Todd Market Forecast for Thursday October 26, 2017

Available Mon- Friday after 3:00pm Pacific.

DOW + 72 on 98 net advances

NASDAQ COMP – 7 on 52 net advances

SHORT TERM TREND Bullish

INTERMEDIATE TERM Bullish

STOCKS: In our update for yesterday, we said that we were already close to a rebound. We got it with the Dow and S&P 500, but the action of the NASDAQ Composite was a bit lackluster. However, there may be help on the way. Check out the chart.

Word was that the ECB would keep its policies loose and this helped European markets and this spread to the U.S. Also, profits were quite good.

A number of companies, including Amazon, reported solid earnings after the close.

GOLD: Gold was down $11. A sharp rally for the dollar helped push down gold.

CHART: The QQQ has been in a downtrend for a week and one half, but it is getting oversold (arrow).  

BOTTOM LINE:  (Trading)

 Our intermediate term system is on a buy.

System 7 We are in cash. Stay there for now.

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

System 9 We are in cash.

NEWS AND FUNDAMENTALS: The trade deficit came in at $64.1 billion worse than the expected $63.9 billion. Pending home sales had zero increase. The consensus was for a rise of 0.4%. On Friday we get GDP and consumer sentiment.

INTERESTING STUFF: “Each problem that I solved became a rule which served afterwards to solve other problems.”- Rene Descartes (1596-1650), “Discours de la Methode”

TORONTO EXCHANGE: Toronto gained 36.

BONDS: The bond market continued its down trend.

THE REST: The dollar surged. Crude oil moved to a rally high.

Bonds –Bearish as of October 24.

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

Euro — Bullish as of October 10.

Gold —-Bearish as of October 17.

Silver—- Bearish as of October 17.

Crude oil —-Bullish as of October 10.

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.   

  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.

www.toddmarketforecast.com

Towards the end of financial bubbles, asset prices behave in ways that can’t be explained with rational/historical metrics. So new ones are invented to make sense of things. In the 1990s tech stock bubble, earnings were “optional” and “eyeballs” – that is, the number of visitors to a dot-com’s website – were what determined value. In the 2000s housing bubble, home prices would always rise, which justified pretty much any selling price and asset backed security structure. 

Now David Einhorn, a high-profile (and highly frustrated) hedge fund manager, has offered an explanation for today’s bubble: 

David Einhorn: ‘We wonder if the market has adopted an alternative paradigm’

(Yahoo! Finance) – Hedge fund billionaire David Einhorn is struggling to make sense of the stock market. In his latest investor letter, the founder of Greenlight Capital raised an interesting question about valuation.

“Given the performance of certain stocks, we wonder if the market has adopted an alternative paradigm for calculating equity value,” Einhorn wrote in a letter to investors dated October 24. “What if equity value has nothing to do with current or future profits and instead is derived from a company’s ability to be disruptive, to provide social change, or to advance new beneficial technologies, even when doing so results in current and future economic loss?”

Einhorn, who identifies as a value investor, said the market “remains very challenging” for folks like himself as growth stocks with speculative earnings prospects outperform value stocks.

“The persistence of this dynamic leads to questions regarding whether value investing is a viable strategy,” he wrote. “The knee-jerk instinct is to respond that when a proven strategy is so exceedingly out of favor that its viability is questioned, the cycle must be about to turn around. Unfortunately, we lack such clarity. After years of running into the wind, we are left with no sense stronger than, ‘it will turn when it turns.’”

It’s tough being a value investor these days
Greenlight Capital returned 6.2% in the third quarter, bringing the fund’s year-to-date returns through September 30 to 3.3%. Meanwhile, the S&P 500 (^GSPC) rose 4.5% during the period, bringing its year-to-date return to 14.2%.

Value investors like Warren Buffett and finance academics would argue that a company’s true intrinsic value can be derived by discounting its projected future profits. Of course, it’s almost impossible to accurately forecast a company’s future profits. Furthermore, it’s widely accepted that a company’s market price in the short-run is affected by other factors including investor emotions.

