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Lance Roberts

Lance Roberts

Lance Roberts has sharpened that lens with 30 years in the investing world from private banking and investment management to private and venture capital. Lance Roberts’ perspective and common sense analysis is sought after by media outlets such as Fox 26 News in Houston, CNBC, CNN and Fox Business News along with numerous publications including the Wall Street Journal, USA Today, Reuters and the Washington Post. Roberts is the Editor of the X-Factor report and publishes the blog Daily X-change.

Articles by Lance Roberts

Has The Narrative Been All Priced In? 09-13-19

2 days ago

The Bullish Narrative
Is It All Priced In?
Sector & Market Analysis
401k Plan Manager

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The Bullish Narrative
This past week was built for the “bulls” as just about every item on their “wish list.” was fulfilled. From a “trade deal” to more “QE,” what more could you want?
Trade Deal Near?
Concerning the ongoing “trade war,” our prediction that Trump would begin to back peddle on negotiations to get a “deal done” before the election came to pass.
Trump has once again delayed tariffs to allow the Chinese more time to position. China, smartly, is using the opportunity to buy soy and pork products (which they desperately need due to a virus which wiped out 30% of their pig population) to restock before the next meeting.

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#WhatYouMissed On RIA: Week Of 09-09-19

3 days ago

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Week In Blogs

The Best Of “The Lance Roberts Show”

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Video Of The Week

Lance Roberts & Michael Lebowitz Discuss QE & The Impacts To Growth

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Our Best Tweets Of The Week

China’s exemption of tariffs on pork and soybeans is not "goodwill" as claimed. It is simply spin. Food prices are soaring in China— Michael Lebowitz, CFA (@michaellebowitz) September 13, 2019
Shouldn’t the media and the public be all over the ECB asking why this next dose of QE is the magic dose. QE and negative rates have

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The August Jobs Report Confirms The Economy Is Slowing

4 days ago

After the monthly jobs report was released last week, I saw numerous people jumping on the unemployment rate as a measure of success, and in this particular case, Trump’s success as President.
Unemployment November 2016: 4.7%
Unemployment August 2019: 3.7%
Argument solved.
President Trump has been “Yuugely” successful at putting people to work as represented by a 1% decline in the unemployment rate since his election.
But what about President Obama?
Unemployment November 2008: 12.6%
Unemployment November 2016: 4.7%
Surely, a 7.9% drop in unemployment should be considered at least as successful as Trump’s 1%.
Right?
Here’s a secret, neither one is important.
First, Presidents don’t put people to work. Corporations do. The reality is that President Obama and Trump had very little to do with

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An Investor’s Desktop Guide To Trading – Part II

6 days ago

Read Part-1 Here
Currently, it seems that nothing can derail the bull market. Trade wars, weakening economic growth, deteriorating earnings, and inverted yield curves have all been dismissed on “hopes” that a “trade deal” will come, and the Federal Reserve will cut rates. While the last two items may indeed extend the current cycle by a few months, they won’t change the dynamics of the former.
Eventually, this cycle ends. Of that, there is little argument. It is the “when,” that is tirelessly debated.
As I have often stated, I am not bullish or bearish. My job as a portfolio manager is simple; invest money in a manner that creates returns on a short-term basis, but reduces the possibility of catastrophic losses which wipe out years of growth.
In the end, it does not matter IF you

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The Costs & Consequences Of $15/Hour – The Update

7 days ago

In 2016, I first touched on the impacts of hiking the minimum wage.
“What’s the big ‘hub-bub’ over raising the minimum wage to $15/hr? After all, the last time the minimum wage was raised was in 2009.
According to the April 2015, BLS report the numbers were quite underwhelming:
‘In 2014, 77.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum.
Together, these 3.0 million workers with wages at or below the federal minimum made up 3.9 percent of all hourly-paid workers. Of those 3 million workers, who were at or below the Federal minimum

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Bulls Regain The Narrative As They Want To Believe 09-06-19

9 days ago

Market Review & Update
The Last Hoorah?
They Want To Believe
Sector & Market Analysis
401k Plan Manager

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Market Review & Update
Last week, we laid out 6-points about the market as the risk to the downside outweighed the potential reward. 
Historically, September is one of the weakest months of the year, particularly when it follows a weak August.
The market remains range bound and failed at both the 50-dma and downtrend line on Friday
The oversold condition has now reversed. (Top panel)
Volatility is continuing to remain elevated.
Important downside support moves up to 2875
The bulls regain control of the narrative on a breakout above 2945. 

