The futures were up this morning when I looked and in our odd work over on the www.peoplenomics.com side of the house, we anticipate the market high this week should come in right around….no, let’s save that for our Peoplenomics subscribers. I showed them how to build the spreadsheet already…
Let’s just say this: the market has another day (or two) of this rally to go. But from there, we should be lined up on this year’s scariest of all market drops…but that will be over by the end of the month, or shortly after, so don’t go getting yourself all worked up about it.
A close today around 1,970 would be fine with me…let’s see how it plays. But if it comes in at 1,973, or so, I will be screaming “I told you so” tomorrow. Even 1,.967 will get Mr. Smug-face going.
Meantime, Roger Reynolds, a fellow who does an email list I have mentioned many times, as a similar view about the present rally:
Friday’s surge??? The move down from mid sept to the recent low is likely being called a successful “test” of the low—-hence Friday’s rally. To me, IF you know some Elliott wave, it’s NOT SO.—–Consider–the Russell went to a new low. So, by Elliott this should have been a fifth wave down. Broken into five waves. I cannot get five waves!!!!! —–SO—-In my opinion, what is going on—-ANS: from the mid Sept peak this is a “B” wave down. This means–From the Aug low—an “A” wave up, now a “B” wave down to be followed by a “C” wave up which really got going on Friday. To me it should be expected to last through option week ending Oct 16. How high—do not know. BUT WHAT FOLLOWS “IF” THIS IS CORRECT—-THE MOVE BELOW THE AUGUST LOWS—AND ALL BUYERS WILL HAVE BEEN SUCKERED IN!!!!!
I’m not giving you FINANCIAL ADVICE but if my sisters ever asked me what I would do with a retirement account, I would switch to the bond fund option for the next three weeks and then back into stocks after a low has been put it. Of course my sisters never ask those kinds of questions…So I will tell my son, instead, although I don’t know if his state university fund allows short-term fund switching.
Meantime, yes, this is the Big Rally I was talking about recently. Blah, blah, blah…fish in the rain barrel.
Data Ahead, Planning for Panic
Looking at some of the hot data this week, the Gallup consumer spending number has just crossed this morning:
“WASHINGTON, D.C. — Americans’ daily self-reports of spending averaged $88 in September, essentially the same as the $89 found in August. Spending has been fairly consistent since April, hovering around $90.”
Tomorrow there is an international trade number, then the Federal Reserve’s consumer debt number on Wednesday afternoon. Based on our timing model, we expect that the Fed number will disappoint and that will start us on the Road to Perdition.
I assume you know Perdition is a 10% of larger market decline in three-weeks, or less?
If our model for this period was precise, we would anticipate the market low would come around October 20. About the only thing I can see out there would be a housing collapse coming back (data due on the 20th) though it could come as late as October 28th which is when the Fed meeting is due.
Frankly, our best guess, for now, is that there will be some “very bad news out of left field” next week that will simply crush the market.
My leading “predictable” is that the Glencore adventure is not over and that somehow, it could return to spook world markets.
As we all know, this has been one of those situations where the bad news came along but now (like this morning) it’s like everything is peaches and cream again with the stock recovering.
Call me skeptical. I think there is simply too much money to be made by the major bondies that they won’t yet find a way to play this as another “Too big to fail” and hold up the governments worldwide for bailout money or they will (in terrorist fashion) threaten to blow up the global economy.
That seems to be a major point of confusion in Washington: Terrorism is finance is NOT OK, but dis-ethical bond manipulators want their cake (return on rent of money), popcorn (pocket the money from risk premium) and soda pop (government guarantees), as long as they are at it.
To think this isn’t a Lehman waiting to happen may be premature optimism, so expect to see a lot of that today on the talking head channels.
Try to keep in mind that from the high of Wave (3) of III, we should decline to a low this month, or next and that will put in the bottom of Wave (4) of III, and then we have Wave (5) of III to look forward to into the election.
Then, come 2017, you’ll want somewhere to hide.
In the meantime, think of every way you can to minimize your personal operating costs.
Another Left Fielder
While the “narrative” out of Washington is that the new (secret) Pacific Trade deal is a good thing – and close to wrapping up says the WaPo report here, I can’t help but be suspicious that it might be a good candidate for an outlier event, as well.
What IF this highly touted 5-year deal is nothing more than another Obamanation/sell-out of American jobs? What IF news of that an a complicit (if not traitorous congress) were to emerge next?
Stay tuned: Could something like THAT be our market-crusher, not Glencore?
