Ready to Play IV 5 Minor (ii)?

Short Version: Market drops today.

Long Version:

My consigliere called Sunday to remind me that we are still on target for World War III or IV in the 2019 to 2024 time frame. Like that’s something I’d forget?

Seven year cycles, George. Don’t forget that: Seven years…

Which, as a student of our Cheerionomics 501 class you will remember as Clement Juglar’s ideas.

If you dozed off during our last discussion, the class notes are here in Wikipedia. Pay particular attention to:

“In 1860 French economist Clement Juglar first identified economic cycles 7 to 11 years long, although he cautiously did not claim any rigid regularity.[6] Later[when?], economist Joseph Schumpeter (1883–1950) argued that a Juglar Cycle has four stages:

1.expansion (increase in production and prices, low interest-rates)

2.crisis (stock exchanges crash and multiple bankruptcies of firms occur)

3.recession (drops in prices and in output, high interest-rates)

4.recovery (stocks recover because of the fall in prices and incomes)”

So this has what to do with BREXIT, exactly?

Hmmm…let me see if I can keep this under a full day of lecture.

We begin with the understanding that there are plenty of cycles to choose from. At the longer end of things, we have a cycle of 83-93 years that it takes to burn through any value in fiat (paper) currencies. (Ure and Mazurok, 2000).

At shorter periods, we have the cyclical long-term interest rates of 48-74 years. (Kondratieff, 1927).

Then we get into the shorter cycles. There is a war cycle, the Schumpeter, the presently discussed Juglar, plus we have the Presidential, the inventory cycle, and the 11-year California Housing cycle to consider.

My consigliere and I have an unfair advantage over most conventional economists. We’re both ham radio operators with Extra Class tickets. Our uncanny ability to think in high-speed Morse, or belch wise antenna calculations (complete with Smith charts and –j factors) doesn’t help so much as does a good understanding of the old hybrid phone patch.

It’s a little early to get into a discussion of how a hybrid transformer set set up. But it does underscore that signals may be either additive, or subtractive, depending on circuit.

Another analogy is in super heterodyne receivers where a local oscillator is injected into a mixer stage. What comes out of the mixer is actually two signals, one additive while the other is subtractive.

Let’s bring this around to economics, then, shall we?

If you have any two cycles of non-equal periods, at some point, their combined result will be either additive – which means you will have a SUPER EFFECT. Or, when the cycles are subtractive, you will have a NULL effect.  Example of multiple additive cycles?  The Great Depression, or course.

It’s not exactly this simple but you can envision this very easily when doing phasor adjustments of a directional AM radio station. There, whether current leads or lags voltage, you are able to “steer” a multi tower broadcast array antenna pattern.

Same thing, it turns out, works in economics.

Except, instead of TWO variables with adjustable amplitudes (voltage and current, remember?) you can get a good general idea of economic forecasting by integrating cycles over time.

Since we already know the cycle lengths involved, 18 months on up to the 90 year range, we can easily build a time-domain model and by assigning weights, predict, with some confidence (say >50%, lol) when the proverbial shit hits the fan.

When my consigliere did his original work (1979) that pointed to the 2019 to 2024 area, it was done by hand on ledger paper and engineering graph paper.

Since then, we have this thing called a spreadsheet that vastly simplifies the process, but now we come eventually to what passes for this morning’s POINTS.

The first is that in order to become an economist, there should be a requirement that any practitioner hold an Extra Class ham radio license. Not that Morse code helps – it doesn’t. But understanding the vagaries of of additive, subtractive, and vector relationships of complex wave forms has a huge payoff.

I occasionally refer to my retired DSP engineer friend “Jas.” Why was it fairly simple for him to pile up oodles of money and retire from Cisco? Because he understood signal processing algorithms and the numbers don’t lie. History comes along and to the more simple of our countrypersons appears to just happen (which is why quants are so much fun to watch).

But the real genius in economics is in understanding internal relationships between multiple wave forms and whether their aggregate is generally additive for markets (upsy-daisy) or subtractive, in which case the OMG we are sooo screwed posts proliferate.

