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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.
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Friday, September 10, 2021, 8:42 am ET
Just as a reminder, September is one of the worst months for holding stocks.
As a 2x4 to the head kind of reminder, US stocks got whacked on Thursday, with the S&P 500 and the Dow Industrials leading the way with losses of nearly one half of one percent.
Outside the purview of most investors, the Dow Jones Transportation Average fell by more than one percent, a particularly troublesome development for adherents of Dow Theory.
Here's why. In June, the Transportation Average failed to make another new all-time high. Instead, it proceeded to notch lower highs and lower lows into and through July, signaling a primary trend reversal from bullish to bearish. The signal was not confirmed by the Dow Industrials. Instead, the 30 blue chips meandered through the summer, only to make a fresh all-time high mid-August.
However, the Transportation Average did not confirm that. It has traded sideways from July through to the present, and yesterday marked four straight losing sessions for both indices, the Transports a mere 106 points away from a correction at 14442.54. The Transportation Average would enter correction below 14,336.51, so, it's almost there. Regardless of whether it breaks higher or lower, the signal of a trend reversal from June remains. So too does the unconfirmed new top signal from the Industrial Average, though that is not a primary trend mover.
Whichever of these signals are confirmed by the other average - either the Dow reversing from bullish to bearish or the Trannys making a new all-time high - will be in charge of the future direction. It's pretty easy to imagine the trend breaking to the downside on the Dow. It's been weaker against the S&P and NASDAQ for weeks.
The transports making a new high would be a lark because four major airlines - Delta, United, JetBlue and Southwest - account for 20% of the entire 20 stock components.
Market action on Thursday was more of what been on the table so far in September. The Dow and S&P registered their fourth straight day of declines and have set themselves up for a losing week, although Fridays in the recent run-up have been rather kind to stock holders. Generally, they're positive, and often manage to turn a losing week into a winning one.
To post on the plus side for the week, the Dow would need a rally on Friday of 490 points. The S&P would need to gain 42 points. The NASDAQ would have to put on 116 points, while the NYSE Composite would need a +247 day.
With less to an hour to go before the opening bell, US stock futures are up impressively, though that's only going to indicate where stocks should open, not where they close. Going long at the open may the the most wrong-footed move of the week, as markets that have lost momentum many times are up sharply at the open, only to gradually lose it all during the session and drop even more into the close. Being Friday, direction is a 50:50 proposition.
We'll be back Sunday for the WEEKEND WRAP.
At the Close, Thursday, September 9, 2021:
Thursday, September 9, 2021, 8:12 am ET
As usual, it could have been worse. Actually, it was. And, it's going to get even worse than Wednesday's slip into the red.
Early in the session, the Dow was down 162 points. The NASDAQ was off by 168, the S&P lower by 26. From the closing numbers, it's obvious that there were dip buyers, though these were not the ordinary plunge speculators.
We've seen these 10:30-11:00 am ET interventions before. This was nothing new. Stocks are wildly overvalued, the entire planet is at risk from something other than a virus but stocks have to keep going up, or, in this case and many others, just not go down too quickly.
Nimble investors have already been moving money since June. They saw the delta variant narrative a mile away, and now, here comes the Mu Flu. It's like clockwork how the Fauci-led progenitors of death and destruction will advance any scare tactic at their disposal, at exactly the right moment. Delta is waning. Mu Flu it shall be. According to the official prognosis, by November we'll all be dead. Understaffed hospitals will be overflowing with sick people. It will all be blamed on those stubborn Trump voters who refuse to get vaccinated.
It's all rubbish. From the cases, to the hospitalizations, to the deaths, to the number and percentage of people vaccinated, the numbers are all fake, just like the news presenters. Who does the counting? The hospitals, the CDC? It might as well be the BLS, because there's no doubt the figures thrown around are estimates, extrapolations, exaggerations, calculations, seasonally-adjusted, massaged, fudged, mashed, worthless.
So, we're supposed to believe that while the entire global economy is suffering from lockdowns, shutdowns, slowdowns, strikes, supply-chain issues, worker shortages, mandates, and vaccination passport bingo, companies are more profitable than ever before.
The major US indices more than doubled since the mini-crash of February-March 2020. Did your 401k or retirement plan do the same? If not, you've become a designated bag-holder. When either a sudden collapse or a slow grind lower occurs, you will not be able to move funds in or out of your account without penalty, if you can access or move them at all.
