Stock Market Crash Stories Experts Push Equate to Nonsense

stock market crash lies

Stock Market Crash Lies Make for Excellent Fables

The lies the media and all the experts were pumping during the sell-off phase (Nov-Dec 2018) was that the crowd had to worry about higher rates and an increasingly hawkish Fed.  And viola like magic the narrative has changed, now they are talking about a Powell put and how the Fed is turning dovish, which clearly proves two points we have been stating for a long time

  1. Mass Media should be viewed and treated with the same respect one accords to sewage.
  2. The masses (which include the experts) are always on the wrong side of the fence. For the record, these same penguins were stating that the markets were destined to crash last year.

Fear pays Poorly

First of all, we hope that the majority of our subscribers are starting to perceive that succumbing to Fear is a dangerous strategy to adopt.  Life and investing should not be stressful; stress is something that every Tactical Investor should abhor.  Moreover, remember, stress comes down to perceptions; alter the perception and one can shift from being stressed to being serene.

Experts love to push the argument that investing is hard and that it takes forever to master this art. Remember that investing is an art, not a science and art is meant to be enjoyed.  So are the masses starting to jump on the bandwagon after this strong turn around; the obvious answer would be yes_? The not so obvious answer would be ___? Continue reading, and you will find out 🙂

Investors are sitting on a massive pile of cash, and it is growing by the day.

The masses panicked when the so-called Santa Claus rally failed to materialise. What they failed to spot was that Santa was providing the astute player with a lovely shopping list and all the goods were on sale.   This January effect was one of the strongest on record and more than makes up for the Santa Claus fail, proving that our stance to remain cool during the so-called December meltdown (opportunity as far we are concerned) was the right posture to take. Santa Claus did not give presents last year, but he provided us with a fantastic list of stocks to buy at a discount price.

To date institutions and individuals have poured billions upon billions of dollars into money market funds. The apparent culprits were; Interest rates, the trade war, government shutdown, Trump investigations and whatever other rubbish you can come up with. Money market assets surged to $3 trillion this January, the highest level since March of 2010, clearly indicating that the masses as always know nothing and jump into the wrong investment at precisely the right time.

Pay close attention to the masses for the data they willingly provide is worth its weight in Gold. Sadly, the masses volunteer for the role of being used as “cannon fodder” over and over again. Try to save them, and they are likely to crucify you to the nearest pole they can find. Watch or read Plato’s allegory of the cave to understand why the masses will never reward anyone that tries to open their eyes.

Common Themes During Stock Market Crashes

The world is ending, and everyone needs to flee for the hills. The wretched media then diligently create a cocktail on steroids, and serve it to the herd; without fail, they fall for the same ploy over and over again.

“Investors can penalize themselves. While money market funds offer safety, they come at a cost as they accept a lower yield,” said Jerome Schneider, head of short-term portfolio management at PIMCO in Newport Beach, California.

https://www.youtube.com/watch?v=BgQ79evjylc

“I like cash now. You can earn a very reasonable return on cash,” said James Sarni, senior portfolio manager at Payden & Rygel in Los Angeles.

We stated all along that the Fed was lying about inflation and now the truth has emerged. Suddenly Powell is changing his tune. Now he has pledged to be “patient” before raising rates; what gives? B.S that is what gives, the Fed’s only function is to foster boom and bust cycles.

“I worry those investors who have long-term horizons may be hurting themselves,” said Kristina Hooper, global market strategist at Invesco in New York.

As always the masses will wait until the very end, then they will jump in and shortly after that the markets will tank. For the masses, the only possible outcome is pain and loss.  Investors sitting on the sidelines are already paying the price, quality stocks have made a strong comeback from their Dec lows, and the party has just begun.

PIMCO’s Schneider stated the following, and we could not agree more

“They tend to play it safe for too long,”

What Is Our Response To These  Stock Market Crash Stories 

It is rubbish end of story, for the markets have already priced this factor in and the experts are now going to spin gossip into news. At the moment they are still pushing the Tariff wars issue, but it will end on the same note; lots of huffing and puffing but the bad wolf will not be able to blow the house down.  What will knock this bull out? When the masses are ecstatic; until then all the nonsense that is graciously labelled as “news” should be taken with a barrel of salt and a shot of whiskey.

 Despite, the sharp rally the markets have experienced, the masses surprisingly are far from bullish; in fact, the largest number of individuals is in the neutral camp. The current reading; the number of individuals in the neutral camp stands at 37 and bears account for 32; this means that 69% of individuals are still either uncertain or bearish and that has to be viewed as fantastic development. 

Courtesy of Tactical Investor

Random views on Sock Market Lies

Stock Market Facing a 2019 Crash: 70% Correction Warning

July 2019 will mark exactly 10 years since the end of the Global Financial Crisis in 2009. It will also mark the longest period of economic expansion on record, surpassing the 1991 to 2001 internet boom.

The question – Is the current boom sustainable?

The 90s economic boom was fuelled by the internet. This economic recovery has been fuelled by historically low-interest rates and cheap credit – a situation many investors and economists say cannot last.

Warning Signs: The End of the Economic Boom
2018 has been the most volatile year in the stock market since the recession, and volatility can make stock market crises more likely.

The Interest Rates and Financial Crises Relationship
As the US economy firing on all cylinders, the Federal Reserve has increased interest rates eight times since 2015. However, as the US nears full employment, there is an increased danger of rising inflation and consumer prices.

Increasing interest rates is a strategy to curb the rise of inflation – increasing the cost of credit and making saving more attractive strikes a balance between people spending and saving.

However, there are also dangers to this approach. Lower consumer spending has a negative impact on the revenue of consumer-facing businesses. Declining revenue then tightens spending across both the consumer and business landscapes. At the same time, higher interest rates make it harder for financially weak companies to meet their debt obligations. Full Story

A Global Market Crash In 2019? 5 Must-See Charts!

Global markets look shaky. Global stocks were volatile this year, and even U.S. stocks have followed their path lower in recent months. The million dollar question is whether this will result in a global market crash in 2019 or whether this is the end of a weak period. After publishing our Stock Market Crash In 2019 Brewing forecast we now look at global markets. Based on these 5 charts we want to make a point about the probability of a global market crash in 2019, and indicate which leading indicators to watch.