Toss all the above (and my own work with the Peoplenomics Aggregate indices which are a simple waveform analysis applied to multiple markets) and we can sort of – very vaguely but >50% – see ahead to where the market is going.

If you remember Chris Carolon’s work on the Spiral Calendar, it is a very similar output, just arrived at differently and it’s easier to manipulate the time domain (diameter of the spiral) as data arrives.

(Whew. Damn that was a lot of coffee this morning!)

So this brings us to this morning.

The futures are suggesting the market will drop another hundred, or so on the Dow.

The decline should continue through tomorrow, by which time the “There, that wasn’t so bad, was it?” sighs of relief should be everywhere.

If you go read this article out today, you will see one of these early sighs evolving and that is how Ures truly will keep my real money on the sidelines until a sense the real bottom of (i) of 5 down is in.

Oh, look! Another BREXIT won’t happen story…

So then, when it feels right, I will buy a batch of just out-of-the-money call options for the July expiration and watch them retrace at least part of the decline and then unload those when the time is right.

Elaine and I are going on vacation in July and even though most of the trip is already paid for (a condo in Tacoma) there are still casinos to be fed along the way and tip-money to be made.

Then there’s the annual on the airplane…

This is a fine day to be alive…and our prospects for grand adventure have seldom been better.

Trump Nails Hillary, Google Nailing Trump

Once again for putting the “thumb on the scale” while at State. Has to do with fees pay to Bill and how Hil they arranged some $55 million of your tax dollars to go to a school but that is questioned by the Washington/Amazon Post story today.

And if you look at Google News, you’ll find a news flow that weighs out anti Trump.

Say what you will about Trump University, there’s something to be said about the Clinton’s operations in higher ed as well…

The problem for discerning news readers is to ask “Is this because the Hil campaign has a bigger ad budget and the MSM is currying favor (and fall media buys)? Or is it really that Hillary has done anything new, lately?

I’m taking door #2, but I told you a year ago Hil had this thing wired despite my personal beliefs that a Constitutionally oriented Supreme Court outweighs any anti-Trump mud. But that’s just me, I ‘spose.

Hil has the larger number of headlines being churned and that dominates news algos (like Google News) so the Hil­adigm becomes self-reinforcing.

Just remember as name familiarity will play large in this fall’s election, that name recall even if bad is good from a subliminal influences standpoint. Names like Capone and Dahmer have high recall and thanks to how Capone worked the press, he still isn’t generally thought of as “bad” – a kind of gangster lite.

I should see if our also ecuador  expat has any thoughts on this because it’s there in pretty clear relief for me, but the ex NYC ad agency view would be instructive and perhaps corrective.

Marginal News Dept.

George W. Bush Slams Kanye West’s Naked Version Of Him: I’m In Much Better Shape…” reports Hollywood Life.  Sheesh.

Meantime, Google News shows 24+ MILLION Kardashian hits.  Double sheesh.

I do want to ask you seriously: What would you expect the outcome of a country like this to be?

Seems kind of evident to me, but then I live in the woods out of the cybersmog.

Train Wreck Engineer Report

As we hurtle down the tracks of this week, our first press handout is the International Trade report just out. Read ‘em and sleep:

Trade Deficit was up to $60.594 billion tweaked and $63.283 billion unadjusted in May according to the report over here.

Which means we are on track to at least a 3.7% increase in national debt on trade losses alone if we annualize this.

Still, globalist rape and plunder of America can’t touch stories like “Hillary Clinton and Pulse nightclub owner join thousands for New York Pride parade amid increased security after Orlando club massacre…

Economic and intellectual reality is not what matters, you see. It’s life at emoticons…that’s the facts of it. Own the emote, own the vote.

No surprise, I hope. We have been hollowed out by the corporatists slowly so as not to be able to stop their onslaught. You DO get that, I hope?

Tomorrow GDP.

Eye doc trip Wednesday after Personal Income and outlays and that Unicorn-like Personal Savings rate.

Bunch of bond settlements on Thursday and Friday is busy with minor data ahead of liver damage weekend.

