Thanksgiving is my favorite Holiday and luckily the market is usually quite generous during Thanksgiving week too. So our guess is that we'll continue the sideways and up move that we've seen lately. The worlds Central Bankers are "all in" on the idea, and unless we get a classic Black swan event, or the CB's decide to pull the rug, we "should" just continue to levitate this week. We're "leaning long and keeping our finger near the sell button"

11.24.2014

Good morning all, welcome to Thanksgiving week. As you might guess, the market will be open Wednesday, but by 11 am, the day will effectively be "over". Then we're closed Thursday and we're only open for half a day on Friday.

Historically the market does well this week and this time should be no different. If they weren't about to roll the market over with all the chances it had last week, they probably won't this week either. So, we should expect a slow grind higher.

Happy Veterans day folks. Today the Bond market is closed for the Holiday, but of course the criminal stock market is open for business. I would have hoped that they could put Wall street on hold for a day, but no.....money trumps everything.

NOTE>>!!!

Next Saturday, November 15th, I’ll be traveling to Scottsdale Arizona for the “Financial Fest” being held at the Westin Kierland Resort. So for any of you who live in the area, please come on by and say hello. The event is free, it runs from 8 am to 4 pm, and we’ll be doing a couple live talks. It’s going to be a fun day and I look forward to meeting you!

All The Tricks

One of the interesting things about putting out a newsletter for almost 20 years is that we've covered so many topics that you really can't even remember half of them. Think about the sheer numbers for a minute.

Late last night the news hit that the Doctor in NY who showed Ebola symptoms had indeed tested positive for the disease. Naturally that's going to create a certain level of fear in the city. The only "good" thing you can say is that down in Dallas, it doesn't seem to have spread exponentially, so there's some comfort in thinking this guy probably hasn't infected the masses either.

10.23.2014

Here we go again....

After four days of intense buying, the market was short term overbought, and quite stretched. It needed a pause day, and yesterday was it. They blamed oil, they blamed the strange shooting situation at the Canadian Parliament. But we tend to think they were excuses rather than reasons.

All night long the futures were soggy. Over in Europe most of the indexes were slightly red. But then they got the juice they needed.

Will They Do More QE?

Pull up a chair and let’s chat folks.  This is going to be an interesting letter on a lot of levels, so let’s get started.

Everyone that has any interest in finance knows that the Federal Reserve has had a program in place called Quantitative Easing for the past 5 years. For those of you who don’t understand what it is, the basics are that the Fed’s have printed up money and then used that money to buy Treasuries from the Government and to soak up toxic assets like bad mortgages from the banks. In doing so, it has had the effect of constantly lowering interest rates, since they don’t have to raise rates to “lure” folks into buying the T bills. The Fed’s would buy them at any price, and any rate of return.

But the offshoot of QE was that because they were buying up toxic crap from the banks, AND because Treasuries are also bought from the “primary dealers” ( the big banks) the banks got tons and tons of money to go play cowboy in the asset markets. With virtually zero percent money for the big companies to borrow and buy back their own stock, and all the bank money sloshing around, we’ve had the best bull market that fake money can buy. Stocks are up gigantically since the beginning of the program.

This morning we awoke to DOW futures showing a negative 100 points. Well, didn't we just have an almost 200 point gain on Friday? We did. So, what's the Issue??  Let's see....

 

 

On Sunday we spelled out all the reasons that the market looked poised for a roll over, or in other words a significant correction. Monday looked bad, Tuesday was worse, then Wednesday they came out of the clear blue and bought up everything. All the folks that were short, scrambled to cover and that sent the market soaring. But today, there was NO follow through what so ever and by 11 am we had plunged 200 points.