The market will fall today. It is NOT the end of the world. That comes this summer.
Peoplenomics subscribers, though, have to be deliriously happy with our Trading Model which has, for about the past three weeks been setting up on a “replay of summer 2011” and which I trade quite publicly. It’s one thing to have a trading model that keeps you in the Big Trends, but it’s another to bet against it and the market as I have been. Neener, neener. Ure wins a cheeseburger. For a change, the market is coming around to my way of thinking.
I’ve mentioned Roget Reynolds email list a number of times. He’s an “old hand” (OK, not that old…) at markets and he sent out a note after Thursday’s little bloodletting…
DID YOU KNOW THAT—-LAST FRIDAY APRIL 4, 2914 THE DOW JONES INDUSTRIAL AVERAGE MADE A NEW ALL TIME HIGH. BUT—DID YOU KNOW THAT ON AN HOURLY BASIS IT DID A BROADENING TOP PATTERN DURING THE DAY? THIS COMPLETED A BIGGER BROADENING TOP STARTING ABOUT MARCH 1. —-BUT, THIS COMPLETED AN EVEN BIGGER BROADENING TOP STARTING ABOUT DECEMBER 1.
SINCE THE BROADENING TOP IS A FORM OF DISTRIBUTION PATTERN—-IT MEANS SOMEONE HAS BEEN SELLING AGRESSIVELY ON EVERY UPTHRUST SINCE DEC 1.
SINCE THE 2007 TOP WAS ALSO A BROADENING TOP OF ABOUT 4 MONTHS—-JUNE TO
EARLY OCTOBER—-INVESTORS SHOULD CAREFULLY MONITOR THEIR STOCKS.
If you want on his list, try sending him a note at email@example.com as he’s been kind enough to accommodate new readers in the past.
Tomorrow’s Peoplenomics will pick up the pieces after today’s session but for now the big battle today will be whether the S&P will be able to close the week over 1835 on the S&P. If it doesn’t, then the market’s next level down ought to be 1740 (Robin Landry) or 1751 (Ure) and in any event, I’m still thinking about the 1,540 level around the 4th of July.
But I’m not the only one looking at this scenario, apparently: Dow looks set to open firmly down again and with it, all kinds of talk about the end of the financial world. And with good reason, mind you.
As I pointed out in Thursday’s headline “Bad News is Good News! (But it’s really BAD)” the news really is bad. We’ve just gotten onto it way sooner than most…which is what we do around here.
The difficulty is whether this is the beginning of my “discontinuity” period…but more on that tomorrow for subscribers along with some comments on Market Risk and Financial Markets Modeling. When I spend $114 on a book, there’s usually a pretty good reason behind it; I’m really a cheap sonovabitch at heart but not penny-wise and pound foolish.
I may post a Peoplenomics update before the close today, if market conditions and the trading model warrant. With yesterday’s decline, though, the scenario outlined in recent issues is playing out to a T. So we’ll just twiddle and watch the money roll in until Turnaround Tuesday, or so….
The Producer Price Index for final demand advanced 0.5 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a decline of 0.1 percent in February and a rise of 0.2 percent in January. On an unadjusted basis, the index for final demand moved up 1.4 percent for the 12 months ended in March, the largest 12-month advance since a 1.7-percent increase in August 2013. (See table A.) In March, the 0.5-percent increase in final demand prices can be traced to the index for final demand services, which rose 0.7 percent. Prices for final demand goods were unchanged. Within intermediate demand, the index for processed goods declined 0.2 percent, prices for unprocessed goods edged down 0.1 percent, and the index for services rose 0.4 percent.
So what does it all mean? Seriously?
It means that overs the past year producer prices have gone up 1.4%. And if you look at the latest Fed money stocks report, you’ll see that M2 has gone up 6% in the last year. And if prices have gone up only 1.4% where has the rest gone?
