Author: Sirhc

The Calm Before the Storm

Sirhc

Authored by Pater Tenebrarum via Acting-Man.com

Intra-Market Divergences Galore

US big cap stocks have rallied to new highs in recent months, but just as in the rally from the low of the February 2018 mini-panic to the September/October 2018 peak, sizable divergences between different indexes have emerged in the process. New highs in the big cap indexes (DJIA, SPX, NDX) are once again not confirmed by small caps (RUT), the broad market (NYA) and a number of sub-sectors (such as the DJTA which is included in the chart below; according to Dow Theory, the DJTA must confirm moves in the DJIA to validate its trend).

From the top: weekly charts of DJIA, SPX, NDX, RUT, NYA and DJTA. The recent new highs in the three large cap indexes have not been confirmed by small caps and the broad market. Note also the sizable RSI/price divergence in the DJIA (which is mirrored by SPX and NDX) – this is a sign of faltering momentum that is often seen ahead of trend changes.

We last discussed a “lengthy non-confirmation” in mid-September 2018 (see “US Equities – Approaching an Inflection Point”). Everything we said about the phenomenon at the time applies to the current case as well. In fact, it could well be argued that the current spate of non-confirmations is even more ominous as they are stretching over a time period of approximately 18 months by now (the broad market represented by the NYSE Index has yet to overcome its January 2018 peak).

US big caps are diverging from European and Japanese stocks as well, which have failed to reach new highs in the recent rally. It is also noteworthy that stocks and junk bonds have studiously ignored weakening macro-economic data in recent months – the rationale is apparently that an impending easing of monetary policy by Fed and ECB is more important than the economy’s poor performance and the prospect of lackluster earnings. The idea seems to be that a resumption of monetary pumping will immediately arrest and reverse recent economic trends, which is quite a leap of faith.

Government bonds and gold have rallied strongly as well this year, and while these markets also reflect rate cut expectations, they normally don’t move in the same direction as stocks for very long. It is a good bet that something will eventually give. Considering the recent yield curve inversion, investors buying stocks and corporate bonds are probably too sanguine about what lies ahead.

The Roaring 20s vs. Today

In April we briefly discussed parallels between the current time period and the late 1920s (see “A Trip Down Memory Lane”). What prompted us to look into this was the fact that the sharp correction in the (normally) seasonally strong October-December period last year was actually a spitting image of the late 1928 correction. As it turned out, this was far from the only similarity between the two eras.

Incidentally, market participants ignored a weakening real economy in the final stretch of the 1920s bull market as well: economic data deteriorated noticeably in the course of 1929, but that did nothing to curb the stock market’s advance – at least initially.

Two women studying the ticker tape in a stock broker’s office in St. Paul, Minnesota in 1929.

Below is a long term chart comparison as a supplement to the charts we showed in April. Interestingly, there is quite a strong resemblance between the stock market patterns of the 1914-1930 and 1997-2019 periods. The cyclical bull and bear markets of the two eras differ slightly in terms of extent and duration, but the basic patterns look remarkably similar.

It should be noted to this that chart pattern similarities are not unusual per se –   all liquid markets exhibit self-similar fractal patterning – both across different time frames and over different historical periods. At some point, these patterns will always diverge – particularly self-similarity between historical periods is usually quite limited.

It is fairly easy to find close correlations over time periods of one year or less, and more often than not they have no predictive value. Nevertheless, we find these long term pattern similarities quite interesting:

Booms and busts in the stock market from 1997 to 2019 and from 1914 to 1930. It is of course possible that the “acceleration phase” of the current bull market still has further to go, but the increase in market volatility, weak money supply growth, historically high valuations and the divergences discussed further above all suggest that a trend change is probably not too far off.

Conclusion

The divergences between the different indexes at the very least represent a heads-up that another correction is likely to begin fairly soon. In view of the increase in market volatility since the January 2018 peak, the next downturn will probably be quite a doozy again.


