Monthly Macro Monitor – October 2018

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Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors’ angst is always hard to pinpoint and this is no exception but this correction doesn’t seem to be due to concerns about economic growth. At least not directly. The most common explanation for the… Read More

S&P 500 Chart – Teetering On The Precipice?

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In the chart below, we compare today’s setup to 2000 and 2007 and the market crashes that followed. Will this historic divergence pattern lead to selling yet again? This version of the original article, by Chris Kimble, has been edited* here by munKNEE.com for length (…) and clarity ([ ]) to provide a fast & easy read. Similar to today, in… Read More

Technically Speaking: Risk Of A Bigger Correction Rising

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In this past weekend’s missive “Market’s Cling To Support,” I noted the early February correction process where we saw a similar short-term bottoming process where the initial bounce failed then bounced in mid-March before failing again to retest the February lows.  On Monday, the market broke through the 200-dma which puts portfolio management on high alert.… Read More

Goldbugs Beware! USD Actually Looks Bullish!

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Interestingly, the U.S. Dollar’s long-term outlook is actually bullish!…[Research suggests] that the USD will go up in the second half of 2019 – 2020 (which coincides with the long-term bearish case on gold and silver). This version of the original article, by Troy (Bullmarkets.co), has been edited* here by munKNEE.com for length (…) and clarity ([ ]) to provide a… Read More

Stock Slump Pushes Yields Lower and Buoys Yen

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Overview:  There is one main story today, and that is the resumption of the slide in equities.  It is having a ripple effect through the capital markets.   Bond yields are tumbling.  Gold is firm.  The dollar is narrowly mixed, though the yen stands out with almost a 0.5% gain.  Most of the large equity markets in… Read More

COT Blue: A Short-term Path For Powell

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On December 12, 2007, the Federal Reserve announced its entry into emergency “non-standard” policy measures. In a belated attempt to “address elevated pressures in short-term funding markets”, the US central bank would begin auctioning reserve funds “against the wide variety of collateral that can be used to secure loans at the discount window.” The Term… Read More

A “Blue Wave” in Midterm Elections? Not So Fast

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This post A “Blue Wave” in Midterm Elections? Not So Fast appeared first on Daily Reckoning. My specialty is global macroeconomic analysis. I don’t usually get too involved in politics, and frankly I’d prefer to avoid the subject altogether. But at certain times politics intrudes on markets and you have to account for it. With… Read More

As Midterms Approach, Prepare for Market Volatility

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This post As Midterms Approach, Prepare for Market Volatility appeared first on Daily Reckoning. Here’s the lay of the land. The Senate is currently divided between 51 Republicans and 49 Democrats (including two Independents who caucus with the Democrats). A change of two seats in favor of the Democrats will give Democrats control of the… Read More

Why Bitcoin May Be On The Verge Of A Powerful Move

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After its powerful surge in late-2017 and stunning plunge in early-2018, Bitcoin’s volatility has died down significantly as it settles into a narrowing range just above its key $6,000 support level. This narrowing pattern appears to be a descending triangle, which has very bearish implications if the cryptocurrency breaks below the key $6,000 support level… Read More

3 Reasons to Get INTO the Stock Market Right Now

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This post 3 Reasons to Get INTO the Stock Market Right Now appeared first on Daily Reckoning. When the stock market has suffered a couple of really big slides in a row, like it did last week, the financial advice to those who are freaking out is always: Do not look at your account balances.… Read More

Europe Challenged

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Europe is in an untenable position.  It is being challenged on many fronts.  A weaker euro need not result, but it is the path of least resistance.   The economy has lost its momentum.  What was first written off as a soft patch, now looks a bit more serious.  This will be driven home by the… Read More

Stop(ped) The (Printing) Press

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Banks in China have to hoard liquidity ahead of their weeklong holidays, twice each year. The bigger of the two, related to the Chinese New Year, occurs in either January or February. The second, associated with China’s National Day, takes place at the beginning of every October and is still a formidable challenge to the… Read More

Cool Video: Bloomberg Discussion of Late US Cycle

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An assessment of the US economy is an important input into the expectations of the dollar’s behavior in the foreign exchange market. As a currency strategist, my views of the US economy are often subsumed in discussions or talked about indirectly by talking about Fed policy.  However, in this clip with Alix Steel and David Westin,… Read More

An Investor’s Desktop Guide To Trading

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Throughout history, individuals have been drawn into the more speculative stages of the financial market under the assumption that “this time is different.” Of course, as we now know with the benefit of hindsight, 1929, 1972, 1999, 2007, and most likely 2019, were not different – they were just the peak of speculative investing frenzies. Of… Read More

Kass: An Open Letter To Larry Kudlow

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“We believe that free market capitalism is the best path to prosperity!” – The Kudlow Creed Dear Larry, You and I go way back – we have been friends for many years. I deliver this letter to you out of respect and in recognition of that friendship. It is being submitted and is intended to be respectful,… Read More

You Are Different This Time

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You don’t always see a respected member of the financial commentariat argue that it’s different this time. But that’s almost what Morningstar’s Christine Benz has done in an excellent recent article. What Benz means is that you’re different now than you were during past market cycles. More specifically, you’re older now than you were during… Read More

Collective Sigh of Relief?

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Overview:  Chinese stocks extended the pre-weekend recovery, with the major indices up 4%+, the biggest advance in three years.  Most markets in the region rose, and the MSCI Asia-Pacific Index has a good start to snap the four-week drop.  European shares are also higher, and the Dow Jones Stoxx 600 is 0.5% higher through late… Read More

How Would A Trade War With China Affect the Price of Gold?

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The United States has flirted with trade disputes with just about every one of our trade partners – Mexico, Canada and even the European Union – but the major dispute that has everyone concerned is with China, one of our largest trading partners. An all-out trade war with China would be destabilizing to the global economy… Read More