All the numbers are fake. All the news is fake.
But don't worry. Get jabbed. The government - the very same one trying to control you and subjugate you into a non-thinking zombie - will save you. Yeah, sure.
It's become quite annoying.
Head's up on the ECB's policy meeting today at which they're supposed to announce some form of asset purchase tapering. It's likely to be nothing big, though markets may look like they're over-reacting wile in reality they're simply beginning to correct, as well they should.
At the Close, Wednesday, September 8, 2021:
Wednesday, September 8, 2021, 9:22 am ET
US markets were closed Monday for Labor Day, but re-opened with a bang-up session Tuesday, just as the nation of El Salvador (ironically, Spanish for "The Savior) officially launched Bitcoin as legal tender alongside the US dollar.
Stocks were not affected in any grand way by the institution of a new currency in a small, Central American country, though they might as well have been, as the US dollar gained ground against most other currencies. Much of the speculation on the dollar was tied not to El Salvador, but to a Thursday meeting of the ECB, at which time some central bank analysts predict a tapering of asset purchases may be announced. Insofar as the ECB cutting back on buying up any and all loose paper issuance, it's far from a certainty, more or less a point of debate and little more than a timing mechanism for speculators. The ECB (and the Fed and all other central bankers) will do as they please - that's obvious - in concert with their peers. If the ECB announces a cut back on assets purchases, expect the Fed to follow suit, a move which will almost certainly induce a global market correction.
If cuts are announced, they are likely to be small and their pace gradual. In what used to be known as "taking the foot off the gas" or "applying the brake," central banks are positioned to reduce their support of markets and banking, judging that the economies of developed nations have withstood the worst of the virus panic, lockdowns, suspensions of civil liberties, and assorted assaults on the public.
Whether they are correct or not in their assumptions, it's almost a certainty that most of the information about the virus from the past 18 months is bogus, distorted, or made up entirely from cloth. Numbers from the CDC or Johns Hopkins University can be trusted only about as far as the mainstream media, which lies about almost everything. People need to question all assumed authority, and many are, as the past 18 months and counting have put the world's public through a wringer of death, desperation, fear, and depression by any measure, be it economic, societal, or political.
The erosion of trust in institutions ties in perfectly with the launch of Bitcoin as legal tender in a nation known as "The Savior." In the midst of a frightening grab for power and control, more and more people are searching for a way out, a "savior" from the economic slavery of debt-based money, by which the entire planet is ensconced.
Some choose gold, others silver, real estate, art, collectibles, and other hard assets. Bitcoin bridges the gap between fiat and hard currencies by providing a digital alternative that is honestly measurable, ultimately transportable, and quickly becoming widely acceptable. Its de facto acceptance by the government of an entire nation is an earth-shattering event which, viewed through the eyes of central bankers, threatens their very existence. The instant reaction, no doubt planned well in advance by nefarious actors in the crypto universe, was to slam the price of Bitcoin (and most other cryptos) down from $52,945 to $42,830 in the course of just 12 hours (11:00 pm ET, September 6 to 11:00 am, September 7).
The actors behind the dumping may think they're opaque, hidden, immune from scrutiny, when the reality is that - just like Donald Trump winning the 2020 presidential election - everybody knows it was the central banking cartel behind the devaluation scheme. The nearly 20 percent decline (19.11%) was so transparently engineered as to give the hodlers and proponents of cryptocurrencies more faith and hope than ever before, and, like everything else the central bankers can devise and execute while in the throes of their own utter and complete currency destruction, will eventually backfire. The devaluing of Bitcoin on the very day the first country in the world made it an official means of payment was designed to discourage, but will encourage even more speculation and, ultimately, acceptance, of Bitcoin over dollars, yen, euros and the like.
Consider what an immediate 20% devaluation in a major currency, like the US dollar would do to global economies. In a word: chaos, which is exactly what the central bank cartel planned for the crypto universe. Sadly, for them, the proverbial horse is out of the barn. It is too late for them to ban, banish, degrade, defile, or de-platform cryptocurrencies. It's a huge market, with a valuation of over $2 trillion, according to coinmarketcap.com.