West Bank Hot
Like the US hospital bombing in Afghanistan isn’t enough of a mess to deal with?
Muslims and the “E” Word
A while back I mentioned to you how the word “eradicate” (as in Muslims) showed up first on the US government-owned Voice of America website and nowhere else.
Well, this morning, we are seeing the word “eradicate” (as in Muslim jihadist training camps) is showing up in reports like this one.
Linguistically, keep an eye on “eradicate” – it’s hot now. Speaking of words…
Is coming and it should improve market predictions, analysis of things like the Dream Center database and the general news scans Grady posts every day at www.nostracodeus.com.
Over the past couple of days, a scan he’s been running on the Middle East as been particularly troubling.
Grady has also been working on making the Fine Structure Constant (which seems to play into the cyclical nature of events – like mass murders) into something we can fiddle with.
Our thinking with this “big data meme crusher” is that while mass murders seem to have a 135-145 day cycle, other things (plane crashes, for example) are off on their own cycle lengths.
When we get done with this project (which will be never) we may be able to look at a whole range of repeating news events (by cycle length) and come up with days, or even weeks, when things are due to “pile on” and in that case it could be a key to market volatility.
Go look at the lingo in “President crisis Markets dead” and you’ll see what the next couple of weeks may be hinting at. When the dead word starts appearing with presidents, it’s time to be cautious.
warhammer on the Warm War
Used to be cold, now it is something else:
Suddenly the unthinkable is becoming thinkable. What if the U.S. and Russia encounter a series of missteps that eventually lead to direct armed conflict?
Plainly stated, Russia is ‘all in’ on an alliance with an Assad-led Syria and Assad’s puppet masters in Iran. Russia is showing its hand, intent upon reestablishing a 21st Century version of colonialism on the Middle East. One cannot be blamed for wonder “what on Earth is Putin thinking?” Like Napoleon invading Russia, is he stretching his supply lines too thin?
The Russian military’s logistical tail is already stretched to capacity. They have neither the air transport capacity nor the naval supply fleet to keep an occupation force in place for a long period of time while trying to provide the necessary training and hardware to Assad’s loyal troops.
Sooner or later Russia’s stretched logistics tail will show signs of snapping. At this point, Putin faces two clear choices. Pull back from what, for all intents and purposes, is another potential Russian Afghanistan, or bulldoze an overland supply path through Georgia and Turkey to augment the Crimean-fed naval resupply and air cargo capacity. Being that Turkey is a NATO ally, this would be an act of war against the alliance, of which the U.S. is the most prominent member. And with Putin initiating a draft for 150,000 new troops, it appears the ‘overland’ contingency is getting serious consideration.
Taking things one step further, with the fall in global oil prices, Russia’s military deployment to the Middle East will further burden their nation’s economy and the Russian people as winter fast approaches. Syrian operations must not drag on or the Russian economy will be further dragged down and the rabble more likely than not will become unruly. If conflict does drag on, Russian industry and agriculture must step up to feed the homeland. This will escalate national debt. One need only look back to Japan’s colonial expansion pre-WWII to see how this might end up when all a nation has to trade is war economy goods.
The Russian bravado displayed to date is another worrisome indicator. Putin has his generals asserting command over Syrian skies while American forces largely keep their distance. We know that Iran is insidiously providing ground forces to support Assad’s army. What if Israel becomes engaged in the ensuing skirmishes on its borders? Here is where things start to get sticky.
On and around a multi-national battlefield, each side must have effective communications. Subordinate commanders must understand their own commander’s intent, not acting independently or out of synch with the main fighting forces around them. With all the pieces successfully aligned into two opposing forces, de-escalation is better achieved. When multiple, uncoordinated fighting forces from each side engage in a confined geographical area, confusion can and often does reign, resulting in unintended intensification of the conflict and command chaos.
The fuse in the Middle East may not yet be lit, but the gunpowder and matches are in place.
As my retired S.F. bro-in-law reminds us: Russia remembers Chechnya. Putin has a soft southern tier to cover.
Curiously, and notable to my kind of thinking, there has been an outbreak of flash flooding along the French Riviera as well.
Out here in cattle country, we’ve only had 2.27 inches of precip since July 1st. Last year in the same period, we had 7.95 inches, so in terms of cattle herd sizes, don’t look for big increases as ranchers around here are looking at how many cuttings of hay and working their cattle herds off that and a dry summer – if it continues into late fall, as its looking like – could mean high meat prices next year.