InvestingHaven’s recent analysis of the important and violet global market crashes recent decades shows that any important crash started with weakness in currency and credit markets.

In other words any attempt to forecast a global market crash starts with a thorough analysis of leading currency charts as well as yields.

More specifically we have to look for the long term chart patterns, and structural changes in patterns like reversals from secular support or resistance as well as breakouts or breakdowns from secular trends. This is also the focus in this article, and we do so based on 5 long term charts.

The short answer to our question whether we should prepare for a global market crash in 2019: no we do not see enough evidence as of now of a global market crash in 2019 but some of our leading indicators are visibly deteriorating. Full Story

Stock Market Crash Inevitable in 2019: Bitcoin to Rise

Whenever a person buys a bitcoin or any other cryptocurrency, basically you are investing in a market known as the crypto market. Most of the people think that there must be a relation between the current trend of other markets such as the stock market on the crypto market. And if it so, one must be worried about what will happen to the crypto market if the stock market collapse. Also, before that, one must foresee the chances of the stock market to be crashed in the upcoming years.

Well, in this article we will discuss two things which are anyhow interconnected to each other. The first phenomenon that we are going to discuss is the collapse of the stock market in 2019. Is it going to happen and what are the chances of the stock market crash in 2019? In the next section, we will discuss how if the stock market crashes in 2019, it will uplift the crypto market and bitcoin will rise due to it. So, let us first focus on how the collapse of the stock market is inevitable in 2019.

The stock market going to crash in 2019:
It has been ten years that a stock market crashed. As per the trade experts, the stock market is definitely going to collapse this year. The year 2018 itself was one of the worst years for stock market after 2008. Let us have some facts regarding the stock market current scenario: Full Story

 

Originally posted 2019-04-10 18:41:09.

Most Hated Stock Market Bull can’t be stopped by weak economy

Most Hated Stock Market Bull can't be stopped by weak economy

The data below serves as further proof that the economic recovery is nothing but an illusion.  It has only benefited those who don’t really need it. The rich have become even richer, the middle class has vanished and the poor are becoming even poorer.

 

  1. Real incomes have been flat to down slightly for the average household in the bottom 60% since 1980 (while they have been up for the top 40%).
  2. Those in the top 40% now have on average 10 times as much wealth as those in the bottom 60%. That is up from six times as much in 1980.
  3. Only about a third of the bottom 60% saves any of its income (in cash or financial assets).
  4. Only about a third of families in the bottom 60% have retirement savings accounts—e.g., pensions, 401(k)s—which average less than $20,000.
  5. For those in the bottom 60%, premature deaths are up by about 20% since 2000. The biggest contributors to that change are an increase in deaths by drugs/poisoning (up two times since 2000) and an increase in suicides (up over 50% since 2000).
  6. The top 40% spend four times more on education than the bottom 60%.
  7. The average household income for main income earners without a college degree is half that of the average college graduate.
  8. Since 1980, divorce rates have more than doubled among middle-aged whites without college degrees, from 11% to 23%.
  9. The number of prime-age white men without college degrees not in the labor force has increased from 7% to 15% since 1980.  Full Story

What should you do?

Sentiment indicates the masses are not bullish so this market is not ready to crash. Instead of panicking make a list of stocks you would like to own and when the market’s pullback, buy these quality stocks at a huge discount.

Market Sentiment Supports Higher Stock market prices

 

Originally posted 2017-12-06 15:49:39.

Permabear – A Special Kind Of A Stupid One

Permabear - A Special Kind Of A Stupid One

Being a Permabear is a recipe for disaster

It takes a special kind of stupid to be a Permabear; the one that even a thousand hard slaps will not alter. Perma-Bears have a death wish; they are begging to be taken to the cleaners for nothing else can explain this short-sighted way of thinking. A simple examination of any long term chart will prove once and for all that being a Permabear is never going to pay off.  There is not one long term chart that can prove that taking a bearish stance, in the long run, has ever paid off.

Whatever trend line you use, the 1st or the second one, the above 100-year chart of the Dow clearly proves that  Permabears are in the wrong when it comes to investing.

The solution is simple

Focus on the simple factors, for that is what helps determine the trend; factors such as mass sentiment, and extreme patterns (technical analysis) on the charts.  The news is not an essential factor; in fact, toilet paper has more relevance than news; at least it serves a noble function; one cannot say the same of news.

Anyone that advocates giving into fear should be thrown head first out of the front door(figuratively speaking that is) and never allowed back into your house or mind; fear never pays off; only the vendors of fear will make a handsome buck, the buyers will lose their pants, their shirts and their knickers too.

Marc Faber is a classic example of A PermaBear that is full of rubbish

This dude has made prediction after prediction calling for the mother of all crashes since the inception of this bull (2009) but the only thing  that has crashed so far are his predictions of a crash.  He would probably make a very good science fiction writer, for he seems to spend a lot of time concocting scenarios that have a very low probability of coming to pass.

Here he states that we are going to experience a great recession in 2018

Turns out once again the only recession was in his predictions, which for now, are the only thing that has been in a bear market. Hence if you are a Permabear on his ability to predict market direction it could actually pay off.

Then he goes on to state the party is going to end in 2018

Random Musings on being a Permabear

First of all, we hope that the majority of our subscribers are starting to perceive that succumbing to Fear is a dangerous strategy to adopt.  Life and investing should not be stressful; stress is something that every Tactical Investor should abhor.  Moreover, remember, stress comes down to perceptions; alter the perception and one can shift from being stressed to being serene.

Experts love to push the argument that investing is hard and that it takes forever to master this art. Remember that investing is an art, not a science and art is meant to be enjoyed.  So are the masses starting to jump on the bandwagon after this strong turn around; the obvious answer would be yes. The not so obvious answer would be no Continue reading. Turns out at least in the first half of 2019, the not so obvious answer would be the right choice. The masses are still nervous and until they start to dance on the streets, every strong correction should be viewed through a bullish lens.

Conclusion

This bull market is unlike any other; before 2009, one could have relied on extensive technical studies to more or less call the top of a market give or take a few months; after 2009, the game plan changed and 99% of these traders/experts failed to factor this into the equation. Technical analysis as a standalone tool would not work as well as did before 2009 and in many cases would lead to a faulty conclusion.  Long story short, there are still too many people pessimistic (experts, your average Joes and everything in between) and until they start to embrace this market, most pullbacks ranging from mild to wild will falsely be mistaken for the big one.

