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Bitcoin Emulates Dot.com Days

Daily Rap 05-22-2017

Tech buyers were back first thing this morning, and within about half an hour the Nasdaq had gained about 0.5%, with the S&P and Dow lagging. In the afternoon, the rally continued and by day's end the former had gained almost 1% while the latter two tacked on 0.5%.

Away from stocks, green paper was weaker, oil gained 1%, fixed income was flat, and the metals were higher, with silver adding almost 2% to gold's 0.5%.

Blockchain of Fools? On a related topic, today Bitcoin rallied roughly 15%(!) today. Back on May 9, I noted it might be in the early stages of a parabolic move, which means it would now about three-quarters of the way through that process based on the "parabola math" that I discussed at the time (i.e., it is now day 16 of an 18-...more

Last year's posts for Ask Fleck

Q: Just a comment on Mr Skin's (very helpful) history lesson today. This time really is significantly different in the case of the usual MSM suspects: they no longer have the monopoly they had during the Nixon witch-hunt, so are now vulnerable. Maybe there's wisdom in Gandhi's pronouncement that only three things can't be concealed for long -- the sun, the moon, and the truth.

In some unpleasant way, today's witch-hunt will take its toll in the days of reckoning that lie ahead for markets everywhere. Too soon to act in a big way, though. And we may all go mad first!

Fleck: Several people commented on his views about the Trump witch hunt (most favorable, but some not). However, I'm only posting this one so that I can clarify what I think the big point is that Mr. Skin was making, that being the all-out warfare now underway.

First, Trump has flaws, plenty of them. That isn't new news. What is new is the near hysteria from the MSM (and many politicians) about virtually anything he does (e.g., many Democrats and Republicans said Comey should go, due to what he did during the election campaign, and now most of those same people are defending him because Trump canned him, in their mind, for the wrong reason. But, the fact is, it almost doesn't matter WHAT he does. This group of people are against it, period.

Second, Trump is a thin-skinned egomaniac and that will continue to cause problems, BUT, even given his flaws ,he should at least get a fair shake on news items. Yet he does NOT (which of course gets him even madder). People who hate him feel like he couldn't possibly have beaten Hillary without somehow "cheating" (i.e., the Russians stole the election) and they are mad as hell and want revenge, when in fact he beat the Republicans, Hillary, and the MSM because the so-called silent majority was fed up with how the country has been run.

Now, WHY this matters is because the market ran up to the moon on hopes he would accomplish things that he could never have achieved even if he were a saint (which he ain't), but the absolute hatred on the part of the Democrats, MSM, some Republicans and the GOVERNMENT BUREAUCRACY means that he will be lucky to get any meaningful legislation passed for quite some time, if ever. At some point, the market will have to adjust to that reality (and it will tank) and then maybe people will see that the economy sucks. Of course, Trump will lose it even more when he gets blamed for all of that, too.

So, this bit of politics looks like it will matter to markets, potentially in a big way, which is why I am addressing it. This could become a very big deal, as an all-out war among these various groups, which is what is taking place, is not only NOT bullish, it is very bearish, period.
(posted: 5/19/2017)

Q: Bill.,
I find myself getting discouraged and the thought keeps returning that we are no longer dealing with human nature, but with an unfeeling and singularly focused AI.. With a majority in ETF's I don't think the machines will never let it fall.

Fleck: No, human nature is still alive and well and no different than ever.
(posted: 5/19/2017)

Q: As a trader, it's really been surprising how gold has not been holding it's value in the face of all the uncertainty. On Wednesday, the Dow was down 367 points and today, Thursday, up 56 (a weak comeback to say the least) for a two-day net of - 311, while gold was up $24 Wednesday and saw half those gains disappear today, for a net gain of $12. My thinking is that when the market is CLEARLY going lower, gold will THEN respond to the upside with gusto. Is that how you see it? Or has gold become strictly an inflation hedge, where a failing economy will not lead to higher gold prices?

Fleck: Gold isn't a put on stocks, but it is a call on failed central bank policies. Currently, the bubble has blinded people to the fact that these policies do not work. A weaker stock market will illuminate that. Ergo, lower stock prices will be bullish for gold, but not because gold is a put. A failing economy will be very bullish for it, because it will show/prove those policies don't work.
(posted: 5/19/2017)

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