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Great Philosophical Question.
...for which I'll give two answers.
#1. Nobody knows what the **** is going on.
#2. If we move from winter to summer (which may happen in a month or so) the market is replacing one depression...a deflationary one, with an inflationary aka stagflation depression. This will favor GLD over SLV and TIPS over EMLC.
....by the way, if and that's only an if, we move from spring to summer that takes VIX out and puts VXX (vol pos) assets!
If markets were boring they would be much fun, personally, I'm having a blast!
More Craziness Could Lie Ahead Next Week.
My growth pulse is turning down. Currently the reading on my pulse is 9 positive out of 9 possible. If five turn south so does the pulse. What that would mean is that TIP/LTPZ/ITIP is the favored asset class.
AND!!!
Some money will be moving out of Spring and Fall assets into Summer and Winter...and I'll be buying back a small position in the LB, and adding to GLD, and TIPs.
It would be truly nuts if the secular growth turned negative...who knows what a month will bring.
That would mean economic summer or stagflation, what I call the inflationary depression.
I'll really get to earn my name if that happens.
It would be just plain nuts if the world moved from winter=>fall=>spring=>summer in one years times. Epic
I'd Have Given 100/1 Odds on 2/11/16.
If someone would have said by 4/29/16 my portfolio would have sold off all the long bonds and replaced them with growth/inflation loving emerging market bonds (in local currency yet).
Just goes to show you, never say never, dancing lightly on the balls of your feet.
The year is only 1/3 old, what other adventures await?
Thanks for the Zero Hedge Link!
...most informative. Love the line, (Zero Hedge contains) 'Interesting things and crazy things.' Exactly my point.
My Allocations For Today's PP.
Spring assets: 50% with EMLC 45% / SLV 5%
Summer assets: 25% with ITIP 22.5% / GLD 2.5%
Fall assets: 25% JNK
Winter assets: 0% TLT/EDV/ZROZ
I'll wait on my two SLV/GLD allocation indicators before bumping up SLV to 20% of EMLC and GLD to 20% of ITIP.
Bases loaded, bottom of the ninth, the count is 3 and 1...and here's the pitch.
Which is Why the World Need Price Inflation.
Bill Gross told the CB'ers time to get the price, not asset, inflation show on the road calling for higher interest rates on bonds (due to price inflation). So far the market is backing the idea they finally got it right.
An inflationary depression keeps people in their homes, a deflationary one leaves them homeless. Between the two stagflation is the lesser of two evils.
Giving Away the Key to the Mint.
I normally do not do this. Give away my target cross. It's my feeling you should develop you own.
However, in this case, since this is the first spring since 2010 I'm making an exception.
The cross is 75,375,0 MACD SLV:EMLC.
When this crosses I'll be all in SLV.
If you'll notice the cross has been beaten back numerous times, will this be the breakout???
http://stockcharts.com/c-sc/sc?s=SLV%3AEMLC&p=D&yr=2&mn=0&dy=2&i=t03499430336&r=1461881652084
Only 25% Through Potential SLV Buying.
Tomorrow I well might be 50%.
Secular Deflation -12 BUT Inflation Pulse Today +16
Doing the math by tomorrows close secular inflation will be +4 and herald the birth of a brand spanking (how we in the Midwest talk) new spring baby bull.
Don't Get Me Wrong on Zero.
It's a great site...when the stick to the facts.
The problem is the have a Nebraska sized corn cob stuck up their #$%^# when they talk about 'what should be' or 'what's going to happen'.
The zero authors are pissed the world has moved away from liquidation depression al la the Great Depression, which we most certainly would be in if not for the CB'ers who are trying to save the world from a mess they didn't create.
The mess was created in 1971 by the executive branch of the United States with approval of Paul Volcker then with the Treasury, with Richard Nixon, taking the world off the gold standard for international settlements.
The CB'ers are no only beginning to realize if you going to get rid of the problem of global debt, and no repeat of the GD, the only choice is to inflate the stuffing out of everything.
Tomorrow Will (most likely) be a PP Day.
...yet with SLV exploding to the upside at Fridays close I'll be 100% invested--backing the truck up to EMLC and SLV.
Welcome the birth tomorrow of the new spring baby bull, taking the place of the fall baby bull, who unfortunately died after only four short days.
Fall Over in Four Days??? Last Time...
Fall lasted four YEARS!!!
This is an epic move my friends, epic!!!
Reworked and Smoothed Inflation Index.
Spring is going to be happening even sooner!
Index is projected to fall to -11 from yesterday's -28, with one of the indicators becoming positive for the first time in five years!