One of the most widely-reported signs that the market as a whole is expensive is the cyclically-adjusted price-earnings ratio (CAPE), a measure of stock market value popularized by Nobel prize-winning economist Robert Shiller. CAPE is calculated by taking the S&P 500 (^GSPC) and dividing it by the average of 10 years worth of earnings. It has a long-term average of just over 16. Currently, CAPE is just above 31, which some view as trouble. The only other times CAPE climbed like this was before the market crash of 1929 and the bursting of the tech bubble in the early 2000s.

Einhorn explained that his investment strategy “relies on the assumption that the equity value of a company equals the market’s best assessment of the current and future profits discounted at the company’s cost of capital.” The fund should outperform when it finds opportunities where “the market has misestimated current or future profitability or miscalculated the cost of capital by over- or underestimating the risks.”

Unfortunately, that strategy hasn’t worked well as momentum stocks have continued to move higher.

“It’s clear that a number of companies provide products and services to customers that come with a subsidy from equity holders. And yet, on a mark-to-market basis, the equity holders are doing just fine,” he wrote.

Consider Amazon, Tesla and Netflix
Einhorn has placed bets against a handful of high-flying momentum stocks that he’s dubbed “The Bubble Basket.”

He pointed to Amazon (AMZN) as an example, writing that the company recently revealed “a much lower level of long-term structural profitability, causing consensus estimates for the next five years to drop by 40%, 22%, 18%, 14% and 8%, respectively.” Even still the company’s stock dipped less than 1% during the third quarter, he noted.

“Our view is that just because AMZN can disrupt somebody else’s profit stream, it doesn’t mean that AMZN earns that profit stream. For the moment, the market doesn’t agree. Perhaps, simply being disruptive is enough.”

Next, he brought up electric carmaker Tesla (TSLA), which he described as having an “awful quarter.” While shares dipped 6%, Einhorn felt it “deserved much worse.”

“So much went wrong for TSLA in the quarter that it is hard to only provide a brief summary,” Einhorn wrote. He went on to list numerous issues with the company including manufacturing challenges, reduced gross margins, markdowns on showroom vehicles, and intense competition.

Lastly, he brought up Netflix (NFLX), where he noted that competition has been heating up with Disney pulling their content for its own streaming service plans.

“NFLX continues to accelerate its cash burn as it desperately tries to compensate for its inability to rely longer-term on licensed content. On the second quarter conference call, the CEO stated, ‘In some senses the negative free cash flow will be an indicator of enormous success.’ To us, all it indicates is that NFLX is capable of dramatically changing the economics of stand-up comedy in favor of the comedians,” Einhorn wrote.

These companies have all raised red flags for Einhorn. Unfortunately, the market often doesn’t cooperate with what investors consider to be rational analysis.

“Perhaps, there really is a new paradigm for valuing equities and the joke is on us,” he said. “Time will tell.”

This has been an especially brutal bubble for hedge funds of every type except trend followers. As governments intervene in formerly free markets, historical relationships that drive black box trading models stop working, forcing the closure of a long list of big-name funds. As for value investors, peak bubble is always a time for questioning assumptions, as stocks that are the opposite of value seem to take over the world.

But not once has a new-age, this-time-it’s-different bubble rationale turned out to be valid. Fundamentals always win out — eventually. As Einhorn says, time will tell.

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 nonsense 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 

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. 

Conclusion 

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

Listen to the Podcast Audio: Click Here

Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and President of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in metals and commodity markets and even authored a book in 2006 titled Gold Trading Bootcamp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce.

He is a highly sought-after presenter at financial conferences throughout the country, and is a regular guest on financial shows throughout the world, and it’s good to have him back here on the Money Metals Podcast.

Greg, thanks for joining us today. And it’s nice to talk to you again. How are you?

Greg Weldon: I’m great, thanks. My pleasure, Micheal.

Mike Gleason: Well, when we had you on back in mid-August you were optimistic about gold at the time. We had a pretty good move higher, shortly thereafter that ended up with gold hitting a one year high. But it stalled out around $1,350 in early September and we’re currently back below $1,300 as we’re talking here on Wednesday afternoon. Gold hit resistance at about the same level in the summer of last year, so give us your update as to your current outlook. What drivers, if any, do you see that can push gold through that $1,350 resistance level in the months ahead, Greg?

