One of our readers posted (in the Comment section) a report that expert Elliott Wave analyst Robert Prechter was throwing in the towel on this – right now – being the start of “The Big One.” In his estimate, the Elliott structure suggests that collapse will not happen for another year…maybe two.
IF that report is accurate, and we’ll check with the Elliott Wave International people as the day goes on – there is a slim chance that bears may be giving up too early.
The reasons are simple…so we can run through them quickly. NBut, you need to understand how our Aggregated Markets view works.
Let’s begin with the fact that investing in a single stock can be a very noisy (often gut-wrench) affair.
To reduce the daily ups and downs, funds were developed. These take groups of stock so that when you invest in funds (at least in theory) the prices should be more predictable over time.
All of which is fine because while there are sector funds, there are also funds that trade whole indices – like the S&P 500 or the Russell 2000. Great way to trade.
Now the problem with the US market – which doesn’t show up when you look solely at the US for your trading – is that the Rest of World is also actively trading. So, while the US market looks like it’s on the verge of going on to new highs, when we look at the whole global picture over the last 20-years, we can see there is a Global Elliott count that is just now “ripe” for a Global decline.
Here’s one of the charts we used in yesterday’s Peoplenomics column for subscribers:
As you can see, the Global Aggregate is in a nearly perfect position to begin collapse this spring. It will take a lot of upside Global action in order to negate the bearish prospects here. Look for the G-20 to slosh mnoney all around to keep up appearances.
The second factor that has me wondering if the bears who capitulate early aren’t making a mistake is the effect of monetary inflation.
Just about every solid analyst I know says, in so many words “George, inflation has nothing to do with wave counts.”?
I’m almost convinced they are right and Ure is wrong, but we can not ignore the reality of the Fed artificially holding rates where they want them and, in addition, money is being shoveled into the system under the concept of Modern Monetary Theory in such vast quantities as to scare the living daylights out of me.
When the market hit its previous all-time high at 25,006.28 back on October 3, the US Money Supply data showed much less money sloshing about.$14.2465 trillion at Seasonally Adjusted M2.
As of the latest reporting period, April 9, 2018, that had swollen to $14.4579-trillion. So, there is 1.48 percent money money about.
If we take the October aggregate (the 25,006.29) and multiply that times the M2 grown, we come up with near 25,377 for an Aggregate target. The highest we got on this rally was Tuesday’s Aggregate close of 25,088.75.
Yes, absolutely, under an “inflation doesn’t matter” analysis, throwing in the towel makes sense. But, to us, the idea is that “money matters” – and especially-so if it’s part of an implementation of MMT (Modern Monetary Theory).
We know some other things, as well.
We know – despite the inability of the Mainstream Media to understand how to report economic stories, choosing to parrot nonsensical news releases instead,of the honest data. We particularly decried the fact the number of persons employed in America was 156,949,000 in February but was down 201,000 to 156,949,000 in the March data.
Yet this decline in the absolute numerical decline in employed persons was lied-over as an “increase!” This is not to say there were not some bright spots, but the double-counting of jobs due to the “gig economy” swells some numbers and that kind of thinking is both illusory and delusional.
I’m NOT saying that the market will collapse…But, I am not prepared until we close significantly higher than 7-months back when we were hitting highs.
Friday, September 21, 2018 our Aggregate closed the week at 24,935.71. That’s before any adjustment for 1.48% inflation Based on the futures early today, we were looking at today’s open being around 24.998.87.
Which is why we focused in Tuesday’s column on the possibility of a “double top.” Those tend to end badly for perma-bulls and premature-bears.
I’m willing to put on my bull suit and get out of cash, but not until the weekly close is in.
See the Reuters story: Fed done raising rates; cut by end-2020 growing more likely: Reuters poll.
Joe Biden holds an 8-point lead over Donald Trump in a shocking poll being bandied about this morning.
How credible is a MorningConsult/Politico poll, anyway? With a year and a half – and then some – to elections, this looks to us, (to recycle a quote a president near you) “total bullsh*t.”
But it fills up up column inches in the fish wrappers, huh?
Let’s Monetize Everything Dept.
See the story in the NY Times this morning “Cannabis, Marijuana, Weed, Pot? Just Call It a Job Machine.” Got the munchies just reading the story… But, how much job growth claimed by the Trumpers is from “budding new industries?”
Durable Goods are up in data just released:
That should keep the market from falling too far. But, tomorrow we get GDP and that’s always fun.
On the Radar:
Media or phone-driven crazies? Americans Are Some of the Most Stressed-Out People in the World, a New Global Survey Says.. Not just here, though: World sadder and angrier than ever before, study finds.
Word that KFC debuts ‘Chickendales’ dancers, dessert biscuits for Mother’s Day has us wondering why the me-me’s aren’t screaming about sexual whatevering…I can just hear Elaine now: “A 20-piece bucket for the old man and I’ll take a side of thighs…”
I’ve hidden the car keys.
Speaking of cars and things that “light up your life” One in 7 Washington State drivers with children in the car recently used marijuana.
Some Personal Woo-Woo
Odd dream overnight about a seriously overweight gangster/fat-cat/politician who was having lunch when I walked into a restaurant and sat down across the aisle down one table and facing the door.
The capo with him as a body guard.comes over and says “Boss wants a word.”
I get up, walk over to the table. “I don’ts like youse lookin at me while I eats.”
“Nothing personal. Just every since I was a kid, I always faced the door no one can sneak up on me,” I explained. I went back and had a good lunch.
There was more to it, but after a vivid dream like this one, we’re just waiting for the lunch picture of a mobster/politician with a body guard to hit the wires… odd looking future ahead, indeed.
Moron the morrow!