The results speak for themselves; the majority of our holdings were in the red during the pullback, but now they are in the black, proving that one should buy when there is blood flowing in the streets. It is a catchy and easy phrase to spit out but very hard to implement, because when push comes to shove, the masses will opt for being shoved.

Courtesy of Tactical Investor

 

Random views on Permabear

Another warning light is blinking on the dashboard of the US economy. This time it is the inflation-tied Consumer Price Index (CPI) which has the bears scurrying for their bomb shelters. David Rosenberg, a so-called perma-bear, was filling Twitter feeds with his unique brand of doom and gloom for the Dow Jones and wider US stock market.

GLUSKIN SHEFF ECONOMIST: CPI DATA PORTENDS RECESSION

David Rosenberg

Today’s CPI did miss targets against an expectation of a 0.2% increase relative to the 0.1% reading. The Dow Jones is easing gently off its highs today as well, having lost 53.29 points as of the time of writing.

In isolation, that’s a snoozefest, but Mr. Rosenberg did note something particularly interesting about the data as a predictor of recession. Apparently, he is using price pressure as a sort of alternative yield curve.

BOND-YIELD INVERSION: A STRONG INDICATOR OF RECESSION
Given that interest rates are always somewhat interconnected with inflation due to the Fed’s approach to monetary policy, this is not particularly ground-breaking. It is interesting, though, particularly with the bond market teetering on the brink of inversion. Full Story

A prominent Wall Street permabear says the stock market is ‘stoned on free money’ and it could ‘prove fatal’

One prominent strategist says the market is high literally and figuratively. Albert Edwards, global strategist at Société Générale, cautioned on Thursday that stock markets were becoming “stoned on free money,” leaving them “detached from reality.” It’s a condition that the strategist says could “prove fatal,” in the end.

U.S. equity benchmarks — and those across the globe — have roared back from a late-2018 selloff that culminated in one of the worst December returns in years, but Edwards says, in a Thursday note, that those gains have been largely aided by central banks that are willing to “inject another dose of euphoria into its market patch.”

Indeed, since a Dec. 24 low last year, the Dow Jones Industrial Average DJIA, -0.70% and the S&P 500 index SPX, -0.50% have both advanced by about 20%, while the Nasdaq Composite Index COMP, -0.22% has returned about 23%, thus far, as of trading midday Thursday, according to FactSet data.

Easing trade-war tensions between the U.S. and China have helped stocks rebound, but a policy pivot by the Federal Reserve in January arguably delivered the most substantial shift in investor sentiment over recent weeks.

The Fed, headed by Chairman Jerome Powell, said it would be more patient in assessing future rate moves, and minutes of the January gathering released on Wednesday indicated that its efforts to reduce a $4 trillion asset portfolio could conclude as early as the end of 2019. Full Story

 

Permabear Sentiment Index

Yesterday, I have created a download item that creates an index called the Roubini Sentiment Indicator. The same guys who created this indicator also created another one called the Permabear sentiment index. Permabear refers to people who are always pessimistic and negative about the future direction of the economy and markets. The Permabear sentiment index is built using aggregate keyword volume data from Google Trends. The index is the result of the sum of four Google Trends popularity indices; the keywords used to create these indices are: Roubini, Peter Schiff, Marc Faber and Nassim Taleb.

The item will login in your Google account, load Google trends and create a Google Trends popularity index for each permabear. It will then download the data, parse it, calculate the sum of each permabear volume data and then save the result in ticker symbol: ^GOOGLE_TRENDS_PERMABEAR. As with the Roubini Sentiment Indicator, you must set the email and password fields of this download item to your Google email and password (Select the item, click on Update, click on the “2 Field(s)” button).

The author of the Permabear Sentiment Index claims that the Permabear Sentiment Index can make 3.5% over a short period of 3 weeks compared to the 1.6% yield of the Roubini Sentiment Indicator over the same period. The author gives one reason behind the good performance of this index. Full Story

Originally posted 2019-04-09 14:36:20.

Technology Driven Deflation Will Kill The Inflation Monster

Technology Driven Deflation Will Kill The Inflation Monster

Technology-Driven Deflation

Venture funding for AI is surging as evidenced by the chart below and the trend is showing no signs of letting up; in fact, the trend is so powerful that one can almost start with certainty that technology-driven deflation is going to be a very powerful force to reckon with. Imagine, small companies having the power to do what Amazon does but on a different scale.  For example, flippy the burger bot replaces several workers saving a business up to 100K a year

“We are excited about the impact Miso’s AI-based solutions will have for the restaurant industry. Humans will always play a very critical role in the hospitality side of the business… We just don’t know what the new roles will be yet in the industry.”

The Bot will never get tired, never need uniforms and it’s not going to get sick or complain. Bottom line it is the perfect worker for small business burger joints that are looking to contain their costs and improve their services.  As for the big players are concerned, it has the potential to reduce their overhead by billions.  Last but not least, companies won’t have to worry about paying a minimum wage of up to $15 an hour and providing benefits

USA AI Funding

Little Caeser’s want to create their own Bot

Pizza chain Little Caesars has been awarded a patent for an AI-based robotic system that will help assemble Pizzas at a significantly faster pace. The patent includes two robots, one stationary arm and another fully-fledged robot chef to handle the dough and take care of oven duties.

According to the company’s explanation in the patent, the robot would free Little Caesars from the tedium of repetitive tasks and allow them to “perform other value-added tasks.” Presumably, that’s the same thinking that gave us Flippy, the burger-flipping robot.

It doesn’t appear to actually cook the pizzas or slice them, and the only listed topping is pepperoni — though it probably wouldn’t be hard to adapt it to other toppings. I’m sure there are only so many ways one can “properly distribute” pineapple or olives. Still, there are other robots already doing the things this particular one can’t — Zume Pizza in Silicon Valley, for example, can shape the dough and bake the pizzas at a rate of 372 an hour.

If Little Caesars were to ever combine their robot with Pizza Hut’s self-driving pizza delivery truck, the only human force we’ll ever need will be a single human to load the pizzas into the car. Full Story

Could the pizza bot move like Flippy? Time will tell

“Now he moves like a ninja and is more reliable,” says David Zito, the CEO of Miso Robotics, which created Flippy.

