Tidbits: Election, Oil and Market-

- "Political language...is designed to make lies sound truthful..."
- George Orwell

In the middle of these dog days of summer, it is too hot to do anything. With that said and the presidential election less than 75 days away, some tidbits are on the page to be shared with you.
Pew Research Center
released a study with poll numbers. They have Clinton leading, but for me a more important aspect of their study provides an interesting point. Of all the people that they polled, more people classify themselves as Independents than ever before. In fact, the numbers convince me that if a third party were to form, it would win a national election. There is hope for America.
People claiming to be independent were 37% of the total voters.
Democrats fell to 32% and
Republicans fell to 27%.
Keep in mind the total vote for the winning candidate in the past two elections. In 2008, Obama running to make a change won with 69 million votes. In 2012, Obama said he would get jobs with "shovel ready" approach. Do you recall that? The voters realized that change meant what would be left in their wallet as we brush off the dirt to realize that we were fooled again. Obama's total fell 10 million to 59 million. When you look back, you realize that President Obama just carried on the same program as President Bush: Tax cuts for the rich, two Middle East wars with both promising to reduce the deficit and both increasing it beyond recognition. Funny thing. I'm watching an "old" John Candy movie, "Delirious" from 1991. In an early scene the camera pans the street where his character is walking. He passes the "debt" billboard. The total was $3 trillion. It is now 7x that amount. Man, they both suck!
Oil
started to rise in February of this year from $26 a barrel. It made it all the way to $51 and change. The shills were calling for $80 oil, but reality said differently. Consider the rig count on the 3rd of June of this year. The US number was 408 and the Canadian number was 41. Last Friday, the US rig count jumped to 491 and the Canadian number climbed to 121. Either the oil and gas companies are desperate for revenues or they believed the hype. In any event, more oil is on the way even in the face of declining oil prices. When you add the fact that Saudi Arabia just lowered their oil price to Asian nations to keep market share away from Iran, the picture is not pleasant for the companies, but great for consumers. After this bounce, I see oil testing the low $30s, probably after Labor Day.
To get a more accurate price in oil, you can use Fibonacci. The market just did a .68% bounce in oil.
Fibonacci
is a great tool and the man who it is named after should get more respect from our schools and society. The "golden number" will provide both a rising and declining target price for anything even football games. Anyway, subtract the present price of oil from its high.
High oil: $51. It fell to $39. It bounced to touch $48.
It should test $35 and at that point, check the volume of contracts because if they are strong, oil could fall to $27 which is the next level under the matrix system.
Market
At present, the market hit new highs, but no conviction. By that I mean volume behind the trend. In fact, the only high volume has been on the down side. Consider our economy for some insight to the direction of the market. The lowering of unemployment has been mainly in service sector jobs. In that category, the restaurant business has the most job formations. This should be reflected in the Restaurant&Bar Index and it has. The index has climbed 257% since 2009. So, what is it saying now?
Wall Street is turning bearish and I do not mean the Goldman Sachs market call for a 10% correction. Stifel has downgraded 11 restaurant stocks even with declining oil which gives consumers more discretionary money. In addition, they said Chipotle could fall 50%. Ouch!
Stifel is not a lone wolf. Andy Barish of Jefferies sees 18 months of difficult times for restaurants, especially with fears of rising wages.
A report from Elliot Wave Theory shows Total Business Sales rose from 1948 to 2007 in an almost undisturbed advance upward. However, there was a big decline in the recession of 2008. The up-trend picked up in 2009 and it went straight up until January of 2015 when it fell to zero. It has been zero ever since. Very scary! In addition, corporate investments has fallen below zero. Companies are looking to preserve cash as they don't see returns from future sales. By the way, the zero reading is a indicator for a strong move to a recession.
Fed: They want to engineer the market. Chairperson Yellen will check her strength with her speech on Friday from Jackson Hole, Wyoming.
Bottom line: the GDP came in at a low 1.2%. Keep in mind back in January the shills said 3% plus. How many more times will we be misled by campaign promises and bureaucratic agencies? The count says every election from the time of Nixon. Not good.