The chart above is updated through Friday’s close. As noted, the bulls did

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#WhatYouMissed On RIA: Week Of 09-02-19

10 days ago

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Week In Blogs

The Best Of “The Lance Roberts Show”

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Video Of The Week

Interview W/ Grant Williams: Negative Rates, Yield Curves & Gold Bugs

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Our Best Tweets Of The Week

Our Latest Newsletter

What You Missed At RIA Pro

RIA Pro is our premium investment analysis, research, and data service. (Click here to try it now and get 30-days free)

See you next week!

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No, Bonds Still Aren’t Overvalued!

11 days ago

Interest rates have plunged lately as concerns about a recession in the U.S. economy have risen. This has led many media commentators to suggest the bonds are now wildly overvalued. To wit:
“When evaluating the desirability of government bonds as a long-term investment, it’s imperative to compare the prevailing yields of bonds with the earnings yields for stocks.” 
While this is a common comparison, it is also wrong. Let’s compare the two:
Earnings Yield:
“Earnings yield” is the inverse of P/E ratios and only tells you what the yield is currently, not what the future will be.
Investors do not “receive” an “earnings yield” from owning stocks. There is no “yield payment” paid out to shareholders, it is simply a mathematical calculation.
There is no protection of principal.
Treasury Yield:

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Technically Speaking: Just How Long Will Markets Keep “Buying” It?

14 days ago

Tighten up stop-loss levels to current support levels for each position.
Hedge portfolios against major market declines.
Take profits in positions that have been big winners
Sell laggards and losers
Raise cash and rebalance portfolios to target weightings.
We are closer to the end of this cycle than not, and the reversion process back to value has historically been a painful one.”

Remember, it is always far easier to regain a lost opportunity. It is a much more difficult prospect to regain lost capital.

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S&P 500 Monthly Valuation & Analysis Review – 9-1-19

14 days ago

J. Brett Freeze, CFA, founder of Global Technical Analysis. Each month Brett will provide you their valuable S&P 500 Valuation Chart Book. This unique analysis provides an invaluable long term perspective of equity valuations. If you are interested in learning more about their services, please connect with them.

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Breaking Down The Bull/Bear Argument

16 days ago

Market Review & Update
Breaking Down The Bull/Bear Argument
Sector & Market Analysis
401k Plan Manager

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Market Review & Update
Really! Another week of nowhere? 

This is the same chart from last week, updated, but here is the salient point.

“This has been an impossible market to effectively trade as rhetoric between the White House, the Fed, and China has reached a fevered pitch.”

Don’t fall into the trap.
On Thursday, the market rallied as China said they were not going to retaliate against the U.S. on trade immediately. They also stated they wanted to take a “calm” approach to the discussions. 
The media, and Wall Street, heard:  “Trade Deal.” 
That is NOT the case by any stretch of the imagination.
As we wrote

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#WhatYouMissed On RIA: Week Of 08-26-19

17 days ago

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Best Of “The Lance Roberts Show”

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Video Of The Week

Interview W/ Grant Williams: Negative Rates, Yield Curves & Gold Bugs

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Our Best Tweets Of The Week

Investing Lesson 101: In portfolio management, you can ONLY have 2-of-3 components of any investment or asset class: Safety, Liquidity & Return. pic.twitter.com/tgUZ0AgdtN— Lance Roberts (@LanceRoberts) August 29, 2019
"My stock market" -DJT Not sure how to better explain the goal of Presidential communications— Michael Lebowitz, CFA

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The Trade War Is Over & Nobody Won