“We’ve been trained since childhood that robotics were coming in the future,” notes Louise Perrin, an accountant who works nearby. “To be a part of it, to see it and watch it happen live in front of you … is absolutely incredible.”

“I had to come in and see Flippy,” she says. “I’d heard the buzz. The concept of a robot flipping your burger is awesome.”

Central Bankers action could Fuel Technology-Driven Deflation

The shrinkage of the U.S. Federal Reserve’s balance sheet has played a significant role in exerting upward pressure on borrowing costs as parts of the U.S. economy have shown signs of decelerating, a study from the Kansas City Federal Reserve released on Wednesday showed.

The model developed for the study showed the level of reserves plays “an important role in determining the federal funds-IOR spread over the medium- and longer-term and that repo rate dynamics play a relatively less important role,” A. Lee Smith, a Kansas City Fed senior economist and the author of the study, wrote. Full Story

 

The China Factor

It is premature to say China is coursing toward a Japan-like falling-prices drama. Yet recent data warrant a moderately sized blip on investor radar screens. In November, consumer prices slid 0.3% from a month earlier, while producer prices fell 0.2%. On a year-on-year-basis, producer prices advanced just 2.7% in November, the weakest reading in two years (consumer prices are up 2.2% from a year ago).

Bond traders are taking no chances. Earlier this week, 10-year yields dropped to 3.27%, the lowest in more than 18 months. And, really, they have every reason for gloom considering the headwinds blowing China’s way — and how they may intensify next year. Full Story

Courtesy of Tactical Investor

Originally posted 2019-04-09 13:38:57.

Nothing about 1987 stock market crash anniversary

nothing about 1987 stock market crash anniversary

Stubbornness does have its helpful features. You always know what you’re going to be thinking tomorrow.

Glen Beaman

Expert after expert is busy proclaiming that the world is about to come to grinding halt again.

They never seem to let up on pushing this sewage onto the unsuspecting masses. This is a clear example of insanity in action;  mouthing the same thing over and over again with the desperate hope that this time the outcome will be different.  The outcome will not be different this time, at least not yet. These guys should focus on writing fiction for reality seems to elude them completely. For years we have stated (and rightly so) that until the sentiment changes, this market will continue to soar higher and higher.

Here is a small sample of the flood of articles that were pushed out this month. If one simply glances through them, one would almost be compelled to think that the writers shared the same notes.  There is almost no originality in these articles. The theme is the same, just because it’s October the focus is on the disaster aspect of the 1987 crash. Almost no one mentions that it proved to be a monumental buying opportunity. The focus is oh the financial world came to a grinding halt. Only it did not, the only that came to a halt was the rubbish the predecessors of today’s experts were uttering back in 1987.  This reinforces the view that most financial writers have chosen the wrong profession   One word sums all this nonsense “Rubbish.”

  • Could the 1987 stock market crash happen again? – Reuters
  • Black Monday anniversary: How the 2017 stock market compares with 1987 – Market Watch
  • Black Monday: 30 years after 1987 stock market crash… Wall Street raises fears of REPEAT- express.co.uk
  • Thursday marks 30th anniversary of the Black Monday stock market crash – courier-journal
  • Buy Climax at 30th Anniversary of 1987 Stock Market Crash – Money Show
  • The Crash of ’87, From the Wall Street Players Who Lived It – Bloomberg
  • Black Monday: Can a 1987-style stock market crash happen again? – USA Today

So are we stating that the stock market will never crash?

No that is not what we are stating.  The market will crash, but for the astute investor, “crash” is the wrong word to use. A strong correction is more likely as most astute investors got into this market a long time ago. It is the crowd that will eventually decide to embrace close to the top that will experience this crash that the experts have been hyping about for years.

This market will experience one strong correction before it crashes, but the moment the Dow sheds 1000 points or more these experts will crawl from the rocks they were hiding under and start screaming bloody murder. To which our response is, please scream as loud as you can; for it will push the markets lower creating a better buying opportunity for us.  This is exactly what we said in Aug of 2015 before Trump won and countless times before and after that.

This market is extremely overbought so a pullback ranging from 1500-3000 points should surprise no one and it certainly should not be construed as a crash but viewed as market releasing a well-deserved dose of steam. To state otherwise, would simply be disingenuous, which seems to be the only real qualification these so-called experts posses

.

Market Sentiment indicates that the crowd is far from Ecstatic

Market Sentiment Supports Higher Stock market prices Bullish sentiment is still too low

 

The Bullish sentiment has risen somewhat, and the crowd is not as anxious as it was at the beginning of this month or last month, but until the readings indicate this crowd is euphoric, a crash is unlikely. Many people state that most people don’t have money to invest in the markets. We beg to differ; look at whats going on in the Bitcoin market, now that is a market showing some signs of Euphoria; the stock market in comparison is at the lukewarm stage.

Buy The  Fear & Sell The Noise 

The only thing that is going to crash and has been crashing since 2008 is the egos of these “know it all” experts. If any of them had even listened to themselves half of the time; they would have bankrupted themselves several times over. The fact that they are still around chiming the same rubbish is clear proof that they don’t believe a word they are putting to print and therefore neither should you.

 Why Not Try Something New For A Change

Make a list of stocks you would love to own at a discount. When the market lets out a nice dose of steam, instead of fleeing for the hills, you can purchase top quality stocks for a discount

The sheer volume of these articles validates our view that the masses are from bullish and a crash is unlikely.  Until the sentiment or the trend changes,  all strong corrections should be viewed through a bullish lens.

 

Obstinacy is the result of the will forcing itself into the place of the intellect.

Arthur Schopenhauer

 

 

Originally posted 2017-12-06 15:45:38.

Nickel Stocks Has Put In A long Term Bottom

nickel stocks

Nickel: Is This The Beginning of A new Bull Market

If you look at a shorter-term chart 1-3 years, it looks like the main move is underway already. However, looking at a ten-year chart, we can see that Nickel is at an important junction. It needs to close above 1100 on a monthly basis; failure to achieve this could push it back down to the 820-855 ranges over rather quickly.  If one is looking for a solid confirmation, then a monthly close over 1200 should do it; this would set the pace for a test of the 1500 ranges with a possibility of trading to 1800.

