CFNAI, A Bounce for…??? Media Coverage and Segregation

Busy as hell around here (though I know it has been coming).  Spring is in the air and for one old man, two deck plans and a generator shed plus greenhouse repairs, plus…  well, to the column, huh?

VIX, Volatility, and CFNAI

We figure another hard down (or blow-off rally) will happen this week.  Because of bank settlement day Wednesday.  Which you don’t read much about – because when I put it to AI, what I got was an admission that there’s not too much written about it:

“There is some evidence suggesting that institutional timing—like bank settlement days—can affect market liquidity and trading behavior, which in turn may influence volatility around those days. In some markets where settlements occur on alternating Wednesdays, researchers have noted that trading patterns (and hence volatility) may be somewhat different just before or after settlement days. For example, liquidity adjustments (as banks mobilize or absorb funds for settlements) might cause a temporary spike or dip in trading activity, which can be reflected in volatility a day or two either side.

However, the research is not entirely conclusive. While studies on day?of?the?week effects sometimes point to midweek anomalies that could be partly driven by settlement procedures, other analyses find that once you control for other factors (like information releases or general liquidity cycles), the specific impact of settlement days is less clear. In short, although a correlation is plausible in some settings, it does not appear uniformly across all markets or time periods.

Further, the magnitude and even the direction of such an effect can depend on the details of the settlement system and the overall market structure. More targeted research with high-frequency data would be needed to isolate the impact of bank settlement days from other calendar effects.”

Still, you can step back a ways and see that when changes of macro trends are in the air, there are lumps and bumps over a top which are useful to study.  Some – arguably like Warren Buffett – will see the trend early and will jump ship before sinking.  Warren Buffett Defends His Growing Cash Pile – WSJ is mostly on point.

And one key trend we will learn a lot more about this week is the future of AI.  I’m betting on the software side of things, but we will know more about hardware – like all those high-end repurposed GPU designs when Nvidia earnings live: what to expect as the AI semiconductor giant announces results. I may have a lift to lead, so watching is not high on my priority list, but let’s go over to our Ebbinghaus model and see what future may portend.

Here’s is the zoom-in based on our Ebbinghaus-Ure model as of the close of the NASDAQ last week. The current closing number is the medium blue line that fell off a cliff Friday. Notice how it even goes below the lowest orange line?

The red circled area is what I was yelling about how we should be “Looking out Below” and then, well, you see what happened…above.

Now, here’s the point:  The lowest trend line (pieced by the light blue) is a kind of puke-orange-salmon color.  (Not our pallet, but whatever…)  This is known around here as “Sheet!NX60” and specifically Series 14.

Which could be anything, but it’s not.  It’s our half-cycle indicator, a 42/43 day moving average of the tech market.  But my point is simply this:  We have seen in other market moves how the Aggregate Index comes down to the 85 DMA and gets a rally going.  We’re almost there, so bounces are possible.

We also know that when we had a little nosebleed like Friday, the Thanksgiving break, the decline did not go below the 43 Day.  It hit just below the 20 day moving average but then stayed above that moving average until December 18th.  We will talk more about Ebbinghaus on Peoplenomics Wednesday.

For now, the least surprising future based on trading in Europe and such would be an “inside day ” today, not going above Friday or lower.  Then, with the VIX (volatility index) coming down, the Bulls ought to put on a “buy the rumor” ahead of Nvidia earnings.

Then we will be in position to break again.  (We don’t know IF we will, but weakness going into NVIDIA might be taken as potential good news coming. Or the reverse if we rally.  Because somewhere, someone, already knows and will set the stage to stack a little cash.

To Hold GOLD???

OK, the OTHER big mover this week *(outside Ukraine and Hamas being pricks again) is 400 tonnes of gold reserves at Fort Knox: US President Donald Trump to ‘find out’ how safe the repository is… IF we get a tour and IF it’s live (as Musk has mentioned) THEN we could see an explosive more up (or down) from around present levels.

As one reader noted, there are lots of claims about how much gold is “paper” and how much is physical.  So we put the question to our (ChatGPT) AI pal:

“• For gold, the universe of paper instruments (futures, options, ETFs, and other derivatives that “represent” gold) is often estimated to be roughly an order of magnitude—or around 10 times—as large as the available physical bullion. In other words, for every ounce of gold sitting in vaults or held by central banks and private investors, there might be claims on roughly 10 ounces of gold traded on paper markets.

• For silver the discrepancy is even greater. Because the physical silver market is much smaller relative to the explosion in derivative trading, some estimates suggest that paper silver may be anywhere from 30 to 50 times (or even more) the physical silver available.

It’s important to note that these figures depend on how one defines “paper” (which instruments are counted and how they’re converted into a physical-equivalent weight) and that market conditions and reporting methods change over time. In short, while no single authoritative ratio exists, a commonly encountered ballpark is around 1:10 for gold and perhaps 1:30–1:50 for silver.

Still, if you round off a bit, gold at $3,000 times 10 could be around $30,000 an ounce.  Silver could be (even at 1:30) $990 – call it $1,000.  At 1:50 it’d be around $1,650.

Of course, if that happens, the Ures will take a few days off to move to a huge compound on a lake somewhere.  But, likely not.

