Aug 24, I was on Fox and the market opened down 1000. I said, "Stay calm. Buy!"

Can't do much better than this. And oh yeah...I followed it up by predicting that the Dow would rebound to 17,000. Here we are.

I see the Dow trading back to the low, 17,000s, but not doing much after that

The U.S. stock market is in "recovery" after the irrational plunge of late last week/early this week. It's coming back as I said it would, however, I don't see the Dow going much above the low, 17,000s for now.

We're really going to have to wait until the new fiscal year and what Congress decides with respect to the debt ceiling. Failure to raise the debt ceiling will have very damaging consequences so this bounce back in the stock market could be the rally to sell if you are into shorting stocks (which I am not).

If they raise the debt ceiling and continue on the spending path that is forecast by the CBO (spending increases by $250b) then we should have another very decent year for the market.

Don't look at the deficit. It might even be a surplus in 2016. Then what are people going to say?

Insane market selloff

This is an insane market selloff. Good companies are getting decimated. Apple has lost $200 BILLION in market capitalization over nothing.

Still have $4.3 trillion of Federal spending this year. That is up over $100 billion from last year. Yes, the deficit has shrunk, but the flows are sufficient to sustain growth around 2.5% or,  where we've been.

China is going to be fine in the long run. It's economy is still growing at 7.5%.

Insane selloff. Unbelievable bargains. I am buying. My only regret is that I wish I had more money to buy more.

Buying opportunity in stocks here. This selloff is crazy.

The stock selloff the past two days and particularly today--500 down--is ridiculous. What's so bearish? U.S. Federal gov't set to spend nearly $4.3 trillion this year. Okay, so spending GROWTH over last year has been slowing, but 1,000 points down in two days? Come on.

Maybe China's devaluation  last week was deflationary as I posted and maybe investors are worried, irrationally, about a Fed rate hike, but this is crazy.

If there's one thing that history has shown time and time again, it's that you ALWAYS have to buy into panic. A-L-W-A-Y-S.

I'm not buying the whole, Dow "Death Cross" thing. I think stocks move back up a bit.

Lots of talk about the Dow "Death Cross" today. That's when the 50 day moving average crosses below the 200 day moving average.

I don't rely much on moving averages. They're great for telling you what has happened, but their  not so great when it comes to telling you what is going to happen. Big difference.

Anyway, looking at the things I usually watch, which means the fiscal (spending) stuff, I don't see  any real pattern emerging. Actually, I take that back...I could almost see a rally back up.

The bottom line is I am not buying the whole Death Cross thing. I think it's bogus. I am, however, buying some stocks down here. Last Friday's purchase of Oasis Petroleum (OAS) is already up 35%. I bought that using the principles int the course I am teaching on Sunday.

February ends with a massive, $460 Federal spending spree

No wonder why the stock market is flying. The data is in and February ended with a humongous, $460 billion spending spree by the Federal gov't. This surpasses last February's $459 billion injection. This may be the biggest February ever. It's certainly the biggest since I have been keeping records.

Last Friday ended with a burst of almost $56 billion in a single day. Total tax refunds for the month (individual and business) came in at $137 billion! That crushes last Feb's refunds of $133 billion. And we can expect another $60 billion in March and $50 billion in April. What a stimulus.

If the idiots in Congress don't f**k it up with the debt ceiling and budget the economy and stocks will be off to the races. Dow 20,000 like butter.

Sadly, though, the Fed will  raise rates. That's my forecast.

You  can't sell into this (stocks). Let's keep our eyes open for Congressional screw-ups mid-month, but for now this is blistering.

Dollar strong now, as it will follow bullish U.S. economic sentiment, but it adds to dollar top probabilities at some point. Bonds will be under pressure from fears of a Fed rate hike due to strong U.S. economy.

Oh yeah, one more thing...

Total employment taxes collected by the Federal gov't in Feb was $186.8b. That is down slightly from the $189.5b collected in January, however, February was a shorter month with less work days so I am hesitant to call any "weaker than expected" result for Friday's jobs number.

Consider this: Last Feb the total employment tax collection  was $177.1b and in Jan of last year it was $185b. That was an $8b differential between Feb and Jan. This year that difference was less than $3 billion, so I am calling Friday's number to be in line with expectations or stronger.

P.S. I teach all of this forecasting off the Treasury Statement  in my course. Watch out for the next one.

More cheap dogma from uninformed gold bugs

There's a column in today's (rag sheet) NY Post written a Seth Lipsky who attempts to distort the truth about the stock market's performance since 1971. That's when Nixon closed the gold window and the dollar lost all convertibility to gold. Actually, FDR took us off the gold standard domestically in 1933, making it illegal for Americans to own gold, while fixing the price of the metal at $35 per ounce, which is where it stayed for the next 38 years. Nixon's move merely removed the ability of foreigners to convert dollars to gold.

Anyway, this article uses all the usual, uniformed, gold bug trickery and distortion even as the author implores us that's it's not at all a trick.

He starts off by saying that if you divided the Dow by the price of gold (typical, stupid, unsophisticated gold-bug attempt at analysis), it is actually down when looking over the past four years. (Notice the small time sample.) Who cares if the nomimal "price" of the Dow more than doubled in that time? This guy says it's all a mirage and gold is making that clear.

While it's true that the Dow/gold ratio went from 9.3 in January 2009 to 8.47 now, if you start the comparison just ONE MONTH LATER, i.e. at the time of the fiscal stimulus, then the ratio went from 7 to 8.47. Clearly, a much different result. This is one of the problems with trying to argue with a very narrow and highly selective set of statistics.

Expanding the analysis, if you go back to 1971, when Nixon ended gold convertibility, the Dow/gold ratio did fall sharply for several years, until 1974. What was that about? It was about gold coming out of a situation where it had been fixed in price for 38 years. Naturally it shot up. In addition, nobody really owned any gold, so there was no one selling to mitigate the rise. However, by the time folks started buying gold around 1974 (still in relatively small quantities), the Dow/gold ratio was moving higher and the Dow's been in a bull market against gold ever since.

The other thing not mentioned in the Post article is that the Dow's nominal price level does not reflect its total return, which means taking into account the reinvestment of dividends. This is huge. Once you factor in reinvested dividends the stock market trounces gold. It's just another fact conveniently omitted by the gold bugs.

Lipsky continues by moving to gas prices, which he says went up not because of speculation or tight supply, but because the dollar was losing value. And here he tries to plainly pin this on Obama, even though he uses a quote from a speech Obama made back in 2008, before he was president. The dollar may have been losing value against gold at the time, but it was holding its own against a broad basket of currencies. The dollar Index, the very index that is so widely followed and cited by the gold bugs, has gone from 71 to 80 in the period from 2008 to today. The dollar has gone up, not down. They just say it's gone down and expect you to take them at their word.

That's the gist of it. Another misleading piece of crap commentary by an ideological goofball who makes his case easy enough for a second grader to debunk. It's laughable. This is not informed analysis, it's cheap dogma.