At the close (if the numbers hold) I'll pick up another 15% in EMLC and 1.5% in SLV.
The VXX Slide of Death.
http://stockcharts.com/c-sc/sc?s=VXX&p=D&yr=0&mn=3&dy=0&i=t61740810702&r=1461857712774
...how does the old saying go? Never catch a falling knife, well it this case it's a machete.
Some of the TVIX guys are having some 'fun' in their misery which really is miserable.
Holy F%$K Batman, our goose is cooked!
Don't count your chickens yet little Chum.
Batman, I put all of our money into TVIX because of the impending crash.
Robin, you layed a big goose egg on that one!
I'll call Tesla to cancel the new Batmobile.
Sample :(
Hope This Guy is Only 1% Right.
http://www.roadtoroota.com/public/998.cfm
...I'd take a $1,000 oz and be very, very, very, very, very...etc. happy.
Pulse Inflation Soon to be Secular.
My pulse inflation moved from a -33.5 deflation to -28.0 deflation yesterday. At this rate in six days, on next Thursday, the world will be entering economic spring.
A season can sometimes last for years, if Fall only lasts for a couple of weeks it will set a record for the shortest season ever.
Let Me Speak Frankly.
#1. First of all the market could give a rats-ass what either you or I prefer.
#2. Go cold turkey and never access the zero hedge site again.
#3. The market never 'just crashes' it always, and I mean always roles over first.
#4. Bonds don't plunge, but growth stocks can. Bonds are protected by an interest yield that automatically goes up as the price of the bond goes down.
#5. Commodities on the other can and have plunged. Silver in 2011. But before the plunge the silver market was sending signals all was not well.
My suggestion to you would be to go 100% in cash until the market signals it's back in economic winter--who knows it may happen next month, next year, or the next decade.
Correction Previous Post.
Fall has five, Spring four, Winter two, and summer only one.
It's possible for one cell not to have any pins at all. Example if secular inflation turns positive the two deflationary pins stuck in winter will be moved to positive inflation in spring giving the spring cell six pins for a PP.
The other adjustment for a secular shift inflation would be to remove two pins from fall and move them to summer.
With the active part of my investment, the other fifty percent it's allocated according to the pins with 1/12 = 1/24 of my portfolio value.
Fall with five pins = 5/24 = 21% as I reported yesterday.
Sounds complicated, but it's really easy, with no second guessing. Once I move a pin, I move money.
How I'm Playing My 50% in MM.
...waiting for the perfect pitch--PP.
So what makes up a PP? When all the stars and planets align just right...let me explain.
As of yesterday we moved into Fall with secular growth positive, and secular inflation negative.
The pulse for growth is also positive.
However, the pulse for inflation is positive which will push us very quickly (next week?) into summer. If that happens it will set up a perfect summer pitch. Both seculars positive, and both pulses positive.
What this means in baseball terms is that I'm at the plate, the bases are full, and the count is 3 balls and 1 strike--every hitter dream.
Now if the inflation pulse turns south and growth stays positive that will set me up for a Fall perfect pitch.
I have a 'war board' with the four seasons next to my computer which has twelve pins stuck in it four pins for secular growth, four for secular inflation, and two each for pulse inflation and growth.
Once one of the four seasons has six pins sticking in it (the max possible) that becomes my perfect pitch. As I look at the board right now fall has five pins and summer four.
So Knowing the Market is Rigged/Manipulated
...one has three choices.
1) Don't bet on moral grounds.
2) Bet with the riggers.
3) Bet against the riggers...the 'r' word--lol.
I'd suggest in order: #2, #1, and certainly last #3. Doing three is like going to an auction with a CB'er siting next to you, what they want to buy, they get.
BoJ Probably Buying Some AAPL This Morning.
http://www.zerohedge.com/news/2016-04-27/youll-never-guess-whos-been-buying-rally
...so how much stock can the CB'er buy? Answer: Every single share issued in the world. Tough to bet that stocks will fall when the printing presses of the developed countries don't want that to happen.
Dan Explains Silver Prices...Sort of.
http://www.marketoracle.co.uk/Article54818.html
Too bad his graph did not run out to 2007, which showed silver leading all commodities up, down, and then up starting in late 2008 putting an inflationary bottom in for the stock market.
If you remember my inflation index uses not only silver but also a broad basket of commodities (GCC) which silver is currently leading...you can see it happening looking closely at the most current pricing data.
http://stockcharts.com/c-sc/sc?s=SLV%3AGCC&p=D&st=2007-04-27&en=2000&i=t19657757943&r=1461755755437
The World is Burning Up Not Freezing.