17 days ago

“You break it, you own it.”
Then-Secretary of State Colin Powell cited this Pottery Barn rule back in 2002. He was advising President George W. Bush of the consequences should an Iraq invasion go badly.
In fact, Pottery Barn has no such rule. You can go in their stores and handle the merchandise all you wish. They see occasional breakage as a cost of doing business.
But Powell still chose a good metaphor. Presidents aren’t just shopping for knickknacks when they make economic and foreign policy decisions. They have real, sometimes deadly consequences.
Bush should have listened more closely.
Far from the “cake walk” Pentagon officials predicted, the Iraq War cost the US vast amounts of money and several thousand lives, not even counting the (much larger) Iraqi death toll.
Worse, the

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8-Reasons To Hold Some Extra Cash

18 days ago

Over the past few months, we have been writing a series of articles that highlight our concerns of increasing market risk.  Here is a sampling of some of our more recent newsletters on the issue. 
The common thread among these articles was to encourage our readers to use rallies to reduce risk as the “bull case” was being eroded by slower economic growth, weaker earnings, trade wars, and the end of the stimulus from tax cuts and natural disasters. To wit:

These “warning signs” are just that. None of them suggest the markets, or the economy, are immediately plunging into the next recession-driven market reversion.
However, The equity market stopped being a leading indicator, or an economic barometer, a long time ago. Central banks looked after that. This entire cycle saw the weakest

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Technically Speaking: Market Risk Is Rising As Retail Sends Warning

20 days ago

Given that markets still hovering within striking distance of all-time highs, there is no need to immediately take action. However, the continuing erosion of underlying fundamental and technical strength keeps the risk/reward ratio out of favor. As such, we suggest continuing to take actions to rebalance risk.
Tighten up stop-loss levels to current support levels for each position.
Hedge portfolios against major market declines.
Take profits in positions that have been big winners
Sell laggards and losers
Raise cash and rebalance portfolios to target weightings.
We are closer to the end of this cycle than not, and the reversion process back to value has historically been a painful one.

Read More »

America’s Debt Burden Will Fuel The Next Crisis

21 days ago

Just recently, Rex Nutting penned an opinion piece for MarketWatch entitled “Consumer Debt Is Not A Ticking Time Bomb.” His primary point is that low per-capita debt ratios and debt-to-dpi ratios show the consumer is quite healthy and won’t be the primary subject of the next crisis. To wit:
“However, most Americans are better off now than they were 10-years ago, or even a few years ago. The finances of American households are strong. 
But, that’s not what a lot of people think. More than a decade after a massive credit orgy by households brought down the U.S. and global economies, lots of people are convinced that households are still borrowing so much money that it will inevitably crash the economy.
Those critics see a consumer debt bomb growing again. But they are wrong.”
I do agree with

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Powell Fails, Trump Rails & The Failure Of Negative Rates 08-23-19

23 days ago

Trump & Powell Square Off
Negative Yields Everywhere
Why The Fed Won’t Go Negative
Sector & Market Analysis
401k Plan Manager

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Trump & Powell Square Off
Let’s start with a simple chart:

This has been an impossible market to effectively trade as rhetoric between the White House, the Fed, and China, has reached a fevered pitch. 
On Friday, several things happened which have at least temporarily significantly heightened market risk.
Jerome Powell disappointed the markets, and the White House, by sticking with their previous guidance concerning monetary policy actions. To wit:
We Will Act As Appropriate To Sustain The Expansion (Will cut rates if needed)
Says Events Since The July Fomc Have Been `Eventful’  (Trade

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#WhatYouMissed On RIA: Week Of 08-19-19

24 days ago

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Best Of “The Lance Roberts Show”

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Video Of The Week

Message From The Yield Curve

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Our Best Tweets Of The Week

If you borrow money from a loan shark at a negative rate do you break his kneecaps if you don’t repay?— Michael Lebowitz, CFA (@michaellebowitz) August 22, 2019
The Washington Post has been leading with recession warnings the majority of this week. These articles will negatively affect consumer behavior and could turn into a self fulfilling prophesy. Today’s lead is the most read

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Investors Dilemma: Pavlov’s Dogs & The Ringing Of The Bell

25 days ago

Classical conditioning (also known as Pavlovian or respondent conditioning) refers to a learning procedure in which a potent stimulus (e.g. food) is paired with a previously neutral stimulus (e.g. a bell). What Pavlov discovered is that when the neutral stimulus was introduced, the dogs would begin to salivate in anticipation of the potent stimulus, even though it was not currently present. This learning process results from the psychological “pairing” of the stimuli.
What does this have to do with investing. Let’s start with a tweet I got recently in response to the article “Fed Trapped In A Rate Cutting Box.”