Trifecta Is A Gambling Term

On Thursday of last week, three market components, the Dow, Nasdaq and the S&P all hit new highs on the same day. The shills called it the "Trifecta!" Dear reader, trifecta is a gambling term pertaining to the track where you call the finish of the top three horses in a race or the winner of the first three races during the day. It gets done, but rarely and that is another reason why the tautology in gambling is the house always wins. In terminology of the market it is this, "the purpose of the market is to take the most amount of money from the most amount of people in the shortest amount of time."
The market is displaying a gambling mania and I don't see it ending well, especially with September looming on the horizon.
However, the market is known to look six months in advance and with the latest price action, the bulls could be on to something. Then again, if that is so much more BS, caution is in order. Let us glimpse a few segments of the market for a clearer picture and filter out the noise.
Corporate debt
is within a whisker of the high it reached in 2007 before the crash at $51 trillion, and still climbing. Ironic thing, defaults have also surged 50% from last year. The leader in defaults has been the oil and gas industry. A few weeks ago I predicted the present bounce in oil. I see it ending after Labor Day and yet, the oil rig count has gone up for the seventh week in a row. A test of the lows could happen as well as a test of the financial durability of companies in the oil and gas business. I see more defaults. Combining debt and low oil prices, they are not building blocks for a higher market.
Poor, Middle and Upper Class
Everyone shops, but according to their means. Here is the latest from where our society shops.
The poor and middle class go to Walmart. If the economy is doing so well as Hillary and President Obama says, how come Walmart is down 32%?
If the wealthy are out spending their big bucks, how come Macy's is closing 100 stores? How can the shills explain the stock is down 29%?
My findings cover our entertainment dollars too. If content is everything, how come Viacom is down 77%? Ouch! Folks, don't say it is the conflict for control because a number that big says a lot more than who gets the biggest pay check.
Retail
everyone knows the malls are in trouble and with Sears and Macy's closing stores, the outlook isn't rosy as the bulls claim with the market hitting new highs. Look at Staples! It is generally in small shopping centers or stand alone buildings. The stock is down 81%. Double ouch!!
Mining
Before you dig, plow or get a permit, you need to know that you have equipment. Caterpillar is the industry leader. How can you explain the stock is down 49%? BHP just had its worst quarter, ever.
This quick survey of our economy tells you more truth than the price action of the market. Maybe the market has to lure you in to get the most amount of money in the shortest amount of time? I can't answer that because I am not a master trader.
Meanwhile, the Bulls like Yellen, yell to look to the future GDP and not the lackluster present GDP numbers. The Bulls scream to look to the future of corporate earnings rather than the fact that earnings have declined for five straight quarters in a row. They pound out that every dip is a buying opportunity to which I now will take a closer look because there is some truth within the market if you know where to look.
Volume
to me is one of the most important aspects the market tells you.  When the NASDAQ hit its high, it did it with trading of 1,490 billion shares on the up day. However, when Nasdaq declined on the 27th of June, it fell with 3,9 billion shares on the down day. It is telling you that the up day is distribution because on the down days, they are all trying to get out.
You can see this same point in the small caps. The IWM was up with 12 million shares and down with 19 million shares.
The strength and conviction in the market is on the downside and that is where I see the market going.  

Greater Fool Theory

- "A sucker is born every minute."

- American Promoter, Gamblers and Confidence Men

Do you know who is the greatest sucker? No, it is not the guy who paid $4,000 for a watermelon in Japan. This is 1,000 times worse. Clue: Lucky you and me, it is taking place in the here and now. Need another clue? How about some background music like on an elevator while you think about it? By the way this coach is going down just like our economy because of the destructive nature of the subject.

Badfinger, "Would you walk away from a fool and his money. If you want it, here it is, come and get it. But you better hurry 'cause its going fast."

Want better singers for your ride down? How about the Beatles?

"Did I hear you say that there must be a catch. Will you walk away from a fool and his money..."

Smart money is jumping on every new negative issue because they realize that they have a safety cushion. The issue is backed by the greater fool to which the smart money can dump. It is the best con because the fool is so stupid that there is actually no "con" at all. For those of you who put the clues together, congrats. The answer is the European Central Bank who is subsidizing anyone who borrows from them.

Hamilton In Vogue

He is the biggest on Broadway, but interest rates haven't been this low since our first Secretary of the Treasury was in office. In fact, Bank of America released a study showing that rates are at 5,000 year lows. 

Yes, there are other negative issues in the market. Japan has the most, but the Bank of Japan buys the entire issue. The ECB sponsors both public and private debt, and this leaves some open tranches to be filled.

Who Wants To Be A Millionaire?

