Oil inventory, gold, silver selloff cause Thursday stocks to wobble

Two-tier administration of justice and unsettling news here and abroad also thwart bulls’ attempts to push stock market higher. Individual investing is getting more hazardous by the day.

Image of a "Suezmax" oil tanker, courtesy of Teekay Tankers' (TNK) website.

WASHINGTON, July 7, 2016 – Not really much to say about today’s market. It’s clear we’re entering the usual summer doldrums on schedule. Having (illegally) goosed stocks and market averages at the end of the 2nd quarter to boost their bonus checks as usual, hedge and mutual fund managers and other Big Boyz have gone back to selling rallies in July, and Thursday is no exception.

After the American Petroleum Institute’s (API’s) Wednesday report of the most substantial drawdown in U.S. oil storage in over a year, the Department of Energy (DOE) reported a 2.2 million drawdown this morning. The API number gave a nice boost to the price of WTI and kick started the stock market to the upside as well in Wednesday’s trade. It’s hard to discover the truth any more. But the DOE number today is thus far proving the value of Newtonian physics in Thursday trading: What goes up must come down.

Averages are minimally off as of 1 p.m. EDT, but energy and energy-related stocks are getting hit fairly hard. Ditto, interestingly enough, are many high-yielding stocks as, for some reason, the risk-on trade seems eager to return despite today’s numbers. Gold and silver—both ETFs and the metals themselves—are taking a decent hit today. That’s disappointing to gold bugs and their friends who, thus far, have been enjoying a banner year in 2016 after two straight years of punishing declines in their favorite metal.

Today’s minor smackdown in precious metals prices is probably a good thing—if it doesn’t persist—as charts for both gold and silver were starting to look parabolic.

But with the after-effects of the Brexit vote still percolating through international trading action; with a pair of likely violence-plagued U.S. political conventions coming up in Cleveland and Philly later this month; with another hyped-to-death police shooting of an alleged innocent in Minnesota set to inspire the arrogant Soros/SEIU-funded #BlackLivesMatter crowd torch inner city businesses and trash symphony concert attendees; and with the FBI and Obama Administration’s clear indication that Americans—particularly America’s Democrats—are no longer required to observe the Constitution or the rule of law, it could be a long, hot summer for what’s left of the United States of America.

None of the preceding will help the bull case. Neither will the stubbornly stupid Republican establishment’s efforts to derail the nomination of their arguably self-selected Destructor, Donald Trump, as their party’s candidate to oppose the coronation of Crooked Hillary to head the next more-of-the-same Obama Administration #3. Clowns like Irving Kristol want ideological purity (and TV face time) more than they want to win the presidency. If they don’t stop the crap—and soon—they’ll get their devoutest wish and lose the Presidency again, ignoring the kind of interesting and powerful political realignment that could very likely enable Republicans to grab and hold national political power for a generation.

And believe us, that’s what it will take at this point to rescue America from the systematic destruction wrought on this country by some 50 years of systematic misrule by the Boomer-led “New Left,” the most despicable generation in the history of this once great nation.

Nope, the GOP’s #NeverTrumpers would rather lose, just like they and their milquetoast presidential candidates did in 2008 and 2012. It’s not for nothing that these idiots have earned their moniker as the “Stupid Party.” Like the Democrats, there’s no learning whatever for these arrogant and ignorant clowns.

This constant political roiling and agitation will not be helpful for stocks at least in the short run. We’ll need to re-position our portfolios to withstand a fair bit of volatility plus a very real chance we’ll have at least a couple more Black Swan events like last months’ successful Brexit vote.

Trading diary

We moved out of a small position in Spark-New Zealand Telephone (symbol: SPKKY) Wednesday for a modest 5 percent profit, deciding to take said profit rather than risk remaining, at least for now, in what was only the second of two positions we held in international companies.

Our other international holding—and it is a large one—Teekay Tankers (TNK) has lately been living up to its name, alas, and tanking. Okay, it was up nicely Wednesday. But today, it’s plummeted below yesterday’s pre-rally low and is fast-attempting to achieve penny stock status. All we need is one of its two upcoming quarters to look half-good to win on this one, even as we collect what we think will be a half decent dividend—although that dividend became “floating”—i.e., no longer fixed, and therefore erratic beginning in 2016’s second quarter.

We are getting nervous about this one. But then again, we got nervous about our biggest holding, Allergan Preferred A (AGN/PRA at our brokerage—your brokerage’s symbol may vary), averaging that expensive-per-share stock down during its sickening drop this spring following the Obama Administration’s beatdown of the parent company’s acquisition by Pfizer (PFE).

AGN/PRA continues to wobble and has been weak this week. But we’ve been nicely to very nicely up in this holding since early June, collecting a near 6 percent quarterly dividend in the process while awaiting the ultimate bonus: the stock’s redemption at par ($1,000 per share) on March 31, 2018. Since our average price per share is around $815, that’ll be a swell capital gain, assuming that the Eurozone—including Ireland, where the essentially U.S. drug company’s HQ is currently domiciled—doesn’t go entirely dhimmi prior to that date.

Elsewhere, we may or may not exit our small trading positions in thinly-traded gold and silver ETFs SGOL and SIVR, the Swiss bullion backed pair that our brokerage allows us to trade without commission.

As long as the national and international political and religious violence and lawlessness continues, both metals may very well continue to behave as they usually did until 2014, serving as a store of value during international tempests of uncertainty. Opposing this natural and customary upward trajectory in times of political and economic trouble, however, has been the quiet, dishonest, but concerted effort of the international banking cartel to keep a lid on the value of precious metals, the better to keep the hoi polloi from investing in them.

That’s a long and difficult-to-parse story, so we’ll avoid the details for now. But suffice it to say that political parties are by no means the only crooked members of the oligarchy out there preying on what’s left of the middle class.

The whole market has become incredibly politicized, frankly, which is why get have gotten so political in this column. Until and unless the politicization and manipulation of markets stops, the dwindling number of honest funds and individual traders will find it tough indeed to end this year in the black.

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