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DrBubb's Diary - Nov. 2018 Trading - v.118


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Top of Page Charts (Odd) : Channel-GE : MP : PP : Charts : Acore : Fringe : Ag B E G H :

t24_au_en_usoz_6.gif : 24hr-euro-small.gif : t24_au_en_euoz_2.gif : AuTD1.png?id=11409261605

idx24_russell_en_2.gif : t24_ag_en_usoz_2.gif:: idx24_hui_en_2.gif : AgTD0.png?id=11409221912

3d : ag : au / Btc / 8yr: 12mo : 5m : 2m : 1m : 25 10 5d 2d / spiral

Goldstock : HK-2840 : GBS.L : GLD : GDX : NUGT : tza/faz -- HKpeg : DXY : StkX : 10-d : SPX : sjw : img :

HK 3081: 2899: 1051: hs / UK: POG / ABX : Sil : IAG : dba-etc. ... lot : PB : CVN : CC2 : BTC 1m 2d : SLV-lv

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Golden Cross... for GCM coming?  maybe.

Not yet for others... GDXJ. GG, MUX will take time

GDXJ ... 3-years : 5yr : 1yr :

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GDX is similar : 3-yrs :  But it made a failed Golden Cross back in ... sep-oct.2017

GCM.t / Gran Columbian Gold ... 3-years : 5yr : 1yr :

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 GCM has shown two REVERSALS after Major MA Crosses
+ A Golden Cross came back in mid-2016.  But it came AFTER a Peak was already in place, with a high near C$2.40.
And the market was already fall (basis 21d MA, I believe) when the Golden MA Cross occured
+ A Death Cross earlier this year looks like it will be reversed too.  Once again, shorter Term MA's were headed higher
when the Death Cross signal was put in place by a Cross of 50d.MA below the 200d.MA

GG / Goldcorp ... 3-years : 5yr : 1yr : GGvsMUX :

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Goldcorp had one Reversal of a Cross in early 2018. Once again ST MA's were falling

MUX.t / McEwen Mining ... 3-years : 5yr : 1yr : GGvsMUX :

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The Golden Cross reversals in MUX did not have the same timing clues as other reversal

: GGvsMUX :

JObxaRB.gif

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HOW CRAZY CHEAP can SILVER get?

UPHEAVAL BEYOND ANYTHING YOU CAN IMAGINE IS COMING -- Bill Holter

"Silver is the Cheapest Asset"

TIME TO BUY?  Maybe

Silver- 3 years

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SLV / silver etf ... All

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Ratio: Silver to-Gold : 0.xxx = Au/Ag R-80.0

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Ratio: SLV to-DBA

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Ratio: SLV to-CRB

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Playful HK Indicators up again today, with Philippines PSEI

HK101 : $15.64 +$0.54 : +3.58% (H: 15.76) Rs: 100% R:10.0X
HK10- : $21.65 +$0.40 : +1.88% (H: 21.80)
HSI---- : 26,372 +188.5 : +0.72% (H: 26397) near HOD
PSEI- : 7,270.x +186.9 : +2.64% (H:7,270.3) HOD
UKX--  : ?? Coming

I am long US stocks (SPY) thru Call options, expiring Friday

Thanksgiving week is usually good for stocks - CNBC.com

Nov 17, 2017 -
Stocks traditionally do well in Thanksgiving week, with the S&P 500 up 75 percent of the time for an average gain of 0.6 percent since 1945.

Thanksgiving_thumb.jpg

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Eric Nuttall's Top Picks: Nov. 16, 2018

Canadian Oil Picks ... update :

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Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners
Focus: Energy stocks

MARKET OUTLOOK

In the past month, sentiment in the energy market has taken a U-turn which has resulted in the price of oil collapsing by over $20 per barrel, enduring the longest streak of sequential down-days in history (12 days). Echoes of “$100 oil in 2019” still rang when new narratives of “demand destruction due to trade wars” and “ineffective Iranian trade sanctions” began to take hold. Even one CNBC market commentator has proclaimed that oil could fall to as low as $40. The rate of change in sentiment has been truly incredible: how did the market swing from universal bullishness to the current level of bearishness in just over a month? How could the financial demand for oil fall so sharply while the physical demand continued to grow, remaining at its highest level in history? How could stocks basically flatline with oil rallying by 25 per cent from January to October and then get smashed by 30 to 50 per cent when oil fell?