The issues in question are in terms of billions of dollars and for example, say the issue moves thirty basis points. The original issue was plus 0.3%. It paid pittance, but returned full principle. Now, the smart money grabs the opening bid. When the issue hits the open market, the fool moves the bond into negative territory. Someone just made $30 million dollars. They cash out and leave the "fool" holding an issue that will pay less than the cost. The economy gains nothing. Society gains nothing except a few hedge fund managers or money institutions who picked the pocket of stupid policymakers. By the way, some day, down the road, the ECB balance sheet will be technically bankrupt. They don't fret. They will just print more even though the citizens of the union will oppose this concept and approach. So much for democracy, but then again, after the Brexit vote, the EU will be in the mood to appease all members and the printing presses will be working overtime!
It is like this quote from Alan Greenspan, "There is no other agency of government which can overrule actions that we take."
US Negative?
Yes. Foreign hedge funds have been buying US Treasuries and even with currency differences, they have made money until now. US yields have fallen so low that they cannot produce positive yields after returning to their native currency. Is this the harbinger of negative rates in the US? Heaven forbid!
What It All Means
We may know what they are doing, but they write the rules. Even if we had the money, the central banks and treasurer's won't allow us to participate in their auctions. This leaves the question: who really is the fool? Maybe it is us for allowing them to control our financial independence. 

But hey, who listens to populism? These financial engineers aren't elected and are not subject to democratic elections. Together, this is another reason to End the Fed!

Coming Attack On $Gold

Don't ask me how I know because it is like the Boston hit, More Than A Feeling. In addition, I have looked at the price action along with the lies of the various fiat banks who all of a sudden are behind the gold surge. They have publically cited $1400 in raising their gold call for 2016. These banks, led by JPMorgan Chase are fiat wolves disguised under the banner of a golden fleece.
First Signs
was the sharp rise in gold after gold fell $100 dollars in early June of this year. The shorts had to cover, but I believe that they changed their tactic at that time. They became buyers of gold. Now, they have a dual approach to drive down the action in gold before it becomes mainstream. They are working with the natural market forces. Let us take a closer look.
Brexit
drove the pound lower and the euro will follow as soon as stimulus becomes apparent. This has led a flight to safety. The dollar is again on the rise. It will probably test the $100. level. A strong dollar hurts commodity prices. While this is happening in the West, the yen is slowly losing steam because of all the excess stimulus. This only makes the dollar even stronger. This fundamental is aiding the attackers.
Negative Rates
is a fundamental reason in helping gold rise. The old argument that gold pays no interest is lost in the shuffle due to the fact that corrupt central bank manipulation of interest rates to negative, only makes gold the best game in town.
So, the fiat people will use the strong dollar along with their purchased contracts to sell gold. They want to derail the gold surge before everyone realizes that if they bought into gold, they would have made a lot of money due to the devaluation of their currency. In addition...
X - Factor
The Fed released their statement on Wednesday. As expected there was no change, however Yellen did yell that the Fed still is going to raise rates. She will try to control the market, but action speaks louder than words. The "no action" boosted the metals. The attacking fiat institutions will be looking at the price action as well as the volume after the announcement. This could delay their plan, but like I stated, something is in the works.
There is "Good" and "Bad" with Gold ETFs and it could turn "Ugly"...
Dear reader, when gold rises, gold ETFs have to buy to balance their book. Conversely, when gold declines, those same ETFs must sell which magnifies any price action. The fiat people know this and they will use it to their advantage.
Now, getting deeper into the "first signs" dear reader, you might understand what I'm seeing.
First Feelers
hit the market two Friday's ago. All of a sudden, gold dropped $20 dollars in mid-day trading. The attackers were testing the strength of gold after it failed to breach $1400. They sought out any buyers of gold if it fell to a certain price. The buyers appeared and gold quickly recovered. No one paid this price action any attention other than myself. Since that time gold has slowly drifted lower and I feel that the end of July will be the D-Day. Friday is the best day for the attack because the world markets close before the US market. The fiat people will sell their gold, use the strength of the dollar along with their shills to decry gold and then, flood the market with a ton of shorts. Weak money will help the decline. Gold could fall to $1260. They will have the entire weekend to tie the political landscape to spin their case against gold. The following Monday, they will add to their short position to kill gold in 2016.
As it turned out, I was wrong about the timing. One has to remember that at the end of the month and the first days of the new calendar, mutual funds buy. The attackers did not want to fight the accommodating Fed. They could launch on this Friday, but it will happen before the middle of August. Let me tell folks. It will not work!
If this scenario pans out, we back up our truck and load it up. We will turn the tables on these corrupt fiat people. We overwhelm them and force them to cover not to mention the tidy profit that we will be riding upon. This will drive the price action to break the $1400 dollar barrier. This in turn will attract new buyers. A new surge will result and I see gold testing $1500 before 2016 ends. As "old" Shakespeare would say, "The die has been cast." 

