Author Archives: NLO Team

Public Storage (PSA) Q2 2020

Posted on August 9, 2020 | Leave a comment

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Industry representatives say that steadiness of FFO is more reflective of a REIT’s health.  For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)

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Posted in PSA, REIT

Digital Realty Trust Inc. (DLR) Q2 2020

Posted on August 4, 2020 | Leave a comment

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Industry representatives say that steadiness of AFFO is more reflective of a REIT’s health.  For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)

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Posted in DLR, REIT

Digital Realty Trust Inc. (DLR) Q1 2020

Posted on August 3, 2020 | Leave a comment

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Industry representatives say that steadiness of FFO is more reflective of a REIT’s health.  For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)

see also:

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Posted in DLR, REIT

A Strategy For the Coppock Curve

Posted on August 2, 2020 | Leave a comment

On, August 1, 2020, we said the following:

“Last month, the Coppock Curve dipped into negative territory flagging us to closely monitor this indicator for a buy signal. In addition to monitoring the Dow Jones Industrial Average, we created a model to back test this strategy against individual stocks. So far, we are very satisfied with the outcome.”

Based on our prior work, we have developed a strategy to compliment the indications made by the Coppock Curve when applied to the Dow Jones Industrial Average. Continue reading →

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Posted in 1931, Coppock Curve, Coppock Index, Dogs of the Dow

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Silver Review

Posted on August 1, 2020 | Leave a comment

On August 25, 2019, we said the following of silver:

“The trend is up, what remains are the buying opportunities (based on the upside targets above) and a lot of patience.”

Since that time, silver has had the following price action.

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Clear buying opportunities have opened up in the intervening period from August 2019 to the July 2020 period.  In addition, our point that precious metals prices decline during stock market declines has continued to hold up as highlighted in our articles published on November 8, 2008 and September 14, 2014.  The mistaken belief that precious metals are the place to be if the stock market “crashes” because they act as a hedge, meaning generally increase, is mistaken.

Our next update on the price of silver will review the upside resistance targets so that those interested in the precious metal can be more selective of where they plan to initiate positions.  We hope to continue the tradition of providing the least expensive lesson on the behavior of precious metals.

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Posted in Silver

GDP and Market: July 2020

Posted on July 31, 2020 | Leave a comment

This is an update January 16, 2020 comparison of the Gross Domestic Product and the Wilshire 5000 on a quarterly basis from 1975 to Q2 2020.

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It seems that the decline in GDP has run its course.  Alternatively, if the decline has not ended then there is not much more to go on the downside.

Meanwhile, it is challenging to think that the Wilshire 5000 does not have more to go on the downside.  However, the sudden nature of the cause in the decline and the extent of chasm that has been attained may mean that the worst is past us, buy only for those who are willing to take a 10 to 15 year investment horizon.  Traders who are long only may see more pain ahead.

see also: January 2020

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Posted in GDP, Wilshire 5000

Transaction Alert

Posted on July 30, 2020 | Leave a comment

We executed the following transaction(s): Continue reading →

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Posted in Transaction Alert

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Hang Seng Index: July 2020

Posted on July 30, 2020 | Leave a comment

On October 5, 2019, we said the following of the Hang Seng Index:

“By all accounts, the failure of the Hang Seng Index to meaningfully exceed the 23,264.43 level indicates that the range of 24,585.53 to 21,616.14 is a lock.”

As seen in the chart below, the Hang Seng Index achieved a low of 21,696.13 on March 23, 2020.

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There is more room for downside risk, as plainly seen in the Dow Theory target of 19,967.86.  Hand over fist buying should be considered at levels below the ascending 19,967.86 trend line.

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Posted in Dow Theory, Hang Seng Index, HSI, Target Achieved

Krugman: Right or Wrong?

Posted on July 16, 2020 | Leave a comment

Source

Krugman, Paul. "A Trade Pact for Chips: Just a fancy form of Protectionism." New York Times. August 10, 1986. F2.

Claims

  • “...limits in trade do not add to employment.”
  • “the jobs protected in one part of the economy are always matched by jobs lost elsewhere.”
  • “...the only net effect of trade restrictions is that we force our economy to do the things it does relatively badly instead of the things it does relatively well.”
  • “The trade policies of foreign governments have not caused or even contributed to our to our trade deficit.”
  • “...the government, in effect, has organized American and foreign producers into a cartel that raises prices at the expense of United States consumers.”

Prediction

“...in the future, we will see many proposals to extend the pattern of sugar, autos and textiles to other industries.”

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Posted in Krugman

RLI Corp. 10-Year Targets

Posted on May 29, 2020 | Leave a comment

Below are the valuation targets for RLI Corp. (RLI) for the next 10 years. Continue reading →

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Posted in 10-year Targets, Altimeter, RLI

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American Tower Q1 2020 Chart

Posted on May 24, 2020 | Leave a comment

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Industry representatives say that steadiness of AFFO is more reflective of a REIT’s health.  For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)

see also:

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Posted in AMT, REIT

The Most Dreaded Chart of Boeing

Posted on March 22, 2020 | Leave a comment

As we enter the bailout phase of Boeing, there is one chart that should alarm all investors.