From our observation, two major events led to the collapse in the oil price over the past month:

  1. Ongoing trade war escalations by Trump increased fears of slowing global growth and with it concerns that oil demand growth was about to fall.
  2. The U.S. issued Iranian import waivers to eight countries and this was perceived as a softening in Trump’s stance towards Iran. OPEC+Russia have already increased production by about 1.5 million barrels per day from the May 2018 lows, largely in anticipation of steep Iranian export declines. What happens if Iranian exports don’t fall as much as expected?

There’s also likely been forced unwinding by a U.S.-based commodity trading fund of a short-natural-gas/long-WTI trade and a notable increase in crude futures selling by financial houses that had hedged producers’ output. These factors have exacerbated the oil price fall, perhaps explaining as much as $10 of the $20 decline in crude. While fundamentals definitely loosened over the past several months, they can’t explain a $20 decline. Our sources tell us that Saudi Arabia now feels completely bamboozled by Trump and will champion a larger-than-expected production cut (1.4 million barrels per day or more) at the next OPEC meeting on Dec. 6. OPEC has recently said they will do “whatever it takes” to restore balance and we believe them. Our view that oil is in a multi-year bull market is unchanged. We believe WTI will average about $70 per barrel in 2019 and that it could trade to $100 more in 2020 based on the exhaustion of OPEC spare capacity and non-OPEC/U.S. production entering into a multi-year decline due to chronic underinvestment on long-lead projects.

On Canada, we believe that the combination of shut-ins (over 120,000 barrels per day), crude-by-rail ramping to 455,000 barrels per day by Q3/19, and Line 3 coming online by the end of 2019 will lead to WCS differentials falling to rail economics ($20 to $25 per barrel) by Q3/19. While Canadian light oil midcaps will struggle to attract investment versus Permian peers, Canadian heavy oil companies whose cash flow can double or triple based on a compressing WCS differential will attract fund flows and experience outsized returns.

(Previous):

Eric Nuttall webinar September 24 2018

Eric discusses why oil is in a multi-year bull market and likely to trade at $80+/bbl in 2019 and over $100/bbl in 2020+.

His Picks

Athabasca Oil / ATH.t ... All-Data : All-Log : 5-yr :

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Baytex Energy / BTE.t ... All-Data :

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Cardinal Energy / CJ.t ... All-Data :

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Cenovus Energy / CVE.t ... All-Data :

vwyg7L3.gif

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Too much complacency... & by me too/

Red Dragon Leo was spot on today

Welcome to Thanksgiving week where volume normally dries up and the market floats up... but will it? We see the futures down small this morning and at one point I think they went green a little... basically they are flat. I know many are expecting a move up to start that will take out the 2815 last important high and go beyond to 2850-2900, which I just don't see happening. At least I don't see that happening right now with the charts still looking so overbought. The daily SPX just doesn't look ready for another strong rally.

RDrLeo, Mon.: http://reddragonleo.com/2018/11/19/es-morning-update-november-19th-2018/

Will go back to sleep and re-evaluate in the morning

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The Unraveling Facebook

SugarBorg's Style: Not-so-Sweet; Nor is SandBorg's

FB / Facebook ... 10-years : 3-years :

o0jGrUc.gif

ZUCK AT WAR...
Aggressive Style Alienating...
Tension with Sandberg flares...

th?id=OIP.656ZQlnP52mzOhIWK5QupgHaFj&w=2 : Might be time to Lean-OUT, Sheryl
Sheryl saintly image unraveling...
CRAMER: UNFRIEND HER!
Employees point fingers...
8 Parliaments Demand Answers...
Psychologists Warn: FACEBOOK causes depression...

"It's total arrogance," one Facebook employee said of company leadership's willingness to blame its communications team for recent crises.

As challenges to Facebook mount from consumer organizations, politicians and journalists, the company's leadership remains convinced that its recent crises are primarily public relations problems, according to people at the company.

