Oh no you don’t. We don’t offer financial advice – and besides, yesterday was a very painful day for me, personally. It was one of those “zigged when we should have zagged” kind of days.
Honestly, I don’t think we’re completely out of the woods, yet. But, the good news is that whever we’re going next shouldn’t be a “close” replay of 1929. Look at this chart and you’ll see what I mean:
We mentioned last week (Desperation Rally) was a possibility and right on cue, Futures dip after rally powered by Powell’s dovish comments, reported Reuters. The open question is how much give-back will follow and is this really a change of trend?
As you’d expect, a number of readers have sent in comments going to the idea that “Elliott Waves” don’t work…”
But, in truth, they do…it’s just that it’s easy to be sucked in to looking at smaller-degree moves and lose track of the bigger picture.
Take our outlook (based on Aggregated Markets work). You can see how the market zoomed upward yesterday based on some optimistic talking by the Federal Reserve chairman.
But, when we look at both the Elliott counts AND the trend channels, it’s clear that we are still in a larger, downward trend. In fact, we can go all the way up to the top of the yellow box and still not violate any Elliott “rules.”
On the other hand, with yesterday’s big (and near as we can figure mostly baseless rally) caught me on the wrong side of things and IF I’d taken the loss it would have cost me thousands.
Here’s the thing, though, and why I didn’t take the loss.
I looked at the channels, figured we would have a pullback, so even if we go higher, selling into panic seemed a poor idea.
How much higher could this rally go? A lot will depend on the next few days and what forthcoming G20 talk, China tariffs do, and let’s not forget jobs data next week.
One of the realities of markets, though, is that sometimes you win, while other times, you don’t. Betting against the Fed is never wise and they have not interest in seeing the economy collapse because that would violate all their mandates. They will do what they must.
But, while they’re doing so, we continue to look at the “underlying problems” list…and it doesn’t look to us like much of anything has changed. Except, we’re finding Bitcoin as a pretty interesting indicator of public mood swings.
Personal Income Moves Up
Just out from the Bureau of Economic Analysis:
Personal incomeincreased $84.9 billion (0.5 percent) in October according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $81.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $86.9 billion (0.6 percent).
Real DPI increased 0.3 percent in October and Real PCE increased 0.4 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.
As a picture, it looks like this:
Please note, however, this is “rearview mirror” data -takes time to compile and not too much can be done with it…didn’t budget futures.
Life Expectancy Falls
Not a lot – but given a choice between living longer, or seeing life shortened by a a bit wmore than a month and a half, most people would take the additional 52-days.
Two things seem to be driving it: A rise in the suicide rate. And a bit increase, particularly in older folks, of drug overdose. Look at this chart and you’ll see it:
See how 55-64 overdose deaths are climbing?
The Wall Street Journal has a deeper summary over here. But, decline lifespans is not a healthy thing. Well, except for Social Security funding…which will last a little longer as a result…
Time report that Exercise Is Great. But Even Light Activities Like Walking and Housework Can Improve Your Health. But as I tell Elaine when she dares enter my office “Vacuuming sucks…”
All the Problems Are Still Here
Despite the love-fest from the Fed, our view is the world problems remain essentially unchanged. The markets were higher November 1st than they are today. Maybe some of these headlines have something to do with it?
- MIGA not MAGA as Fiat Chrysler to spend 5 billion euros on new models, engines in Italy. Related: Trump administration to study tools to raise U.S. tariffs on Chinese autos,
- Open Borders Note: The Latest: Slovakia mulls opting out of UN migrant compact.
- California still doesn’t get it, though: California AG ‘monitoring’ possible legal action against use of force on border.
- How about health holds? One-third of migrants in caravan are being treated for health issues, Tijuana health official says.
- Ukraine dealmaking? Or will it be sabre rattling? Trump-Putin meeting at G-20 Summit is a go, Kremlin official confirms: report .
- Oil falls, heading for biggest monthly slide since 2008, but don’t look for much in the way of falling prices. We expect companies will be keeping any savings to drop onto their balance sheets.
- We see sour grapes as German antitrust watchdog launches probe into Amazon.
Toss in the background footwork in Ukraine and we wonder what North Korea is up to…and no, nothing much has changed…
A Real Use for Blockchains?
At least it’s more rational than competing groups ofd greedsters making up their own currencies: Blockchain platform goes live for North Sea crude oil trading.
Remember IOur “News Shortage?”
We’ve been watching to see what happens when there’s too much channel capacity and not enough content to see how “news” organizations will cope.
Today, we see from the BBC How long does it take to poo Lego out if a child eats it?.
On the other hand, the CNN story In some states, this birth month is linked to higher rates of ADHD diagnosis, study says was plain interesting.
And, if you live in the South, this could be a very big deal: Ointment to counter the effects of brown recluse spider bites is tested on humans.
Speaking of bites…time to put on the feed bag, so moron the ‘morrow…