Reflections on Trump - Platform - Election

First off, let me reveal that I dislike the Republican Party. On local and state levels they keep spending in check and they are for low taxes. In that respect, they are superior to the Democratic Party. However, when considering national issues, they never do anything for citizens. For example, they say they are for less regulation. This translates to allow big business to plunder and pollute our environment. The sightless Libertarians suffer from the same delusion. This happens all the time. Recently, a so-called watchdog of utilities rubber stamped a fee for AT&T. Of course, when you appoint the committee, you get the results that you want just like the Supreme Court. They passed onto customers a .61 cent charge to cover administration. Customers are paying their costs! BS! Do I remind you that Republicans were against Social Security and they pushed for the Federal Reserve? I rest my case.
As for the Democratic Party, I will attack their wagon train when it passes Philly next week. For disclosure, I believed at one time the party stood for issues that protected workers and citizens. That is no longer the case. They have lost touch with ordinary citizens. President Obama thinks someone making $250,000 a year is middle class. My friend, after four years of work that person is a millionaire. They are arrogant and they put their ego before public welfare. Their door is open to every fund campaign supporting lobbyist here and aboard! To hell with them!
Personally
I'd like to see the formation of a new political party that represents the people. At present, we have many national issues, but these four should come first.
One, end all trade deals, tax outsourcing and put tariffs on imports just like every other nation in the world. Free trade is a lie! This will lower our national deficit, create jobs and stop the decline in our standard of living. Our country needs to return to self-sufficiency. Screw globalization because in reality it is an anti-worker concept which explains why we have a wealth gap problem. Secondly, we are not the world's police force. Screw the thinking of "America's place in the world." It has placed us under a terrible burden of debt with continuous wars with no end in sight. We are 300 million strong and that is like Sparta one million times stronger. We demand a return to peace, cut the military budget to basic defense and use that money for our needs. Thirdly, end the Fed! This corrupt institution is nothing more than socialism for the banking industry. It is the thief which causes inflation and lowers our standard of living. Finally, we need an amendment to balance the budget. No more off the books and secret programs. It is either a plus or minus in the ledger - period!...Now, that I got that off my chest, this is how I see the election and my take on Trump's platform.  
The Horses Are At The Gate...
and the media is making its bet - Clinton! They have been wrong before. Dewey versus Truman comes to mind. The conflict in this race is for us to choose between the lesser of two evils. Logically, for me, Trump has made issues of points that I can relate too. Granted, in his victory speech, he claimed to have an answer for all our ills, but he did not provide the how. Since all campaigns make promises, this is a given, however let me take a closer look.
His top point is "law and order." Any candidate who screams that expression scares the hell out of me. I see the opposite like endless protests in the Nixon era. He ran on the same issue. Do I even mention Hitler?
His second issue is to re-negotiate trade deals and "walk away" if they are not good for America. I love that, but the "old" republican roots would never say or fight for this. Maybe that is why they stayed away from the convention? This is why I see Trump as the lesser of the two evils. If he can do this, our nation will have another chance and the "American" dream will be the meme again. His daughter and sons provided credence that Trump does what he says and he sees it to completion. They gave examples of his protection to workers and women issues. There is a consequence to this point. Trump has used debt to fund expansion and he will increase our national debt, but sometimes you have to spend to grow.
He vowed to end ISIS. This is worthy. Nevertheless, war is dangerous and his willingness to spend on the military budget is troubling. Violence only begets more violence. Did we ever have terrorist attacks before these Middle East wars? No!...I don't like this aspect at all.
His stance on the border is in reality too late. Yes, we need to secure our borders, but Mexicans are no longer flooding into the US. Why, you ask? Because Mexico is enjoying an economic boom. All nations are outsourcing there and quality jobs are available. I have an answer for outsourcing in my unpublished work, but if Trump ends Nafta and Cafta that will be a good start.
Finally, in the ebb and flow of his speech, the crowd responded with many replies. I noticed one in particular. If Trump were smart, he grab it as his campaign slogan. Slogans are crucial in elections. Do you know or remember, "I like Ike!" How about, "JFK, all the way!"
Once the crowd responded, "Yes, he will!" Donald, use it with everything.
Will he win? " Trump: Yes, he will!"
Will he protect workers? "Trump: Yes, he will!"
Will he make America great? "Trump: Yes, he will!"
Bottom line: the horses are at the gate and it is up to us to determine our bets. And they're off...    