Since the low in the stock market on March 9, 2009, Boeing (BA), (as of March 20, 2020) has gained approximately +206%.

In the same period of time (March 9, 2009-March 20, 2020), the Dow Jones Industrial Average has increased +192%.

Let that sink in for a minute.  We are about to bail out a company that as of March 20, 2020 has exceeded the gains of the Dow Jones Industrial Average since the March 2009 low.

Now, Let’s look at the chart that should be causing dread for all investors.

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The comparison between Boeing and the Dow Jones Industrial Average, when drawn on a relative basis, shows the extent of the bubble in the price of Boeing stock.

Defenders of the Boeing bailout say that the total shutdown of the airline industry and the coronavirus are the reasons that Boeing is suffering more than usual.  However, when viewed on a relative basis against the Dow Jones Industrial Average, which Boeing is a part of, we can only conclude that Boeing is only reverting to the mean.

As noted above  (206% v. 192%), the mean has not been reached and as Charles H. Dow has said, the reaction will swing to the opposite direction before being resting at the mean.

see also: Dow Theory’s December 2018 Bear Market Indication

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Posted in BA, DJIA, relative

Review: Texas Pacific Land

Posted on March 21, 2020 | Leave a comment

On January 30, 2019, we said the following:

“The rebound has been exceptional but requires one last step in the process of confirming that the trend is actually up.  In order for the trend to be CONFIRMED as up, the price of TPL needs to retest the $409 level and hold.  Without holding at the $409 level, TPL would be expected to test the ascending $290.66 target, at minimum.”

Since January 30, 2019, Texas Pacific Land has had the following activity:

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We’ve updated the Speed Resistance Lines because the peak in the price increased from our prior level at $871.99 to $901.04.  Unsurprisingly, TPL has achieved our lowest downside target after bouncing at the $410 level.

Now our concern is how far below the $300 level that TPL might go.  We seem to be in the early stages of the current market decline so we’ll have to update the downside risk as we go.

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Posted in Edson Gould, SRL, TPL

GE: Is the Party Over?

Posted on March 21, 2020 | Leave a comment

Review:

  • On January 21 2018, when General Electric (GE) was trading around $16, we said, “the speed at which the current decline is taking place indicates that sentiment will push the stock to the $5.27 price and the elimination from the Dow Jones Industrial Average is eminent.”
  • On December 12, 2018, General Electric (GE) achieved a closing low of $6.45, 22% above our estimated downside target.
  • On January 1, 2019, when General Electric was trading around $7.25, we said, “…now is the time to consider the upside resistance targets.  The above chart lays bare the expectations for an upside move.” We also said, “The year 2019 could be forgiving to GE…” This was 12.40% above the December 12, 2018 low.
  • On December 31, 2019, the closing price of General Electric stood at $11.16.

Update

Before the full year of 2020 was under way, General Electric had managed to give back all ofthe  2019 gains.  The era of forgiving has been quickly forgotten.

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Now that General Electric sits on the cusp of the 2018 low, the questions becomes, can the stock recover and retest the 2020 peak?  We don’t think so for two primary reasons.

  1. Declining below the $19.82 upside resistance target.
  2. The potential for a recession for the next 6 months.

The fact that the price could rise as expected and the falter at the very resistance target that was highlighted near the 2018 low suggests that there are powerful forces at work.

The reality is that a recession is on the way.  the depth and length is the only unknown.  However, we have always maintained that if General Electric couldn’t do well during a booming economy then what should be expected during a recession?

We advise caution as the market seems bound and determined to expose failings and frauds which will result in collateral damage to companies like General Electric.

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Posted in GE, General Electric

TBTF: Too Boeing To Fail

Posted on March 21, 2020 | Leave a comment

Advocates for the bailout of Boeing (BA) are citing the “black swan” event of COVID-19 as the reason the company has reached the tipping point of failure.  These same people are saying that, in spite of Boeing:

  1. distributing defective merchandise
  2. that resulted in loss of life
  3. then lied about knowingly distributing a defective product

The company is too big to fail because the cascade of job losses throughout the entire U.S. economy would be catastrophic.

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We’d argue that demise of Boeing began near the February 20, 2018 period.  We don’t know why it occurred at that time, However, the stock had run out of upside momentum and vacillated between the $356.66 price since that time.

The most recent decline is the culmination of the collective wisdom of the markets which decided after March 4, 2019 that the fate of the company had been determined.

As with the bank and auto bailouts of 2008, the belief is that there doesn’t exist the capacity of the largest and most broadly developed economy in the world to absorb the loss of such a big company.  Thanks to the bailout to come, we will continue to never know.

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Posted in AIG, BA, GE