the chart below shows – and is still proceeding apace (and very likely too slowly for the bulls).   Have a gander – The above chart spans the period from silver’s high (close to $50 an ounce) through until today.   And as you can see, the picture is brightening.   We have every reason to expect that the fully formed and most sensual rounded bottom (seen above, in red) marks the end of…

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Precious Inversus Correlatus (SLV,QQQ)

Precious Inversus Correlatus (SLV,QQQ)   There’s no easy way to speak about what’s coming down the pipe.   There’s going to be a great deal of difficulty headed our way in both the financial and social realms shortly, and there’s going to be a good deal of suffering, too.  It’s our firm belief, however, that there are immediate, practical steps you can take today to prepare yourself for that eventuality and to insulate yourself – to some extent – from the slings and arrows that this way cometh. When we talk about ‘close’, we mean inside a decade.   When we talk about ‘financial distress’, we mean a banking and currency crisis that will more than likely change the way people transact business for many years to come.   When we talk about ‘social’ fissures, we mean the kind that will plague cities, disrupt small towns and sweep unhappily through rural areas.   Civil unrest is difficult to describe.  It’s a phenomenon that takes on the character of the locality it afflicts, sometimes along socio-economic lines, sometimes racial, yet always tied to some sort of ideology.   In short, there will be an upheaval as the excesses of the current…

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Financial Drone Strike! (NOC,DBC,JCP,LOW,SLV,UUP)

There’s been a great deal of press lately regarding a handful of tech companies and the outsized role they’ve played in goosing the market averages.   And, indeed, it’s the case that Amazon, Alphabet (Google), Microsoft, Facebook and Apple have all been climbing recently, and contributed in great measure to the success of the NASDAQ, not to mention the S&P 500 in the last fortnight.   But a look at breadth figures for the rest of the big caps shows that the big five are not alone; nearly all the index components have been pulling their weight. The percentage of S&P stocks trading above their 50 day moving averages, a rudimentary indicator of bullishness, climbed from 40% to nearly 60% in the last two weeks, as the market bumped up a solid 3%.   That’s as clear a sign as any that the market is not a mere five cylinder engine.  One hundred and sixty big-name, big-cap stocks also turned sharply higher in that period.   Negativity in the Noise   Be that as it may, the biggest five U.S. stocks have been a great bet a) since New Year’s, b) since the election, and c) going back a full…

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