Stock Market Crash 2017; reality or all Hype

man profits more by the sight of an idiot than by the orations of the learned.
Arabian Proverb
We have one expert after another predicting that it is time for the markets to crash; mind you these same chaps sang this same terrible song of Gloom in 2015, 2016 and now they are singing it with the same passion in 2017. There is one noteworthy factor, though; a few former Bulls have joined the pack. Does this now mean that the markets are going to crash? Apparently not, well, at least if you look at the indices, as of Jan the market continues to trend higher. Furthermore, what is a crash or for that matter a pullback or a correction? Does it not all boil down to a perception? One individual could view it as a crash, while the other views it as a mild correction and an opportunity to purchase more shares. It would all depend on when you jumped into this market. If you embraced this bull market in 2016, then a pullback in the 10%-15% ranges would feel like a crash. On the other hand, if you embraced this beast (Stock Market Bull)anywhere from 2009-2011, it would seem like a mild orderly correction. Most experts almost gleefully try to force their twisted perceptions on everyone. Just because theexperts decide to label it as a crash does not mean you should follow their lead; experts are known for getting it wrong all the time. In fact, experiments have shown that monkeys throwing darts at a random list of stocks fare much better than Wall Street experts. Hence, take their so-called sage advice with a barrel of salt.
If these experts were so astute, then why have most of them missed one of the biggest bull markets of all time. Moreover, now they want to convince you that it is time to short it after failing to embrace it. How can one trust these penguins? If they failed to identify the bull market in the first place, how is it they are suddenly able to predict the top.
Several weeks ago we penned an article (excerpt provided below) where we stated that caution was warranted as the markets should let out some steam, but as the trend was still up, we did not feel it was time to short the markets. All the experts that stated it was time to bail out and short the market must be smarting from their losses. The market loves to punish arrogant self-proclaimed know it all gurus. Mass psychology is very clear when it comes to the markets; the masses need to embrace the markets before one can claim a top is close at hand. The masses so far have refused to embrace this market for a prolonged period.

This post was published at GoldSeek on Friday, 17 February 2017.

Another Bear Throws In The Towel: “Canada’s Most Famous Investor” Closes Bearish Hedges After Huge Loss

Another bear throws in the towel.
Prem Watsa, the CEO of Fairfax Financial, and largely recognized as Canada’s most famous investor, is dropping his bearish stance on the markets. Watsa announced that he is covering his firm’s equity hedges after suffering a $1.1 billion net loss on its investments in Q4, and $1.2 billion for all of 2016.
The reason is a familiar one: Donald Trump.
‘[Full-year] net losses on investments of $1,204 million were primarily as a result of fundamental changes in the U. S. in the fourth quarter that may bolster economic growth and business development in the future. Consequently, we removed all our defensive equity index hedges and reduced the duration of our bond portfolios to approximately one year,’ Watsa said in a press release late Thursday.
Net losses on investments of $1,204 million were primarily as a result of fundamental changes in the U. S. in the fourth quarter that may bolster economic growth and business development in the future. Consequently, we removed all our defensive equity index hedges and reduced the duration of our bond portfolios to approximately one year. Our investment actions resulted in our having cash and short term investments in excess of $10 billion at year-end,” said Prem Watsa, Chairman and Cfhief Executive Officer of Fairfax. “In the fourth quarter we announced our agreement to purchase Allied World for $4.9 billion, a transformative acquisition for Fairfax. We continue to be soundly financed, with year-end cash and marketable securities in the holding company approaching $1.4 billion.

This post was published at Zero Hedge on Feb 17, 2017.