Greg Weldon: Yeah, well, exactly as you said. You had the move that we were anticipating when we last spoke and it kind of had already started from the 1205-ish level. All of this fitting into the kind of bigger picture, technical structure that still leads to a bullish resolution. But as you accurately mentioned, you got up to what have been close to, not quite even towards last summer’s highs around $1,375, $1,377. In this case, around $1,360 and ran out of steam.

The dollar kind of changed some of the picture and the thought process linked to the Fed changed some of the picture. So, you embarked on a downside correction. $1,260 was the low, you have a nice little correction from that level. That was the level that equated to 200-day exponential moving average. It’s a level that was just below the 38% Fibonnaci retracement of the move up from $1,205. Actually, the move up from $1,123 back at the end of 2016. So you had real, critical support there. So, to me, everything’s kind of mapped out the way you might expect it to, structurally, in this market.

From here, one of two things happens, I think. Well, one of three things, anyway. You could be cut if you have a bit of low rally backed up to $1,300. You back below it a little bit to dollars; still looks kind of strong. It’s an interest rate differential dynamic as a more hawkish view for the Fed is priced into the Fed funds; that gets transferred into the two-year and five-year treasury notes. The two-year treasury notes at a record high-yield relative to the German two-year schatzi. So, that lifting the dollar … it’s kind of gravitational pull to the upside. And that is some of the downside risk here; that the rally we just saw is kind of you b-wave and maybe you have a c-wave down towards $1,240. That’s kind of an ultimate low. Whether or not it plays out that way, longer term we still like it.

Mike Gleason: Precious metals have had a pretty respectable year all in all. Gold is up about 11% year to date. Silver is up about half as much. There isn’t exactly a lot of excitement. It seems like it’s always two steps forward, one step back. Sentiment in the physical bullion markets, where we operate, is muted. There are multiple factors to consider as to why metals markets are stuck in a bit of a rut. It seems to us that one of the big ones is the equities market stock prices just keep marching relentlessly higher. Either investors have become totally desensitized to risk or maybe there just isn’t as much risk as well think there is. In any event, barring some sort of spike in inflation expectations, which pushes metals and stocks both higher, we don’t see gold and silver breaking out unless investors start getting nervous about stock market valuations and thinking about safe havens. So what are your thoughts about equity markets and how they relate to precious metals, Greg? And where do you see stock prices headed in the near term?

Greg Weldon: Yeah, I mean it’s a perfect question because the reality is, and we in our daily research we focused on this, in fact yesterday. We haven’t spoken … It sounds like we arranged this question. Focusing on the fact that gold, relative to S&P, is at a low. You really are kind of lows that we’ve seen before, but at a level where if you get much lower, you’re breaking down to multi-year lows and this whole thing gets called into question from a technical perspective. But my problem with looking at it from a technical perspective, is that I think the stock market is living in borrowed times. Basically, the Fed has done exactly what they wanted to do. They have flushed people out of safe havens and into risk assets. That’s the whole idea of QE. It worked. You reflated the stock market. That has facilitated a huge, unprecedented rise in consumer credit.

Instead of the housing market being the collateral like it was in 2006 and 2007, now it’s the stock market that’s the collateral, the Googles and Amazons of the world and the Facebooks of the world. And you have this demand that is being driven or really being fed by credit. Now you see the credit numbers start to slow. They’re unsustainable. You start to see the consumer roll over a little bit. So that’s the number one risk to the stock market; it’s actually the consumer.

If you look at the retail sales numbers, outside of automobiles and gasoline, which is price-based, you don’t have much of anything. And you have eating and drinking growth slowing. That’s a key component, a key layer to the discretionary spending that’s an important tell to the bigger picture. The consumer discretionary sector is breaking down against the S&P. So that’s a warning sign to me.

