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Timing & trends

The Robot & The Electric Car


Posted by Gary Tanashian - NFTRH

on Wednesday, 13 June 2018 08:19

With a few exceptions, I notice around the internet that some services like to tell you about all the massive gains they’ve provided their subscribers in certain stocks. This especially goes on in the junior mining swamp but is also a proud tradition in the stock picking world. Tout the multi-baggers and conveniently soft shoe the losers, which everybody has.

So here at NFTRH we will continue the proud tradition of touting the winners but also exposing the losers, with the key being have more god damn winners than losers! Duh. The reason I don’t get defensive or obsessive about this stuff is because stock picking is not even my main charter; keeping us right with the macro markets is. It’s only everything if you ask me.

So anyway, Robbie the Robot here was first charted in NFTRH using a weekly chart as we scouted its bounce potential from longer-term support. I then bought it just above said support and it was initially robotic in its gains but lately is getting a little impulsive (read: pumpy).

Meanwhile, the Electric Car (noted here publicly a while back), complete with a Tweeting CEO who I cannot stand (yup, that’s emotion folks) has done a similar thing, against my short position. I am down 18% on Tesla and up 25% on IRBT. So these are basically a wash because the TSLA short position is a little larger than the IRBT long position.

irbt-tsladid two things purposely here. I did not sell IRBT as it exceeded the SMA 200 and I did not cover TSLA as it exeeded the SMA 200. That second thing is going against sound trading practices but as a portfolio twittler I can afford a view of things working in unison and among my few short positions there are some that are very strategic and working well, partially offsetting the TSLA debacle (in the making?). And then there is the rest of the portfolio, which is long and doing very well on balance.

I may not come out here and report to you if/when I cover TSLA in ignominy because you (the public) are a casual reader and not part of the business end of NFTRH (it’ll be noted in the NFTRH Trade Log). But since I’d highlighted it previously in public I wanted to note here that as of now it’s not going well and that’s just the way it is.

IRBT on the other hand was a ‘bottom feed’ play and I am trying to decide whether it holds the potential for further gains or perhaps I should slink away and not be greedy.

Subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRHStockTwits or RSS. Also check out the quality market writers at Biiwii.com.

 



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Real Estate

Canada's 6 City Housing & The Plunge-O-Meter


Posted by Brian Ripley - Canadian Housing Price Charts

on Wednesday, 13 June 2018 07:58

chart-canada 18 orig

The chart above shows the average detached housing prices for Vancouver*, Calgary, Edmonton, Toronto*, Ottawa* and Montréal* (the six Canadian cities with over a million people each) as well as the average of the sum of VancouverCalgary and Toronto condo (apartment) prices on the left axis. ​On the right axis is the seasonally adjusted annualized rate (SAAR) of MLS® Residential Sales across Canada (one month lag).​

In May 2018 Toronto metro SFD prices remain under resistance and 14 months since the March 2017 spike and peak price, they have lost $168,869 or 14% ​(Plunge-O-Meter). Vancouver prices are still defying gravity but also at resistance. FOMO and speculative pricing is still on in the strata sector in some neighborhoods. 

Anyone owning a detached house in the scorching hot Vancouver market is sitting on an unredeemed lottery ticket while the Bank of Canada interest rate up-moves and stress testing at street level are thinning the crowd even more.

In Calgary prices are labouring under the new Energy Sector 2.0 as the oil majors head for blacker fields; big money is fleeing Canada and has been for nearly 20 years, but on the street, Calgary buyers are buying the price dips.

​When earnings drop so do asset prices. ​Wage earners needed to buy a single family detached house in: Vancouver: 3.5, in Toronto: 1.9, in Calgary: 1.0 and in Montreal: 0.7

​It remains interesting to note that the combined average sum price of a Vancouver, Calgary & Toronto condo is currently 59% (no typo) more expensive than a median priced Montreal SFD. Montreal has more listing inventory available for sale than any of the other 5 biggest metros in Canada and the lowest monthly absorption rate based on total listings and sales.

High net worth trophy hunters have spent the last few years picking off well located SFD properties in hot markets while the hoi polloi settled for anything before being "priced out". Are they going to enjoy being "priced in"?