These are not toys, trinkets to be trifled over, cryptos are, despite their ethereal natures, as real as stock holdings, currency in a digitalized bank account, or the limit on a credit card, the only difference - for most - being that they are not created by a central authority, i.e., a central bank, which is why they are so desirable in the current bizarro-world environment.
Seriously, in a world where so much is fake - from world leaders to pandemics to news reportage - only what is most transparent can be trusted. Bitcoin fits that bill. Eventually, as the central banking cartel seeks to destroy or contain its most volatile competitor (as they have for decades or centuries with gold and silver), they will be forced to issue (print) more and more of their own counterfeit, eventually sinking their own ship as they are overwhelmed by the glut of currency in private hands. This is a war they cannot win, which is exactly why the fear tumult has been amped up to maximum volume.
It is no coincidence that Australians and New Zealanders are locked down, that the French and Canadians, Germans and Italians are rising up and protesting against their governments, that Afghanistan has fallen, that Guinea is under siege, its government apparently ousted, and that El Salvador has taken its bold step against monetary tyranny and toward economic liberty.
The world is in the final phase of a multi-century economic boom and bust, that began with with industrial revolution and will end in transformational economies outside the traditional central banking regime of debt and destruction.
As the globalists promote their twisted, incarcerating Great Reset and Build Back Better agenda, the liberation of the Fourth Turning, the Great Awakening has arrived.
At the Close, Tuesday, September 7, 2021:
Sunday, September 5, 2021, 12:03 pm ET
It was a fair week for holders of stock securities, with the Dow Jones components a not insignificant exception.
Dow stocks were down about a quarter of a percent, or 86.71, which, in the larger scheme of things - the Dow, at 35,369.09 is within one percent of its all-time high - is actually not huge, though more signal than market noise in the present situation. However, that little bit of signal coming from the Dow Industrials resonated even louder on the Transportation Average, which has been struggling of late.
On Friday, the Transports managed to erase what little gains it had made on the week by dropping 158 points. What was a five-point gain for the week at the close Thursday, turned into a 153-point loss by 4:00 pm ET Friday. Hardly a trivial matter, the better than one percent loss on the Transports was yet another reminder that the so-called "reopening recovery" that was supposedly well underway, hit a speed bump somewhere around the middle of May and has been more based on hopes and wishes than reality ever since.
It gives one pause to consider that the magic reopening of businesses, offices, cities, and schools relied heavily on transportation. People were working from home, schooling at home, cooking at home. With the release of the vaccines and lifting of restrictions, primarily those limiting going places and doing things the economy was supposed to lift off toward some new normal.
No doubt, in the beginning, there were signs of a healthier economy. In many places, needles went into arms, masks came off of faces, dust was cleared from offices furniture, textbooks were reopened, the price of a gallon of gas soared as oil prices ramped from under $40/barrel last November to over $75 by the first of July.
The Transportation Average - one of those technical indicators nobody pays attention to any more - stalled out and began to descend in May and it has failed to recover in any meaningful way.
On May 7, the Transportation Average attained an all time closing high at 15,943.30, reaching it's low point on August 4, when it closed at 14,243.68, a loss of 1,699.62 points, or, 10.7%, technically correction territory. The average closed at 14,751.62 on Friday, having recouped 508 points, or just about 30% of the recent loss.
It has been higher. On the 16th of August the average closed at 14,986.80 (743 points; 43% of the loss). Anybody trying to find a Fibonacci ratio - especially the 38.2% level - can do so readily, as it has bounced around in a range of 14,585 to 14,950 for the past month. If the Transportation is on the mend, the next level to monitor would be 15,093, which would constitute a 50% retracement.
Looking ahead, for the Transportation Average to improve, one would be pinning hopes on the US Congress to pass what amounts to a $1 trillion infrastructure bill, and the $3.5 trillion "human" infrastructure bill (aka, budget reconciliation) currently taking shape in the Capitol, because infrastructure is tied very tightly to transportation and the companies which compose the Average would likely be large beneficiaries of increased spending in that space.
From a political perspective, getting both pieces of legislation passed within the next four to six weeks - before the debt ceiling is breached - looks like a 50-50 wager. There's plenty of support for the $1 trillion package, but the $3.5 trillion might be a stretch, especially since Republicans in the Senate have vowed to vote against it.
A more cynical view might make it closer to a sure thing, relying on Senate RINOs like Mitt Romney, Susan Collins, and Lisa Murkowsky to fall in line with the Democrats, even if Dems such as West Virginia's Joe Manchin and Arizona's Kyrsten Sinema defect.