You have, in terms of the dynamics around what the expectation is for GDP growth, predicated upon policies that have not yet been even agreed upon, let alone voted upon, let alone implemented, let alone starting to work. So, I worry about that kind of fracture between the expectations, the patience level of stock investors, diminished returns, diminished volumes. I think there’s a stock market risk. That’s one of the reasons we like gold, because what would go hand in hand with that, was some kind of maybe statement or a pull back on the dot plot from the Fed that would then cause the dollar to come off its little rally here.

Mike Gleason: Let’s play the devil’s advocate maybe a little here. We look at these record stock prices and wonder about what is beyond this extraordinarily high valuations in the past when PE ratios hit these levels, it was a signal that markets were nearing a top. But there’s one big difference between the past and today: the advent of high frequency and machine-driven trading. Huge amounts of daily volume is generated by trading algorithms. That is a game changer. These programs don’t sense risk on an emotional level like human traders do. They respond very differently to geopolitical events. So, if today’s markets seem disconnected from reality, perhaps because it’s because they are.

Now you have been on the front lines, trading in these markets for decades. You were a witness for how markets have transformed in recent years. What is your take on high frequency and algorithmic trading and what does it say about the possibility that current equity market valuations can be sustained or maybe even pushed higher? What are your thoughts there, Greg?

Greg Weldon: That’s phenomenal question and it’s very well timed given that we did a big special in September called “Shrinkage,” which is a shift in the Fed policy here. But if you take now your question, which is pertinent now, and you look at experience, in my experience over decades, it brings back 1987 right off the bat. We’re not saying the market’s going to crash. There clearly there are a lot of differences. But when you ask about high frequency trading, it sounds to me, the first thing I think of, is portfolio insurance on steroids, times a thousand, times ten thousand. So, the risk in terms of just what is the catalyst that then causes kind of that cascading downside?

One of the things we’ve been pointing out to our customers… and by the way, I’m working out a gigantic special that shows just how intriguing some of the similarities are around movements in the dollar, movements in bonds, movements in gold, and movements in stocks, and some of the ratios, and even down to crude oil, Fed policy and CPI. Now as there was basically from 1985 to ’87, once they kicked in the Plaza Accord, which depreciated the dollar. A lot of intriguing connections there and the special report that I’m writing on this, it’s called “What, Me Worry?” which we’d love to make available to any of your listeners, first of all, if they want to email me.

But in terms of the catalyst, setting it up, again I think the landmines are laying in wait out there. I think if you take an example, one of the things, like I said we’ve been telling our customers, if you take Amazon or Google. Stock are trading at $1,000 a share. You need $1,000 to buy one share. So, the volume of trading has diminished dramatically over the last couple of years as the stock prices has gone up. The ownership is huge. And it’s passive, and it’s managed investments, it doesn’t matter, it doesn’t discriminate in terms of what type of investor. The people who want to own these stocks, own them. The dynamic between the price level being so high, nominally speaking, to buy up block shares, the amount of money needed, pure and simple, against the volume, to me, sets up something like you’re talking about that would be exacerbated by a flash crash. So, it becomes very scary in terms of what kind of meltdown could you see if you get the ball rolling to the downside.

I still think that this is something that will play out over some time. I think the Fed is there. I don’t think this is … There are a lot of differences. I’m not trying to make a direct ’87 comparison. But I’ll tell you what, the risk is there. No doubt about it. The risk is rising.

Mike Gleason: In terms of the Fed here, Greg, what is your thinking on who it might be that talks over for Janet Yellen as the next Fed chair and then also, tell us what you think they’re going to do here in terms of getting inflation to where they want? Basically, what are your general thoughts on the Fed and Fed monetary policy? Clearly everyone’s favorite subject.

Greg Weldon: Really, it’s two totally separate questions right now because who is Donald Trump going to pick versus how inflation going to play out. I think if you look at what the Fed is saying, the Fed has been very clear. This is where (Jerome) Powell becomes, what seems to be, and I’m not saying I believe this, I’m just saying it seems that Powell’s a logical choice if, IF, your goal is to maintain policy. Thinking about bringing in a guy like (John) Taylor, and the Taylor rule and where the natural level of Fed funds should be here, he would obviously be a much more hawkish choice. While him and Trump might have really gotten along, and maybe there’s a lot Trump can learn from him, I don’t think that’s the guy Trump wants in terms of policy for trying to get his growth agenda going.

