I don’t know about you, but when I read ads popping up around the net like “Stock Market to Collapse in 2016!” it usually means it’s a good time to sit on your wallet. Someone is going to try to sell you something.
Independent analysis? Different deal.
How long have we been talking about 2017? A very long time, for sure.
A lot, admittedly, will depend on holding the line about here….here being the 2-standard deviation trend channel. ( ?x? to some.)
Still, let’s count them up: The price of oil is up. The price of gold is down. And when comes down to it, perhaps much of what has been this (so far fourth wave) decline has been sanctions coming off Iran and their oil hitting the market.
What people forget, though, is that Russia and Iran are sort of tied-at-the-hip. Iran is getting (shopping list ready?) More nuke plants, parts for Bushir, support for the Guards in the way of military hardware and so forth.
The Tehran mullahs are getting a piece of the oil action out of their country – but with the understanding that they won’t hammer the market too badly because Russia needs petro revenue as well.
The Saudis sure don’t want things to go too badly, since they are trying to slice up Aramco – and that means they will likely not be first to lower prices, at least too much.
As always, the market is in the process of “price discovery” and the folks getting whip-sawed in all this will be the last-minute arrivals at the party who invest in lesser newsletters than our own Peoplenomics.com offering and then wonder why “capital preservation” isn’t working out…
So this is how the week begins:
As you were lollygagging last night, Australia opened up almost 9-10ths of a percent.
That was followed with the Hang Send up 2% and the Shanghai market was up nearly 3 and a quarter.
And that’s why Europe (Eurabia) today is up across the board better than 2%. The no-brainer trade of the day would be Australia which is lagging the Rest of World and should be good for a 1% rally, although hard to make money on that for civilians.
Meanwhile, oil is up over $2-bucks on the West Texas contract, a bit lower in Eurabia for Brent, but still, consider the geopolitics and you’ll see no one makes real money from a price war on oil.
This is not to say the bottom is in – but it could be. And with it, the clouds will part. Industry that depends on oil (diesel, plastics and that whole evolutionary branch) will be able to profit without real growth for a year to 18-months. That’s because, as my consigliore reminded me Monday, while it’s true that full dispersion takes 65-months, or so, the bulk of an oil change is within 18-months.
Since this has been largely a Big Oil event, so far, and there’s no sign of a major too big to fail candidate, yet, we should see stocks touted as terribly over-sold (which they are) and the odds of a fifth wave go high once again.
So the short version of this (more in Coping in a minute) is that you have been warned, but the larger question is what – if anything – are you going to do about it?
The average person will do nothing – which is a sure-fire recipe to remain “average.” The exceptional person will hear the call to thrift and will be managing affairs so when the depths of the Great World Depression show up, you’ll be among the few who has structured in advance for The New Way of being.
That said, there’s no assurance a fifth wave will continue. We need to see the S&P set a new record here shortly (within 6-7 months). The key level to watch will be 2,135 on the S&P.
For now, I’ll be going back to the larger questions of life: Why did Elaine buy organic coconut/almond milk? And why is our editor, Zeus-the-Cat, left-pawed?
The other questions – like “Will China roll out more stimulus?” – are really givens over time.
The Horror of Hil Films
Seems to be a good business model in making a film that slams Hillary Clinton. After 13-Hours out came a C.I.A. denial that the film is a documentary in any sense. But hold on a minute, here’s the author firing back at the Agency…
And if that’s not enough, here’s the NY Times on a film about Anthony “social flash” Weiner and the woes his wife, key Hil advisor Huma, having to cope.
We notice that other candidates aren’t having as much box office play. In our efforts to help Hollywood, might we offer…
- A Romanov (tsarist novel) story starring Bernie Sanders? (America’s rich can’t believe his tax plan, either.)
- An episode or three of Suits with Ted Cruz as a new senior partner?
- Or a remake of Towering Inferno with D. Trump? I’d call this one Infernal Towering…
Alas, but with good reason, our phone isn’t ringing off the hook.
Passings: Glenn Frey
The “Divided States of America”
Despite yesterday’s holiday we are now reading how “David Oyelowo Goes Off on Oscars: “I Am an Academy Member and It Doesn’t Reflect Me“”
Death Industries Thriving, Too
Time to Bail from Bitcoins?
With the price down to $383 this morning, we are at the sell threshold. One reason? Mike Hearn’s devastating column on problems of the blockchain essentially being at capacity. A key quote?
“…700 kilobytes of transactions (or less than 3 payments per second), is probably about the limit of what Bitcoin can actually achieve in practice…”
If that isn’t fixed, BTCs and the other cryptos will be in trouble. And you may not wish to ride this one down. It could be a $5.7-billion crater.
Could this be a correction as BTCs climb a “wall of worry?” Maybe, but I don’t like “maybe” as an investment plan.