If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
While it’s too soon
to declare the bull market dead and a new bear market starting, given the duck
test, rising interest rates, and that it was "dress up month-end, that’s probably the way to bet.Looks like “sell in May, go away,” came early this year.
The race is not always to the
swift, nor the battle to the strong, but that's the way to bet.
Damon Runyon
The
simple reason the Dow snapped a 9-quarter win streak: Wall Street’s surging
‘fear index’
Published: Mar 29, 2018 5:24 p.m. ET
The Dow and the S&P 500 halted a record-setting streak of quarterly wins
at nine, and the clearest reason why may be explained by the VIX index, widely
known as Wall Street’s “fear gauge.”
The Dow Jones Industrial Average DJIA, +1.07%
posted a quarterly decline of more than 2.3%, snapping the longest streak of
quarterly gains for the blue-chip average since an 11-quarter rally that ended
in the third quarter of 1997. The S&P 500 index SPX, +1.38%
booked a 1.2% quarterly fall, ending its longest such stretch since the first
quarter of 2015.
There are perhaps a host of reasons for the surcease of such a lengthy
bullish run for the most prominent equity benchmarks: The Federal Reserve’s normalization
of monetary policy, with the central bank lifting rates for the fifth time
this month since December 2015; Intensifying uncertainty in the makeup and
agenda of President
Donald Trump’s administration, underscored by a number of high-profile
departures; and the intensification of trade-war
fears, after the president imposed duties on steel and aluminum imports and
leveled more targeted
tariffs at the world’s second-largest economy: China.
However, the surge in the Cboe Volatility Index VIX, -12.68%
is perhaps the most correlated with the market’s downtrend. According to
WSJ Market Data Group, the VIX posted its biggest quarterly rise, up more than
80% (on a preliminary basis) since it jumped in the third-quarter
of 2011following Standard
& Poor’s historical downgrade of the U.S. credit rating and worries
about Europe’s debt-crisis jitters.
The VIX reflects option traders’ collective expectations for S&P 500
volatility in the coming 30-day period.
Much had been made about the gauge’s subdued readings over the previous 18
months, a period that ended when the index surged 115% on Feb. 5.
Since that period of unnatural calm came to an abrupt end, the index has
climbed to trade near its historical average around 19 or 20.
----Of course, its hard to say if the VIX is driving stock
moves or if the decline in stocks represents a shift in the volatility dynamic.
But one thing is certain: a stretch of extraordinary placidity is over.
VIX Up 81% Shows Extent of Stock Market Pain in
Jarring Quarter
By Elena Popina, Sarah Ponczek, and Lu Wang
Are we
having fun yet?
For two
years traders bemoaned the tranquility in global equity markets. That era just
ended in a fit of turbulence, as stocks plunged into the first correction since
early 2016 and volatility almost doubled from historically low levels over the
past three months. Dip buying no longer worked, and holding tight on the
S&P 500 Index delivered the first quarterly loss in 2 1/2 years.
With the
White House spoiling to reorder the global trade hierarchy and the Federal
Reserve raising interest rates, the word on Wall Street is: get used to the
swings.
“Think about
all the waves and stress caused on the surface of the water when a boat is
changing directions,” said Michael Cuggino, president and portfolio manager at
the Permanent Portfolio Family of Funds in San Francisco. “You have a
transitory period of changing directions in monetary policy and growth
expectations. As investors try to sort through that, that creates volatility.”
Even though most of the market’s worries can be countered -- after all,
interest rates are meant to go up sometimes, stocks are meant to go down
sometimes -- the handwringing is amplified by the torpor that came before. The
S&P 500 gained or lost 1 percent in a single day 23 times this quarter; in
most of 2016 and 2017, it went for months without a single such move.
The 81 percent jump in the Cboe Volatility Index tells the story of a
quarter when stocks went from euphoria to correction in a matter of weeks.
Optimism over Donald Trump’s tax cuts triggered unprecedented inflows into U.S
equity funds in January as the S&P 500 jumped the most in 22 months. Then,
a popular short volatility trade blew up, triggering
a 10 percent correction that wiped $2 trillion from U.S. stocks.
Here’s
how the stock market’s performance stacks up over the week, month and quarter
Published: Mar 29, 2018 4:31 p.m. ET
With the U.S. stock market closed
on Good Friday, Thursday’s closing bell not only marks the end to the
latest week of trading on Wall Street, but the close of March and the first
quarter of 2018.