Mark Zuckerberg, Facebook's chief executive officer, and Sheryl Sandberg, the company's chief operating officer, believe Facebook's negative image is a public relations problem that stems from a bungled press strategy and sensational media coverage, not a structural or philosophical shortcoming that requires a wholesale course correction, six Facebook sources familiar with their thinking told NBC News. The sources asked not be identified because they were not authorized to speak publicly.

As a result, some inside Facebook believe the company's leaders are likely to respond to the current controversy in the near-term by revamping their communications strategy, not by making drastic changes to personnel or the platform.

To critics from Silicon Valley to Capitol Hill, that is likely to be seen as a continuation of the "delay, deny and deflect" strategy covered by The New York Times that got them into hot water in the first place.

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Tech Holders get Zvcked!

SPY vs SOXX, FB, etc ... 10d :

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Stock : --11/19-- : - Chg.  : - Pct.- : MktCap : Old.MCp: -1d.chg: SPYpt: income: PER: peak : chg%:
FB----- : $131.44 : -$7.98 : -5.72%: $401.0B: $425.3B: -$24.3B: - 0.27 : $19.5B: 20.6: 218.6 -39.9%
AMZN: 1512.29 : -81.12 : -5.09%: $779.1B: $820.9B: -$41.8B: - 0.47 : $08.9B: 87.?: 2050. -26.2%
AAPL : $185.86 : -$7.67 : -3.96%: $918.4B: $956.3B: -$37.9B: - 0.43 : $59.5B: 15.4: 233.5 -20.4%
NFLX : $270.60 : -15.61 : -5.45%: $124.8B: $129.3B: -$04.5B: - 0.05 : $01.3B: 96.0: 423.2 -36.1%
GOOG: 1020.00 : -41.49 : -3.91%: $740.6B: $770.7B: -$30.1B: - 0.34 : $18.8B: 39.4: 1274. -20.0%
==== 
Faang: $2963.9 : -138.6 : -4.68%: 2963.9B: 3102.5B:-138.6B: - 1.56 : $108.B: 27.4:
SPY- : $269.10 : - $4.63 : -1.69%: 23.88Tr*: 24.29Tr*: - 410.B: - 4.63 : $1.09Tr 22.0: 293.9 -8.43%
NDX- : 6642.92: - 224.1 : -3.26%:

=====

*SPX MktCap was $25.79Tr. at 9/30/18 ($290.72/269.10=1.080) = $23.88Tr

FAANG's Drop of -138.6B was 33.8% ($1.56 spy pts) of the $410B drop in SPX

FAANG's MarketCap was 12.4% of the $23.88 Trillion MarketCap of the SPX

Without the FAANG's SPX dropped from 21.19Tr to 20.92Tr : that's 1.27%, 3.44pts

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Crypto's Collapse & The Perils Of Price Reflexivity

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"As the price of digital assets make new lows for the year, shocking many (myself included) a lot of people are asking why they have fallen so much. To answer that question, I’d like to pose another question: why did they go up so much in the first place?"

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Oil Crashes Most In 3 Years, Triggering CTA "Max Short" Programs

2018-11-20%20%282%29.jpg?h=aa9bdd4d&itok

Just when oil bulls thought it couldn't get any worse, it did...

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WTI Crude Crashes To $53 Handle, 12-Month Lows

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Oil is plunging again this morning (down almost 6%) on persistent fears that a surplus will re-emerge next year despite OPEC’s plans to cut production.

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Will this ‘buy, cry, die’ chart pattern signal a stock-market bottom

‘Exasperation’ by pundits, media also point to room for rally: analyst

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Have stock-market bulls thrown in the towel, capitulating to the tech-led selloff that this week saw the S&P 500 and Dow Jones Industrial Average erase their 2018 gains while pushing the Nasdaq Composite deeper into correction territory?

That’s an important question because identifying the bottom of a market washout is a contrarian process. And Tuesday’s damage, and the growing alarm around the selloff in the media, has some investors ready to argue that the worst of the carnage may be done.

Opinion: Here’s how to tell if stocks will enter a bear market or rise to new highs

In a Wednesday note, Andrew Adams, analyst at Raymond James, pointed to a string of alarming headlines across financial news sites (including a couple from MarketWatch), and a host of other observations that he said offer “promising signs that have prevented us from losing all hope.”

