Tax Receipts vs. the Stock Market

Following the US Treasury’s update of April tax receipts, our friend Mac mailed us a few charts showing the trend in corporate tax payments. Not surprisingly, corporate tax payments and refunds mirror the many signs of a slowing economy that have recently emerged. An overview in chart form follows below. First up, corporate tax receipts in absolute figures.

 

1-corporate tax receiptsCorporate tax receipts in absolute dollars and cents – this is quite astonishing considering that the amount of money in the US economy has increased by roughly 125% since early 2008. Corporate taxes by contrast haven’t even made it back to the 2007 peak.

 

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A New Bull Market in Gold?

On April 10, the Incrementum Fund’s advisory board held its quarterly meeting. Two of the regulars (Zac Bharucha and Rahim Taghizadegan) were unable to attend this time, but we were joined by special guest Brent Johnson, the CEO of Santiago Capital. The transcript of the meeting with all charts can be downloaded further below.

 

1-June Gold, dailyGold, June futures contract, daily  – click to enlarge.

 

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Triangle Thrust and Reversal

In mid April, we discussed weekly resistance levels in the HUI Index. Given the recent almost blow-off like move in the index and its subsequent reversal, we decided to provide a brief update on the situation. First, here is a daily chart comparing the HUI, the HUI-gold ratio and gold:

 

1-HUI, gold and HUI gold ratioAfter building another triangle, the HUI has delivered an upside thrust in the direction of the preceding trend. This is quite normal, and so is the subsequent  move back to its origin. Three things are noteworthy here: 1. in terms of the HUI-gold ratio, the recent decline is already the strongest of the entire rally since the January low;  2. the downturn hasn’t violated the short term uptrend line just yet; 3. the peak was put in exactly on the day on which gold confirmed the rally in the HUI by breaking out to a new high for the move as well – click to enlarge.

 

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Second Helping

The first round of our IV crush earnings plays was a resounding success and as there’s about a week’s worth of announcements left in this quarter we are pumped and ready for a second helping.

 

vega crushThe next round of Operation Vega Crush begins

Photo via artcarcentral.com

 

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Objective Reality

After spending three weeks with objective truth at the ranch, we are now forced to return to the world of myths, delusions, and claptrap. Yes, we are in Buenos Aires looking at a TV!

And there they are… talking about the world of politics, money, culture… the world of Facebook and CNBC… of Trump and Clinton… of ZIRP and NIRP… and of Game of Thrones.

 

IronThrone2The royal seating accommodation fought over in “Game of Thrones”. It looks decidedly uninviting – a literal pain in the a**, you might say. High political office strike us as very similar in this sense, so the iron throne actually works quite well as a symbol. We have often wondered why anyone would want to have a job the main purpose of which is to meddle in the lives of other people against their will. What could possibly be more off-putting?

Photo credit: HBO

 

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Europe’s Political Class Under Fire

All over Europe not only religious and national holidays are observed, but also a socialist holiday, which we always thought was a bit strange – and in a way quite telling (as far as we know, there is no holiday celebrating the free market). Traditionally the rank and file comrades tend to gather around their leaders on May Day, waving their party-approved banners  and dutifully applauding at the appropriate moments. Not anymeure, as Clouseau would say.

 

einig-in-der-ablehnung-aufThe sign says: “Lying press, system of lies, scandal” – in Germany these demonstrators are somewhat condescendingly referred to as “Wutbürger” in the mainstream press (i.e., “angry citizens”). The term essentially implies that while they’re momentarily irate, they have no plan anyway, and can be expected to calm down again soon enough. This seems to have succeeded in making them even more angry.

Photo credit: IMAGO

 

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Pros and Cons

The recent rally in commodity prices has surprised many market participants and has greatly supported the stock market’s rebound. It has also made bulls out of a number of former stock market bears, as one of its side effects was to cause an improvement in market internals. But does the rally actually make sense?

 

bethlehem steelThe original Bethlehem Steel Works in Bethlehem, Pennsylvania.

Photo via leggendaurbana.it

 

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Operation Volatility Crush – Post Mortem

[ed note: this is a follow-up to “Let’s Crush Some Volatility”, penned by the aptly named Ray the Options Executioner for the Evil Speculator]

Our introduction to earnings-based options strategies has started off with a bang. Actually, it’s hard to imagine a much better results for our first option campaigns. Granted, we’ve been doing this stuff behind the scenes for a while, and we expected the options strategies in FB and FSLR to succeed. Still, you gotta love when what happens is pretty much exactly what you predicted.

 

make_it_rainThe rainman

Photo credit: musictory.de

 

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Odd Couple

While checking on the US primaries a few days ago, we came across a piece of news informing us that pretend candle-swallower Ted Cruz had picked Carly Fiorina as his “vice-presidential running mate”. Our first thought upon hearing this was “WTF”?

 

CruzinaThe match made in heaven… two loooosers find each other.

Photo credit: AP

 

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The Metals Take Off

The price of gold shot up over $60 this week. The price of silver moved up proportionally, gaining over $0.85. The mood is now palpable. The feeling in the air is that of long suffering suddenly turned to optimism. Big gains, if not the collapse of the price-suppression cartel, are now inevitable.

The headlines and articles, screaming for gold to hit $10,000 to $50,000, are pervasive. Today we won’t dwell on our favorite point that if the price of gold hits $50,000 then that means the price of the dollar has collapsed. If you own an ounce of gold, then you may have a lot more dollars. But unfortunately, each of those dollars is worth a lot less.

Today, we want to look at this new alleged precious metals bull market. Does it have legs? Are we likely to see silver hit $20, much less $1,000? We will support our analysis with a new graph to show the big picture.

 

paper metals

Photo via sprottmoney.com

 

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Damned If You Do…

After waking up on Thursday, we quickly glanced at the overnight market action in Asia and noticed that the Nikkei had tanked rather noticeably. Our first thought upon seeing this was “must be the yen” – and so it was:

 

1-Yen, June, dailyJune yen futures, daily – taking off again – click to enlarge.

 

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Stampeding Animals

The mass impulse of a cattle stampede can be triggered by something as innocuous as a blowing tumbleweed.  A sudden startle, or a perceived threat, is all it takes to it set off.  Once the herd collectively begins charging in one direction it will eliminate everything in its path.

 

bison-herdBetter get out of the way… stampeding bisons

Photo credit: Surface Niusance

 

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