We looked at several large producers of nickel, and all their charts illustrated that the stocks were consolidating, which suggests that Nickel is likely to pullback before trending higher unless the metal is going to diverge and trend in the opposite direction.

Let’s take a look at some Nickel Producers

VALE, which is the world’s second-largest producer of Nickel, appears to be consolidating while nickel prices trend higher and the same appears to be true of NILSY (Norilsk Mines).  What could be taking place here is that the stocks are pulling back and building energy for the next phase upwards.

On the monthly chart of VALE, we can see that the stock is holding up quite well, while our indicators are letting out some steam. If one were willing to take some risk and wanted to act before our indicators moved into the oversold range capital could be deployed in the 9 to 10 dollar ranges.

The pattern is quite interesting here; this is one of the few stocks in the sector that has not experienced a nice upward move. The other stocks are now consolidating building up steam for the next leg up, however, this chap is still trading in the extremely oversold ranges and technically could mount a rally at any moment. However, note that this is a speculative play.

This company also trades in London under symbol GLEN (LSX: GLEN), and it is currently the world’s 4th largest nickel producer.  Risk-takers could deploy some capital in the 3.25-3.30 ranges and another lot deployed if it drops down to the 2.90-3.00 ranges. We would hold onto the third and deploy it after one of our customer indicators generates a buy signal.

Courtesy of Tactical Investor

Random views on Nickel Stocks

Use of nickel has been traced as far back as 3,500 BC. In more recent times nickel has been used in coins (a nickel), but is best known for its use in stainless steel driven mostly by Chinese construction. With the current negative sentiment due to the US-China trade war and some mild slowdown in China, nickel prices have fallen to a low level, as have the nickel miners. Provided we don’t head into a significant China or global slowdown, any resolution in the trade war with China should lead to some recovery in nickel prices and the nickel miner’s stock prices.Class 1 nickel demand forecast to increase 17 fold from 2017 to 2025 due to the EV boomAccording to McKinsey research if annual electric vehicle (EV) production reaches 31 million vehicles by 2025 as expected then demand for high-purity class 1 nickel is likely to increase significantly from 33 Kt in 2017 to 570 Kt in 2025. Class 1 nickel is the “high purity” nickel that is used in electric vehicle lithium ion batteries. The stainless steel industry uses both class 1 and class 2 nickel (lower purity) and is the main driver of overall nickel demand. Full Story

The share price of nickel mining stocks rose significantly in the Philippine Stock Exchange last week. This was driven by the sharp increase in the price of nickel traded in the London Metal Exchange (LME). The price of nickel is currently $14,860 per ton, up 17 percent compared to its end-June level and up 39 percent compared to its end 2018 level. This is despite the slowing global economic growth, which is pulling down the price of most commodities.

The higher price of nickel in LME is largely due to the steep drop in inventory levels. From 200,000 metric tons during the start of the year, LME’s inventory level fell to 160,000 MT as of end-June and is now down to 149,000 MT. This is equivalent to less than two months’ worth of supply and indicates a potential shortage, according to Jervois Mining executive general manager Michael Rodriguez, as reported by SmallCaps.com.

A reason for the decline in nickel inventory is growing demand for lithium-ion batteries used in electric vehicles. Note that various groups are projecting demand for electric vehicles to increase by a compounded annual growth rate of more than 20 percent in the next five to 10 years as governments globally are encouraging the adoption of electric vehicles due to environmental reasons. Consequently, demand for nickel used for electric vehicle batteries is also increasing and is expected to account for more than 50 percent of total nickel demand by 2030. Full Story

https://seekingalpha.com/article/4159556-top-5-nickel-miners-consider-nickel-boom

2016 was lithium’s year, 2017 was cobalt’s year, and 2018-2020 are likely to be nickel’s years as nickel inventories decline and nickel prices finally start to rise. Strong Chinese and global stainless steel demand and ever increasing demand from electric vehicles [EVs] using higher nickel content batteries NMC (8:1:1).

In this article the first 2 stocks are more solid and safe diversified nickel investments (with exposure to other metals) that will do ok even if the nickel boom is delayed until 2020. The last 3 stocks are nickel-cobalt optionality plays that can give out-sized returns should the nickel price continue to improve as I expect. They will also be helped significantly by strong cobalt prices. In all cases investors will need some patience with a 5 year plus investment time frame.

Nickel price and inventory
Nickel is only just recovering now from a severe bear market from 2012 to early 2016 (low of just below US$4/lb), with the price moving up in 2017 and reaching USD 6.10/lb by late January 2018. Inventory is finally slowly declining and price is recovering. Whilst some Philippine supply is expected to come back, the demand picture is strengthening as global economic growth picks up and the mass market EV boom begins.

In 2017 nickel prices rose 27.51% on the back of solid Chinese stainless steel demand. I expect something similar each year from now until 2020, as demand is steadily boosted from the EV boom. Full Story

 

Originally posted 2019-08-07 18:10:55.

AMD vs Intel

AMD vs Intel

AMD vs Intel; Can AMD maintain its advantage?

“INTC has lost the leadership in process technology, its key differentiation, and it is losing momentum,” he wrote in a research report published Tuesday. “We continue to be more pessimistic about INTC gross margins as its competitive position is eroding and yields for 10nm are likely to depress gross margin in 2H:19.” https://bit.ly/2H7DX7d

INTC is still running into an issue when it comes to 10nm wafer technology, so how is it going to deal with TSM and AMD that are gearing up to sell 7nm chips. Intel states that it will be ready to sell 10nm chips in 2020, while AMD is gearing up to sell 7nm chips in bulk next year.  In the short term, the picture does not appear to be positive for Intel.

Andy Grove was right when he stated the following “Only the Paranoid Survive” It appears those at the helm of Intel have allowed a culture of arrogance to mushroom. To the early bird comes the worm, to the late bird the bullet.

Google the behemoth joins the AMD vs Intel Foray 

The relationship between Google and AMD could strengthen further. Google has already chosen them to supply GPUs for its stadia gaming service.  Intel was supposed to provide the chips, but a further chip delay could push Google to build upon this relationship with AMD.  Many analysts also feel that Google could embrace the EPC 2 “Rome” processors that are based on the Zen 2 microarchitecture. Google has millions of servers so this could lead to a nice boost in profits for AMD.  Focus on the word “could” and do not change it for the word “will”; this is the trick analysts employ to con the masses into accepting a false narrative.