Market Conundrum

The US stock market just broke new all-time highs in the Dow and S&Ps, however in this age of globalization, European banks are falling to all-time lows. Dear reader, it is not just Europe. The Japanese Nikkei 225 is down 15% and Japan's third largest bank, Mitsubishi UFJ financial Group(MTU) is threading water. It is down 38%. What gives?
In Europe
The Swiss banking giant, Credit Suisse(CS) is crashing. It is down 57% and that is no typo. Ouch! Not only did the IMF say that Germany's largest bank is the world's most riskiest, but Deutsche Bank(DB) has already dropped 59% of its value. Double ouch!! England has problems, but its worse up in Scotland. The Royal Bank of Scotland(RBS) is stumbling. It is down 52%.
Even in the US, Citigroup(C) is off by 24%. All these examples are deep in bear territory and it tells me something is seriously wrong, but we don't know what it is until it hits the fan. By the way, according to Dow Theory, the market needs the transports to go along with the Dow if the market is truly showing financial strength. The transports are a long way from a new high. Anyway, I looked deeper and my pisans are in trouble.
Italian Banks
are one reason for caution. Italy's third largest bank, Monte dei Paschi has lost 83% of its stock valuation. That is not an ouch, but closer to suicide. The government will add money to capitalize their banking system, but as it stands the outlook is terrible. The number of loans that are considered so bad equates to one-fifth of the total economy. No amount of stimulus will make sour loans turn good. Here is an insight from an official of Deutsche Bank. David Folkerts-Landau says, "European banks are sick. I'm no doomsday prophet. I am a realist." He believes the EU should recapitalize the whole system.
As things stand with Brexit, I think the EU will let the printing press work overtime. They have a real fear of contagion. This will be another devaluation for the euro. This tells me that the best investment is precious metals, especially since corporate earnings, the true driver of the markets, has been down for five straight quarters. It does appear that earnings in this quarter will not be as bad as the last quarter, yet they still will be down. Although the market may have you scratching your head, it leads me to this analogy. Baseball had its Home Run Derby last week and this year the long ball in the markets is gold and silver.

Environmental Hope and $More

I was watching my local news here in Florida and a report featured an innovative US technology company called Ecosphere Technologies. The CEO, Dennis McGuire is a fan of Jacques Cousteau. He modeled his company on Cousteau's environmental thinking. This small firm has been around for ten years and it is dysfunctional in nature. On one hand, it has amazing patented solutions to our ecosystem, but it has been an underachiever in impacting society and financial returns.
In any event I got excited when I heard that its Ozonix System does not use chemicals to treat contaminated water. The report showed the company using this system to clean up a marina in Martin County Florida.
Algae&Odor
The marina had been in the news last week because it was closed for the Fourth of July with this green slime in the bay with its awful odor. ESPH(stock symbol) says its patented technology will clean it up without chemicals which could harm the ecosystem.
I did some research. As you know I do not usually give out stock recommendations because I will feel doubly in pain if the stock tanks. ESPH is a penny stock and on the BB which should scare almost anyone away, however it takes time for small capitalized companies to make their mark. This will be the week whereby we know if ESPH can conquer the problem of algae bloom and odors from waterways.
In addition, the company has many other patents like its Power Cube which won the science award for Science Innovator of the year in 2014. This solarized portable center can be set up anywhere in the world, especially in locations off the grid. It is used to pump water in arid climates where there is no infrastructure. Amazing!
They have a host of other systems and solutions for agriculture, manufacturing, mining, oil and gas, sewage and of course, water. They have medical solutions for bacteria control and disinfection.
You could say that maybe this small firm is trying to do too much with so little capital. Nevertheless, if they are successful in this water test, they will not only help the environment, but your pocketbook too. I don't think a small investment will crush anyone and in a way our support of the company will be like partnering with the ecosystem.
For $1,000
I'm all-in, but I'll wait to see if this company can pass the test of the algae infected marina before I commit.