CMHC is not so sure. In November 2015 CMHC had a private audience in New York City and brought along a stress test of $35/bbl oil and its potential effect on Canada. I covered the bullet points here and here. The Department of Finance is also worried:

The age-related deceleration in economic growth in Canada will take place amidst other powerful, slow-moving global forces. As in Canada, the world population is aging and productivity growth (Canadian Productivity Chart bottom of this page) has slowed across OECD countries. These structural forces are paving the way to slower global growth for the next number of years. Slower nominal GDP growth will thus reduce the growth rate of government revenues, thereby limiting the capacity of governments to continue to maintain the growth rates of public expenditure at levels as high as in the past. At the same time, population aging is also expected to put upward pressure on public expenditure, notably for age-related programs such as elderly benefits. Department of Finance Canada December 2016

Screenshot 2018-06-13 07.53.16

....for more info on Plunge-0-Meter go HERE



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Energy & Commodities

Dust In The Wind


Posted by Sean Broderick - The Edelson Institute

on Tuesday, 12 June 2018 07:24

"The Massive Bull Barket in Equities continues, alongside A Major Bear <arket in commodities. This bull market in Stocks will end someday — as all bull markets do — but as it does the new Bull Market in Commodities will spring up. This historical article will give a reader a perspective on the massive size that bull market in commodities could atain "- R. Zurrer for Money Talks

A huge bull market in commodities suddenly takes a downturn. Equities are getting clobbered. The nation is groaning under insurmountable debts after the banks throw caution to the wind.

Some people say the market is over-regulated — others that it’s not regulated enough. And weird weather is making headlines — in fact, some people think the weather could herald the beginning of the end.

It may sound like the U.S. in the 21st Century, but it’s also our country on the brink of the Great Depression. It’s a story told in the book “The Worst Hard Time,” by Timothy Egan.1423148868017162412

I highly recommend this National Book Award winner to you. It is a fascinating glimpse of a time that has vanished from all but the longest memories. And it offers great insights into today’s markets and economic climate.

Does that mean I think that America is on the slippery slope of a Depression? No, there are differences, too. But the similarities make for great lessons that can help all of us today.

A Shot at the American Dream

Egan’s story starts in the last free land in America — the Oklahoma panhandle. After the original (native) inhabitants were chased off, settlers could stake out up to 640 acres and take their shot at the American dream.

That part of the country — including surrounding areas of Texas, Colorado and Kansas — was marginally farmable land that marketers palmed off on unsuspecting new arrivals, the kind of folks who believed in tomorrow because it was all they had in the bank. As Egan explains …

“Hope died the first time people laid eyes on Boise City, Oklahoma. It was founded on fraud. Even the name itself was a lie … from the French word le bois — trees. Except there was not a single tree in Boise city. Nor was there a city. On Boise City’s imaginary streets, the buyers found stakes in the ground and flags flapping in the wind. No railroads. No tracks. No plans for railroads. No fine houses. No businesses. Worst of all, the company did not even own the land that it sold.”

Despite this inauspicious start, people did scratch a living from the land in Boise City and other towns and hamlets in the panhandle. Home was often a hole dug out of the sod, covered with boards and shared with tarantulas, snakes and so many centipedes that they crunched underfoot.

“The flattest, driest, most wind-raked, least arable part of the United States was transformed by government incentive, private showmanship, and human desire from the Great American Desert into Eden with a haircut. Settlement was a dare, on a grand scale, to see if people could defy common sense.”

But it was a life, and for many, the only home they knew. And for a while it seemed that heaven smiled on this venture – a decade of wet years made farming in the panhandle a breeze.

New technology reshaped the world of the 1920s — for farmers, the ride of choice was the tractor. In the 1830s, it took 58 hours of work to plant and harvest a single acre. By 1930, it took only three hours for the same job. A tractor did the work of 10 horses and took a lot less maintenance.

In their eagerness to reap as much of a profit as they could, the farmers plowed the tough prairie grass under and planted wheat. With the price of wheat at 80 cents a bushel, they reaped profits.

The problem started in 1915, when, with a war in Europe raging, the government guaranteed the price of wheat at $2 a bushel. The person in charge of this program was named Herbert Hoover. You may have heard of him. Thanks to Hoover’s government largesse, soon every idiot who could scratch a stick in the ground was trying to wrest his fortune from prairie soil.

This was no flash-in-the-pan bubble. It lasted 14 years.

By 1926, the self-described Wheat Queen of Kansas, Ida Watkins, told everyone she made a profit of $75,000 on her two thousand acres — bigger than the salary of any politician, and more money than any star athlete but Babe Ruth himself.

“Life in America in September 1929 was almost too sweet, too bountiful, too full of riches,” Egan writes.

Before the wheat boom, banks refused to lend to farmers west of the 98th meridian on the grounds that it was “too dry.” Then Congress passed the Federal Farm Loan Act in 1916, and banks offered 40-year loans at 6% interest to any man who had a farm to work.