All of those time periods have featured some of the sharpest volatility in
stocks in years, and the sharp swings back and forth—sometimes in the same
session—may have market watchers confounded about the latest trends. Here’s how
the major indexes have performed.
Weekly performance:
• The Dow Jones Industrial Average DJIA, +1.07%
gained 2.4% this week.
• The Nasdaq Composite Index COMP, +1.64%
rose 1%, turning positive for the week with Thursday’s gain of 1.6%.
• The Russell 2000 index RUT, +1.08%
of small capitalization shares rose 1.3% over the week.
All four indexes are coming off a two-week decline.
Monthly performance:
• The Dow lost 3.7% over the month of March, its second
straight negative month, although February’s drop was steeper—down 4.3%. The
longer-term uptrend has been positive, however, as February’s drop followed a
10-month rally, which had been its
longest such streak since 1959.
• The S&P fell 2.7% in its second straight monthly decline.
• The Nasdaq fell 2.9%. Like the Dow and the S&P, this is
its second straight monthly decline, although it is also its biggest monthly
drop since January 2016.
• The Russell rose 1.1% over the month.
Quarterly performance:
• The Dow is down 2.5% over the first quarter, putting an
end to a nine-quarter streak of gains, its longest such rally since an
11-quarter rally that
ended in the third quarter of 1997.
• The S&P 500 is down 1.2% for the first quarter, and the
benchmark index also put an end to a nine-quarter rally. However, that was only
the longest such streak since one ending in the first quarter of 2015.
• The Nasdaq is up 2.3% over the first quarter, its seventh
straight quarterly gain, its longest such streak since a 10-quarter rally that
ended in 2015.
• The Russell is down 0.4% over the first quarter. This puts
an end to a seven-quarter streak of gains, its longest since an eight-quarter
stretch ending in the second quarter 2014.
“There is only one side of the market and it is not the bull
side or the bear side, but the right side.”
Jesse Livermore
Note the next LIR update will be on Saturday.
Normally in our current casino, central
bankster rigged stock markets, as we approach the all important end of first quarter,
money managers and other “smart money” operatives, attempt to game the market
close, knowing that the central banks have their backs covered by the
Greenspan-Bernanke-Yellen “Put.” Under Fed newbie Jerome Powell, that Put is in
question, and it shows in this week’s market action.
Below, some reasons to think that the Put is
so old last year. Scroll down to the Coppock long term indicators.
“If you have timed the movement correctly, your first commitment
will show you a profit at the start.”
Jesse Livermore, How to Trade
In Stocks
Asian markets drive toward gains following
early dips
Published: Mar 28, 2018 11:33 p.m. ET
Many Asia-Pacific stock markets rebounded from declines Thursday after the
tech sector dragged U.S. stocks lower and oil prices dropped.
Indexes in Shanghai SHCOMP, +0.09% and Hong Kong HSI, -0.17% were down by as
much as 0.8% early before rebounding, with mainland benchmarks turning higher
by the midday break. Taiwan Y9999, +0.01% and South Korea SEU, +0.22% also edged into
positive territory as the morning progressed.
Meanwhile, signs of easing geopolitical tension allowed for solid gains
throughout Thursday’s early trading in Japan NIK, +0.46% .
The tech sector continues to be under pressure globally due to fears about
more regulatory oversight. The tech-heavy Nasdaq Composite COMP, -0.85% closed down 0.9%,
underperforming the Dow Industrials DJIA, -0.04% and the S&P
500 SPX, -0.29% . Amazon.com AMZN, -4.38% , Netflix NFLX, -4.96% and Tesla TSLA, -7.67% were among the
biggest losers.
Energy shares helped push down Australia’s S&P/ASX 200 XJO, -0.47% after crude prices
fell on higher U.S. inventory levels. New Zealand’s NZX 50 NZ50GR, -0.82% slipped 0.7% as a2
Milk ATM, -4.17% and Synlait Milk SML, -3.34% dropped more than
4%.
Japan has contacted North Korea about a possible meeting between Kim Jong Un
and Prime Minister Shinzo Abe, according to Japan’s Asahi Shimbun newspaper.
That report comes after Kim met Chinese President Xi Jinping in Beijing earlier
this week and a possible summit with President Donald Trump is also looming.
This may mean that Pyongyang is willing to negotiate about its weapons
development.
The easing of geopolitical tension contributed to the yen’s sharp fall
against the U.S. dollar, said Stephen Innes, senior trader with Oanda, though
he also flagged an uptick in the dollar, helped by better-than-expected U.S.
economic growth figures overnight.