If you know the world is in one holy mess, and that holy messes usually don't turn out for the best the question is specifically how will it all unravel.
http://stockcharts.com/c-sc/sc?s=SLV%3AVXX&p=D&st=2010-04-27&en=2000&i=t93734865973&r=1461753271650
Will there be an ice age of deflationary depression with a crashing stock market and a soaring VIX? Or an inflationary fire age depression and soaring precious metal prices?
Well underneath all the talk of deflation, silver has been doing quite nicely against VXX. Note how well in did the last time the world moved into an economic spring in mid-2010.
Each time silver crashed vs. VXX and touched the three year MA the CB puts were activated to drive interest rates down and stock prices and PM prices relatively higher to keep the global economy from freezing up.
So if you are a perma-bear and can't find it in your heart to own a share of stock the question is what do you own? VXX? or silver?
Going against a trend is THE surest way to lose money there is.
Next POTUS Will be an Inflationist.
http://www.npr.org/2016/04/27/475843970/with-the-nomination-all-but-decided-clintons-and-sanders-goals-change
...so why did Bernie run, to become president--fat chance. What he wanted all along is what he's going to get, a 'progressive' read inflationist, platform for the Democratic party which Hillary must back and follow or turn into a the biggest Trojan horse, since the Trojan horse.
Forgive student loans, and anything that smacks of sub-prime and give away 'affordable' read free housing. Plus expand unlimited medical care for all--at no cost and increase SS payments. That should add a couple of points to CPI.
The Donald on the other hand wants Apple to make all the gizmos it sells here made here, along with all the other pots and pans China/ROW makes. That should add a couple of points to CPI.
Maybe / Maybe Not.
All depends on how it ends.
No doubt vol pos assets would do well in a winter deflationary depression, but what if the world enters spring and then summer stagflation--an inflationary depression.
A price inflation does two wonderful things for a company: #1 the value of their tangible assets, or book value, increases, and #2 the revenue growth from inflation makes paying off the debt easier. As long as the costs lag the revenue growth things look good for the company as the workers wage suffers in real terms.
The nice thing for the worker who owns a home is that the nominal increase in wages makes paying off the house or student loans easier. Another huge benefit for the homeowner is the increase in value of the house, especially so if leveraged with a fixed rate mortgage.
In sum workers with debt gain, those with no debt lose. Anyone renting on a fixed income, 'investing' in MM is royally screwed.
If you look at history, such as Germany post-WWI, or recently in Zimbabwe you'll find the stock market was a fair (but not great) hedge against inflation. The problem with inflation eventually leads to a crack-up boom when it's left to run out, or a deflationary depression if the powers attempt to stop it by using traditional means.
In an inflationary depression the DOW could easily reach 20,000 or 200,000, or 2,000,000 depending on how many zeros one decides to add. If your hoping for the deflationary depression (which you are) watch out for the rising price of silver, your worst enemy, for silver is the stalking horse for the financialization of all commodities--the new money.
Market Yawing on Apple Miss.
SP 500 futures off a tad, LB futures up a tad.
Good illustration of the impossibility of timing an individual company...unless of course your the CFO, which would then be illegal--lol.
I'll take bonds and commodities over equities any day of the week. Same was true of Jesse Livermore, saying commodity trends were much easier to figure out vs. the variability of quarterly reports.
The 'Other' Bond King is Buying My Sells.
http://www.investing.com/news/economy-news/gundlach-says-reasonable-move-to-start-moving-into-treasuries-398059
...so far Jeff's up 1.67% YTD. Should have bought them earlier in the year Jeff.
It's ALL Up to Silver Now.
My inflation index contains three silver measures:
SLV:TLT/LTPZ/GLD
Plus a fourth GCC:WIP
Together/4 they make up my inflation index which stands at -33.5 with the pulse of +5 each day on average reducing the negative or deflationary secular trend.
Doing simple math the index will turn positive in seven days. Of course this could be shortened if SLV shoots up again or lengthened/reversed if the price gains of SLV slow or the metal reverses.
So Long Old Friends -- TLT and ZROZ
...for the year TLT up 6% and ZROZ 8%. Thanks guys you've been great, but I have to say goodbye for a while until growth and inflation turn south. As you leave old friends you make new ones: JNK 21%, EMLC 15%, SLV 1.5%, IEF 8.5%, and TIP 4% for a total of 50% with 50% in MM waiting to see if spring happens.