The Gaslighting Of The American Public Continues…

Submitted by Howard Kunstler via Kunstler.com,
The gaslighting of the American public continues, with Gaslighter-in-Chief, The New York Times, whipping up a frenzy of Russia paranoia.*
It reminds me of an old gambit in fly fishing called the ‘artificial hatch.’ Trout like to gorge on mayfly nymphs as they rise out of a stream and shuck their nymphal shells to fly away as winged adults. The bugs do this in bunches, at a particular time of day, according to sub-species. This ‘hatch’ drives the trout into a feeding frenzy.
A lot of the time, of course, there’s no action on the stream, so the bored fly fisherman whips his line here and there around a particular pool, trying to create the simulation of a mayfly hatch so the trout will wake the fuck up. It is, to be frank a crude dodge, really an act of desperation. But at least it gives the fisherman something to do for a while besides worry about missing another mortgage payment.
The Russia paranoia frenzy is serious business because it indicates that a state-of-war exists between the permanent bureaucracy of government (a.k.a. the Deep State) and the new Trump administration. There are features of the struggle that ought to be much more disturbing than the dubious alleged monkey business about Russia hacking the election and the hoo-hah around a single intercepted phone call between Michael Flynn and the Russian ambassador, made to open a line-of-communication between high-ranking officials, strictly routine business in any other administration.

This post was published at Zero Hedge on Feb 17, 2017.

Gold Sector Update – What Stance is Appropriate?

The Technical Picture – a Comparison of Antecedents
We wanted to post an update to our late December post on the gold sector for some time now (see ‘Gold – Ready to Spring Another Surprise?’ for the details). Perhaps it was a good thing that some time has passed, as the current juncture seems particularly interesting. We received quite a few mails from friends and readers recently, expressing concern about the inability of gold stocks to lead, or even confirm strength in gold of late. In light of past experience, such market behavior certainly deserves to be scrutinized. We felt reminded of another occasion though, when a negative divergence prompted a flood of mails to us as well (not every divergence does).
The HUI compared to gold. It is a good rule of thumb that positive divergences between the HUI and gold are bullish signals and negative divergences are bearish signals. Also, gold stocks should ideally lead gold in order to confirm the prevailing trend. They should be strong relative to gold in uptrends and weak relative to gold in downtrends. As you can see above though, not every negative divergence is meaningful. It can even turn out to be a major misdirection, as happened in early 2016. We published a great many posts on the sector between August and December of 2015, stressing that we felt a great opportunity was at hand. The brief break of support in January 2016, coupled with a negative divergence, prompted many people to write in and express concern – click to enlarge.

This post was published at Acting-Man on February 18, 2017.

Tony Blair Says Brits Should Now Rise Up and Revolt

In studying history, it is interesting to see that it is always the left which creates uprisings and tries to force their beliefs upon all others. Historically, the left is responsible for the murder of countless tens of millions of people beyond what anyone can count. Besides the intolerable American mainstream press who should be criminally charged for advocating the overthrow of the government (18 U. S. Code 2385), now we have another left-winger in Britain former PM Tony Blair advocating that those who lost in the BREXIT referendum should ‘rise up in defence of what we believe’.

This post was published at Armstrong Economics on Feb 17, 2017.

Warning Signs a Stock Market Crash Is Coming

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
The Dow has soared 13% since Election Day, and just last week (Feb. 10), all three major indexes closed at all-time highs. The ‘Trump Rally’ has been great for stocks, but some observers are starting to wonder if soaring highs mean a stock market crash is coming.
No one can predict a stock market crash with 100% certainty. But we want our readers to be as informed as possible about what could happen in the market.
That’s why we’re looking into historic stock market crashes to identify warning signs that can be used now.
And we want our readers to know how to protect their money when the next stock market crash happens.

This post was published at Wall Street Examiner by Money Morning News Team ‘ February 17, 2017.

