RF's Financial News

RF's Financial News

Sunday, October 2, 2016

This Week in Barrons - 10-2-2016

This Week in Barrons – 10-2-2016:


 “Our economy is hitting the brakes, and there is a direct correlation between heavy trucking activity and economic growth”… Diane Swonk


Thoughts:
I’m presently at the ATA trucking show where Diane Swonk will be speaking later today, and as much as I want to talk about Thursday’s market meltdown surrounding Deutsche Bank, I first need to touch on our own Presidential (media) race because of its market impact. 

1.    At the last debate, Hillary (in order to ‘stop the bleeding’ of her own polling numbers) attempted to reinforce how nasty Donald Trump is toward women.  It seems that after winning the 1996 Miss Universe pageant, Ms. Alicia Machado began gaining weight.   Hillary (on camera) accused Donald of ‘fat shaming’ her, and this was still further evidence of his being a misogynist pig.  Factually however, CNN itself reported on January 29, 1997- Web posted at: 4:15 p.m. EST - Correspondent Jeanne Moos - NEW YORK (CNN) – When Alicia Machado of Venezuela was named Miss Universe nine months ago, no one could accuse her of being the size of the universe. But as her universe expanded, so did she, putting on nearly 60 pounds.  Rumors also surfaced that she might be forced to give up her Miss Universe crown. But Trump, as co-owner of rights to the pageant (along with CBS), said he would never let that happen.  CNN then held a small news conference on the issue, and (well) you can decide for yourself: http://www.cnn.com/videos/politics/2016/09/27/donald-trump-alicia-machado-1997-3.cnn.  My point is simply that we’ve seen this movie before, as our election draws near – Hillary is going to panic, will stop at nothing, and therefore expect more shenanigans.

2.    Included in the media frenzy are elements such as Michael Savage’s radio show (The Savage Nation – broadcast across 400 Westwood One radio stations nationwide / 20m listeners) was mysteriously silenced on Monday when he was comparing Hillary's fragile health to those actions associated with someone suffering from Parkinson's disease.

3.    But into this election the media has introduced another issue that is actually more sinister – an example of which is The Baltimore Gazette:  http://baltimoregazette.com/- “Baltimore's oldest news source and one of the longest running daily newspapers published in the United States. With a focus on local content, the Gazette thrives to maintain a non-partisan newsroom making our content the most reliable source available in print and across the web.”  The issue is that the real Baltimore Gazette went out of business over one hundred years ago.  The site is FAKE.  It’s a site put up strictly for election manipulation.  Another one is: The Boston Tribune: http://thebostontribune.com/. 

My point here is that all of you have the ability to search out the truth, and prepare yourselves as necessary.  This Presidential fight is getting deeper, wider and nastier than anyone we’ve ever seen.  Criminal?  Sure.  But then what isn't in America 2016?


The Market...
What a wild ride this week.  On Tuesday the market celebrated what many thought was a Hillary win on Monday night, and gained 130 DOW points.  There was no fundamental economic reason for the ramp, simply what was perceived as ‘stability’ associated with a Clinton win.

Then on Thursday we fell 190 DOW points, on reports that high frequency traders and 10 Hedge funds were withdrawing excess cash from Deutsche Bank (DB).  They feel the bank is darned near insolvent, and with the U.S. seeking a $14B fine for mortgage fraud in the 2008 meltdown, they could fail.  So the panic hit, and everyone sold stocks.



On Friday, things started out calmer with the market hugging the flat line for hours.  Then out of the blue it started roaring higher on word that the U.S. was willing to drop the DB fine to $5B instead of $14B.  So all the panic subsided, everyone felt that DB would be fine again and up we went. 

The truth is that DB is indeed basically insolvent; however, so are most of our institutional banks.  They're simply propped up.  The feeling is that Germany would never let it simply fail, and that they would print as much money as needed to keep it afloat.  I agree that Germany won’t admit defeat and let DB crash, because it is tied to so many other major banks.  With DB’s connection to the third party derivative marketplace, the crash of DB would bring down the entire global banking network.  But that doesn't mean DB is healthy, nor that the world’s systems are healthy.  It simply means that they'll conjure up any means via band aids, bailing wire and zip ties to keep things creaking along.  This is NOT a picture of health.

So on Friday we regained the Thursday loss on the S&P.  On Thursday the S&P opened at 2168 and fell like a rock.  Friday we ended the day at 2168.  Therefore, the S&P recovered to exactly where the market opened before the plunge.  Guess where the 50 day moving average is – 2168.

Everything is broken:
-       Germany's largest bank is truly insolvent yet the market rejoiced that it was not about to go ‘bust’ just yet.
-       The FED (this past week) paraded no fewer than 15 individuals spewing insanity about interest rate hikes, and how they continue to be cautious of the ramifications.
-       Earnings Season is about to start, and most feel that earnings are going to continue their year-over-year downward slide (see chart).















