I have mentioned several times to readers that I was long the SSO but when it set up for a suspicious move strongly up on Thursday my alarm bells went off.
As Peoplenomics.com readers know, I developed a very simple spreadsheet that takes possible Elliott wave 1 moves and projects them to three and five wave outcomes.
My lowest target for my SSO long trade was 67, but because of BRECIT uncertainty, well, sometimes let’s just say intuition is important. Hopping up to 67.32 was just too good to be true.
Thursday, my spider-sense kicked in, along with the old adage “Buy the Rumor, Sell the News.”
What you are waking to this morning is the “Sell the News” part.
Let me run down some of the (way overdone (financial hand-wringing for you.
First, Gold popped up more than $50. We like that.
Silver was up more than 40-cents and we have hopes it will breach the $18 line shortly.
The downside target for this reaction (and maybe over-reaction) is into the 2040 down to 2020 area of the S&P. I haven’t decided whether to re-enter the trade, or not, but do remember the world hasn’t ended – not by any stretch. This vote is advisory, takes two years to implement, and is more psychological than anything else.
On the other hand, I know of a guy on Pennsylvania Ave. who has not had a very good past 24-hours: He not only was slapped back on immigration, but his personal grand-standing/campaign to defeat BREXIT is also something of a slap.
On the flip side, I would expect (if he hasn’t done so already) Donald Trump to be posting or tweeting that this is what happens to bad trade deals in the end – people revolt.
Keeping You Personal Financial Grip
Now, a further observation, or two, about the reality of where we are:
For one, a decline of 500 points on the Dow today would really amount to a 270 point decline. Why so? Well, that too frothy for my tastes blow off to the upside Thursday – before the results were known – took the market up +230.
A long-term reader who has been waiting for our 2040 down to 2020 levels to come in might be seeing them between now and perhaps next week.
The Calendar matters hugely right now. Think not only quarterly inflows next week, but also the Central Banks of the world are NOT going to take this sitting down.
I have referred many times in the past to “global, synchronized inflation.” I would expect that within two to four weeks that the Fed M1 number, already blowing up 17 percent annualized, will surpass the 20% mark.
With the dollar down overnight, it’s actually good for the Dow and other major indices. It means it will take a bigger pile of money to buy the same underlying values in stocks.
Could this be a failed fifth wave? The start of the global depression? We’ll ponder that for our Peoplenomics subscribers tomorrow.
In the meantime, no “Coping” section this morning. I think there’s plenty to be “coping” with in markets – so we will focus on exactly that with additional updates as the day goes on.
Time to roll out one more saying among the uber rich: “Buy when the blood is running in the streets.”
I might be the guy with the checkbook again, today. We’ll see…
Is it time for our total collapse? From a longwave perspective, it should old off until the first year of whoever the next president is. But there’s a reason we live on a well stocked (and armed) survival platform. Sticking to the fundaments always provides us with a great deal of comfort when the problems of the world’s “paper economy” try to come home to roost.
Another Key Point:
The Dow closed a week ago around 17,675. Uf we whack 500 off the Dow in the midst of panic today and look to bring it back up again, around the close, the BREXIT action could, on a weekly basis, provide fairly insignificant. Just something to think about about…