FEB 17/GLD LOSES 2.37 TONNES OF GOLD INVENTORY/SLV INVENTORY REMAINS CONSTANT AGAIN/GOLD LOWERS BY $2.40 AND SILVER BY 4 CENTS/BUBBLE BURSTS IN USA AUTO LOANS/ROBERT HARWARD REJECTS TRUMP’S OFFER…

Gold at (1:30 am est) $1237.60 down $2.40
silver was : $18.02: down 4 CENTS
Access market prices:
Gold: $1235.50
Silver: $18.01
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON .
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
FRIDAY gold fix Shanghai
Shanghai FIRST morning fix Feb 17/17 (10:15 pm est last night): $ 1248.41
NY ACCESS PRICE: $1238.25 (AT THE EXACT SAME TIME)/premium $10.16
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1248.41
NY ACCESS PRICE: $1238.20 (AT THE EXACT SAME TIME/2:15 am)
SPREAD/ 2ND FIX TODAY!!: 10.28
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London FIRST Fix: Feb 17/2017: 5:30 am est: $1241.40 (NY: same time: $1241.20 (5:30AM)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Second fix Feb 17.2017: 10 am est: $1241.95(NY same time: $1241.90 (10 am)

This post was published at Harvey Organ Blog on February 17, 2017.

Permian Panic Continues As Rig Counts Rise Amid Record Glut In Crude

With a record glut of crude and gasoline, US crude production pushed to new cycle highs this week and continues to track lagged rig counts.
US crude inventories are at a new record high…
And so are Gasoline inventories…
And the rig ccount keeps rising with lagged oil prices…
Production keeps rising, and has a long way to go to catch up to the lagged rig count…
And the oil algo idiocy from DOE data has been erased with RBOB back below $1.50…
The surge in rigs has been driven almost 100% in the Permian, but as OilPrice.com’s Nick Cunningham asks, how much longer that the Permian craze continue?

This post was published at Zero Hedge on Feb 17, 2017.

The Art and Pseudoscience of Monetary Policy

Definitely Maybe Everyone’s got a plan for sale these days. In fact, there are so many plans out there we cannot keep up with them all. Eat celery sticks and lose weight. Think and grow rich. Stocks for the long run. Naturally, plans like these run a dime a dozen.
All social engineers who get to impose their harebrained schemes on the rest of the world through the coercive powers of the State, as well as all armchair planners regaling us with their allegedly ‘better plans’, should have this highly perceptive quote by Robert Burns tattooed on their foreheads. In case you’re wondering, ‘gang aft a-gley’ is slightly old English for ‘usually turn out to be total crap’. The second part that points out that as a rule, we get nothing but grief and pain instead of promised joy, is applicable to interventionism in general; the so-called ‘unintended consequences’ of interventions almost always turn out to be their main feature and defining characteristic.
Good plans, however, are scarcer than hen’s teeth. You can’t possibly see them no matter how closely you look. They simply don’t exist. This was the case on Capitol Hill this week, where money and politics collided at the biannual monetary policy gala.
Despite all the hubbub, no good plans were offered. What’s more, on first glance, no bad plans were offered too. When Fed Chair Janet Yellen’s testimony was finally over, Congress knew less about the Fed’s plans than when it started.
For instance, when asked if the Federal Reserve would raise rates next month, Fed Chair Janet Yellen replied, ‘I can’t tell you exactly which meeting it would be. I would say every meeting is live.’
What does this mean, really? Does it mean she’ll definitely maybe raise rates? Does it mean she absolutely ‘might could’ increase them? Only time will tell.

This post was published at Acting-Man on February 17, 2017.

Why Hitting 2% Real GDP Growth Is Key For US Corporate Profits

Submitted by Eric Bush via Gavekal Capital blog,
While the myth that stock market returns are highly correlated to a country’s GDP growth rate has largely been debunked, there remains a strong, and intuitive, relationship between corporate profits and GDP. GDP measures the output of an economy and corporate profits are simply the income to capital owners derived from that output (with some accounting adjustments made along the way). In the long-run, equity investors need to see growth in corporate profits in order to justify equity prices.

This post was published at Zero Hedge on Feb 17, 2017.