-       The most recent revisions for Gross Domestic Product (GDP) came in at a less than stellar 1.4% growth rate for the first half of 2016 (see chart below).  "This makes us very nervous for the third quarter," said Paul Ashworth, chief U.S. economist at Capital Economics in New York. 















-       Oil bounced because OPEC has supposedly agreed to limit oil production (starting in November) to 32m barrels/day.  The news is coming from ‘sources’ – probably the same ones that floated that balloon in the past.  It remains to be seen if any of these nations are really going to cut anything. I find it amusing lately how rumors, sources and deals just happen to take place at times where the fundamentals of the market stink, our FED looks to be beyond hope, and Hillary’s approval ratings begin to fade.
-       And, the election is continuing to drive people crazy.

Keep an eye on the levels.
-       For a rally to break out we 1st need a close over 2168, then one over 2175, and finally a close over 2180 to really think they're going to achieve the momentum they need for another all-time high.
-       Until those levels fall, we're still trapped in the sideways range.
-       On the downside, if we ever lose 2140 again, we will immediately test 2120 (probably the same day) and if 2120 doesn't hold – look out below.

Be careful out there because all heck is breaking loose!  Trade this market, don't marry it.  There is NO fundamental reason for the market to rise other than more funny-money being printed and injected into the system.  And while that does make stocks rise or at least hold on – it’s NOT a sound reason to buy.  And once we get past election day – all bets are off.  Next stop on the upside is about 2180, but it’s never been as dangerous as it is right now.  Take care folks and be safe out there.


TIPS:
One thing I’m watching is TSLA:
-       TSLA is in a weekly squeeze to the ‘downside’, and after the early mutual fund cash comes into the market on Monday and Tuesday, I plan on selling a Call Spread or shorting TSLA.
-       I’m also nibbling on AG, AUY, CDE, FCX, FFMGF, FSM, HL, NGD, PAAS, PGLC and SAND – knowing that they could have a little more downside until moving higher.

To follow me on Twitter.com and on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there!

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com>.

Please write to Mr. Culbertson at: <rfc@culbertsons.com> to inform him of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <rfcfinancialnews.blogspot.com>.

If you'd like to view RF's actual stock trades - and see more of his thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is the handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0


To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://
rfcfinancialnews.blogspot.com/> 
Until next week – be safe.

 
R.F. Culbertson

Sunday, September 25, 2016

This Week in Barrons - 9-25-2016

This Week in Barrons – 9-25-2016:






















“I’ve lost faith that our FED can find the right way out of this mess”… Bill Gross


Thoughts:

For the past week or more, I’ve had the luxury of being outside the U.S. – looking in.  Last week’s actions had the DOW closing around 19k with an operating economy resembling Mexico.  I guess it could be worse – our DOW could be at 100k with an economy resembling Syria.  But who will ‘Find the Right Way’ out of this mess?

Will our FED ‘Find the Right Way’ out? Unfortunately, our own Federal Reserve badly damaged their own credibility this week by deciding to leave the federal funds rate unchanged.  The FED did tell us that they decided to wait for more evidence while: (a) the job market strengthened, (b) the economy picked up, (c) household spending grew, but (d) business fixed investment remained soft.  The FED’s own dot chart showed a median forecast for only one 2016 rate increase.  Their own ‘National Activity Indicator’ showed its 19th consecutive month in contraction – making it the worst non-recessionary streak in 49 years.  So it shouldn’t surprise you to learn that people with functioning brain cells like Bill Gross and even CNBC’s Steve Liesman were dumbfounded with the FED’s lack of movement and came out and said: “The FED has made fools of themselves.  Yes, Bill and I knew that they may not raise rates, but we didn't think they would lower their rate forecast by 30% over the next 3 years.  That was stunning!”  Marc Faber even suggested that the central banks will just continue to print and buy real estate, stocks, bonds, and junk bonds until they own the world.  Conclusion – it’s doubtful our own FED will ‘Find the Right Way’ out.

Will our Banks ‘Find the Right Way’ out?         This week we heard Congress question Wells Fargo’s CEO on creating millions of fake accounts by using existing accounts as the base, and then charging those innocent new accounts overdraft fees, credit card fees, etc.  It was comical except for the fact that the CEO will NOT go to jail, and the mastermind of the plan received a $125m bonus.  Only in American banking can you get rewarded for screwing tens of thousands of people.  So it’s doubtful our Banks will ‘Find the Right Way’ out.