Moving forward, a shortcut to front run the market may be to just keep an eye on congress, though it also may be useful to note that investors in that space may have a jump on everyone.
Friday's decline on the Industrials and Transports were no doubt a reaction to the huge miss on employment coming out of the August non-farm payroll report. Released just prior to the open on Friday, the BLS sent chills though the markets by announcing a feeble 235,000 jobs created in the month. Analysts (routinely getting these kinds of things wrong) who had been looking for a number closer to 700,000 should have gotten pink slips themselves. Market reaction was somewhat muted, but the aftereffects are likely to be much more pronounced.
What a slowdown in job creation means to the economy is enormous. The August payroll report gives the Fed ample ammunition to halt any plans for tapering asset purchases. Looking back another week prior, it becomes clear that judging by the tenor of Chairman Jerome Powell's virtual speech at the Jackson Hole symposium, he had gotten advance warning on the labor front and had tailored his remarks to reflect the underlying reality.
It made good sense to the treasury market, where the yield on the 30-year bond advanced a mere three basis points to 1.94% and the 10-year budged up only two, to 1.33% over the prior end-of-week reading. With nobody giving away the script, it may indeed be congress on the hot seat, the provisional being their ability to pass the legislation before them in due time, thereby supplying a stealthy fiscal lift to an economy clearly on the slide.
Congress will get back to the normal swing of things on Wednesday, September 8, and none too soon. Wall Street and the world will be eager to see progress on the political front, though counting on congress for anything may be a fool's errand. Still, there's ample rationale to follow the fools and their money maneuvers.
With Friday's NFP reading throwing a very wet blanket on the economic landscape just prior to the final holiday weekend of the summer, satellite markets in commodities and cryptocurrencies were moribund, though Bitcoin found just enough good reason to bump through the $50,000 barrier. BTC actually broke through on Thursday, but Friday hit above $51,000 just after the jobs report went public. Into and over the weekend, thus far, it's still not a convincing move, its indecisiveness a reflection of the fragility of the current situation.
Oil prices also didn't move very much, as WTI crude gained a mere 36 cents, moving up from $68.74 the prior Friday to close on the 3rd of September at $69.10. On Wednesday, OPEC+ agreed at an online meeting to stick with earlier plans to add back 400,000 barrels per day beginning the first of October. In keeping with a plan based on steady improvement to the global economy, the oil cartel adds more pressure for the congress to act expeditiously.
The one sector not sold on the rumor and instead buying the news was precious metals, as gold and silver made hay on the weak jobs number. Already on a rally footing, gold advanced smartly on Friday, ending the week at a one-month high, $1,827.60 the ounce. Silver added 79 cents on the day, closing out the week at $24.68. Players n the precious metals space entertain a different view from those in oher asset classes. To them, and similar to the crypto crowd, signs of inflation, stagflation, or any kind of disruption to the general economy is welcome, steadfast as they are that their currency reigns over all, especially in light of non-stop debasement in the fiat regimes.
Prices have improved each of the past four weeks in gold, and for the last three in silver. Premiums remain high and retail demand hasn't missed a beat.
Here are the latest prices for common one ounce gold and silver items sold on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
The Single Ounce Silver Market Price Benchmark (SOSMPB) settled at $41.09, an decrease of 72 cents from last week's price, $41.81, reflective of concentrated weakness in one ounce silver bar prices.
Looking ahead, all eyes should be on congress and their effort to act in an adult manner on pending legislation. Any sign that their tenuous set-up will face irregularities, setbacks, or opposition has the potential to send stocks into a downward tizzy, one that likely would not be easily rectified. A somewhat telling sign comes from the Sunday morning news shows, adroitly sidestepping Capitol Hill politics for a change. The most important politicians were sure not going to tip their hands before getting back to their high ground. Not a single important person appeared on any Sunday show.
Head's up on Wednesday, after the bell, when original meme stock and darling of the reddit group r/wallstreetbets, GameStop (GME) reports earnings for their fiscal third quarter. So far, it appears the "apes" have it right. A year ago, GME was a seven-dollar stock. It closed Friday at 202.75.
That, good people, is a WRAP. Enjoy Monday off.
At the Close, Friday, September 3, 2021:
For the Week:
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