The Trump administration passed the steel and aluminum tariffs under the guise they pose a risk to US national security. Sometimes facts get in the way of how people think.
Let’s start with steel. The US Geological Survey (USGS) estimates the US produced about 80 million metric tons of steel in 2017. The military uses less than 3% of that per year. This is despite the fact the US government is involved in endless wars around the world. In other words, US companies produce more than enough steel for the military-industrial complex.
Let’s us move on to aluminum. In order to make aluminum you need bauxite. Of all the bauxite mined, about 95% is converted to alumina for the production of aluminum metal. The largest producers of bauxite are Australia (31.3%), China (24.6%), Brazil (13.2%), India (9.5%), Guinea (7.5%), and Jamaica (3.2%). You should take note that the US is not a top producer of bauxite. The US relies on imports for almost 100% of its consumption needs. Domestic ore provides less than 1% of the US requirement for bauxite. If aluminum really was an issue of national security, which it is not, than the US government would still be dependent on imports for bauxite to make aluminum.
Author: s4k
Being Behind in Life
Ray Kroc was a milk shake mixer traveling salesman. He heard about the McDonald brothers after they bought eight of his mixer machines. Ray Kroc drove across the country to visit them in person. After the visit, he became convinced the business model the McDonald brothers had developed could spread across the country. He got the idea to franchise McDonald’s. What most people don’t know is how late in life he did this. He was in his fifties. He risked his home to open his first McDonald’s in Des Plaines, Illinois. He faced financial ruin if his McDonald’s failed. As people get older, their is a tendency to become more conservative with regards to taking risk like this. Seeing the opportunity is one thing. Acting takes a lot more courage. A lot more conviction in your idea.
Ray Kroc became the most successful businessman in the 20th century.
If you are feeling behind in life, watch one of the greatest upsets in Olympic history.
Got them in the last lap.
Cocoa- Close Enough
Cocoa trade has been closed out.
Another Down Leg Coming
Bitcoin has a failed head and shoulder bottom and a double top. This market is going to test the $6000 low made in February.
It has also decoupled from the general stock markets. The price action since February has looked suspicious to me. I suspect some big players are painting the tape.
The Crowd
Gustave Le Bon on the masses:
“The masses have never thirsted after truth. They turn aside from evidence that is not to their taste, preferring to deify error, if error seduce them. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim”
BOOM!
Nasdaq makes all time high.
The break out to an all time high was forceful.
Don’t listen to the bears.
The North Korean “Threat”
Trump wants a sit down with Kim Jong Un. This sent the neocons into hyper drive. They never met a war they didn’t like. They figure since the other US wars are going so great, we should add another one.
The idea that North Korea is a threat is absurd. Yet it has been catching headlines for over a decade. It is reminiscent about the Soviet Union “threat”. The Soviet Union was a basket case. Their economy was a disaster. Yet the US government thought the Soviet Union was an economic power house until the day before it dissolved.
If you pay close attention to South and North Korea government officials from non-US media outlets you will realize that North Korea is not a threat. The idea that North Korea will attack South Korea or the US is silly. The South Korean government actually sent humanitarian aid to North Korea when the United Nations put sanctions on North Korea.
Predication: Before this century is over North and South Korea will unite into one country.
So You Want to Get Rich?
How do you get rich? “Buy low and sell high.” That is a wall street adage. It happens to be true. It sounds easy. Few investors do it. Investors love to buy at the top and sell at the bottom. In short, they can not control their emotions. If you are buying the SP500 or Dow, you are not buying low. You are buying stocks that are over valued. I don’t think the bull market in stocks (SP500 & Dow) is over. I own stocks. You can check out the performance tab to see for yourself. I think they will become more expensive.
While you are over there take a look at the worse performers. They are the resource shares. If you were to take them away you would have an open profit of 10.6% in the stock portfolio. They have gotten cheaper. This is typical when you buy depressed stocks. They tend to get cheaper. They tend to stay cheaper a lot longer than can be imagined. So how cheap are they?
Above is the HUI to Gold ratio. The resource/mining shares have not been this cheap since 2001 relative to gold. This is called “buying low”. How will you know when you should sell? Easy. Flip the chart. 
This is called “selling high.”
Let me tell you what FNV did in 2017:
1) $675 million in revenue- a new record and a 10.6% increase year-over-year.
2) $516.1 million adjusted EBITDA- a new record.
3) $194.7 million of net income- a new record.
Most investors will wait until the resource shares get expensive. They will go higher and higher. Than, at the top, they will want to buy. This never ceases to amaze me.
CHF Stopped Out
The Swiss Frank trade did not play out as expected. I suspected it would not. See here.
We got stop out at 1.05.
SP500 Trend Lines and Resistance
Looking at the SP500, I see the following:
Let us see if the the market ignores the downward trend line. Resistance is at 2785. A break above this will be a good sign that the correction is over and new highs will be coming. Support is at 2675 and 2590. Price action today and all next week will give some indication about the current correction.