Out here in the Outback, we were awakened by what sounded like the Tet Offensive Saturday night as neighbors apparently mixed some Jack and Fireworks. Schools aren’t so good out here…calendar-challenged is endemic.

A week from Friday before we get the employment situation.

And maybe the week after that, we will get our first glimpse at how much BREXIT money the Fed tossed in, or more likely, week after that.

We pass our condolences to the Flood victims back east.  With the sun in sun spot free-fall, the past couple of solar cycles have really increased global humidity and when it cools, well, let’s just say we have more flooding on the calendar over the next couple of year.

Sorry to be the bearer of how physics works.

Comments

Ready to Play IV 5 Minor (ii)? — 15 Comments

  1. For the Elliot Wave Theorists and Financial Forecast readers amongst us (are there any besides myself?), 15500 (Dow) is when the barrel goes over the falls..point of no return…

  2. …and seven sevens equals the beginning of a Jubilee. Hmm…

    All good, But I’m not giving my land back without a fight.

  3. I’ve been wondering since last Friday morning if this wasn’t becoming a wonderful buying opportunity. Practically every market and commodity has decreased in price, and given your blow-off-the-top prognostication for the past several months it makes even me consider jumping back in for the short-term.

  4. Ah yes another another July 4th weekend at the ranch. Sounds of a full on firefight after a day day of drinking and BBQing by the neighbors 3/4 mile down the road, to which we have been invited once several years ago. Followed by 0600 hrs phone calls the next morning to them and then me driving down to their gate and telling them to get their asses up to the road to clean up the debris from their fireworks show and beer bust which usually ends up in front of my gate.

    That is probably one of the reasons we have not been invited to very many of their celebrations.

  5. OK. “Everything’s a business model” sooooo…

    Could this be a classic “greenmail” hostile takeover of the GOP? The big money guys offer to pay to make it go away (the current guessing is that $150 mill or so should do it). Looks like win-win.

  6. I have the market in a small wave iv down. Then we get a B high of Primary 4 down — similar count to 1987.

    Projected high could be 100 times the 1927 high so around 19,500.

    The big down day Post-BREXIT (and today) looks similar to the last correction in the summer of 1929 before the FINAL TOP.

    link: http://chartsrus.com/charts.php?image=http://www.goldchartsrus.com/chartsfixed/USDJIND1929cr.gif

    I am looking at that big red bar down in early August 1929.

    Now:

    link: http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=djia&uf=0&type=4&size=2&sid=1643&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=8&rand=1395129470&compidx=aaaaa%3a0&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

    So, that might be the BULLISH case! at least short-term.

    With the next high after this current sell-off comes in, it will be a B high, with the C wave down being either a full-on crash or a multi-week sell-off to below 15,000. Possibly down to 14,000. That would complete the A-B-C wave 4 triangle that has been forming over the past year or two.

    da bear

    • This is exactly how it is looking to me, too. But that’s more on the PN side of the house. Too much gloom….astill 2017=1929 along about a sept to sept match up and we’re good with the call

  7. Phase/amplitude relationships of ‘cycles’ of any kind are the nature of how reality works. I never thought to apply it to economics, though. I learned that at my first AM Directional radio station that I engineered. I was twenty years old and inherited a screwed up antenna pattern when the old chief was fired. I learned a lot… in a hurry!

  8. FBI says those deaths in Orlando all happened after 5:13 when swat was on site. Hmmmmm…

  9. Any explanations on how the VIX was red most of the morning and is just barely green as I type, while the S&P and others are dropping fairly significantly? What causes that? Anybody? How is volatility controlled in this kind of environment and why do they care, if the corresponding market is near free fall? TIA

  10. re: trading

    george, have you ever heard of and/or read the book “THE DELTA PHENOMENON” BY welles wilder??

    if not, can i very highly recommend that you do?

    ive read many, many investing books in my life, maybe not quiet as many as you, but certainly a lot of em.

    my top two of all time are the one by the murrey math guy, t henning murrey and the second one is the above.