Not to sound like a broken record here, but it means Washington is still not coming to terms with a 4-1/2% deflation problem. And the bond market is rallying like a MF’s this week because that means cash is king and will stay that way until at least early summer. And that means what?
And that means money sitting in dead pools in banks, bonds, and hedgies where it doesn’t do much more than collect dust. Money at rest doesn’t employ anyone, dammit!
This is the worst the velocity has looked in 70-years and it’s the stuff that Depressions are made of. There is no genuine recovery and anyone who can’t grok this has shit-for-brains…why even the dolts on the Street are waking up slightly….
Write this down somewhere you won’t forget it:
Ure’s Axiom 46: Printing money for the rich is NOT a Recovery!
The good news is that those of us who own a “lone gold coin” and buy stocks by the bushel when the markets hit incredible lows this summer will be rolling in the long green stuff in a few years. But is it too early to buy gold? Can’t say for sure, but when the market declines, remember that the big hedgies will be selling everything including the kitchen sink (and paper gold) to try and score another unwarranted bone-us.
Still, with the Fed printing up so much dough, when the dam eventually breaks (summer/fall?) then hyperinflation does become something to think about.
For now, we just patiently watch in horror as the Fed makes money the old fashioned way – by printing it – and wonder why so few purported “economists” see things as clearly.
Oh, wait…they have a financial interest in the outcome….think that has something to do with it?
All of which leaves us with only two Friday riddles: Which side of 16,000 will the Dow close on, and which side of 1800 for the eS&Pee?
Falling on Sword: Sebelius
With word that Kathleen Sebelius it resigning after the botched roll-out of Obamacare, we have to admit about zero surprise. We’ve been patiently waiting for this since I wrote on December 13th of last year (knowing the irony of the date):
Remember a while back, I told you how HHS Secretary Kathleen Sebelius would probably have to “take one for the team” and would, in the end, likely be let go? Or be asked to fall on her own sword, metaphorically speaking?
Well, we may want to add by way of the jailhouse as being one of the exit strategies, too, now that Congressional House Oversight Committee boss Darrell Issa is threatening criminal charges of obstructing a congressional investigation if HHS doesn’t order contractors to turn over documentation in the Obamacare probe.
Why, this is getting to be fun, ain’t it? A regular “he said – she said” kind of thing. Go read the story…and then go back to the previous one and rethink the suing Obama on failure to enforce the laws of this (once) Great Nation.
Which all circles around to Rep. Issa who just landed a congressional contempt citation against former IRS official Lois Lerner.
The key thing to look at here? “Ex-IRS Official Held in Contempt” (emphasis added).
Well, now with Sebelius exiting stage left, we have to wonder if the Obamacare probe will be coming up again…and this time with Sebelius unable to dodge using executive whatever.
Crank it Up for Holder
If you work for the Attorney General’s office in DC, you might want to “crank it up” for the boss when he comes in this morning with this tune…
So let’s see what his calendar looks like, shall we?
We have 200 feds completely over-reacting at the ranch in Nevada. (Bring your own helicopter)
The DoJ tolerance policy (read: failing to enforce laws on the books) is resulting in a huge influx of illegals from South America.
Issa is after Holder on failing to turn over GunWalker docs and Holder just popped back angry at an Al Sharpton rally last night…. Forget the laws on the books, let’s make it personal, eh? What card is this?
With the republicorps hot on his tail there’s only two ways out here: Holder could borrow the “sword of Sebelius” OR he can keep on keeping on. Hence our “tune of the day” for him.
Yo, brud…’n’udder one down’n Papua. 7.1 with seconds at 6.5 nearby.
There – another week of reports done. And with an ending BP of 129/80 (pulse 60) I figure it will be a lot higher next week. Because that’s when we should be back into the Eastern European showdown mode. Always something, isn’t it?
The MSM is still peddling Kardashian stories….it reassures me the world hasn’t quite ended just yet…maybe when they repo the Rolls?
See you Monday!