Move over, Facebook. U.S. investors have a new punching bag among the
FAANGs: Amazon.com, Inc.
Facebook Inc. gave up the top loser spot to Amazon.com, which lost $53
billion in market value on Wednesday after Axios reported that President Donald Trump
is “obsessed” with regulating the e-commerce behemoth. The social media giant
had previously underperformed the tech megacap group amid concern over the
company’s handling of its users’ personal information.
The FAANG stocks, once assumed to be a monolith of performance, have
suffered degrees of decoupling recently, including the outperformance by
Netflix Inc. earlier in the year.
Amazon.com fell as much as 7.4 percent Wednesday before paring some losses
to close 4.4 percent lower after a Stifel Nicolaus & Co. analyst said the weakness created a
buying opportunity. Facebook diverged from the group in early trading, rallying
0.5 percent after announcing it’s redesigning a menu of privacy settings in
response to public outrage over the user data practices. Netflix was the
second-biggest loser in the FAANG group of stocks, sliding 5 percent on the
heels of the #DeleteNetflix campaign.
“Netflix and Amazon haven’t really experienced the intense selling that
Facebook did,” said Michael Antonelli, an institutional equity sales trader and
managing director at Robert W. Baird & Co. “The ‘flu’ that Facebook got is
now spreading to the others.”
Tesla
Plunges Again as Questions Swirl Around Fatal Accident
By Dana Hull and Ville Heiskanen
Updated on 28 March 2018, 21:40 GMT+1
Tesla
Inc. shares dropped for a second day as questions about a fatal Model X
crash in California intensified the pressure on Elon Musk’s
electric-car maker.
The company is working with authorities to retrieve data logs from the
vehicle that crashed Friday, killing the driver, according to a Tesla blog post. Tesla didn’t say whether
the vehicle’s Autopilot system was engaged but preemptively defended the
driver-assist feature, which it’s developing as a precursor to autonomous driving.
March has been brutal for Tesla, with shares falling on all but five days
and the company this week losing its perch to General Motors Co. as the most
valuable U.S. automaker. The stock declined 7.7 percent Wednesday to $257.78.
Its unsecured
bonds have hit all-time lows ahead of the release of first-quarter
production results expected next week. The tone of the day was captured in
analyst reports, with Cowen & Co. saying it’s time to “question Autopilot
leadership” at Tesla and Sanford C. Bernstein focusing on the “fallacy of
automation” to boost production.
The crash, which is being investigated by U.S. authorities, adds to Chief
Executive Officer Musk’s challenges including concerns that the electric-car maker
won’t reach its production targets for the all-important Model 3 sedan. The
accident also potentially raises fresh questions about self-driving
features after a deadly Uber Technologies Inc. accident that happened days
earlier and sent ripples across the broader autonomous-vehicle industry.
“We have in the past questioned Tesla’s promise that the current hardware
will be able to eventually provide full self-driving capability,” Cowen analyst
Jeffrey Osborne, who rates Tesla as “underperform,” wrote in a note. Given
regulators’ reaction to the fatal Uber crash, “we see a large risk” that the
self-driving equipment and capabilities Tesla has been touting to customers
many not meet the eventual government standards, he wrote.
Tesla’s bonds dropped 3 cents on the dollar to 88 cents at 4:36 p.m. in New
York, according to Trace, the bond price reporting system of the Financial
Industry Regulatory Authority after reaching their lowest price ever earlier
Wednesday.
Fed mistakes could spark ‘unusually fast’
bear market, ‘lost decade’ for stocks
Published: Mar 28, 2018 4:48 p.m. ET
Uncertainty over trade policy may be the primary driver of the U.S. stock
market at the moment, but the real policy risk facing equities could be coming
from the Federal Reserve, with the potential downside a lot more pronounced
than investors are currently anticipating.
Last week, Fed Chairman Jerome Powell said the economic outlook had
strengthened, but he painted
a mixed picture about what policy might look like going forward. The U.S.
central bank raised interest rates but indicated it would only do a total of
three rate hikes in 2018, which some saw as a dovish signal given that a number
of investors had expected four this year. However, the Fed pushed up its
expected rate path in 2019 and 2020.
Barry Bannister, head of institutional equity strategy at Stifel, said it
was a concern that the Fed’s view for 2019 and 2020 had grown more hawkish,
which raised the risk of the central bank making a policy mistake.
“What matters for investors is that any decline is likely to be unusually
rapid and occur as a result of P/E compression, resulting from policy risks not
weak GDP,” he wrote in a research report. “Investors need a bit more
acrophobia, as our best model points to a bear market and lost decade for
stocks.”
