Currency

Bitcoin is History

Posted by Mike Maloney

on Wednesday, 15 November 2017 15:31

Bitcoin is monetary history in the making. But as Mike Maloney points out in this latest video, many of the investors in cryptocurrencies are new to the arena. Unfortunately, most have no idea how important monetary history is. The technologies may change, but the human emotions that power the markets – greed and fear – do not. 

 

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RECORDS BEING BROKEN: This Is Exactly The Kind Of Thing The Late, Great Richard Russell Used To Warn His Readers About…

Posted by KingWorldNews

on Wednesday, 15 November 2017 13:41

KWN-VIII-11142017Records Broken At Art & Diamond Auctions!

November 14  – This is exactly the kind of thing that the late, great Richard Russell, the “Godfather” of newsletter writers, used to keep an eye on — records being set at art and diamond auctions.  From Bloomberg in May of this year:

….continue reading HERE

 

…also from KingWorld:

MAJOR ALERT: Remarkable Commercial Trading Moves In Silver & Crude Oil!

GE Looks To Divest Energy Assets As Turmoil Continues

Posted by OilPrice.com

on Wednesday, 15 November 2017 13:37

UnknownGeneral Electric Corp., as part of a turnaround plan announced November 13, halved its common stock dividend, from $.24 to $.12. per quarter, a fifty percent reduction. Wall Street had anticipated this move, but the stock has declined 8 percent following this announcement.

Given GE’s lengthy connection with the locomotive industry, it doesn’t seem inappropriate to view the company as a slow moving train wreck, at least in terms of share price performance. Under former CEO Jeffrey Immelt, GE’s stock declined forty percent while the S&P 500 stock index more than doubled. Today’s dividend cut is simply one more in a long list of indignities for shareholders starting in the year 2000 when the stock peaked at about $60 per share. (It is trading a tad below $19 today.)

But since August this Stamford-based conglomerate has had a new Chairman and CEO, John Flannery. The dividend cut and proposed corporate restructuring are on his watch. As an aside, former CEO Immelt begin his corporate tenure by cutting the stock dividend after the financial conflagration at GE capital. Not an auspicious omen.

You can find Leonard Hyman’s lastest book ‘Electricity Acts’ on Amazon

The company plans to streamline and reorganize around three legacy businesses: power generation, aviation, and healthcare while divesting oil and gas exploration, transportation and the energy connection/lighting businesses. Mr. Flannery and his team hope to collect $20 billion from asset dispositions. In addition, dramatic cost-cutting measures could boost corporate cash flows by a total of $3 billion between 2017 and 2018. You don’t need us to tell you that strategically you can’t cost-cut your way to growth and profitability. We suspect that new-CEO Flannery knows this too.

Of the remaining business lines, aviation and healthcare look capable of generating at least average earnings growth relative to the broad market. The power business on the other hand, faces “business challenges”, as the presentation slide show put it (as did the soon-to-be- divested oil & gas business). GE managers seem unable to name the real challenge.

Related: OPEC Chairman: Output Cuts Are The ‘’Only Viable Option’’

The electric utility business both in the U.S. and Europe has become a low growth-no growth business. This looks to be a secular rather than a cyclical challenge. As a result, GE may not see a pickup in demand for its gas turbines, generators, IGCC technologies, and nuclear fuel and support services that the company offers to the power industry around the world.

However, GE is also in the renewables business, particularly on shore and offshore wind turbines as well as hydro generation. From a strategic standpoint, the senior managers of the renewables business want to render the legacy power generation obsolete. Literally they are trying to kick the legacy fossil and nuclear generators off the grid. It must make for interesting conversations over the punch bowl at the annual Christmas party.

You can find Leonard Hyman’s lastest book ‘Electricity Acts’ on Amazon

We are not experts in corporate strategy. But this house-divided-against-itself internal business dynamic seems self-defeating over the long term. It creates potential conflicts. Should one division be reined in to slow the decline of the other (bigger) division? The renewables business could likely command a much higher PE multiple than the slow growing (at best) legacy electric power generation business. How CEO Flannery handles this divide could well determine his success as CEO.

As for GE’s stock and its proper valuation, right now despite all the tumult the market values the company at about 19 times projected earnings and the dividend yields 2.5 percent. The stocks comprising the Dow Jones Industrial Averages trade at around 19 times estimated earnings and yield about 2.2 percent. In other words, investors currently seem to view GE as an average company. The question is whether the new management can meet those even those expectations with its existing mix of businesses and inherent business conflicts.

by Leonard Hyman and Bill Tilles for Oilprice.com

More Top Reads From Oilprice.com:

 

 

Todd Market Forecast: NAAIM Exposure Index Supports Further Rally

Posted by Stephen Todd - Todd Market Forecast

on Wednesday, 15 November 2017 13:13

www.toddmarketforecast.com

Todd Market Forecast for 3:00 pm PST Tuesday November 14, 2017.

DOW – 30 on 725 net declines

NASDAQ COMP – 20 on 382 net declines

SHORT TERM TREND Bullish

INTERMEDIATE TERM Bullish

STOCKS: The weight of the evidence suggests a market that should move higher, but it’s being suppressed by the lack of progress on at tax reform plan. More revelations about Senate candidate Roy Moore are also contributing to the uncertainty. As you know, the market hates uncertainty.

One specific factor leading the market lower was a drop in commodities such as crude oil

GOLD: Gold was down in the early going, but came back to up by $2.

That is normally a bullish pattern.

CHART: We have been showing the put call ratio and noting that it shows sufficient bearishness to support a multi day rally. Here’s another measure of sentiment. It comes to us courtesy of Tom McClellan of McClellan Financial Publications.