What sets these chips apart from Intel’s chips? They incorporate 7nm technology, and each chip can have up to eight smaller 7nm chips inside them, allowing a single EPYC 2 processor to have 64 cores and they will be able to execute 128 threads.  The entire data-centre processing industry is paying close attention to these chips, and if a big player like Google embraces them, the odds are relatively high that a lot of other players will follow suit. No one wants to be left behind especially with AI-based technology gaining traction at a rapid pace.

Tom’s Hardware on AMD’s New Chips 

While AMD has said that a single EPYC Rome processor could deliver up to 128 PCIe lanes, the company hasn’t stated how many lanes two processors could deliver in a dual-socket server. According to ServeTheHome.com, there’s a distinct possibility EPYC could feature up to 162 PCIe 4.0 lanes in a dual-socket configuration, which is 82 more lanes than Intel’s dual-socket Cascade Lake Xeon servers. That even beats Intel’s latest 56-core 112-thread Platinum 9200-series processors, which expose 80 PCIe lanes per dual-socket server.

Patrick Kennedy at ServeTheHome, a publication focused on high-performance computing, and RetiredEngineer on Twitter have both concluded that two Rome CPUs could support 160 PCIe 4.0 lanes. Kennedy even expects there will be an additional PCIe lane per CPU (meaning 129 in a single socket), bringing the total number of lanes in a dual-socket server up to 162, but with the caveat that this additional lane per socket could only be used for the baseboard management controller (or BMC), a vital component of server motherboards… If @RetiredEngineer and ServeTheHome did their math correctly, then Intel has even more serious competition than AMD has let on.

Amazon has already started to use the EPYC chips in its AWS service which it is marketing as Amazon EC2 Instances

Projections are now being made that AMD could capture 10% of the server market share by 2020, this in our opinion could be a conservative estimate; when the rats start to abandon ship, and they usually stampede instead of slowly crawling out.

 

TSM appears to be cementing its lead over Intel

TSM said that its 5nm process is already in risk production mode. The company claimed it would offer customers a new level of both performance and power optimisation. Compared to TSMC’s 7nm process, the new process generation promises 1.8 times the logic density, 15% speed gain on an Arm Cortex-A72 core, as well as improved SRAM and analogue area reduction.

The 5nm process generation will be TSMC’s second to use extreme ultraviolet (EUV) lithography, which simplifies the manufacturing process. According to TSMC, the EUV lithography also offers excellent yield learning, allowing the 5nm process to achieve a level of maturity faster than previous TSMC process nodes at the same development stage. The new 5nm process design infrastructure is now available for customers to download from TSMC Online.

5nm Processors?

TSMC said earlier this year that its 5nm process would be ready for volume production by the end of 2020, which should be well ahead of Intel’s own relatively competitive 7nm process. Apple’s 2020 iPhone chips are expected to use TSMC’s 5nm EUV process. https://bit.ly/2uSQFzO

TSM does not directly compete with INTC, but this debatable as they are leaving INTC behind when it comes to wafer production, but  INTC competitors like AMD can use these developments to leapfrog ahead of INTC even further in the chip design arena. The ball is now in AMD’s court, and if they execute, correctly it could possibly be a game changer for this underdog.

Furthermore, it opens the door for even more competition as new companies can focus exclusively on creating better chips without having to build the facilities to manufacture the wafers.  This is what scalability is all about. INTC is now losing on two fronts; its wafer technology is out-dated as well as its chip technology.

Wei also noted that TSMC’s 7nm chip client portfolio broadening. Originally focused on smartphone applications the 7nm node is now being targeted for chip designs for applications such as HPC and automotive. “Customer tape-outs activities at N7 continue to be strong despite the cautious macro outlook,” Wei said.

At the same time, TSMC executives discussed the introduction of N7+, a second generation of the 7nm production process that makes use of EUV lithography. “Our N7+ yield rate is progressing well and comparable to N7. N7+ volume production is scheduled to begin in the second quarter this year. As I have stated before, we are working with several customers on N7+ to support their second and third wave product designshttps://bit.ly/2IVhkFd

The crowd follows those it believes to be the leader; if the perception of leadership is challenged the leader’s image suffers irreparable damage over the short to intermediate time frames. The former leader has to move fast to contain the damage, if not the damage is usually permanent.

Even minnows are now attempting to take on INTC:

Rene James, the former number two at Intel, currently heads a start-up called Ampere that is going after Intel’s dominant Server chip business. Her exact words “It’s a once-in-a-50-year situation,” but here’s the rub, it is using TSM to build those chips, and it has already produced data centre chips that have been selected by Lenovo and a few other server-based companies.  This is probably the very start of a new megatrend; time will tell how fast this trend gathers traction.

While Amazon is using AMD’s chips, it is also designing its own chip called the Graviton, and it would never have managed this without TSM capabilities.  AMZN is the largest cloud company in the world, so that’s another thorn for Intel; a price war is brewing which will further erode Intel’s margins as it struggles to hold onto market share.  Therefore it is possible that INTC could lose up 20% of its current market share to its competitors and possibly more if the masses think nothing is being done to address its shortfalls.  There is still time for Intel to remedy the situation (taking a long term view), but it needs to start acting decisively soon.

Conclusion

Can we state with certainty that AMD and TSM have won the battle?

If you start off with the wrong premise no matter how hard you try the answer will be wrong.  AMD does not have its own Fabs, which means its at the mercy of TSM. TSM could start to charge AMD whatever it wants (in theory), and this would affect AMD’s bottom line. In the end, the relationship between AMD and TSM is one in which TSM holds all the crucial cards for now; designing great chips means nothing if you do not control the means of production.

The real story is the battle between TSM and Intel and in that arena, TSM is leading for now, and if the US government does not start to support essential players as is the case in China, then this could mark a turning point.  While TSM is a Taiwanese company, China has its hands in that pie too, and you will see why as we the article below addresses this issue.

TSM vs INTC Appears  To Be The Real Issue

If TSM remains the dominant player, then sooner or later this technology is going to make its way to China.  China’s government supports key industries, semiconductor’s, 5G, etc. and this is what is enabling them to advance at such a rapid pace. Unless The US starts to take a similar stance, it is just a matter of time before China wins the 5g wars (which it appears to have won already as Huawei so far has the best 5g hardware on the market) and the semiconductor wars.  China is already poaching talent from TSM and other Taiwanese chip based companies at a rapid clip.