In that context, how you maintain continuity, which really isn’t that bad. They’re certainly not tight and they’re not tightening to any nth degree. It’s almost Goldilocks material here, inflation aside. Powell is a logical choice because you make a headline splash, which of course he loves. You basically make a change, but you kind of keep the status quo.

The other one would be (Kevin) Warsh. He was more away from QE and towards just using interest rates. He’s an interesting kind of dark horse. Yellen is certainly a dark horse. What mattes really is how does the Fed decide they’re going to deal with this inflation issue when they can’t even decide what’s causing it? Because you keep hearing transitory, idiosyncratic. These are the words that being used repeatedly, over and over and over again to describe, and you’ve had one Fed official go so far as, and even Yellen herself has made comments to the effect of, “We don’t understand why it’s not materializing.”

Again, kind of back to the Taylor model, the basic rule of thumb that the Fed is counting on, i.e. hoping for, is that as the labor market continues to tighten wages, inflation will go up and that will support of a general rise in prices. The question now becomes is the natural rate of unemployment lower than we thought it was. Or, are there structural differences now, technologically based dynamics in the labor market that has hollowed out the labor market, the reason you still have participation rate while finally up a little, is still so low historically, therein lies the question. What is it kind of keeping inflation back and how does this play out?

I think the employment numbers from this month, for September, were huge in the sense it was the biggest wage number … and you know how I break the number down. To the nth degree, this was the real deal. Only one month, but still the real deal, and the best wage number we’ve seen since 2007. So, will that continue? We know anecdotal evidence is there. Will this continue over the next couple of months?

If you look at CPI and PPI, the pipeline, the year-over-year dynamics around some of the commodities, God forbid, grains, oil seeds, and tropical commodities started to rally because then you’d have a real problem. Look at what the base models are doing. Look at what energy potentially you’re going to break out here. So, I think there is some inflation coming and it’s apt to push the Fed to have to raise to meet their dot plots, and I think that’s going to be problematic for the equity markets. They’re walking the high wire act with no safety net. It’s a very difficult job.

Mike Gleason: Getting back to metals here for a bit. We would like to give our listeners an update on the silver and gold price rigging scandal that erupted a year and a half ago when Deutsche Bank was forced to acknowledge cheating and turned over mountains of evidence, which may prove damning for a number of other banks. But the courts and regulators have a record of moving slowly, if they do anything at all. Now you’re much closer to the futures markets than we are. Are you aware of any developments on that front and what do you see as the implications of the civil action against the bullion banks? Do you sense that the Deutsche Bank revelations here led to more honest markets, perhaps because of all that evidence struck fear into banker’s hearts or is it more business as usual for these bullion banks who seem to have so much influence in these markets, Greg?

Greg Weldon: I have the sense it’s business as usual. I get the sense that it’s a kind of laissez faire attitude about that because the problem is so big, if we were to actually kind of get unearthed, the impact would be much, much larger and we would know it based on the price section very quickly. It’s a powder keg. It’ll blow at some point. This is something, gosh I’ve been in the business how long, and we’ve been talking about this how long? Really, this goes way, way back. The degree to which it has gotten worse is, I mean, the thing you debate, not whether it exists or not. Is it going to be somehow uncovered to the extent that it causes that kind of disruption? I think again, this is probably fodder for a great movie… a spy movie or whatever.

Sure, there’s probably a lot of that kind of thing going on in background, but in terms of the day to day operation of the trading of these metals, I don’t see any tangible impact in the dealings I have here, no.

Mike Gleason: Well Greg, as we begin to close, give us a sense of what you’re focusing on here, maybe some of the things that we haven’t touched on and then give us a sense of how you’re evaluating these markets for your clients. Do you think it’s time to get defensive, go to cash, favor metals and commodities here as an inflation hedge, or does the wave of exuberance in stocks still have a ways to go? Any final comments or anything else that you want to leave us with today?