Worse Than a Decade of Stagnation

Retail sales are held up by only two sectors. The rest are sinking. There are two components of ‘retail and food services sales’ that have been booming over the past few years through the fourth quarter 2016. And then there’s all the rest combined – 71% of total retail sales – that has been in decline since the third quarter of 2008. That’s the tough reality of retail sales in the US.
First the good news: e-commerce sales In the fourth quarter, e-commerce sales soared 14.3% from a year earlier, to $123.6 billion, not adjusted for seasonality and price changes, according to the Commerce Department today. E-commerce sales for the entire year 2016 jumped 15.1% year-over-year to $394.9 billion, accounting for 8.1% of total retail and food services sales, up from 7.3% in 2015. You see where this is going.
E-commerce sales include online sales by retailers with brick-and-mortar stores, such as Walmart and Macy’s that are all trying to carve out a presence on the internet, with varying success.

This post was published at Wolf Street on Feb 17, 2017.

Dow, VIX, Gold All Up As Yet Another Ratio Screams “Record High”

This market reminds us of this…“none shall fall”
Gold remains 2017’s biggest gainer, oil is down, bonds flat and the panic bid this week dragged The Dow higher…
After 6 straight intraday ramps in the S&P 500, the last two days – since Catalyst stopped its forced covering – have seen the character of the market shift notably…


This post was published at Zero Hedge on Feb 17, 2017.

Gold-Stock Volume Divergence

The gold miners’ stocks have blasted higher in this young new year, far outpacing the broader markets. But surprisingly gold stocks’ trading volume has diverged from their powerful rally. Volume has actually been waning on balance since gold stocks’ newest upleg was born in mid-December. While volume is a complex nuanced indicator, this bullishly suggests that major gold-stock buying hasn’t even started yet.
Naturally price action is the most-important technical indicator, exposing underlying supply-and-demand trends for anything. The shares of precious-metals miners and explorers have surged this year because investor demand exceeds supply. The capital flowing into this beaten-down sector is overwhelming the numbers of shares sellers are willing to part with, bidding up stock prices and driving their sharp rally.
But the strength of rallies isn’t fully apparent through their price moves alone. Trading volume, how many shares change hands daily, is a critical secondary indicator. The strongest rallies advance on big high-volume buying, showing growing investor interest and broadening capital inflows. The more volume that drives any rally, the greater its momentum, staying power, and ultimate gains. Volume reflects vigor.
One of the many problems plaguing today’s radically-overvalued Fed-levitated stock markets is the low-volume buying driving recent years’ gains. Low volume reveals low conviction, traders begrudgingly buying shares in moderation since they doubt a rally’s durability. Low-volume rallies are often more the result of a lack of sellers than any meaningful buying. That’s what’s happening in gold stocks so far in 2017.

This post was published at ZEAL LLC on February 17, 2017.

The Coming Bear Market

The bears are dead. Long live the bears. And that, in a nutshell, describes every bubble and emerging bear market there ever was. There is no doubt that the recent market environment has been unrelenting in terms of its unidirectional focus. Yet it is precisely the very market environment bears wanted: Exuberant markets, markets highly stretched above historic moving averages, complacency everywhere and capitulation toward the upside at a time when stocks are the most expensive in many years.
Consider: Not only is the $NDX on its 9th year of consecutive up, but also on its 7th consecutive up week in 2017 (in fact it hasn’t had a single down week in 2017 as of this writing) and on it’s 9th consecutive day up in February.
Yet I’m calling for a coming bear market here at $SPX 2351. This market, while perhaps still going higher, is setting up not for a correction, but a major bear market. And mind you this can grind around for a while. Tops are processes and not events.
And let’s be upfront: I’ve not liked the structural backdrop of markets for quite some time, but have been cognizant of its technical apex potential. The blow-off top scenario if you will (see Media). The reason why is plain: The entire global financial system is 100% dependent on central bank intervention and debt expansion and low rates. There is zero evidence that markets can organically support current assets prices anywhere in the world without any of these things. I’ve outlined my structural concerns in detail in the Market Analysis section in the past and you can read up on them there.

This post was published at Zero Hedge on Feb 17, 2017.