Bannister argued the new Fed, under Powell, “wishes to fade the ‘Fed put,’”
or the idea that the central bank would step in to prop up falling equity
prices. “The cost may be a 16% P/E drop,” he wrote, referring to
price-to-earnings, a popular measure of equity valuation.
The Fed is expected to regularly raise rates over the coming years, and some
investors think it may hasten its pace of increases to rates in the event that
inflation returns to the market in a more pronounced fashion.
In other autopilot car news, Uber wisely
decides to avoid a clash with America’s notorious tort bar.
March 29, 2018 / 3:38 AM
Uber reaches settlement with family of
autonomous vehicle victim
TEMPE,
Ariz. (Reuters) - The family of the woman killed by an Uber Technologies Inc
[UBER.UL] self-driving vehicle in Arizona has reached a settlement with the
ride services company, ending a potential legal battle over the first fatality
caused by an autonomous vehicle.
Cristina
Perez Hesano, attorney with the firm of Bellah Perez in Glendale, Arizona, said
“the matter has been resolved” between Uber and daughter and husband of Elaine
Herzberg, 49, who died after being hit by an Uber self-driving SUV in the
Phoenix suburb of Tempe earlier this month.
Terms of the settlement were not given. The law firm representing them
said that Herzberg’s daughter and husband, whose names were not disclosed, will
have no further comment on the matter as they consider it resolved.
Fall-out from the accident could stall the development and testing of
self-driving vehicles, which are designed to eventually perform far better than
human drivers and sharply reduce the number of motor vehicle fatalities that
occur each year.
Uber has suspended its testing in the wake of the incident. Toyota Motor
Corp (7203.T)
and chipmaker Nvidia Corp (NVDA.O)
have also suspended self-driving car testing on public roads, as they and other
companies await the results of an ongoing investigation into the Tempe
incident, which is believed to be the first death of a pedestrian struck by a
self-driving vehicle.
Uber does not use the self-driving platform architecture of Nvidia, the
chipmaker’s Chief Executive Jensen Huang
Finally, how Facebook, Apple and Google, turned us all into
a Chinese (and others) takeaway!
Nothing
You Say Online Is Private
By Shelly Banjo
28 March 2018, 07:03 GMT+1
As Facebook’s latest privacy missteps unfolded via the Cambridge
Analytica imbroglio,
the skeptical side of me couldn’t help but wonder how anyone would be surprised
that what they post on the internet could be co-opted for marketing — or
more nefarious purposes.
People in China, for one, seem to know better. Internet users here are
all too aware that what’s posted online can and will be used against
them.
Which is why it was so ironic when the operator of the country’s single most
dominant social media platform — WeChat —
declared at an earnings briefing last week that its one billion-plus users can
trust their data would never "leak" like Facebook did. When the
obvious follow-up question came about the Chinese government’s access to said
data, Tencent President Martin Lau backpedaled and said cooperating with law
enforcement was a
different story.
Most Chinese internet users have the built-in assumption that pretty much
everything is monitored. Some don’t seem to care. But many more are just much
savvier about what personal information, photos and content they post online.
Or how they post it: web users employ a constantly evolving palette of
code-words to evade the all-seeing eye whenever they simply must speak up
(say, “river crab” as
a proxy for the Communist Party).
When I asked a friend living in China recently whether she took more
precautions on social media than she did in the U.S., she instinctively replied
“let’s talk about this offline, not on Wechat.” It’s pretty common for people
to mandate face-to-face meetings in fear of
online communication.
Another friend spoke of turning off location services, avoiding keywords
that could alert government or company censors, and staying off rival firms’
products to prevent corporate spying. Others mentioned never posting on WeChat
Moments, akin to Facebook’s newsfeed, or deleting Moments posts after a day or
even an hour so friends can see your photos but not indefinitely. (This often
happens with news articles and blog posts, too).
But even private or small group chats can only be trusted as much as the
person on the other side of the conversation. A string of recent scandals in
China that originated from screenshots taken of private chats have put some
users on notice.
As guides on how to better safeguard your data or #deleteFacebook spread
across the internet, the bigger question is whether it’s time to abandon the
idea that any company, government or other entity is going to protect our
privacy for us — especially those whose business models depend on monetizing
user data.
“It has
always been my experience that I never benefited much from a move if I did not
get in at somewhere near the beginning of that move.”