1911 Saint Gaudens Double Eagle PCGS MS65+

Sirhc

Satiny Sashaying Saint

The 1911 claims one of the few mintages of less than 200,000 coins, but the story of its availability is similar to that of other issues in the series. Most examples were exported to European markets, either directly from New York to London or through Ottawa, Canada. Those pieces that avoided melting overseas were subjected to rough handling, explaining why nearly all 1911 double eagles are found in MS64 or lower condition. Gems such as this, are scarce. The PCGS population is only 14 with 19 higher. Listed at $21,500 in the PCGS price guide.

Offered at $18,975 delivered

We do business the old fashioned way, we speak with you. Give us a call with your question or to execute transactions.

(800) 257.3253
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

1885 Liberty Nickel NGC MS67

Sirhc

Pop 3, None Higher Key Date Lib Nickel

 The 1885 has been recognized for more than a century as the coin to have, the key to the set of Liberty nickels. Only 1.4 million pieces were struck and pieces were set aside shortly after this tiny mintage became known; although by the time the general public was aware of it most coins of this date had been in circulation for some time. The availability of the 1885 shows a typical bell curve. At NGC, MS60 pieces show only two pieces certified, numbers gradually increase to the MS64 grade, then quickly taper off to the ultimate grade of MS67. The NGC population is just three (one of which is a star-designated example) with none higher. Listed at $38,700 in the CDN CPG and $25,000 in the NGC price guide.

Offered at $20,700 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

1914-D Lincoln Cent PCGS MS65RD

Sirhc

Positively Perpetually Popular

The 1914-D Lincoln cent is a key issue in the series, from a low mintage of 1.1 million pieces. Unfortunately, despite the low mintage figure, the 1914-D was largely overlooked by contemporary collectors and few high-quality examples were saved at the time of issue. The date became better known and highly sought-after in the 1930s, with the advent of coin albums and the Standard Catalog. By then, most examples had circulated extensively and few would grade better than Fine-Very Fine by today’s standards. The PCGS population is 65 with 17 higher (with 10 of those 17 being 65+ pieces). While the population might not be extremely low in terms of absolute numbers, it’s small when you consider the vast number of Lincoln Cent collectors. Listed at $15,000 in the PCGS price guide.

Offered at $14,400 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

Roman Empire Augustus – Silver Cistophorus obverse of Augustus, reverse of six grain ears, bound together 27 BC to AD 14 NGC XF* Strike – 5/5 Surface – 5/5

Sirhc

For close to 60 years, Augustus was a dominant player in Rome’s political scene – as the grand nephew and heir of Julius Caesar, Augustus was able to mold the character of the Republic into a truly different system of government, with a ruling figurehead, complete with veto powers , this latter of which had the effect of formally ending the Republic. Rome was now a constitutional hereditary monarchy that would persist for another 500 years in the West, and another 1500 in the East.

Augustus (formerly Octavian) is considered the first Roman “emperor”. An Extremely Fine Cistophorus is on offer here, a sizable silver denomination with a splendid portrait of Augustus. Well struck on good metal, it offers a chance at a fine portrait of the emperor on a silver coin much larger that the more commonly encountered denarii.

Offered at $4, 440 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

Offered @ $4,440 delivered

1852 Humbert $10 NGC MS61

Sirhc

Rare Mint State Territorial Gold Piece

Moffat & Co., in its role as semiofficial branch mint and United States Assay Office of Gold in California, struck both over-dated (1852/1) and normal-date 1852 ten dollar gold pieces of 884 fineness using the Humbert nameplate on the reverse. Most survivors are well circulated, and true uncirculated examples are rare. In fact, the NGC population is a mere two with one higher. Listed in MS60 in both the CDN CPG and NGC price guide at $24,200.

Offered at $21,190 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check.
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

1898-S $20 Liberty NGC MS 65

Sirhc

In the top tier of existing specimens – only 7 graded higher!

A stunner from the turn of the last century – seldom seen any finer, it is sure to please the most discriminating of U.S. Gold collectors. Sports a rich deep to medium golden tone and fabulous eye appeal – a coin perfect for a high grade gold type set or $20 Liberty collection.

Offered @ $5,900 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253 
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check. 
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.


