Author: s4k

Will GE Survive?

General Electric has been in free fall since Q2 2017. This is despite a roaring bull market in stocks last year.

I can summarize GE’s problem in two charts.


There operating cash flow has gone negative.
More importantly though, they have to much debt. When assets and liabilities get this close I get suspicious of accounting games being played to make it look like you are not buying a stock with negative equity. For instance ‘Goodwill assets’, ‘other long-term assets’, etc are high on their balance sheet. Digging deeper you could discover you are buying shares in a company with negative equity.
Amazingly, despite these deteriorating financials, the stock went side ways in 2016 all the way through the first quarter of 2017.

The Bullish Case For Gold

Putting aside central bank mischief for a moment.
Just supply and demand.
Below is the world mine production total.

Mine production is at a record high. So why be bullish?
See the mine production per country.

China and Russia, two of the largest producers are net importers. China in 2017 imported about a 1,000 metric tons. Not a single ounce of gold leaves China. When you take away China and Russia, the production picture looks very different.
Gold bottomed in 2016 at about 1,050$/ounce. The mining shares are a disaster. You can’t give them away. In the next five years, the prices of these stocks will be a multitude higher than they are at present.

The Great “Crash” of 2018

The amount of hysteria displayed among all parties is astounding. The market is down less than 10%. Yet even the white house chimed in on the down stock market. The correction approaching is long over due. I said so here and here. I also believe this correction is going to last a few weeks. Below are some charts of the Dow.

The first issue is the amount of small speculators who are wildly bullish. This is the “dumb” money. Second the RSI hit above 90. As far as I remember, I have never seen it this high.
The market is in the process of unwinding this overbought condition. It will take time. Further down side is to be expected. This should be used as a time of accumulation. The elements of a 2008 style recession are just not there. The market is ever changing. Therefore, my opinion is subject to change. A few months from now conditions could be different. Especially if the Fed begins to unwind its balance sheet.

Swiss Franc Breaks Out

Why I like this trade.
1- Two touches at the bottom and the third touch at top it busted through forcefully.
2- It is going with the trend.
3- It closed out at a high it hasn’t seen in over 2 years.
4- Markets are correcting. People consider the Swiss Franc as a safe haven in times of panics.
Place your stop at 1.05. It looks like the target is 1.15.

On The Radar

Leans Hogs looks like it wants to make a massive head and shoulders bottom. We wont go long unless it breaks the trend line.