Today a legend discusses everything from Julius Caesar to today’s Fed decision and the 2nd most Hindenburg and Titanic warning signals in 30 years.
Caesar Across The Rubicon, Pompey, Cleopatra & Ptolemy XIII
September 26 (King World News) – The following is from legend Art Cashin: On this day in (+2) 48 B.C., one of ancient Rome’s most brilliant generals, a certain Pompey the Great landed on the shores of Egypt. (Mr. Cashin! Yes Sister? Please try to remember the general’s name is pronounced Pom-pea; Pom-pay was the name of the city buried by the eruption of Vesuvius in 79 A.D. If you don’t pay more attention, you’ll never remember enough history to get out of the 6th grade, let alone enough to ever help you in business! Do you understand??….Yes Sister!!)
Anyway, flashbacks aside, Pompey landed in Egypt kind of “on the run.” As you may recall from earlier episodes (or from the 6th grade), Rome was going through a parliamentary crisis.
A popular general and possible reformer named Julius Caesar had been busy dividing Gaul into three parts and sending reform suggestions to Rome. The Roman Parliament (pronounced “Senate”) sent a nasty note (on parchment) to said Caesar – saying he had a lot of Gaul and ordering him to come home and retire and (P.S.) to please leave his army behind.
Said Caesar headed home and took the army with him (across the Rubicon don’t-cha know!). Since that was considered bad form (pronounced formus stunkus), the Roman Senate called upon a former war hero for protection. The guy they picked was Pompey the Great (page 6 in your program) – victor over Spanish Rebels (76 B.C.), over a certain “Spartacus” (72 B.C.) and over that early Hitler, King Mithridates (63 B.C.).
Despite this veteran’s record, said Caesar made salad out of Pompey at the Battle of Pharsalus. (Beating him badly with an army half the size of Pompey’s.)
This led Pompey to flee to his last known ally, Ptolemy XIII (pronounced Friday the 13th), King of Egypt and the Nile Delta. Ptolemy XIII (age XV) was at war with his pudgy sister. So, with Ptolemy XIII needing no new enemies (i.e. said Caesar), Ptolemy had his old ally assassinated (i.e. Pompey, who was stabbed as he got off the boat). Said Caesar sensed that such habits did not make Ptolemy XIII (age XV) a great candidate for new best friend. So, said Caesar threw in with the pudgy sister named Cleopatra. What happened next…I forget! (Sorry Sister!!)
Tuesday’s market was scarcely decisive enough to cross any Rubicons. Rather it was more like taking off your helmet and camping by the riverside and chatting about the many distractions that crowd around the usual market talk.
Stocks opened a bit higher but without a lot of conviction.
The leadership came from a couple of rather familiar sectors. Energy stocks got a boost as crude continued its rather relentless rally of the past few weeks.
The financial sector got a bit of a boost from rising bond yields. The yield on the ten year moved up to 3.11% within a tick or two of the high for the year. The imminent rate hike from the Fed helped push the yield on the two year to 2.84%, its highest level since before Lehman fell.
The President’s UN speech even seemed to have some mild influence on the markets. His continuing tough talk on trade, during the speech, seemed to coincide with some selling pressure on the multi-nationals.
His shot at OPEC may have inspired some profit-taking in crude and it eased back off its highs.
In the end, the Dow was the weakest of the key indices, weighed down by the likes of United Health, 3M, Johnson and Johnson and Travelers.
Among the sectors, utilities got pressured by rising yields. Tech was weak overall but the FANG stocks were mixed. A rather inconclusive session.
Is The “Fed Drift” Beginning To Drift? – Over the years, we have written many times about the Fed Drift. This is the historic tendency of the stock market to move higher on an FOMC decision day.
The always insightful, Jason Goepfert, the head guru at SentimenTrader wrote a bit on the apparent drift in the drift:
Fed fade. There has been a generally positive bias to “Fed days” when the Federal Reserve announces its policy on interest rates. That has changed since the end of QE in October 2014. Since then, Fed days have been positive only 40% of the time. Buying the day before the Fed meeting and holding for the next two weeks resulted in only 12 wins out of 30 attempts, with risk of -2.2% versus reward of +1.6%, during a time when the S&P gained nearly 50%.
Jason also notes the recent cluster of technical warning signals:
More warnings. Over the past 3 weeks, the NYSE has generated the 2nd most Hindenburg and Titanic technical warning signals in 30 years, next to late December 1999 and tied with mid-December 2014.
As they used to say around the pool hall – Verbum Sat Sapiente.
Overnight And Overseas – In Asia, Tokyo saw a modest rally, while there were more significant bounces in Hong Kong and Shanghai. India was odd man out as concerns linger on their shadow banking problems.
European markets are fractionally higher on what looks like light volume.
Among other assets, Bitcoin is fractionally higher, trading just under $6500. Gold continues to trade around the $1200 level. Crude cools just a bit with WTI trading right around $72. The euro is a touch softer against the dollar and the yield on the ten year is a tick or two lower.
Consensus – A 25bp hike is almost universally expected so the big item will be the wording and tone of the statement and the press conference
Stay alert and very, very nimble.
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