Jesse
Livermore, How to Trade In Stocks
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, VW again. With a horrible noisy clattering
sound, a great cloud of black smoke, and a trail of noxious gases, Britain’s
duped and conned VW diesel victims, finally got around to filing their long
overdue lawsuit. GB’s ambulance chasing tort bar, unlike its American cousins,
has never been accused of being swift. I think heavily polluted London should
follow Europe’s lead and ban all diesels from London’s city centre. Minus its
busses and taxis, and two thirds of its commercial vehicles, the rest of us can
get back to zipping around like the 1970s again.
March 27, 2018 / 1:44 PM
British VW drivers start 'dieselgate' claim
in High Court
LONDON
(Reuters) - Lawyers for more than 50,000 British car owners kicked off a
lawsuit against Volkswagen (VOWG_p.DE) in London’s High
Court on Tuesday in a battle for compensation over a diesel emissions scandal
that has engulfed Europe’s largest carmaker since 2015.
The three-day hearing will determine whether the claims can be managed
collectively under a Group Litigation Order (GLO) and will set a deadline for
claimants to sign up to what lawyers say could become the largest group action
in British legal history.
Volkswagen has said about 11 million cars worldwide - and 1.2 million in
the UK - were fitted with software that cheated diesel emissions tests designed
to limit noxious car fumes and carbon dioxide (CO2) pollution.
VW agreed to pay up to $25 billion in the United States to settle claims
from owners, environmental regulators, states and dealers. It offered to buy
back 500,000 polluting U.S. vehicles.
The company has not reached a similar deal in Europe, where it faces
billions of euros in claims from investors and customers in the worst business
crisis of its 78-year history, dubbed “dieselgate”.
Law firm Slater and Gordon, which says it represents more than 40,000
claimants in Britain, alleges VW deceived people into buying cars that breached
emissions regulations by installing “defeat devices”, engine management
software designed to mask pollution levels.
The German company dismissed the allegations and said it intended to
defend itself robustly. It said it had broken no English laws, that British
drivers had suffered no loss and that the legal proceedings were premature and
unfounded.
“We ... are confident of a successful outcome,” the firm said in a
statement. It said it had not been established that the software was an illegal
defeat device and emphasised that the U.S. situation was “materially
different”.
“The vehicles are different, the regulatory environment is different and
the technical measures are different. The affected vehicles in the UK do not
cause more pollution on the road than expected,” it said.
Volkswagen has offered European drivers a software update removing a
mode that operated when cars were experiencing test conditions.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
Is Offshore Wind a Better Deal With
Batteries?
Ørsted news highlights the growing appetite for storage with offshore wind.
A partnership between developer Bay State Wind and NEC Energy Solutions this
month highlighted a growing push to pair energy storage with offshore wind.
Bay State Wind said it will work with NEC Energy Solutions to add batteries
to an 800-megawatt offshore wind farm planned for 15 miles off the coast of
Martha’s Vineyard, Massachusetts.
The project will represent the world’s largest wind‐paired energy
storage system for commercial‐scale energy, said Bay State Wind,
which is a joint partnership between the Danish power company Ørsted, formerly known
as Dong, and U.S. transmission builder Eversource.
This month, Bay State Wind qualified for Title 41 of the Fixing America’s
Surface Transportation Act (FAST-41), making it the first and only offshore
wind project, and one of only 38 infrastructure projects in the U.S., to
receive FAST-41 status.
NEC will add 55 megawatts and 110 megawatt-hours of storage to the wind farm
“to help the region in overcoming winter reliability challenges by delivering
energy when it is needed most and help to reduce winter peak energy prices and
price volatility,” Bay State Wind said.
The developer highlighted the deal’s potential to create new jobs, since NEC
Energy Solutions was born from the ashes
of A123, a Massachusetts-based company.
“I have been in the speculative
game ever since I was fourteen. It is all I have ever done. I think I know what
I am talking about. And the conclusion that I have reached after nearly thirty
years of constant trading, both on a shoestring and with millions of dollars
back of me, is this: A man may beat a stock or a group at a certain time, but
no man living can beat the stock market! A man may make money out of individual
deals in cotton or grain, but no man can beat the cotton market or the grain
market. It's like the track. A man may beat a horse race, but he cannot beat
horse racing.”
Jesse Livermore
The monthly Coppock Indicators finished February
DJIA: 25,029 +283 Up 01. NASDAQ:7,273 +313 Up 03. SP500: 2,714 +212 Flat.
Barring some sort of miracle, all three monthly indicators will turn down at the close of the month later today. For some a new bear signal, for others a take profits and get back to cash signal.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