Greg Weldon: Well, I think some of that depends on whether they can actually get some kind of job done in Washington where the Republicans finally realize their own necks are on the chopping block here, so let’s finally ban together and get a tax reform package done. We’ll see whether that happens. I think that might be one of those last gas type of moves for the stock market. It could be a “buy the rumor sell the fact,” but I think lot has been priced in and I think there’s still going to be disappointment down the road for that.

I’m watching the consumer specifically. The retail sales numbers have been really poor all year. It’s minuscule gains in discretionary items since January. And the debt numbers are interesting. You’re starting to see a roll over, starting to see rise in delinquency rates. The debt obligations for consumers and for the Federal government, by the way, are high despite the fact that rates are still low. Can you imagine if the Feds actually did push rates a hundred basis points higher over the next however many, 14, 15 months? I think that would have a real reverberating effect on the consumer and on the government where deficits are still increasing and they’re at high levels again. No one talks about it. You have $20 trillion dollars in sovereign debt and you’re about to push the five-year note above 2%, which is your trigger to increase cost on funding the debt. Man, the land mines are out there.

I’m watching all of it. That’s what we do for our clients every single day because never before, have you had to be more plugged in. Look at the way things happen so much more quickly now. You asked about what’s the difference from 30 years. So much more availability of news, quickly. But the fact of the matter is, the basic thing that we do hasn’t changed at all, which is dissecting all of it, connecting all the dots, and kind of trying to make it all make sense in terms of what the markets are doing and how you might profit from that.

Mike Gleason: Well Greg, thank you so much for joining us again. We enjoyed it very much and love getting your very studied and experienced outlook on the state of today’s financial world. Now before we let you go, please tell folks about Weldon Financial, how they can find you, and any other information they should know about you and your firm.

Greg Weldon: Sure, thanks, appreciate that. We’re found at WeldonOnline.com. We do Weldon Live, one product, one price. It’s kind of a multi-layered product, although it’s just again, one price. We do daily and we cover daily global macro, fixed income, foreign exchange, stock indexes and ETFs, precious and industrial metals, energy, and agricultural commodities. And we tie them all together and we have what we call our Trade Lab, which is part of Weldon Live. These as specific trading recommendations in all of those sectors, we’re old school futures guys, so that’s kind of the way we approach it. What we find is a lot of family offices or independent brokers or even individuals out there, and there’s no reason with the way your see ETFs now being utilized that the average investor can’t operate more like a hedge fund manager or CTA.

We try and provide rhyme and reason to what’s going on and then specific strategies to take advantage of it. Weldon Live found at WeldonOnline.com.

Mike Gleason: Well great stuff. Thanks so much for your time today, Greg. I hope we can talk again down the road. Take care and we appreciate you coming on.

Greg Weldon: Thanks. No problem, Mike. Any time.

Mike Gleason: Well, that will do it for this week. Thanks again to Greg Weldon of Weldon Financial and WeldonLive. For more information, simply go to WeldonOnline.com and we urge everyone to sign up for a free trial there. Again, you can find all of that information at WeldonOnline.com. Be sure to check that out.

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

1. How Much Money Do You Need To Retire On Dividends Alone?

For the past 18-years Ryan Irvine has had a remarkable track record with average returns well over 30% annually over the last 4 years. Ryan tells Michael and the Money Talks audience today about the cash generating and under followed small-cap stocks that he has found. Between 1926 – 2004 Small-cap stocks averaged a 15.9% return compared to only 9.26% for Large Caps and thats the reason Warren Buffet laments he has grown to large to buy them.

…read more HERE

2. Victor Adair: This Tremendous Rally in Share Prices

This tremendous rally in share prices has been fueled by a $15 Trillion tsunami of Quantitative Easing from the Big Four central banks (and who knows how much “accommodation” from the People’s Bank of China) and even though the Fed has announced a very modest program of “Quantitative Tightening” the ECB and the BoJ will continue with their “stimulative” programs.

….continue HERE

3. Warning: 43% of Giant Eurozone Banks in Danger

by Martin D. Weiss PH.D

“This hard data confirms our view that, among the economic superpowers, the United States continues to win the Miss Universe crown for the “least ugly.”

….read it all HERE