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The Great Bear Market Of 2018

Authored by Lance Roberts via, The Bear Market Of 2018 Let’s start with where we left off last weekend: “Currently, we do not know whether the current corrective action is JUST a normal, healthy correction, or the beginning of something bigger. BUT – this is the expected correction we have been discussing over the last several weeks. It is also something we had planned for by reducing overweight positions and adding a short-hedge to portfolios.  With the markets on a short-term sell signal (noted by black vertical dashed lines in the chart above,) the current correctional process is underway. But, with the market now oversold on a VERY short-term basis a counter-trend rally over the next week, or two, should be expected.” Well, we did indeed get a very nice rally last week with the market breaking above the 50-dma on Thursday. While the immediate consensus is the “bear market of 2018” is now over, there are several important points about the chart above that should be considered. Despite the correction, the market did hold support at the 200-dma The bullish trend line, which goes back to the beginning of 2016, has also not been violated. However, the upper red “trendline” may provide some overhead resistance temporarily and is worth watching closely.  While the market did get oversold on a short-term basis, which suggested a bounce was likely, the longer-term overbought condition, and subsequent “sell signal”...

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NYSE’s Most Iconic Stockbroker Admits He’s “Never Owned A Share Of Stock In My Life”

If you have a pulse and own a stock, The Washington Post points out, you probably have seen Peter Tuchman’s face. But a household name he ain’t. The 60-year-old trader is perhaps the most iconic face of The New York Stock Exchange – and the US stock-markets – as the trader’s Einstein-y look can be relied upon as a real-time indicator of sentiment – be it anguish, anticipation, desperation, or triumph. Tuchman is without doubt the most photographed person at The NYSE. “The floor of NYSE is the greatest office on Earth. It has energy, people. These are hallowed floors. It’s 120 years old, and every president, every head of state, celebrities have walked this floor. What goes on on this floor will affect world finance on a daily basis. And I’m in the middle of it. I love that. And once my face became what it’s become, I love that part of it, too.” What does Tuchman do? “I am the eyes and ears and the conduit for trading and point of sale of buying and selling stocks for customers. It’s very simple. If Grandma in Kentucky wants to buy 100 shares of XYZ company, she calls a broker at Charlie Schwab, Merrill Lynch or JPMorgan and says, “I want to buy 100 shares of XYZ.” The broker generates the order. It gets sent to a machine on...

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Why One Bank Is Worried That Credit ETFs Will Blow Up Next

Two weeks after the unprecedented, record Feb. 5 surge in the VIX, the historic move is rapidly fading into memory as “the dip gets bought” again: to those who correctly predicted it, like Fasanara Capital  and Eric Peters,  and those who profited from it, like Ibex Investors  and Peter Thiel, congratulations. Now the question is which product, read ETF, will generate returns similar to the 94% bonanza reaped by those who were short the XIV ahead of its terminal implosion (the XIV will cease trading after Feb 20, with holders receiving a cash payment of its residual value, which is virtually nothing). To be sure, numerous candidates have been proposed over the past two weeks, with two names frequently cited – certainly by this site among others – include the two big junk ETFs, HYG and JNK, whose existence is only assured as long as the structure and liquidity of the underlying cash junk bond market isn’t seriously tested, as the ETFs would spontaneously implode once the market of underlying junk bonds freezes up, something which Howard Marks has repeatedly warned about. So when do HYG and JNK blow up — zerohedge (@zerohedge) February 9, 2018 What is strange – as we discussed on several occasions  over the past 2 weeks – is that credit fared relatively well in the washout from the VIXplosion, widening by markedly less than...

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Hezbollah Leader Threatens “We Will Open Fire” On Disputed Israeli Offshore Oil & Gas Operations

During a televised address in Beirut on Friday Hezbollah Secretary General Sayyed Hassan Nasrallah once again warned Israel to back off its claims over disputed oil and gas field just off the southern Lebanese coast, threatening that Hezbollah could “disable [Israel’s offshore oil installations] within hours.” “If you prevent us, we prevent you; if you open fire at us, we will open fire,” Nasrallah threatened.  The dispute over the eastern Mediterranean gas field goes back to January 2017, but blew up starting in late January of this year as it has been put up for tender by Lebanon and is expected to be developed by an international consortium of energy companies. However, as we reported at the time Israel has aggressively pushed for major sectors of the field to be internationally recognized as lying within its rightful territorial waters, going so far as to warn “respectable” companies from participating in the tender, which would be a “major mistake”. Israeli Defense Minister Avigdor Lieberman said in late January, “They [Lebanon] are announcing a tender on the gas field, including Block 9, which is ours by any definition,” and Lebanese actions “very, very challenging and provocative conduct here.” Israel bolsters maritime defense in offshore oil and gas zone. Source: Reuters “Lebanese officials previously announced plans to begin exploratory drilling in 2019. Israel is already producing gas at the Tamar field and expects...

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Swan Song Of The Central Bankers, Part 5: The Flat-Line Does Not Spell Recovery

Authored by David Stockman via Contra Corner blog, The punk January industrial production (IP) report brought another reminder that the Fed has stimulated nothing at all on the output/employment prong of its dual mandate. Indeed, as they celebrate a purported “mission accomplished” full employment recovery and confidently prepare to plow forward with an epochal pivot to QT (quantitative tightening), our Keynesian central bankers have remained absolutely mum on this stunning fact: To wit, there has been no recovery at all in US industrial production, and that’s as in nichts, nada and nugatory. In fact, January 2018 output in the manufacturing sector was still 2.2% below its December 2007 level, and total industrial production has barely crept forward at a 0.19% annual rate. And if you don’t think that is close enough to zero for government work, just recall what a real historical recovery looks like on the IP front. During the December 2000 to December 2007 cycle, for example, total IP grew at 1.4% per annum and manufacturing output rose by 1.9% per annum on a peak-to-peak basis. Prior to that during the 1990-2000 cycle, the figures were 4.0% and 4.6% per annum, respectively. And if you want to dial way back in time to the Reagan-Bush cycle from July 1981 to July 1990, the peak-to-peak growth trend for total industrial production was 2.3% per annum and 2.8% for manufacturing output. And, by your way, that cycle also included a deep recession in 1982 that was only slightly less severe than the...

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