Negative Bond Yields? Please, Not In Front Of The Children

The close of the week found the Dow Jones -3.49% from its last all-time high of July in the BEV chart below.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 615\Chart #1   DJ BEV 2013_20.gif

After weeks of the Dow Jones closing darn near the same distance from its last all-time high, this is getting pretty boring. A better view of what I’m talking about can be seen with the Dow Jones in daily bars below. Inside the red box is the daily action for the Dow Jones from the first week of August, and I’ve circled this week’s trading.

A lot of churning is going on inside that box, though on Friday the Dow Jones did peep above the box’s upper levels. I’m not going to call that a breakout in the Dow Jones just yet. Let it break above the 26.5K line before we assume a breakout, because as things are now, the Dow Jones could just as well break below the box’s lower levels by the end of next week.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 615\Chart #2   DJIA OHLC.gif

What might cause the Dow Jones to do that? Lots of things, but what’s on my mind is the current situation in Hong Kong. Everyone in the navy looked forward to a port call in Hong Kong; a beautiful city filled with happy people, great food and tourist sites visitors would long remember. I still have a stub for a ticket to the Star Ferry that provided transportation for people from the Island of Hong Kong to Kowloon on the main land.

InfoWars reports the CCP is sending troops and armored vehicles into Hong Kong. So much for the “One Country, Two Systems” policy Beijing promised in 1997. That’s the problem anyone dealing with communists will soon discover; in their zeal for “social justice”, they’ll quickly abandon any contractual obligations that would hinder them.

Hong Kong is a major league player in the global financial markets. Do you believe the Chinese Communist Party bosses in Beijing can rape Hong Kong and not impact the financial markets? Maybe, but I think not.

Here’s how the other major stock indexes I follow have performed this past week. The Dow Jones Utility Average made four new all-time highs as the other indexes all crept forward to their last BEV Zeros. However, with slight variation that has been the weekly summary since the end of July; with everyone in scoring position, only the DJ Utilities Average (#1 in Table Below) manages to do so.

Will this continue to be the story as we progress through September? I doubt that. Something is going to happen that is going to force the market to either take these indexes to new all-time highs or test the lows of last December when the Dow Jones saw an eighteen percent market correction.  

Hey! We’re approaching the month of October. If something big & bad is going to happen, Mr. Bear typically likes to do it in October.

Unlike the stock market, something BIG is happening in the precious metals markets. The latest advance began in late May when gold lifted off its BEV -32.5% line ($1284) in the BEV chart below. Three months later, gold cleared its BEV -20% level ($1541).  

That’s a big three month move, and we’ve yet to see gold have a day of extreme volatility, a 3% move from a previous day’s close. Gold may not see a 3% day until the public once again moves into the gold and silver markets. When would that be? When gold is trading at much higher prices, somewhere above the BEV -10% line ($1700) in the chart below. That’s just a speculation on my part, just as thinking when gold does see its day of extreme volatility, things could become wild in the financial markets.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 615\Chart #3   Gold BEV 1999-2018.gif

Next is silver’s BEV chart going back to 1969. Before January 1980, the BEV plot (Red Plot) and dollar plot (Blue Plot) are separate in this chart.But as silver’s last all-time high is still from forty years ago, its BEV and dollar plots can be overlaid, which I have done in the chart below.

It’s a nice feature to be able to see silver’s BEV value by looking over to its left scale, or its dollar value on its right scale from the same plot. This will continue to be the case until silver once again breaks above its current all-time high of January 1980, at which time these two plots will decouple from each other.

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This is a link to an important video from SGT Report on something important discussed this week at the annual Jackson Hole central bank ...

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