This is a great example of “classical conditioning” with respect to investing.
In 2010, then Fed Chairman Ben Bernanke introduced the “neutral stimulus” to the financial markets by

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Technically Speaking: This Is Still A “Sellable Rally”

27 days ago

In last Tuesday’s “Technical Update,” I wrote that on a very short-term basis the market had reversed the previously overbought condition, to oversold.
“This could very well provide a short-term ‘sellable bounce’ in the market back to the 50-dma. As shown in the chart below, any rally should be used to reduce portfolio risk in the short-term as the test of the 200-dma is highly probable. (We are not ruling out the possibility the market could decline directly to the 200-dma. However, the spike in volatility and surge in negative sentiment suggests a bounce is likely first.)”
Chart updated through Monday’s close

This oversold condition is why we took on a leveraged long position on the S&P 500, which we discussed with our RIAPRO subscribers last Thursday morning (30-Day Free Trial).:
“I

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The “Trade War” Is Over, Trump Just Doesn’t Realize It Yet.

28 days ago

On Tuesday, the markets bid higher following a statement from the U.S. Trade Representative’s office that tariffs will commence on September 1st, but that some products will be delayed until December 15th. To wit:
“…some tariffs will take effect on Sept. 1 as planned, ‘certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent. Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles.”
The only part the algos heard was “tariffs delayed,” which sent them into stock panic buying mode.
However, stocks crashed again on Wednesday as the yield curve inverted, sending “recession fears” through the

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Pay Attention To The Message The Yield Curve Is Sending 08-16-19

August 17, 2019

Quick Review
Listen To The Yield Curve Message
No One Ever Says Sell
Sector & Market Analysis
401k Plan Manager

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Quick Review
Do you love #volatility yet? 
Last week the market swung wildly back on forth on “trade talks,” “tariff relief,” inverted yield curves, and recession fears to finish the week on “hopes” banks will rescue the markets once again.

The bounce on Friday, was not unexpected as the market had gotten very oversold on a short-term basis. As shown in the chart below, the bounce off support gives the market a little room to the upside before several levels of resistance kick in. 

This oversold condition is why we took on a leveraged long position on the S&P 500 which we discussed with our RIAPRO

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#WhatYouMissed On RIA: Week Of 08-12-19

August 16, 2019

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Best Of “The Lance Roberts Show”

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Video Of The Week (The Yield Curve Inverts)

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Our Best Tweets Of The Week

Serious question- If the US were to buy Greenland, I assume Greenland puts that money in their Treasury. If so, once the US takes delivery, so to speak, isn’t Greenland’s Treasury and its assets the property of the US. Ergo, wouldn’t such a purchase ultimately be free?— Michael Lebowitz, CFA (@michaellebowitz) August 16, 2019
"What we are witnessing is not just coloring outside the lines;

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UNLOCKED RIA PRO: S&P 500 Plunges On Yield Curve Inversion

August 14, 2019

We have unlocked yesterday’s report that went out to our RIA PRO subscribers following the crash. You can subscribe at RIAPRO.NET and get 30-DAYS FREE to gain access to our portfolio models, analysis, and research.

Yesterday, the financial media burst into flames as the yield on the 10-year Treasury fell below that of the 2-Year Treasury. In other words, the yield curve became negative, or “inverted.”

“Stocks plunged on Wednesday, giving back Tuesday’s solid gains, after the U.S. bond market flashed a troubling signal about the U.S. economy.” – CNBC

According to CNBC’s logic, the economy was perfectly fine on Tuesday, notably as Trump delayed “tariffs” on China, since the yield curve was NOT inverted. However, in less than 24-hours, stocks are plunging because the yield curve

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Technically Speaking: 5 Reasons To Be Bullish (or Not) On Stocks

