Posts by Kirill Zagalsky

March 19, 2019 |

It’s a Classic Bull Trap

bull trap

Stocks have again found their winning ways in recent weeks but it’s likely all a classic bull trap… After a rough end to 2018, the markets have been moving higher even as a U.S./China trade deal remains elusive. The benchmark S&P 500 is once again challenging resistance around the 2800 level, and some investors are hopeful that the market will stage an upside breakout and embark on a fresh leg higher into a new all-time high territory. However, investors may be very disappointed if the... Continue Reading

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March 12, 2019 |

U.S. Treasury Taking Steps to Avoid Debt Ceiling

US Treasury, Debt Ceiling

As U.S. debt has soared past the $22 trillion level, the ongoing problem is once again catching some attention. It was recently reported that the Treasury Department is taking some extraordinary measures to avoid violating the debt ceiling as it could have significant effects. Reuters reported that Treasury Secretary Steve Mnuchin sent a letter to House Speak Nancy Pelosi on Monday saying he was suspending investment in the Civil Service Retirement and Disability Fund and that a “debt issuance suspension period” would commence on Monday... Continue Reading

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March 4, 2019 |

Another Explanation for the Rise in Gold

to remain

The recent rise in gold has been widely discussed in financial media. There have been numerous issues attributed to gold’s rise including the U.S./China trade war, an increasingly-dovish Fed, a slowing economy and a rising risk of recession. One issue-albeit one you probably have not heard about yet-is the increasing risk of stagflation. The phrase stagflation was first used in Great Britain and today is understood to mean a period in which prices rise without a corresponding increase in demand. During a period of stagflation,... Continue Reading

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March 1, 2019 |

More Symptoms of Economic Trouble

Economic Indicators

Today, the Institute for Supply Management reported that its manufacturing purchasing managers index fell in February to the lowest level since November 2016. Not coincidentally, it is not the only economic indicator to decline to the lowest levels since that time. Could this mean more symptoms of economic trouble? Of course, November 2016 was when Donald J. Trump was elected President in a victory that caught many off-guard. Since he has been in office, Trump has enacted significant legislation. His administration has performed significant deregulation,... Continue Reading

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February 28, 2019 |

How About 55% Declines for Stocks?

decline for stocks

Love him or hate him, President Trump has accomplished a great deal in his first two years in office. Stocks are near record highs, unemployment is near a 50-year low and the economy is seeing real growth. Trump, who has never been one to shy away from voicing his opinions, and he recently tweeted: ‘Had the opposition party (no, not the Media) won the election, the Stock Market would be down at least 10,000 points by now. We are heading up, up, up!’ – President... Continue Reading

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February 21, 2019 |

Does the Fed Have Any Credibility Left?

currency debasement

The Federal Reserve has demonstrated that it is incapable of weaning the stock market off Fed-stimulus. This begs the question of whether the central bank has any credibility left as an inflation fighter and independent institution. The central bank began “treating” the market years ago. The Federal Reserve began with an initial round of QE, and when that didn’t work, it proceeded to provide additional injections in the form of QE2 and later QE3. Even that wasn’t enough, and the Fed was also forced to... Continue Reading

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January 21, 2019 |

Could Another Round of QE be in the Cards?

House of Cards

Markets have been wrestling with numerous issues in recent months. The ongoing war on trade, rising interest rates, Brexit, the continuing government shutdown and other geopolitical concerns to name a few. During that time, stock markets have come under pressure and recently flirted with bear market territory. A sharp rise in volatility didn’t help matters either, and investors have been left wondering if a market top has been reached. Much has been made of the mixed messages from the Fed. Not long ago, Fed chief... Continue Reading

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January 15, 2019 |

What Can the Fed Do?

Federal Reserve

The Federal Reserve has been the topic of considerable debate in recent months. The central bank has continued its course towards policy normalization over the last couple years but has recently run into a brick wall. The Fed has hiked several times over the last year, drawing the ire of numerous analysts and even the President of the United States. The central bank recently followed through on its plan for another 25-bps rate hike in December. The recent release of the latest FOMC meeting minutes,... Continue Reading

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January 10, 2019 |

Risk is to the Upside

highs near

When it comes to managing investments, risk management is everything. Knowing the potential risk on any position is imperative to success. Risk is not always to the downside, however, and oftentimes markets will exhibit behavior that warrants upside risk. The gold market may currently be displaying such upside risk. After spending much of 2018 probing the recent lows, the selling pressure eventually began to run dry. Try and try as they might, the bears were simply unable to push prices to significant new lows. In... Continue Reading

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January 2, 2019 |

Get Ready for Some Serious Bumps

busy week

The markets are ending the year on what can only be called a sour note. Stocks are either in or on the verge of entering bear market territory and the potential downside could be just getting started. Measures of market volatility are also highly elevated and could potentially be indicative of further selling pressure in the months ahead. The potential risks facing the economy and global stock markets are immense. The ongoing war over trade, the potential fallout from a hard “Brexit,” higher interest rates... Continue Reading

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