Will our FBI ‘Find the Right Way’ out?               Remember when FBI Director Comey decided NOT to indict Hillary concerning the e-mail scandal?  My feeling at the time was that he knew if he took it to the Department of Justice for an indictment, all of the information would be sealed as evidence, and the public would never have known what happened.  The Huffington Post recently ran an ‘obituary’ on ‘Why Hillary Clinton LOST the Election’ and their reason #8 was: “James Comey - He might as well have indicted her for real, like he did in the court of public opinion.  He was extremely careless.”  FBI Director Comey knew exactly what he was doing.  The only way he could let the American public make up their own minds was to NOT indict her, and let the information out.  Even the Huffington Post realizes that now.  Maybe the FBI will ‘Find the Right Way’ out.

How about WAR?               Desperate times call for desperate measures.  For approximately 4 years now, I've been suggesting that the elites would like nothing more than to start a war with a major player.  This past weekend a horrifying event took place.  We were 4 days into a brokered ceasefire in the Middle East when “a U.S. led coalition bombed the Syrian Army with phosphorus bombs - killing more than 60 soldiers and wounding more than 100.  The U.S. pretends it was an accident, and that the timing was a coincidence."  How on earth could the U.S. intelligence error so badly as to bomb the Syrian army and civilians?  And why would the U.S. be the nation that violates a cease fire?  After all, I thought we were the good guys?  There is NO doubt that this was a ploy to pull Russia into a hot exchange with the U.S.  A ‘hot exchange’ with Russia would cause people to forget about our fraudulent FED's monetary policy.  Our FED could swing into emergency mode, print more trillions for the war machine, and no one would bat an eye.  As the economy would continue to crumble, the FED could blame everything on the war.  If you wish to learn more about the struggle in Syria (that is not flattering to the U.S. Government) – please review the following video: https://www.youtube.com/watch?v=c8JppJyVxYU

How about the Debate:     On Monday night at 9 pm, it is estimated that 100m people are going to tune in to watch Donald Trump face off against Hillary Clinton.  To put this in perspective, the MOST popular Super Bowl received 114m views – so this event is indeed the Super Bowl of political face-offs.  Last December I predicted that Donald Trump would win the primaries, and that Hillary Clinton was in much poorer health than most realized.  But I also made another prediction that: "If Hillary puts on a poor showing in the first debate, the DNC (Democratic National Committee) will pull her.  They will say that she's had some form of pneumonia relapse, and will substitute a different candidate (presumably Joe Biden) in her place.”  Now, I still believe that.

Bring your popcorn and a stiff drink.  The U.S. Super Bowl of Debates kicks off Monday night.  And YES – I’m counting on one of these two individuals to ‘Find the Right Way’ Out of this mess.


The Market:










Thanks to ES for his charts.

This week was clouded in more volatility with our spineless FED deciding not to hike rates, despite telling us that all of the ingredients for a rate increase were there.   That same FED continued to tell us that they are not political, but just not willing to rock-the-boat ahead of The Obama Legacy.

This triggered a two-day market romp higher, taking the S&P from about 2140 to a high of 2180.  Then on Friday, some of the air came out of the balloon, and we faded back down 12 points – closing at 2164.

So what now?  The high is 2190, and the recent low was the intra-day low of 2120.  When markets get volatile, you stop looking for trends (because there are none), and you look at ‘levels’.  With a close at 2164, we are above the important level of 2160.  If we don't let 2160 slip away, we will try and inch higher toward the top of the range.  But, if we close under 2160, then there’s no real reason that we couldn't quickly sink right back down to the 2140 level.

The other level is the 50-day moving average of 2169.  If we close back above that, it lends credence for our markets moving to new all-time-highs.  But of course a lot is going to depend on what happens Monday night.  If Trump does really well in the debate and Hillary does not, it might initiate a risk-off selling event in the market.  Wall Street and the establishment do not like Trump, and they won't enjoy seeing their appointed queen do poorly.

What this all boils down to is that we're going to have a lot more chop.  There is no real trend, and after trading sideways for almost 3 months – all that has happened is that the sideways trading range has expanded.  For 40 days the range was 2160 to 2190.  Then the range widened to the downside to 2120, and looked frail before they rescued us and got us back up over 2160.

With the election looming, and with the dangerous situation in Syria percolating – expect more up and down chop.  Keep your position sizes low, and don't be afraid to take profits.  Until we break out of the range, each day could go either way.  Take care and enjoy the Debate.  It ought to be interesting.


TIPS:

Currently I’m out of everything except gold, silver and oil:
-       AG, AUY, CDE, FCX, FFMGF, FSM, HL, NGD, PAAS, PGLC and SAND.

To follow me on Twitter.com and on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there!

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com>.

Please write to Mr. Culbertson at: <rfc@culbertsons.com> to inform him of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <rfcfinancialnews.blogspot.com>.

If you'd like to view RF's actual stock trades - and see more of his thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is the handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0


To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/> 
Until next week – be safe.

 
R.F. Culbertson