Precious Metals Breaking Down! 3 Amigos to Abort? 4 Horsemen to Ride?

I am not trying to be a wise guy with the first half of the title (it’s a goof on alarmist media), but if you were not bear biased or outright bearish on the gold sector’s daily and weekly technicals, and its macro and sector fundamentals by now all you have left are the alarmist […]
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Nothing Can Bring Down This Market Except . . .

This past week, we experienced yet another horrendous terrorist attack in New York City. And, amazingly, just like what occurred after several other terrorist attacks that have been experienced over the last year, the market rallied right after the attack. It has almost gotten to the point that people now expect the stock market to […]
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Illustration of how it never works to tell people to calm down

As far as I have seen, saying “calm down” is nearly always a waste of breath. ” “Trump Isn’t a Threat to Our Democracy. Hysteria Is.” (nytimes) and associated comments illustrate this principle nicely.

The authors, eggheads from Yale and Oxford, saying “calm down”:

The sky is not falling and no lights are flashing red, but Americans have nonetheless embraced a highly charged, counterproductive way of thinking about politics as a “new Cold War” between democracy and totalitarianism.

History raises serious doubts about how helpful this tyrannophobic focus on catastrophe, fake news and totalitarianism really is in dealing with the rise of the populist right, of which this bumbling hothead of a president is a symptom.

If there is one lesson from the 20th century worth learning, it is that an exclusive focus on the defense of liberal fundamentals against a supposed totalitarian peril often exacerbates the social and international conflicts it seeks to resolve.

Reader comments, picked by the NYTimes editors:

Democracy purposefully corrupted in so many different ways put Trump in power.

Seeing the threat that Trump is to democracy is a rational conclusion to rational analytical thought.

Word salad dressed up as coherent thought. Trump IS a threat to our democracy and to dismiss everyone who sees it as being hyperbolic is disingenuous . You can’t ignore how millions of people feel.

No, Trump and his enablers have not yet declared themselves our forever rulers. But they are taking steps to undermine the government and our system of the systems of checks and balances.

Some reader comments, upvoted by other readers:

Democrats are united in wanting a fairer distribution of the economic pie. The Republicans are not. They are the tyranny.

And what of the recent reported survey findings that more than half of self-identified Republicans would support suspension of the 2020 presidential election until the country could fix the mythical voter fraud problem

I would rather err on the side of fighting tyranny now, rather than regretting its implementation later. As an earlier commentator observed – of course, panic and hysteria are bad. But anyone paying attention to the current state of democratic institutions in the USA should be alarmed. Perhaps the authors of this piece have not been paying attention.

Philip Greenspun’s Weblog

Mazda will take down Tesla?

“Mazda announces breakthrough in long-coveted engine technology” (Reuters):

The new compression ignition engine is 20 percent to 30 percent more fuel efficient than the Japanese automaker’s current engines and uses a technology that has eluded the likes of Daimler AG and General Motors Co.

A homogeneous charge compression ignition (HCCI) engine ignites petrol through compression, eliminating spark plugs. Its fuel economy potentially matches that of a diesel engine without high emissions of nitrogen oxides or sooty particulates.

Mazda’s engine employs spark plugs under certain conditions, such as at low temperatures, to overcome technical hurdles that have hampered commercialization of the technology.

On a pure “energy-consumed” basis it was always tough to justify an electric car compared to putting a super-efficient diesel engine in a lightweight vehicle, right? Now it seems that Mazda will be changing the efficiency calculations. But maybe it doesn’t matter because people buy electric cars with their hearts, not their heads? (or at least governments use their hearts to hand out electric car subsidies to virtuous rich people?)

Separately, this would be truly revolutionary if it could be adapted to aircraft. People have used Mazda rotary engines in experimental planes before. Imagine this new engine in a legacy airframe, such as the Cirrus. The range could be extended from about 1000 miles to at least 1250 miles, for example (or payload increased due to the need to carry less fuel on any given trip).

Related:

  • Porsche PFM 3200 engine, about 80 of which were sold in the 1980s. This Flying Magazine review highlights the lack of vibration compared to the conventional 1950s engines, and implies that efficiency was improved by at least 20 percent (fuel capacity was reduced from 75 to 60 gallons).

Philip Greenspun’s Weblog

It Took the Threat of Nuclear War to Send the Dow Down 100 Points Today

I’m joking of course but doesn’t it feel that way?

With rhetoric ramping up over North Korea, maybe that was the only thing that could send this market even slightly lower from its non-stop bullish uptrend.

Let’s update our chart and note what’s happening with the Dow Jones at a key price target:

Dow Jones Pullback uptrend

The Dow Jones “melted” up through the beginning of August, notching 10 up-days in a row.