The farmers turned around and used that money to buy tractors, which in the good times provided more than enough income. And more and more land went under the plow.

All good things must end. By 1929, America had a grain surplus. Prices crashed … but the farmers still had loans to pay.

The only way for someone who made $10,000 in 1925 to duplicate his earnings in 1929 was to plant twice the amount. At least, that was the theory. Soon, unsold wheat piled up next to the railroad track. By 1930, land that once brought an income of $4,000 now brought only $400!

What’s the Worst That Can Happen?

And things got worse! The price of wheat actually went to ZERO — that’s what farmers were told they would get if they brought any more of that damned grain near the station.

Since farmers had no income, they couldn’t repay loans. 1930 saw the first widespread bank failures. The town thrifts closed their doors forever, taking what little money farmers had left with them. And then, that same year, the weather changed. The marginally farmable land of the panhandle could produce a crop of wheat during wet years, but that part of America tipped into a full-scale drought. The land simply dried up and blew away.

But it didn’t go peacefully. Instead, dust storms raged across the landscape. From the first-hand descriptions, the best I can come up with is a dust storm is like being forcibly stuffed into an industrial clothes dryer and tumbled around with a load of dirt … only 100 times worse.WWE4067 2

The clouds of dirt would pile up 10,000 feet high and march across the prairie, looking, as one eyewitness recalled, like a range of mountains on the move. The storms blew out windows, buried cars and tractors, fried food with static electricity caused by all that dirt rubbing together, suffocated animals where they stood and filled the lungs of every living thing. The storms were killers of animals, men, women and children.

Black Sunday

One storm, in 1934, blew up a great rectangle of dust from the Great Plains to the Atlantic, 1,800 miles wide, and laden with 350 million tons of dust — three tons of dust for every American alive at the time.

The worst storm, known as Black Sunday, hit on April 14, 1935, and carried twice as much dirt as was ever dug out of the Panama Canal.

Faced with nature’s furious onslaught, many people ran for their lives. Ten thousand people a month fled the Great Plains, the biggest single exodus in American history. Still, many others stayed … either too stubborn or too poor to move along.

The Dust Bowl was the physical manifestation of the nation’s financial and emotional sickness, problems that turned the election of 1932 into a lightning rod for “change.” The candidates talked about being the real agent of change. Sound familiar?

Vote for me, I’m an Agent of Change!

The Republicans stuck by their President, Herbert Hoover. Hoover believed the cure for the Depression was to prime the pump at the producer end, helping factories and business owners get up and running again. Goods would roll off the lines and prosperity would follow.

The Democrats had two main candidates.

One, William “Alfalfa Bill” Murray was born in Toadsuck, Texas, but rose to become Governor of neighboring Oklahoma by railing against what he called “The Three C’s — Corporations, Carpetbaggers and Coons.”

With the Presidential election looming, populist Democrat Murray ran for the nomination on the “Four B’s — Bread, Butter, Bacon and Beans.” The problem, he said, was that America had gone soft.

Half the country was going hungry — Murray’s message resonated. They also liked that Murray hated socialists even more than he hated corporations.

The other Democratic candidate was an East-Coast swell named Franklin Delano Roosevelt. FDR’s platform was to give people jobs with a huge public works program to build America’s infrastructure.

FDR beat Murray on the third ballot at the convention. Outraged, the titan from Toadsuck switched party affiliations to Republican. But he found himself on the wrong side of history.

FDR is famous for getting America through the Depression. Along with Social Security and other landmark programs, much of his energy was focused on stopping the Dustbowl, which spread like a cancer in America’s heartland.

At its peak, the Dust Bowl covered one hundred million acres. By the end, some scientists estimated that more than 80 million acres in the southern plains were stripped of their topsoil.

But with FDR’s leadership, the problem wasn’t insurmountable.

• Four million acres of farmland were abandoned — the farms bought up and the people moved away.

• Young men were paid a dollar a day in the Civilian Conservation Corps to plant trees from the North Dakota border with Canada all the way to Amarillo, Texas.

• A government program taught farmers a new way to till the soil and farmers agreed to abide by strict soil conservation standards.

• New technology allowed those farmers who remained to tap the Ogallala aquifer — a subterranean body of water as large as Lake Superior — in even the driest times.

By these combined efforts, the Dustbowl was tamed. Thanks to these and other new programs, the country emerged from its economic slumber. Here’s what I think we can learn from history …

Lessons from the Dustbowl

Good laws are good for business. Hoover said regulation was the wrong thing at the wrong time, and would slow down the recovery. His opponent, FDR railed against crooked bankers and called for more regulation. The public weighed the facts and sided with FDR. His bank holiday and subsequent regulation restored America’s faith in his banks.