Throughout this article, we used the word could, and might several times, we could have easily opted for the word “will” or something more forceful, but injecting emotions into the game plan is a sure fire way to guarantee a loss. Every situation should be treated in the same way; examine the data in a cool, calm and rational manner.

Courtesy of Tactical Investor

 

Originally posted 2019-08-07 17:56:35.

BitCoin VS Precious Metals

There is no absurdity so palpable but that it may be firmly planted in the human head if you only begin to inculcate it before the age of five, by constantly repeating it with an air of great solemnity. Arthur Schopenhauer

 Gold bottomed in 2002, and it took nine years for its trade to a high of roughly $1900 (September 2011). Contrast that to Bitcoin, in less than 1/3rd of the amount of time it is showing gains of more than 11,000%.  It took nine years for Gold to show gains of roughly 700% and Gold has given up a substantial portion of those gains.

 

We bailed out of Gold in 2011 for two reasons:

  • Gold was trading in the extremely overbought ranges, and the Gold Bug Camp could not contain their glee; they thought the sky was the limit. Instead, they found out that the Ground was a lot closer.
  • The masses were not embracing Gold, and they refused to treat or view it as a currency.

Only those from the hard money camp continued to believe that Gold was a currency,  but sadly their numbers are dwindling with the passage of each day. The masses view Bitcoin as cool and secure; a feat Gold has struggled to achieve and is not likely to achieve in the foreseeable future.  Whether this is true or not, hardly matters for when it comes to investing, perceptions are all that matter.

Does this mean the precious metals sector is dead?

Well, that depends on what one means by dead.   Gold has performed abysmally since (it topped out)  2011.  The money supply soared, and Gold tanked, not exactly a good sign. In doing the opposite of what was expected from it, Gold cemented the view that it was an ancient relic that has no place in today’s monetary system. We are speaking in terms of Mass Perception. What we think, matters not; we follow trends, and we don’t waste time trying to look at things from a personal vantage point.  There are many reasons for Gold’s underperformance after 2011; one of them was the “velocity of the money supply” which all but stalled after 2011. However, the masses don’t waste time on details like this. They look for simple cause and effect answers. Money supply soared, Gold did nothing, and hence Gold is a waste of time.  A bit simplistic but that’s the mass mindset for you.  However, looking forward some factors could limit Gold’s lustre

Demand for Gold continues to drop

 India’s gold consumption is likely to drop to its lowest in eight years in 2017, hit by government moves to make bullion trading more transparent and by faltering demand from some rural areas, the World Gold Council (WGC) said on Thursday.

Evidence of weaker appetite in a country where gold is used in everything from investment to wedding gifts could drag on global prices that have been hovering near their highest in three weeks. India is the word’s No 2 consumer of gold behind China. Full Story

The Dollar appears to be putting in a base

US dollar ready to rally in 2018, Good for Bitcoin bad for Gold

The dollar topped in early 2017 and what did Gold do? Absolutely nothing; instead of surging to new highs it could not even trade past its July 2016 highs.  The dollar, in contrast, has been going through a well deserved period of consolidation after mounting a stunning rally that started in 2011.  It tested support and held, and as long as it does not close below 90 on a monthly basis, the outlook will remain bullish.  Consequently, a monthly close above 94.50 will open the possibility for a test of the old highs.

Conclusion

The dollar is getting ready to mount a rally, demand for Gold is declining, and Gold has been unable to trade past $1350 even in the face of a weaker dollar.   Then we have the Bitcoin market, which the masses (especially millennia’s) find to be a lot more exciting and rewarding than Gold. All these factors don’t bode well for Gold.  It appears that Gold is likely to test the 1000 ranges unless it decides to diverge and trend upwards in tandem with the dollar.   Bitcoin, on the other hand, is now in the feeding frenzy stage, so this market is ripe for a correction. However, the upward move is still not over. After a hard correction, Bitcoin is likely to resume its upward trend.

Gold will probably never experience a move akin to that of Bitcoin, but that does not mean it won’t make for a good investment one day. For now, the trend is neutral;  a weekly close below $1100 will darken the outlook for Gold, but a monthly close above $1350 will indicate that Gold is ready to trend higher.

Word to the wise

Never fall in love with any investment.  In the end, it’s the trend that you should pay attention to, for no sector can trend upwards forever.  The odds of the Dow trading to 29,000 are far better than of Gold trading to $1900.

 

Published courtesy of the Tactical Investor

 

Originally posted 2017-12-06 15:33:36.

US Dollar Finally Hit Bottom?

US Dollar Finally Hit Bottom?

US Dollar Finally Hit Bottom and Gold could be heading lower

The theme from the Gold bug camp for so long has been; Gold is going to soar to the moon.  What many forget is that these fools have been singing this same song for decades. Instead of soaring to the moon,  Gold has been licking the dust for almost 7 years. It topped off in 2011 and since then the action has all down with a few false breakouts that the misguided Gold bugs mistook for the beginning of a new bull run.

We are not against Gold or the precious metals sectors; we actually favour the hard money doctrine, but the problem is that view is not shared by the majority.   Mark Dice illustrated that most individuals would take a candy bar over a 10oz bar of Silver.

Now many would respond by saying these people are stupid, etc.  That’s not the point, the point is that most people no longer view Gold as currency; instead, they view it as some ancient relic.

Is the Dollar getting ready to Rally?

 

Is the Dollar getting ready to Rally?

The bigger issue is that the Dollar appears to be putting in a base. The dollar has mounted a very strong rally since it bottomed out in 2011, so the current consolidation is to be expected.  The dollar is holding firmly at 90; a zone of strong support.  As long as the dollar does not close below 90 on a monthly basis the outlook will remain bullish.  With the passage of the Trump’s Tax package, the outlook for the dollar and the stock market has brightened significantly pushing Gold even deeper into the shadows.  If the Dollar can close above 94.50 on a monthly basis, the groundwork will be laid for a test of the old highs.

Gold, on the other hand, looks like it’s going nowhere

Gold market ready to crash, US Dollar ready to Rally

The dollar topped in early 2017 and did the Gold market respond positively to this event.  The reaction was muted at best. Instead of surging to new highs it could not even trade past its July 2016 highs.  To make matters worse, gold put in a lower high than it did in July of 2016, even though the dollar traded below its 2016 lows.

