It is often said that there are two sides to every story and, somewhere in middle, lies the price of oil. Okay, I paraphrased that just a bit.
But, isn’t it odd that the day after the Saudis threaten $400/barrel oil, Donald Trump suddenly embraces the ludicrous “rogue killers” theory for the death of Washington Post columnist Jamal Khashoggi?
It appears that after days of vehement denials of any involvement, the Saudis suddenly remembered that Khashoggi was, in fact, assassinated and dismembered in their Turkish embassy (Saudi operative: “Oh, yeah…that guy that we chopped up with a bone saw? I had forgotten all about that!)
After a 20-minute conversation, the president who fell in love with Kim Jong-un also came to terms with Saudi King Salman. Was it love? To quote the master of the deal, himself, who knows?
But since Trump is desperate to reverse the rise in gas prices, inflation, and interest rates between now and November 6 (and, to salvage billions in arms sales) don’t be surprised if we get that next leg down in oil prices very soon. Nobody knew the economy could be so complicated!
And, while we’re on the topic of government prevarication, the much-delayed September Treasury Statement was finally released yesterday. Anyone notice something odd about September outlays? Did we really see a plunge in every expense category? Or, maybe, someone decided to massage the numbers just a bit to prevent the report of a $1 trillion deficit. Appearances, again.
Nah…then we’d surely see other efforts to obfuscate the country’s fiscal plight. For instance, they’d never allow charts like this one from the August report.
The same chart in September… (appearances, indeed!)
continued for members…
I’m still on the road today, so I’m going to post and dash. We’re facing essentially the exact same setup as yesterday except that SPX closed below its SMA200 yesterday instead of above it as happened on Friday. We’re still looking for that 2703.62 tag.
Again, futures have run up to the SMA200 in the pre-market. If I’m right, this is a pretty good opportunity to short a bunch of e-minis for a 70-pt gain. Use stops, though, in case this is more than a delaying tactic.
And, VIX is threatening to break down.
If CL and RB break down, VIX might be able to remain contained by the falling yellow channel but still accommodate a 47-pt drop in SPX.
The currency picture is unchanged, with EURUSD likely headed for its SMA200 and USDJPY trying to compensate. Even so, DXY is slipping again.
More later…
Comments
2 responses to “Appearances”
Last week, the sell-off was blamed on companies not buying back stock due to a lockout period for earning announcements…an obvious myth. We are 89 years from the 1929 crash. The Dow also crashed 89% from the highs made in 1929 to 1932. Approx every 89 years there is a depression. There were some sell-offs in 1929, but the markets recovered after every sell-off until Sept of that year. After a nine year bull market, it was hard not to be bullish. Irving Fisher and any leveraged bulls lost everything two weeks after his famous quote!
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
– Irving Fisher, Ph.D. in economics, Oct. 17, 1929
I love it. Great food for thought, Tim!