What I'll look at is the inflation pulse which continues to build. As long as it builds I'll hold cash until the pulse becomes the secular trend and then plunge into EMLC/SLV.
On the other hand if the pulse turns negative I'll then jump into JNK meaning that fall is still in play.
Somewhat further down the road I have a SLV/EMCL indicator which may play out in a couple of weeks having me in SLV at 30%, and EMCL at 70% of EMCL allocation percentage.
TVIX @ New All Time Low -- Again.
http://stockcharts.com/c-sc/sc?s=TVIX&p=D&b=5&g=0&i=t25278982193&r=1461687917613
...since the first week in Feb., it's lost 75%. Now that we have entered a new bull market and not a bear market rally IMO the losses will only steepen.
At the Close I'll Cover BG's JUCIX.
Been watching my portfolio fall as JUCIX has gone up, but now Gross and I see eye to eye. I'll still be 50% in cash however, just so long as the inflation pulse continues to build, making my BIG MOVE when secular inflation (if/when) turns positive.
Celebrate Today the Birth of a Baby Bull.
If the morning levels hold at the close I'll add significantly to JNK, EMLC, SLV, eliminate LTPZ and TLT, and replace each with a lowed allocation of shorter duration TIP and IEF!
The real excitement could be happening this next week as the fall bull gives way to the spring bull, providing SLV leads the way.
As I said earlier, the last spring bull market started mid-2010. You might want to look at the chart for SLV running like a bat out of hell for a full year.
Secular Growth Crosses to the Positive Side Tomorrow.
Secular inflation is still negative, but could cross to the positive side as early as next week.
In that case fall => spring within a week!
The shorter term pulses for both inflation and growth are positive. Tomorrow marks the end of a bear market rally (secular growth negative but with a positive pulse) to a new bull market...secular positive growth.
The bull has turned on the lions and has ripped them a new one.
As it stands at the market close today: Secular growth --. pulse growth + with secular inflation --, pulse inflation + or economic winter.
At the close tomorrow Secular growth ++, pulse growth +, with secular inflation --, pulse inflation + or economic fall.
However with the massive move silver has put on, next week this could be the case:
Secular growth ++, pulse growth +, secular inflation ++, pulse inflation + economic spring
This would be the start of a 'super spring' (both secular and pulses being positive) generating a risk on movement driving up emerging markets, commodities, and equities in general.
In spring the last asset in the world I'd own would be vol positive.
If SLV Pops From Current Levels Fall Ends
...almost before it begins, perhaps lasting only a week or so, then ushering in spring as secular inflation joins secular growth to the upside.
If that occurs I'll reduce my TLT/IEF position to zero!
The market is like a train pulling into the station going one way and leaving going the other. The opposite of winter of course is spring a risk on global melt-up.
THINGS COULDN'T BE MORE EXCITING!
Secular Growth Cross Tomorrow--Entering Economic Fall.
...leaving winter tomorrow, unless the market completely unravels. A secular growth cross appears imminent. At the close tomorrow I'll increase JNK, EMLC, and SLV, and reduce TLT/EDV and LTPZ moving into shorter duration IEF and TIP.
Tomorrow is a big day, as any secular shift in growth or inflation causes a substantial reshuffling of assets.
Changes Ahead for Forgiving Fed.
http://www.marketwatch.com/story/how-the-fed-ignored-the-constitution-and-played-favorites-during-the-crisis-2016-04-25
...problem with tactical bombing is that you bomb some and make them your friends, but not other who then hate you for playing favorites.
'Cat' Got Clawed.....Month #3
https://www.crescat.net/products-performance/global-macro-hedge-fund/
...Losing over 5% for the month taking them down to 1.8% YTD vs. GT 6.26% YTD.
Cat was both short oil and Chinese equities both of which rallied hard. March was also a tough month for me but relative to Cat I've got nothing to complain about.
Thanks, PP Will be Drawn on the 29th.
Four Ways to Deal with Excessive Debt.
#1. Grow your way out.
#2. Print your way out... strategic bombing with money
#3. Bankruptcy...deflationary depression 'Ice Age'.
#4. Forgiveness...tactical bombing with money.
Looking at each one:
#1. Isn't going to happen with global inequity and high debt levels acting as a drag on consumption.
#2. May happen in the future.
#3. Won't happen if either #2 or #4 is used.
#4. Forgiveness... tactically using money to shore up the system from imploding but keeping it in a zombie state that stymies growth. This is what the Japanese have been doing for close to thirty years and all the others for the past decade.
The difference between #2 and #4 is that #2 increases the general level of prices where #4 prevents the fall or deflation of prices.