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August, 2017

Richard’s Thoughts on Corrections and the VIX

Richard’s Comments

 

What are the two most difficult things to do in this business?  Here they are: (1) Buy early in a primary bull market and then ride the bull market all the way to near its completion.  (2) Sell out on a Dow Theory bear signal, and then stay out of the bear market until it's nearly completed.

 

Why are those two actions so difficult?  They're difficult because a bull market tries in every way to frighten you out of its clutches.  And a bear market tries in every way to draw you back into its grip.  In both situations, both the bull and the bear markets make full use of secondary reactions.

 

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Something's Brewing With Gold

By Chuck Butler

 

Welcome back to another week of fun on the Butler Patio! For those of you who are new to my writings, The Butler Patio is where I used to tell my readers that they would have to meet me to further discuss things. When I started writing for Dow Theory Letters, they wanted me to have a name for my articles, and “On the Butler Patio” seemed to fit perfectly! 

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Daily Recap

Equity markets had an overall positive tone today, with the Global Dow gaining 0.60%. The Asia Dow reflected mixed markets, ending down a tiny 0.03%. European markets were decidedly more bullish, and the STOXX 600 ended with a 0.69% gain; that sentiment rolled over to US markets, which opened on the upside.

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Talk's Cheap

by Jon S. Strebler

 

The big story last week was significant ratcheting up of war talk out of N. Korea, followed by “I’ll see you, and raise you” from the U.S. Stock prices swooned around the world, as everyone wondered just how far two of the world’s most volatile leaders, backing nuclear-powered militaries (sort of, in N. Korea’s case), might push things. The vulnerability of stocks to an overdue correction has been widely touted; sometimes corrections seemingly develop out of nothing, and sometimes a dramatic event precipitates them. Could this be an example of the latter? 

 

 

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Complacency Doesn’t Rule

By Matthew Kerkhoff

 

Until just recently, stock market volatility had been exceptionally low, leading many to believe that this market had become “complacent.” That assessment elicits concern, because many view complacency as a warning signal … a calm before the inevitable storm.

 

Well … as Hyman Minsky taught us, that storm will come, and in many ways it will be a direct result of our complacency. But right now, U.S. equity investors seem to be anything but.

 

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Richard’s Thoughts on the Impossible Happening

Richard’s Comments

 

Many years ago, when I was still living in NYC, I had a subscriber, a Swiss man named Jay Pfister.  Jay owned a chemical company.  During the early 1930s Jay sold his company to American Cyanamid.  That sale made Jay quite wealthy, and he had a home in NYC and one in La Jolla.  

 

It was Jay who first told me about La Jolla.  Jay suggested that I leave Manhattan and enjoy "a better life" in La Jolla.  I thought a lot about Jay's advice.  In 1961 I followed his advice, and it proved to be one of the best pieces of advice I've ever received.

 

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