Other bearish factors

Instead of putting in a series of higher lows, Gold has been putting in a series of low highs since 2013.

It has not managed to trade above $1350 for more than a brief period.  This illustrates that demand is not robust and the market is not pricing in all the negative news.  Until Gold can trade above $1350 on a monthly basis, the outlook will remain Neutral to bearish.

If the US Dollar Finally Hit Bottom, then it should be testing its old highs within 12-15 months

The dollar is oversold and the pattern is still bullish. It has gone through an extensive consolidation phase and it is now trading in the oversold ranges.  A monthly close above 94.50 will solidify the longer-term outlook and indicate that the dollar is ready to test and possible challenge it’s all-time highs.

 

Published courtesy of the Tactical Investor

Originally posted 2017-12-06 15:22:06.

Bull and Bear 2019: Which one is the winner?

Bull and Bear 2019

Before we get into any commentary take a look at the images and charts below.  Remember that the best time to buy from a long term perspective is when blood is flowing freely in the streets and blood is flowing now. Finally, keep in mind that we have always advocated that crashes are nothing but long term buying opportunities. Pull up a long term chart and you will be forced to arrive at the same conclusion.The Big player’s game strategy is to get individuals to focus on words such as bear market, crash, and end of the world, etc; in doing so, the crowd focuses on the tree and forgets the forest.

Anxiety Index - Tactical Investor

Source: Tactical Investor

The anxiety gauge has red-lined, and the gauge is in unchartered territory;  it has set an all-time new high.

Bull and Bear Chart - Tactical Investor

Source: Tactical Investor

Bearish sentiment is approaching the seven-year high level. Fear and hysteria are trading at off the chart levels.  Mass psychology states that stock markets never crash when the masses are in a state of panic.   Bull markets emerge when the masses panic, so forgot about the what happens if the stock market crashes scenario? If it does crash, run out and buy all the top companies; from a long term perspective stock market crashes are fantastic buying opportunities.

If things were declining retail sales would not be improving. Holiday season retail sales are set to exceed the $ one trillion mark for the first time.

Holiday Season Retail Sales

Source: emarketer.com

Random Views on Stock Market Bull and Bear 2019

Big-money investors see the bull market ending in 2019

  • Institutional investors believe the bull market in stocks will come to an end over the next 12 months.
  • They also expect the next financial crisis to come in one to five years, according to a Natixis survey.
  • The results come as market tumult has left stocks barely positive for 2019.

The longest bull market run in history is coming to an end in 2019, according to the pros who handle Wall Street’s big-money clientele.

A survey of institutional investors show that 65 percent see a change coming, with the biggest threats being geopolitical tensions and rising interest rates, according to Natixis, which surveyed 500 managers of pension funds, endowments, foundations and the like. Respondents also included sovereign wealth funds and insurance funds.

In addition to seeing the bull market stopping, they also anticipate the next financial crisis coming in one to five years.

Despite the pessimism over where the market is heading, the collective portfolio allocation to stocks is expected to dip only slightly — from 38 percent to 36 percent. But 41 percent of those surveyed said they will be reducing allocation to U.S. equities.

Allocations are expected to increase slightly for bonds, from 37 percent to 38 percent, and cash, from 5 percent to 6 percent.

“The market is catching up to what they’ve been thinking about. I think they’ve been positioned for this for quite a while,” he said. “For the most part they’re staying put, except U.S. equities.” Full Story

 

Opinion: A bear market and 6 other forecasts for 2019

A new year is usually a time for fresh starts and empty promises. But investors begin 2019 in a state of high anxiety.

That’s because despite a post-Christmas rally, stocks still had their worst December since 1931 and their worst year since 2008 (both ominous comparisons). By Christmas Eve, the S&P 500 SPX, +0.00% was within 0.2 percentage points of a 20% bear-market decline, before a Santa rally kicked in.

So are we in a bear market? Is recession around the corner? And how will Democratic control of the House of Representatives and the looming 2020 presidential election affect markets this year? Here’s my take.

1. A trade deal with China will boost markets and investors’ confidence. President Trump already has hinted (or tweeted) that trade talks with Chinese President Xi Jinping are making “big progress.” Both men really need a deal—Xi, because of the slowing Chinese economy, and Trump, because of plunging stock prices.

I expect they will cut a cosmetic deal in which Xi makes some concessions, but ultimately Trump will cave on his major demands, as he did with North Korea (which still shows no sign of real denuclearization). But both will declare victory and that will be good enough for hardcore Trumpkins and for Wall Street, which just wants markets to go up.
So stocks will rally sharply… Full Story

Will 2019 be a Bear Market or Bull Market?

AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.

Is The 2019 Stock Market Crash Over? Or Will The Bear Market Continue?
In this video we’ll do a quick market review to see whether we’re headed higher from here in stocks or if the bear is still creeping behind the corner.

The market is battling through the major supply overhang (red zone) that I pointed out a few weeks ago. I’d expect a selloff from these levels over the next few weeks. This bounce is technically overextended (price is near the upper Bollinger Band) and one more good washout would really set the stage (both from a technical and sentiment point of view) for another major leg higher.

Of course, we don’t need to see a selloff. We could see persistent strength and have the market move higher from here. But, I believe it’s odds on we see a reversal before the market makes another major move.

The market has so far, though, given us a number of things to be optimistic about. Both credit and Cyclical vs Defensives have been confirming this rally; which is just the type of action we need to see in order for a significant bottom to be in place.

And various breadth indicators are showing extremely large buying pressure coming into the market. My longer-term breadth indicator is moving in the right direction. Full Story

Conclusion

The correction of 2008 was warranted as the masses were euphoric in terms of the housing sector; it took a turn for the worse when Lehman brothers were purposely thrown to the curb by the Fed.  Regardless of this development, you can see that the markets were trading in the extremely overbought ranges and masses were euphoric.

The same sequence of events occurred during the dot.com bubble and the not too late Bitcoin bubble. If there were charts, we could demonstrate the exact setup going back all the way to the tulip bubble.  The masses are not euphoric and the markets are not overbought; hence the current pullback most likely falls into the “opportunity” category.

 

Originally posted 2019-04-03 12:28:41.