Day 28: Brazen Trump Inspires Murky Global Markets

Yellen spoke to congress this week, and her remarks about the new Commander in Chief could be foreshadowing an upcoming battle between the Fed’s goals and Trump’s plan to weaken the dollar. The President also made amends with China’s President Xi Jinping, but has new problems to deal with as other foreign governments shed their US Treasury holdings.
Battle Between Strong vs. Weak Dollar Policy
After Yellen’s speech, rate hike odds are 23% for March 50% for May. Near-term, the value of the dollar seems uncertain. Fed hints at rate hikes only to cover up reality that they can’t. The dollar is definitely in murky waters starting out in 2017, what with the potential of Trump’s plans to create a border adjustment tax and cause lower overseas earnings. Despite Yellen’s concerns this week, many analysts are predicting a strong medium-term growth overall for the dollar, at least into the second half of this year. Nevertheless, an administration and Fed that fail to see eye-to-eye will only create more confusion and a tug-of-war scenario for the greenback.

This post was published at Schiffgold on FEBRUARY 17, 2017.

This Is How the Status Quo Unravels: As the Pie Shrinks, Everybody Demands Their Piece Should Get Bigger

Fragmentation, discord, discontent, class war: this is the inevitable result of a shrinking pie.
The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the “pie” being cheap energy, government revenues and consumption, sales and profits.
Horsetrading over a growing pie is basically fun. There’s always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus.
Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else’s slice.
Everyone turns on their most compelling emotion-based defense: “we wuz promised” is a reliable standard, as is “we need more money to defend the nation from the rising threat of XYZ.” “Help those in need” plays the heartstrings effectively–as long as the “help” comes out of somebody else’s pocket.
Everyone sharpens their knives, the better to carve a slice off somebody else’s slice of the pie. A passive-aggressive free-for-all ensues as everyone reacts with aggrieved defensiveness to any attempt to diminish their slice, even as they launch shrill attacks on everyone else’s defense.
As the pie shrinks, the motivation to join a broad consensus vanishes like mist in Death Valley. Any cooperation is merely a brief tactical move designed to carve a big chunk off another player’s slice. Once that’s accomplished, the alliance quickly splinters as the survivors battle over the meager spoils.

This post was published at Charles Hugh Smith on FEBRUARY 16, 2017.

Stocks and Gold; the Next Opportunity

Unless you visit the Notes From the Rabbit Hole website regularly, you might think the title of this article implies it is written by a market analyst pretending to know what will happen; like a top in the stock market or a resumed bull cycle in gold. You might also think it is written by one of the writers who’ve either a) been fighting the stock bull since the bearish market terminated a year ago or b) been a perma gold bug bull.
So once again, we have our disclaimers because in a milieu of quickly forgotten soundbites, integrity is important. So I point you to a couple of posts (among many others) that indicated, when the time was right for people to get bullish the stock market in favor of gold.
AMAT Chirps, B2B Ramps, Yellen Hawks and Gold’s Fundamentals Erode (May 30, 2016)
Detailed Multi-Market Update (an NFTRH premium update, now public, from July 22, 2016)
From the July 22 NFTRH update, in the event you don’t wish to follow the link to read the whole thing…
Yesterday in a public post a target was established for the S&P 500. I’d love to see a drop toward 2100 to clear over bullishness but regardless, SPX targets 2410 as long as it’s at or above the noted support zone.
Here is the price panel of the chart from that update…
Indeed, SPX went on to make a hard test of 2100 on election jitters, as you can see by today’s version of the very same chart. That folks, was the last opportunity for those who had remained bearish after Brexit, to stop being so.
Sure, I tout this stuff to show that NFTRH has nailed the markets over the last year – and indeed, through the preceding bear phase as well – but I also tout it because today I am writing an article that looks ahead to the changes that I think are coming and it is important for the reader to know that this is not written by a perma bear clicking the heels of his ruby slippers hoping that this time, finally, he can go home.

This post was published at GoldSeek on 17 February 2017.