Market Talk – December 22nd, 2015
Asia returned a quiet lacklustre day’s trading Tuesday with Toshiba alone claiming the reason the whole market had edged lower. The stock sank an additional 12.3%, extending Mondays 9.8% decline, having stated it is expected to post a 550Bln Yen loss ($4.54Bln) for the fiscal year. In Shanghai and Hong Kong we saw marginal gains of around 0.25% each.
Europe ended a quiet day mixed (DAX -0.1%; CAC +0.05% and FTSE +0.8%) as Oil continues to drift lower. The lower/slower market momentum was blamed yet again on the decline in Brent and the much discussed glut in storage. Interestingly the spread between WTI and Brent has tightened yet again as delivery costs retreat into insignificance when absolute prices are so low.
As the US markets opened the drift of money continues to flow towards the USD resulting in strong performance across all US Indices. The DOW closed up +165 points (+0.96%), the S+P up 18 points (+0.88%) and finally the NASDAQ closed +32 points (+0.65%). The USD saw a strong performance against GBP today gaining around (0.5%) to push Sterling below 1.4800 at one stage in the day.
We have finally seen the last big data point for the year (US GDP) earlier today and despite a 2% print (against a forecast of 1.9%) this failed to alter any markets course and so we finally wind-down for Christmas.
Gold has drifted a little in late trading (currently down $8) at $1072 and the US Treasury market has drifted also. Last I saw US 10’s trading at 2.23% (+4BP) whilst 10yr Germany was last seen at 0.60% which closes the spread this evening at +163BP.
Into year end it is worth watching the spread between US/Germany in the Bond market, keep an eye on the WTI/Brent spread also and finally the US Dollar itself. The DXY closed this evening marginally lower at 98.20 (-0.15%).
Keep the Power Dry Going into Year-End
This is historically a thin period of trading. Things can be a bit more volatile for a lot of the big money parks and parties at this time of the year. The Dow has not broken to the downside of the upside, as it is BASING within the trading channel. Wait for DEFINITIVE trades to emerge. This year-end is very important for it will help to determine if we are entering a blast off into 2017 or if we need to wait for the world to say “OH SHIT!” and it’s off to the funny farm into 2020.
We can see that the volatility models favor everything going nuts from 2017 onward. That will be the political year from hell as well. We also have the conclusion of this 2016 presidential race. If the Republican Party elites do not rig the primary or have Trump assassinated remotely using drones or hijack his car to run into a tree or off a cliff, then next year will be very interesting between Trump and Hillary — the Queen of banking Corruption. (see latest one on one attacks)
We can see from the daily array that the 16 was a turning point that produced the high close. We backed off but held the channel and bearish reversals, and now we have a choppy period with directional changes. So hold on. Keep the power dry.
1816 & Global Cooling from Volcanoes
COMMENT: Marty, the NASA study is absolutely correct. I work in a different area of geological observations. When a volcano erupts, the ash creates global cooling reflecting the sunlight. You are correct that this global warming is a tax agenda.
Thanks for spreading the word
Anonymous
REPLY: Yes. Go to the beach on a partly cloudy day. When a cloud blocks the sun it suddenly gets cool. This is common sense. As far as volcanoes blocking the sun, well all someone has to do is read: The Year Without Summer: 1816 and the Volcano That Darkened the World and Changed History
Mount Tambora erupted in 1816 and threw into the air so much ash that it snowed during the summer in New York City. It became known as 18-hundred-and-froze-to-death. This account from history tells the story that 1816 was a year when the sunlight could not penetrate the natural pollution from Tambora. As a result of a volcanic eruption at Mount Tambora in Indonesia, weather patterns were disrupted worldwide for months, allowing for excessive rain, frost, and snowfall through much of the Northeastern U.S. and Europe in the summer of 1816. The global cooling altered the natural weather and it resulted in a serious food shortage that set off a mass migration from New England to the Midwest within the USA as people were trying to find the sun. Some saw this as an omen and there was also a religious revival.
While wheat prices peaked in 1812 during to the War of 1812 between Britain and USA, we can see that going into 1817, prices soared again and made a strong reaction high due to weather. (see chart above)
Even Europe was cold and crops failed, which resulted in famine, food riots, and migration. These events created real havoc. Prices soared during this period of global cooling. What fools we mortals are to believe that we have the power to actually alter the climate. We can pollute a river or a stream and throw garbage on the street, but this will not alter the climate which has its own cycle. Just ask the people frozen in position when Pompeii erupted. The planet is far more powerful than we will ever be.
Sorry — it’s all about finding an excuse for taxation.
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