    if you want to trade succesfully either is a must. the delta book used to cost $75 per, but someone apparently has posted it found it on google search online .pdf.

    http://www.ganntrader.org/WWdelta.pdf

    briefly, every market has turning points based on the moon phases, full moons in particular. once you solve for a market, thats it. it has ‘x’ number of turning points and either 1 or 2 inversions that you can look for at the end of the cycle of turning points. one can solve for any of the deltas; intraday, daily, weekly, monthly and even yearly. either of these systems are deadly accurate. what ive come to realize is that trading is emotions. you can nail the trades but if you get greedy or feel that you can ‘tweak’ them,then one can get into trouble. to me these systems are both better than elliot way/prechter systems, which i have also read. and the reason i dont like EW is because of the constant possibility of multiple wave counts which can lead to multiple outcomes.

  11. I agree with you that ad budget isn’t buying media. In the old days that would have been the case. But now I believe the media is controlled by the Globalists. Case in point: The first reporters on the scene of 911 all used the word imploded. Within minutes that word was scrubbed from every main stream media and never used again. Coincidence? I don’t think so. Also they couldn’t carry out all the false flag terrorist attacks without media control. Isn’t that what the Rothschild’s have done in every country? First control the banks and then the media. It’s all being controlled for the outcome they want. But I’m not sure yet what that is. Nothing would surprise me.
    Name recognition is more important in smaller elections, but I think everyone (unless they’ve been in a coma for the past year) voting for president will be familiar with both Trump and Hillary by name. I find it interesting that Hillary is going by her first name. It underscores her as the potential first woman to be elected, but I also think she wants to separate herself from her husband and his presidency. Because using her first name is weak, subliminally. Trump says: man, and Hillary says, girl or lady. What Hillary has done well is label Trump as a racist. I would bet the farm that if you polled Hillary supporters and asked them to describe Trump in one word, that word would overwhelmingly be: racist.
    But what I see Trump doing is something that was used against Gov. Jerry Brown when the media nicknamed him Gov. Moonbeam. While Brown may be finally ready to enter politics again, at the time and for a long time after, that nickname ruined his career. If you can make a nickname stick, then you give people a sort of shorthand to dismiss someone without having to think about it. I see Trump doing this with Elizabeth Warren by calling her Pocahontas. Trump never mentions Hillary without a derogatory term attached. I will be watching to see if he finds a nickname for Hillary, similar to Pocahontas, that he can get to stick.
    Trump has also very effectively used the tactic of complimenting his followers on knowing that the mainstream media is all lies and that they are smarter than that. Trump followers seem to be getting their information from the Internet and sites like this one and all the media hype doesn’t change their minds. Trump has commented on the loyalty of his supporters and how he could shoot someone in the middle of Fifth Avenue and not lose their support. I tend to agree that no newspaper article of nightly news segment is going to flip them. I see Hillary using the Internet to post selfies with Kim Kardashian and I even heard her say on the Tonight Show that in the past when she went through the crowds that people stopped to ask her questions about policy. Now she said, they just want to take selfies, and that she’s fine with that. I think she’s also courting the younger voters much the way Sanders went after that demographic. And let’s not forget that the Globalists run Hollywood too, so they trot out the celebrities to endorse their golden girl and her causes, which has more influence with younger voters.
    I can get US tv, but it doesn’t come with US advertising, so I’m missing all the political advertising to critique. Someone did tell me yesterday that the Trump campaign is using footage of Obama using his own words against Hillary when he campaigned against her. Footage in the public domain, practically zero cost to produce…brilliant.

    • In the same vein, some force in media has crushed the word “illegal alien”, even though it’s a term of art, with a very specific meaning to INS, aka ICE.

      They’ve replaced the word with “illegal immigrant”, a term with no real meaning in context of the aliens crossing our border. Some may be immigrants, and many are not. An immigrant is generally considered to be someone coming here to become part of society and has been vetted by the government. Real immigrants are generally good people who have been through the wringer to get here, whereas illegal aliens could be anything from illegal settlers to smugglers, to terrorists. The language needs to be used accurately if we’re to think and choose with precision.