August 13, 2019

Just recently, Tom Lee, head of Fundstrat Global Advisors, published a list of 5-bullish signs for the stock investors which he says you should “ignore at your own peril.” As he notes:
“In short, these signals are saying the S&P 500 is set up for a monster 2H rally. We are not ignoring the negative signal of a plunge in interest rates, nor saying that a full-blown trade war is negative for the World. But, we believe the trifecta of strong US corporates, positive White House (towards biz) and dovish Fed, are major supports for the US equity market.”
His view is that the short-term disruption of the market over “trade” issues is an opportunity for investors to increase equity exposure.
Over the last few weeks, we had discussed the excessive deviation to the market above the 200-dma, which

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When A Bond Bull Becomes A Raving Stock Bull

August 12, 2019

Over the last few years, I have continually battled the “bond bears” about calls for higher rates simply because rates were low.  Here is a short list of some of the more prominent calls for higher rates:
Those are just a few, and certainly, there were many other calls for higher rates from every corner of Wall Street.
One of the biggest issues with the predictions of rising 10-year bond yields, which started in earnest in 2013, is they have been consistently wrong. For a bit of history, you can read some of the more recent posts on why I have stated rates can’t rise in the current environment. (The first post on this topic was June 2013)
(Of course, we have been avid buyers of bonds on “rate pops” in our portfolios during that time frame as well.)
It is this bit of history that I share

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Risk Happens Fast. Is The Selling Over? 08-09-19

August 10, 2019

Risk Happens Fast
Is The Selling Over?
Risk Happens Slowly, Too.
Sector & Market Analysis
401k Plan Manager

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Risk Happens Fast
Over the last few weeks, we’ve been discussing the potential for a correction due to the extreme extension of the market above the 200-dma. To wit:

“In the very short-term, the market is grossly extended and in need of some correction action to return the market to a more normal state. As shown below, while the market is on a near-term ‘buy signal’ (lower panel) the overbought condition, and near 9% extension above the 200-dma, suggests a pullback is in order.”

Chart Updated Through Friday

The correction was inevitable; it just needed a catalyst, like President Trump ramping up trade wars,

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#WhatYouMissed On RIA: Week Of 08-5-19

August 9, 2019

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed.

The Best Of “The Lance Roberts Show”

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Video Of The Week

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Our Best Tweets Of The Week

Trump calling the Fed "incompetent" may just be his way of revealing the justification for firing or demoting Chair Powell.— Michael Lebowitz, CFA (@michaellebowitz) August 7, 2019
Rate wars, currency wars, what’s next??WHITE HOUSE TRADE ADVISER NAVARRO CALLS ON FED TO CUT INTEREST RATES BY ANOTHER THREE-QUARTERS OF A POINT OR FULL POINT BY END OF YEAR TO BRING U.S. RATES INTO LINE WITH RATES ELSEWHERE -FOX NEWS

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The Fed Continues To Make Policy Mistakes

August 8, 2019

“During the last year, the Federal Reserve has hinted that the period of ‘ultra-accommodative monetary policy’ was coming to an end. The Fed started that process last October by terminating the latest ‘Quantitative Easing’ program, which induced massive amounts of liquidity into the financial markets. Subsequently, the Fed has turned its focus towards the near ZERO level of the ‘Fed Funds’ rate.” – July 6, 2015
It seems like an eternity ago now, but I warned then the Fed was too late in the cycle to tighten monetary policy due to the impact higher rates have on economic growth.
“While the Federal Reserve hopes that they can effectively raise interest rates without cratering economic growth, the problem is that the bond market may have already beaten them to the punch.
While I do not expect

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Technically Speaking: Stocks In A Bloodbath, Look For A Sellable Rally

August 6, 2019

On Monday, stocks took a beating from rising trade tensions as China put the brakes on imports of agricultural products following Trumps latest tariff threat. As noted by the WSJ:
“So much for a trade deal any time soon.
Monday’s pain for U.S. investors was foretold late Sunday evening. The Chinese yuan sank below 7 per dollar and hit an all-time low in offshore trading Monday with local officials blaming the depreciation on President Trump’s decision last week to extend tariffs to almost all Chinese imports. Mr. Trump responded on Twitter, accusing China of engaging in currency manipulation.
The result was a mess across global markets. The Dow Jones Industrial Average fell 766 points while the S&P 500 and Nasdaq Composite fell about 3% and 3.5%, respectively.”
Before we get into the

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