> more: https://www.marketwatch.com/story/will-this-buy-cry-die-pattern-signal-a-bottom-for-nasdaq-broader-stock-market-2018-11-21?siteid=bigcharts&dist=bigcharts

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PENT UP?  DEBT rises massively... but not gold production. In fact, gold prices fell

GLOBAL DEBT INCREASE 2018 vs. GOLD INVESTMENT: Must See Charts

EXCERPTS

Global debt increased at the fastest rate at the beginning of 2018.  In just one quarter, total global debt jumped by more than $8 trillion.  That is quite surprising as total world debt rose by $22 trillion for the full year in 2017.  Thus, the increase in global debt last year averaged $5.5 trillion each quarter.

However, global debt according to the Institute of International Finance dropped by $1.5 trillion in the second quarter of 2018.  While mature markets saw their debt decline in Q2 2018, emerging market debt increased by $1 trillion lead by China.  In looking at the data from the Institute of International Finance (IIF), they stated that global debt jumped by over $8 trillion in the first quarter of 2018 to $247 trillion, but then declined $1.5 trillion to $247 trillion in Q2 2018.

So, the global debt must have jumped by $9.5 trillion to $248.5 trillion during the first quarter of 2018 and then dropped $1.5 trillion in Q2.  Thus, the IIF must be revising their figures each quarter.  Either way, the net increase in global debt in the first half of 2018 was $8 trillion.

Global-Debt-Increase-1H-2018-vs-Gold-Inv

Gold-vs-Silver-Investment-Central-Bank-H

Total global gold production I forecast will reach 3,375 metric tons this year (108.5 million oz), going by the World Gold Council’s Q3 2018 Gold Demand Trends, worth a total value of $137 billion (shown in the first chart above).  Which means, the increase of global debt in the first half of 2018 was 58 times greater than the value of world gold production this year.

The ability of Central banks to print money and add debt has impacted the value of most stocks, bonds, and real estate.  Thus, we have experienced massive “ASSET PRICE INFLATION” rather than “CONSUMER PRICE INFLATION.”  Simply put, Central bank monetary policy has mostly benefited those who invest in stocks, bonds, and real estate.

Global-Gold-Silver-Production-Value-2018

. . . while the retail investor is still BAMBOOZLED by Central bank asset price inflation, physical gold investors continue to purchase a significant amount of the metal as it is one of the only safe havens available in the market to protect wealth.  And let me tell you, the time will come when retail investors wished they had purchased some “SAFE HAVEN GOLD” at much lower prices after the markets crashed.

> MORE: http://www.investmentwatchblog.com/global-debt-increase-2018-vs-gold-investment-must-see-charts/

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Hussman On The Three Great Delusions: Paper Wealth, A Booming Economy, & Bitcoin

"The problem isn’t that logic or reason has failed, but that the inputs have been distorted, and to justify the the speculative excitement, careful data-gathering is replaced by a tendency to confuse temporary factors for fundamental underpinnings..."

Conceptualizing the “stock of real investment” as broadly as possible, the wealth of a nation consists of its stock of real private investment (e.g. housing, capital goods, factories), real public investment (e.g. infrastructure), intangible intellectual capital (e.g. education, knowledge, inventions, organizations, and systems), and its endowment of basic resources such as land, energy, and water. In an open economy, one would include the net claims on foreigners (negative, in the U.S. case). A nation that expands and defends its stock of real, productive investment is a nation that has the capacity to generate a higher long-term stream of value-added production, and to sustain a higher long-term standard of living.

Understand that securities are not net economic wealth. They are a claim of one party in the economy – by virtue of past saving – on the future output produced by others. When paper “wealth” becomes extremely elevated or depressed relative to the value-added produced by an economy, it’s the paper “wealth” that adjusts to eliminate the gap.