It is the NAAIM Exposure Index and measures the overall market exposure of money managers. Right now it’s under 60%, which shows a lot of bearishness.  

Screen Shot 2017-11-15 at 6.24.29 AM

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

System 7 We are long the SSO at 102.50. Stay with it on Wednesday.

System 8 We are in cash. Stay there for now.

System 9 We are in cash.

NEWS AND FUNDAMENTALS: The PPI final demand rose 0.4%, above the expected rise of 0.1%. On Wednesday we get the CPI, retail sales, oil inventories and the Empire State Mfg. Index.

INTERESTING STUFF: “A lie gets halfway around the world before the truth has a chance to get its pants on.”—– Sir Winston Churchill (1874-1965)

TORONTO EXCHANGE: Toronto got whacked for 113.

BONDS: The bond market moved solidly higher.

THE REST: The dollar was sharply lower. Crude oil took a solid hit.

Bonds –Change to bullish as of November 14.

U.S. dollar – Bullish as of October 20.

Euro — Bullish as of October 10.

Gold —-Bullish as of November 1.

Silver—- Bullish as of November 1.

Crude oil —-Change to bearish as of November 14.

Toronto Stock Exchange—- Bullish as of September 20, 2017.

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  

Screen Shot 2017-11-15 at 6.29.23 AM

Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.

  No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.  

 

1.    Without growth in Western gold ETF holdings, the “decent but not spectacular” demand from China and India is not strong enough to move the gold price higher.

2.    Please click here now.  The SPDR (GLD-nyse) fund gold holdings currently sit at about 843 tonnes.  There has been very little change in the total tonnage for several months.  That’s neutral for the gold price.

3.    Governments don’t like their citizens to own much gold.  Restrictions they impose (like India’s import duty as a recent example) dampen demand enough so that the price rises very slowly most of the time.

4.    Economic growth in China and India are increasing demand (the love trade) and mine supply is contracting, but the process is essentially “Chindian water torture” for investors who want to see the price skyrocket like it did in the late 1970s.

5.    Investors that want “big action” in the gold price need to wait patiently for the US business cycle to peak.  

6.    For the price of gold to really sizzle, the business cycle needs to have an inflationary peak.  That hasn’t happened since the 1970s.  Many gold price analysts have used overlap charts that suggest the gold market now is akin to the 1976-1978 period.

7.    I look at fundamentals first, and charts second.  From an inflationary standpoint, the US economy looks more akin to the late 1960s than the late 1970s.

8.    The winds of inflation are beginning to blow, but they won’t become a hurricane for some time.  Having said that, I’ve noted that the St. Louis Fed has calculated that the QE program would have sent the US inflation rate above 30% if money velocity had been at normal levels.

9.    The Fed is projecting seven rate hikes over the next 24 months, and Goldman Sachs projects there could be nine.  I’ve predicted there will be six.  Whatever the number turns out to be, it will likely be enough to move a lot of money into bank accounts.

10. As that happens, banks are likely to become very aggressive with new loans, because the fractional reserve banking system makes the potential reward worth the risk.  The Fed’s new accelerated quantitative tightening program will also help push money into banks.

11. Odds are very high that money velocity begins to rise quite strongly later in 2018 and into 2019.  The bottom line is that inflation could rise much faster than anticipated over the next 24 months.

12. That could essentially create an institutional and retail investor stampede into gold.

13. For now, in the $1200 – $1000 price zone gold is well-supported but sluggish.     

14. I don’t expect that to change until money velocity moves higher, and that’s unlikely to happen until institutions see that the Fed is serious about consistent hikes and accelerated QT.

15. Trump’s tax cuts and tariffs can speed up the arrival of inflation, but the tariff action has been modest, and his tax cuts are bogged down in congress and the senate.  The meandering gold price reflects this quagmire.

16. Please click here now.  Double-click to enlarge.  Gold’s technical price action also fits with the slow arrival of inflation.  Bulls and bears are equally frustrated. 

17. My www.gudividends.com investors are happy, because they get paid to wait.  There’s no question that gold investors need to wait.  If investors must wait for something, they should get paid with a bird in the hand, not just a promise of a bird in the bush! 

18. Dividends are probably the least exciting type of investment for gold bugs.  A lot of the stock market’s gains have really come from dividends, but few investors think about this fact.  

19. Compounded 4% – 8% payouts can build significant wealth over time, and reduce the frustration of waiting for gold market “blastoff” moments.

20. Please click here now.  Double-click to enlarge.  The dollar-yen price action correlates strongly with dollar-gold.  

21. There’s a bear wedge in play and overhead resistance at about 114.  There’s also a potential head and shoulders top formation.  The dollar “should” fall down, but it may not happen until Chinese New Year gold buying begins and the Fed does its next rate hike.

22. Please click here now. Double-click to enlarge this GDX chart.  A beautiful bull wedge is in play and my 14,7,7 Stochastics oscillator is moving higher.

23. Unfortunately, without a rally in gold bullion, GDX is unlikely to perform as well as the bull wedge pattern implies it will.   

24. Gold bugs have incredible patience and intestinal fortitude.  That’s necessary because debt-soaked governments will do anything and everything to avoid paying the piper.  I’ve described the $23 – $18 price zone as a key accumulation zone for investors, and GDX is in the upper part of that zone now.   Buying gold stocks value is vastly more important than predicting the price, and that value is here for the taking in this key accumulation zone!

Thanks

Cheers

St  

Stewart Thomson  

Graceland Updates 

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