We are fast approaching that part January where we have been eyeing a confluence of events in our charts, channels, technical indicators, and entrails of small animals, where a change of winds will be worked out.
Specifically, now that Bitcoin has reached our $16,279 target level (and then some), we could be set for a re-test of recent lows. There was some weakness overnight in the lead crypto, which a couple of hours before click-time (used to be press time, lol) Bitcoins were down to the $15,360 range.
We are academically interested because as my friend and commodity & crypto friend JB Slear (www.fortwealth.com) observed over the weekend “Technical analysis sure works well on cryptos…” Which we heartily agreed with. Still, it’s like watching a train wreck in slo-mo.
What will be interesting is the resolution of the technicals from here.
There is a case for the $35,000 outcome with a break to even marginally higher highs than the all-time $19,500 area. But there’s also the “lights out” notion if Bitcoin breaks below $11,000.
This is just the first of our Recent Rallies Raise Real Reservations view this week.
Then we have the stock market. There are multiple theories of “bluer skies and free money for all” ascribed to market performance during the first week of January in any particular year.
A little deeper into the fine print is the asterisk: *Provided the month closes higher.
Then – if this major tripwire is avoided – there’s another asterisk that says *Provided Q1 is positive..
On-balance volume has begun to suckify, but pretenders in no limits don’t cotton to such antiquated measures of sentiment. It’s a New World, after all. And it always is.
As usual, the market offers all-comers a chance to kiss its asterisks.
Here’s the problem in a nutshell:
We know – at least based on historical data – that we shouldn’t begin a crash for at least 37-days (*which was a one-time outlier) and most commonly 55-days from an all-time market high.
Using this logical basis, and remembering that another old saying is “sell in May and go away” we can plug in the date math from Excel to offer some modeled futures.
Not that the market is “long in the tooth” but here’s the statistical “Box Canyon” we’re riding into:
In the Strange Land of Ure this suggests three scenarios: We “go soft from here” which we can might label the “Running out of Viagra” scenario. The tax cuts are done, the dems are coming up with more hype than expected with Oprah lining up to be their Obama II. And there is still not global peace and what about Mueller, et al? Side of Korean flash-bang?
This scenario looks pretty good to us: Oprah has a solid middle-class base, has a net worth of $2.8 billion reported (Trump is reported $3.1) so it’s a good financial showdown. And with all the press and name familiarity, what could be better than to see a Winfrey-Kardashian ticket in 2020? It’d be a no brainer for the dopes of social who, in case you missed it, are The Force everyone’s fighting with for control of the light saber…
Meantime, back in the Box Canyon, Scenario 2 is the “Ides of March.” This is the one where we keep setting a tiny new high every few weeks as the very last of the gullible are sucked into the market.
Last, but not least, we will see if Scenario 3 shows up. We call this one “April Showers.” This is the genuine nightmare because the way it could play would be a left field event in April (Mueller???) and then a massive sell-off as the world eyes Vice President Milqtoast.
My read of Milqtoast is he’s a “consensus player.” That’s what people lacking leadership and vision seem to run with. Gives ’em plausible deniability when the consensus fails. Actions speak louder than words…so where are his actions?
That could certainly lead to a major Wave 1 down, perhaps several hundred S&P points, then a retracement rally to August/September. The the Bigliest Awefulest blow-down in history would be on for October.
The prospect of Daddy Warbucks versus Lady Warbucks would be an ad agency’s wet dream. Already Time says “Read Oprah’s Powerful Golden Globes Speech.”
Reservations about recent rallies? You bet’cher ass.
Meanwhile, we may have to resume our Street-Level Economics reports. (We’re thinking of bringing back the SLE feature because we’re coming to the ALL TIME HIGH zone.
For example: My consigliere was shopping recently at a big-box electronics store somewhere int he Midwest and he noticed the help-staff was looking down in the mouth.
“Say, you’re not in cryptos, are you?” he asked. And sure enough…this was on a day BTC has fallen out of bed.
Yet, the help-staffer maintained, as all True Believers do “BTFD!” [buy the frigging dips‘] That’s the advice he was offered.
Shocked, he called to report, “Remember the shoe shine boys offering tips in ’29?”
It cements our belief that the world has gone completely and socially mad when a 20-something clerk offers sincere investment advice to a man north of 50, a JD/tax attorney and CPA at that, whose forecast of how the long wave of economics would roll has been very close to the mark since 1979.
The asylum has been fallen, though and it won’t be until the last Crypto Tulip has been bid, that history will follow by rolling out the financial guillotine.
I’ll have the stand selling head baskets. Elaine plans flower stand, wanting nothing to do with the financial gore.
Sun’s Gone Out
Speaking of “financial Gore” please observe that the Sun has effective “gone out.”
I like to think, being a simpleton and all, that the August bump was why the nice fall here in Texas. Delusion land is warmer than the Northeast, though.
There isn’t a day goes by we don’t pray that someone besides us will look at real long-term change and begin to tax glaciers which haven’t been punished enough since the end of the Maunder Minimum.
People Will be Talking About…
Hot stories to some, perhaps, but not around here. Where we’re more interested in stories…
People Will Miss…
Oil approaches 2015 highs on fewer U.S. rigs, OPEC which is meaningful because that will drive gas prices and then food prices because you know food is really made from oil, in a sense, right?
Here’s another way to end the oil glut, though we don’t endorse it: An Oil Tanker Burning off the Coast of China May Be About to Explode. (Accident or secret message?) How’s Ure stock of SE Asian seafood?
Make Dubai Great Again? Dubai to build new record-breaking skyscraper. Hmmm…wonder what the Developer-in-Chief here thinks…
CES: MAGA or Machines Taking Over?
Like an Android camera makes 3D spinnable selfies matters? Confession: I’m suffering from SOMD (skeptical old man disease). It’s marked by Tourette’s like screams of “WHAT’S THE POINT???”
I’m not hearing answers, either. Maybe my hearing is going, too… what?
Still, Headphones made from recycled firearms could be a blast….(rim shot as the gaff comes out)…
Moron the ‘morrow…piece out.
[Explanatory note: If you are going to sent a note correcting this last to “peace, out” don’t bother. It’s an embedded IQ connectivity test to see if you can remember the “recycled firearms” part in the previous paragraph. Recycle firearms, piece out, capiche? You see, we like people who can connect data in a different (than spoon-fed) way. Thank you. Member FDIC.] Fine desert ice cream?