That’s a long streak and price was “due” for a pullback as we highlighted last week for you.

We’re seeing a natural, normal, and expected pullback toward the rising 20 day EMA.

It just so happened that the North Korea headline news occurred during the pullback.

We should have fun trading markets, and it sure does feel like this pullback is the market saying “Hmm.  Wouldn’t it be bearish if we ramped up a nuclear war with North Korea?”  It certainly would be bearish.

So here we are at a critical “make or break” support target.

As usual, get ready to frame your next trades in terms of the departure from the rising 20 day EMA near 21,850.

Play bullishly for a simple pullback/retracement if above it or bearish for a deeper retracement toward the rising 50 day EMA – roughly 21,600 – if beneath it.

And… keep watching the headlines.  SOMETIMES, they actually matter.

 

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

Down Hard Goes the Dollar as Up Quickly Go Gold and Oil

Of the recent intermarket price swings, the most interesting development has been the ongoing slow collapse of the US Dollar Index.

It’s set the stage for recent bullish rallies in both Gold and Oil – commodities priced in Dollars.

Let’s see what’s happening in the intraday intermarket grid:

US Dollar Inex Gold Intermarket

Crude Oil @CL

I sandwiched the falling US Dollar Index between the rising Gold (top) and Oil (bottom) charts.

I wanted to highlight the quick correlation between these two major commodities and the Dollar, namely as the Dollar continues its slow slide with minimal retracements.

Put your trades within the broader context of money flow between major markets.

We’ll discuss this and much more with members in a special report this weekend. Join us!

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

Ford F Flags Down to the Lows in Bearish Breakout

If you’re a big fan of technical analysis and bear flags like I am, you’ll love Ford (F) right now.

We’re seeing price in a downtrend rally toward a critical resistance pivot in a Bear Flag… and then break (collapse?) beneath the trendline this morning after falling from the resistance pivot.

It’s a great lesson and perhaps a better trade set-up right now.  Here it is:

Ford Bear Flag Breakdown

On a separate lesson, a Symmetrical Triangle developed in early 2017.

Note how volume declined as the pattern formed – that’s a textbook pattern example.

Price ejected beneath the lower trendline, setting up a Breakout Trade that was wildly profitable for bears/short-sellers.

In May after price completed a sharp liquidation phase, buyers stepped up their game, bouncing price higher up away from the $ 10.00 per share level on a persistent positive momentum divergence.

Green volume and momentum surged on the initial breakout , but look what happened next.Momentum and Volume both declined – diverged negatively – as price rallied up toward the underside of the falling 200 day SMA (red line).

This critical “Make or Break” pivot was an excellent aggressive short-sale trade set-up – a retracement.

See our “Perfect Pullback/Retracement” Lesson Bundle for specifics on recognizing and trading this excellent opportunity.

From there, price collapsed toward the lower rising trendline (initial swing trade target) beneath $ 11.50… and today we see a bearish breakout beneath the rising (lower) trendline, triggering a breakout entry.

Watch price on the current departure from the $ 11.25 pivot.  Stops are placed back inside the pattern near $ 11.25 (which makes it the critical pivot at the moment).

 

 

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

When can a church take down a Black Lives Matter flag?

Happy Bastille Day!

One of the richest whitest towns in the United States, Concord, Massachusetts, is next to our local airport (Hanscom Field). When I go into Concord I pass a tall white church with a “Black Lives Matter” flag out front. (I have never seen a non-white person in the vicinity of this church.)

When the congregation put up the flag, I’m wondering if they had a plan for when the flag can be taken down.

Surely nobody is going to step forward and say “We don’t care about black lives anymore, so let’s have a ‘No human being is illegal’ or rainbow flag instead,” right?

If someone says “African-Americans are doing better than white Americans, so we can take the flag down,” that can always be refuted with at least one statistic on which white Americans are doing better (I don’t think this is true for Asian-Americans!). In any case, the typical member of the congregation would have virtually no contact with black Americans and therefore wouldn’t have any direct personal experience to offer.

Will we therefore find a descendant of that flag 100 years from now?

[Separately, last weekend I flew a helicopter tour for a couple of African-American local college students who’d bought a Groupon from East Coast Aero Club. As we flew over downtown Concord I pointed out the flag in as neutral tone as I could muster. The passengers broke into fits of laughter.]

Philip Greenspun’s Weblog

Chop Down the Tree

My infatuation with retail shorts is aided greatly by the collapse in auto retailers. Here, for instance, is my first post about shorting O’Reilly. It has fallen 35% in the half-year since that post. Of course, in typical Sloper fashion, instead of thanking me effusively for a great idea offering for free, I get this……… […]
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