Ancient Greek Coinage – the Athenian Tetradrachm Ca 450 – 404 BC NGC AU – Strike 5/5, Surface 4/5

Sirhc

The most prominent city in Ancient Greece militarily and economically, Athens had at its disposal an almost inexhaustible supply of silver from the mines it controlled at Laurion. This mine would be instrumental as Athenian influence increased in the region. To facilitate this expansion, a large supply of coinage was necessary, both for international economy and as a means of declaring Athems’ dominance in the region. The famous “owl” silver coinage was introduced around 520 BC, featuring the helmeted head of Athena, and on the reverse, the standing figure of an owl, her sacred bird. Over time, the design of the owls became more streamlined, culminating in the naturalistic style of the coins on offer here.

Struck around the time period of the Peloponnesian War (431 to 404 BC), these ancient trade coins formed the basis of the Greek economy in antiquity and circulated widely in the Mediterranean region and beyond. Athenian “owls” are a good candidate for being the most famous coins of antiquity, and provide a link to the history and style of the ancient world that is without parallel.

A most famous ancient Greek silver coin, certified About Uncirculated and boldly struck, with an attractive light grey tone.

Offered at $1,595 delivered

We do business the old fashioned way, we speak with you.

(800) 257.3253 
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check. 
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

Three 1907 High Reliefs PCGS MS61, 62 and 63

Sirhc

One-zee, Two-zee, Three-zee

The 1907 High Relief Double Eagle is one of the most popular coins ever struck by the United States Mint. The coins are sculptural in appearance and are considered by many to be the most beautiful regular issue gold coin ever produced. 

Wire Edge PCGS MS61 (PCGS price guide $17,500) Offered at $14,850
Flat Edge PCGS MS62 (PCGS price guide $19,000) Offered at $16,975
Wire Edge PCGS MS63 (PCGS price guide $23,500) Offered at $20,950

Unfortunately, the design was also impractical and redesigned by Charles Barber later in the year. The date is given in Roman numerals (the coins nickname by some) and lacks the Motto, IN GOD WE TRUST. President Roosevelt believed that money could easily be used for ungodly pursuits such as gambling and thus the name of the Lord should not be used on coinage. 

The 1907 High Relief is categorized by most as either Wire Rim or Flat Rim. The coins are identical except for raised metal around the rims. This is probably the result of some tinkering by the Mint while they struggled to produce coins with such extreme relief. 

Around the late 1960s or early 1970s experts began to describe certain 1907 High Relief Double Eagles as Proof. These coins are certainly different, but not exactly like the latter Proof Double Eagles of the series. There are no mintage figures and the origins of the coins are a mystery. The coins have deep swirling die lines and exhibit a satiny surface similar to the Roman finish Proof gold coins. A fairly large number exist and it is my opinion that they are the result of experimentation with the new design by Mint employees. 

Many, if not the great majority of the original mintage was saved when the 1907 High Reliefs were issued. Thousands still exist and most seen are in some form of Mint State. Gem examples can easily be purchased if budget permits. A few nearly flawless examples are known. The finest High Relief graded by NGC is a PR 69 that sold for $534,000 in 2005.

We do business the old fashioned way, we speak with you.

(800) 257.3253 
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check. 
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.

1837-42 Bechtler $2.50 NGC AU58

Sirhc

1 of only 13 For All grades by NGC

This is the 70g. 20c variety. As early as the spring of 1831, Christopher Bechtler formulated a plan to mint quarter eagles and five dollar gold pieces at his Rutherfordton, North Carolina private mint. The elder Bechtler realized that a local minting operation was needed for native Carolina and Georgia gold dust — which otherwise had to travel to Philadelphia for assaying and minting — providing local miners a more cost-effective option while satisfying the critical need for cash in local commerce. NGC has graded only 13 pieces for all grades combined, only 6 of which have graded higher than the one offered here. This example is lighter and brighter than seen in our images. Listed at $20,000 in the CDN CPG and $21,200 in the NGC price guide.

Offered at $19,125

We do business the old fashioned way, we speak with you.

(800) 257.3253 
8:30 AM – 5:00 PM CST M-F
Private, Portable, Divisible Wealth Storage

Price is based on payment via ACH, Bank Wire Transfer or Personal Check. 
Major Credit Cards Accepted, add 3.5%
Offer subject to availability.