Several years ago, I introduced what remains the single most reliable measure of valuation we’ve ever developed or tested, easily outperforming popular measures such as the Fed Model, price/forward operating earnings, the Shiller CAPE, price/NIPA profits, and a score of other alternatives. From the above discussion, it shouldn’t be surprising that this measure is based on the ratio of equity market capitalization to corporate gross-value added. Specifically, the chart below shows the market capitalization of U.S. nonfinancial equities, divided by the gross value-added of U.S. nonfinancial companies, including estimated foreign revenues. This measure is shown on an inverted log scale (blue line, left scale). The red line shows actual subsequent S&P 500 average annual nominal total return over the following 12-year period. We prefer a 12-year horizon because that’s where the “autocorrelation profile” of valuations (the correlation between valuations at one point and valuations at any other point) reaches zero. Presently, we estimate negative total returns for the S&P 500 over the coming 12-year period.

mc171218a.png

Among the valuation measures we find best correlated with actual S&P 500 total returns in market cycles across history, the S&P 500 is currently more than 2.8 times its historical norms. Importantly, this estimate of overvaluation is not somehow improved by accounting for the level of interest rates. The reason is that interest rates and economic growth rates are highly correlated across history. Lower interest rates only “justify” higher market valuations provided that the trajectory of future cash flows is held constant. But if interest rates are low because growth rates are also low (which we’ll establish in the next section below), no valuation premium is “justified” at all.

So even given the level of interest rates, we expect a market loss of about -65% to complete the current speculative market cycle...

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Get Out Now: SocGen Releases The Most Bearish 2019 Forecast Yet

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"We see further downside potential to global equity indices for the next 12 months. The spectre of a US recession in early/mid-2020 would impact equity markets in 2H19."

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Gee, WTF has become of GE ?

chart : 10yr :

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These Banks Now Have A $41 Billion Problem With GE

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The five biggest Wall Street firms have committed to lending at least $3.5 billion each to GE even as the industrial giant is facing rising concerns about its viability.

Three weeks ago we reported that in the first nail to its investment grade coffin, GE had found itself completely shut out of the Commercial Paper market when Moody's downgraded its senior unsecured rating to Baa1, from A2, and downgraded the short-term rating to P-2, from P-1, making future sales of CP impossible. So, in lieu of CP access, GE said it would replace that funding with a net $40.8 billion of available credit facilities committed from banks. Or, as we explained "GE will now use its revolver, which carries a higher interest rate, to fund what it previously achieved using CP."

This transition in GE's reliance from commercial paper to revolver is not just a problem for GE, however, which now faces higher funding costs and encumbered assets: with the industrial conglomerate's business and operations deteriorating rapidly, GE has become a major headache for America's largest banks almost overnight.

ge%20exposure%2011.21.jpg?itok=0ld6Gbbg

As Bloomberg reports, the five biggest Wall Street firms have committed to lending at least $3.5 billion each to GE even as the industrial giant is facing rising concerns about its viability and the sustainability of its debt.

As we reported on Halloween, GE has almost $41 billion in credit lines it can draw from, and according to Bloomberg, when fully tapped, GE's two main credit facilities would rank as the largest loans to any U.S. company that go beyond next year.

The good news for GE, is that so far it has only used about $2 billion of the available credit by the end of the third quarter, leaving itself ample room to pull more if necessary. That's also the bad news for the big banks who are contractually obligated to provide GE with an additional $39 billion in liquidity.

Indeed, companies typically draw down heavily on their credit lines when facing funding shortfalls. Earlier this month, investment grade-rated, yet extremely troubled California utility PG&E fully used its credit facility, sending its stock plunging even as its investors worried the company might lose its investment-grade credit rating or face liability related to wildfires ravaging the state.

Bloomberg notes as much, saying that from GE’s perspective, the unused credit is a crucial backstop as analysts voice concerns about the risk of a funding shortage.

Chief Executive Officer Larry Culp has been selling assets to raise cash and is under pressure to raise more through a stock offering. The untapped credit “gives us a foundation” as the firm takes steps to reshape itself and ultimately reduce its borrowings, he told CNBC this month.

From the banks’ perspective things are not nearly quite as rosy as the possibility of a draw-down by a borrower shut out of other funding sources poses serious liquidity risks, "including default if the company ultimately proves unable to manage its obligations."

> https://www.zerohedge.com/news/2018-11-21/these-banks-now-have-41-billion-problem-ge

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Wait for bounce, and then retest maybe

USO is the etf for US Oil, is WTI

USO-etc ... update :

75hedtZ.gif

 

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that is true

What you see in USO is a clear persistent downtrend, what I call a LAZER BEAM

These are dangerous, and can go on a long time, breaking support levels

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