Not all change is good! Can you imagine what this country would have been like if racist demagogue William Murray won the 1932 election?

Bull markets can end with a bang. The 1929 bull markets in both grain and equities ended rather suddenly, when everything looked GREAT. This is a reminder to all of us to keep one eye on the exit even in the best markets.

This bull market will end someday — all bull markets do — but this bull has just begun. Here’s a recent chart of the CRB Index. That’s a basket of leading commodities.

You can see that the CRB — and commodities — bottomed in 2016. After bouncing along and building a wide base, the CRB is finally starting to push to the upside again. The bull market may zig and zag. But it is on.

WWE4067 3s

And that makes any pullbacks buying opportunities.

All the best,

Sean



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Stocks & Equities

This Unloved Sector Is Set to Rally 20% This Year


Posted by Chad Shoop - Banyan Hill

on Tuesday, 12 June 2018 07:16

It’s no secret: I expect the stock market to rally in the second half of the year.

In fact, I have said the S&P 500 could rally double-digits from here.

Well, today, I want to let you know which sector is the one you want to own.

This is important because we’re not going to see a straight shot higher — this is going to be a volatile second half of the year.

But amidst this volatility there’s one sector that will stand out amongst the others.

It has been unloved since the start of the year. It sold off along with the rest of the stock market during the latest correction, but it is the one sector that has failed to bounce back at all.

That’s about to change. Here’s why…

A Steady Group of Stocks 

The consumer staples sector isn’t one we generally think of as being unloved. It’s typically a steady group of stocks that go back as much as a century in their respective fields.

Stocks like The Procter & Gamble Co. (NYSE: PG)The Coca-Cola Co. (NYSE: KO) and Walmart Inc. (NYSE: WMT).

These stocks also tend to follow the market, at the very least.

But since the latest stock market correction, it’s a sector that has failed to recover, and is actually down more than it was during the correction.

That represents an opportunity when you understand one simple concept about the major sectors of the market — there is always a rotation.

It’s a concept I have talked about before, and have been studying for years now.

Over and over again, one thing is certain: Stocks rotate around the S&P 500 Index in a predictable fashion.

The Relative Rotation Graph™

The graphical representation is in the Relative Rotation Graph™ (RRG) concept. I’ll keep it brief today, but if you want to read more, click here.

Basically, it looks at the relative performance of a stock or sector compared to the S&P 500, and adds a momentum indicator to that. This shows that stocks or sectors rotate in a predictable fashion of moving from lagging the S&P 500, to improving, then leading, and eventually weakening again to fall back to lagging — and then do it all over again.

This is the rotation that occurs in the stock market.

Consumer Staples Sector

And right now, the consumer staples sector has drifted a significant distance from the center, which represents the S&P 500. Take a look:

wid1-final-10

We can confirm this lagging segment for the sector by looking at a price chart of the sector itself. You’ll see it hasn’t participated in the rally the broader stock market has in the past couple of weeks.



Read more...

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Economic Outlook

Trump Suspends Joint "War Games" With South Korea, As China Emerges Big Summit Winner


Posted by ZeroHedge

on Tuesday, 12 June 2018 07:00

tkWhile Trump was quick to take a victory lap after signing a non-binding letter (of intent) with North Korea's leader Kim Jong Un to implement the dunclearization of North Korea, several questions have emerged among which:

 

  • the lack of deal enforcement
  • the lack of verifiability of N.Korea's denuclearization efforts as part of the "Complete, Verifiable, Irreversible  Denuclearization" or CVID protocol
  • the legitimization of North Korea's regime
  • China's role in the process
  • the end of joint military drills with South Korea.

 

While Trump's response to most critics was that the process is just starting and that it will take time to denuclearize, where Trump will see the greatest amount of pushback is on the last bullet point. Speaking in an interview with George Stephanopoulos shortly after the one-on-one with Kim, when asked if there was talk of pulling U.S. troops out of South Korea, Trump said the topic didn't come up, however he said the following:

"We didn't discuss that, no. We're not going to play the war games... I thought they were very provocative. I also they're also very expensive." 

In his press conference after the summit, Trump reiterated that the US would halt joint war games with South Korea, as Pyongyang has agreed to destroy a "major" missile testing site.

“We will be stopping the war games,” Trump said Tuesday during a news conference after four hours of meetings in Singapore with the North Korean leader. He offered no specifics about which exercises would be affected,.

....continue reading HERE



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