See, there’s a trick to this paper gold thing most people don’t think about.  The FedGov has historically valued the gold at $40/ounce.  Does this mean there could be paper leases on America’s Gold?  Well, sure. All the Audits of Ft. Knox (and don’t leave out the NY Depository!!!) wouldn’t resolve the truth of that.  UNLESS Trump were to compel the Fed to release ALL LEASING ACTIVITIES AROUND GOLD.

Bet there’d be some hand-wringing and bed-wetting on that prospect, huh?

OK Eventually we get to…

CFNAI

A tad weaker:

“The Chicago Fed National Activity Index (CFNAI) decreased to –0.03 in January from +0.18 in December. Two of the four broad categories of indicators used to construct the index decreased from December, and one category made a negative contribution in January. The index’s three-month moving average, CFNAI-MA3, increased to +0.03 in January from –0.13 in December.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.10 in January from –0.07 in December. Thirty-nine of the 85 individual indicators made positive contributions to the CFNAI in January, while 46 made negative contributions. Thirty-four indicators improved from December to January, while 50 indicators deteriorated and one was unchanged. Of the indicators that improved, 10 made negative contributions.”

Stock futures remained pointing for a hard bounce up at the open.

Sorry for Our Prescience

(again)

Let’s go back to our Valentine’s Day column on the 14th.  Where I wrote “… Say, you don’t think the movie Conclave was a message in advance, do you?”

We have movement on both the movie and the Papal front.  Pope first (we go by seniority around here.  He’s looking at possible early signs of kidney failure.  But the prayers and happy-talk continue: Pope Francis, in Critical Condition, Is ‘Resting’ in Hospital, Vatican Says – The New York Times

Now, on the movie, Conclave, cast and crew won for ensemble at the (assuming you remember SAG is the Screen Actors Guild) SAG Awards Winners List 2025: See Who Takes Home The Trophies.

Scrolly Rollers

In other Holy Scrollers! today:

The Ukraine War cha-cha continues to entertain: Foreign leaders visit Ukraine to show support on war’s 3rd anniversary. We don’t see it as anything other than a management tool of the global elite to keep making up jobs to make more useless shit (to put in storage units) as I outlined in my book The 100-year Toaster.  Which continues to be one of the least-read books on Amazon, lol. Point of that book is that planned obsolescence has been a dandy escape from genuine human spiritual advancement.  But, not like we need any more, right?

We continue in awe of the Trump H.R. picks.  It just keeps getting better and better: Who Is Dan Bongino? Right-Wing Commentator And Ex-Secret Service Agent Named FBI Deputy Director. We’re just guessing Senator Schumer won’t be thrilled…but only Monday morning spidey-sense.

Except for the “trade dress” issues, we’d do a Good Housekeeping  award for: The Trump administration is putting USAID staffers on leave worldwide and firing at least 1,600.

Germany conned again.  (Why can’t these people do better picking leaders?) German election victor Merz plans pivot from US as coalition talks loom. Plans pivot from suckling us and Ft. Knox? Naw..all for show.  Same leach class, new marketing campaign.

BTC unable to break over $97,000 for the weekend.  US Bitcoin ETFs lose $1.14B in two weeks amid US-China trade tensions. Well, that and and a hack, right?  But hype springs Eternal in the wallets of humanity:  Montana House Rejects Bold Bitcoin Reserve Bill: A Missed Opportunity?  We were looking for Montana ranchers to start raising “virtual cattle” if this had passed…

OK, some Actual thoughtful perspective now: Designing For Gen Z And Alpha: 5 Insights From The Next Generation Of Innovators.

And to wrap the headline scan, since I have a daughter with peanut allergies, this is of keen interest: Peanut Allergies: The Hidden Environmental Factors.

Around the Ranch: Rural Fiber Fairytales

Let me say up front that this is a rant about media impact on du jure segregation.  Where (if you cut Latin ) “De jure segregation is the legal separation of people based on characteristics like race, religion, gender, or age. It’s enforced by laws and government policies. ”

This frenzy of ADHD-crazed thinking was touched off by my remarks about the virtues of “two or more remotes” for every electronic device. Which was in the ShopTalk Sunday column here.

See, when I was growing up (on the side of Beacon Hill in Seattle), my pal of 73 years, the Major, lived up the hill from us by a hundred feet of elevation, or so.  But small as that may seem, it meant that he had great television reception on some channels that didn’t even show up on our screens.

You see, in the early days of television, the amazingly high towers for transmitter antennas were not around.  As a result, since V and UHF TV travels like a light beam, only the highest income parts of town got good TV.  Stations went where the money was.

Now, in Seattle (the ghetto) part of town (always reverently The Central Area) had some pretty-well shadowed signal areas.  As a result, the backside of Capitol Hill was always “in the dark” so to speak. One of the slowest areas in town to benefit from housing inflation.

Now walk with me out to the power pole in the front yard, where about 30-feet of fiber is neatly aging in place.  We were supposed to have Rural Fiber in here at least a year ago.  Nope.

One excuse was an industrial accident (a fatality) so work stopped for months while lawyerization moved along.  Then, the money hasn’t gotten from Spectrum to the system builder year (goes the story, anyway) so work is stalled “We have to finish the first section near Athens (texas) before we can run your fiber…”  went the conversation with one supervisor.

But now, we get to the “social engineering aspects” of not getting Rural Fiber finished:  We think that the Universe is arranging for as many City Hostages as possible.  Yep. Keep ’em in the mid-rise buildings and not building deer stands…I can visualize the greedsters planning your 250-square foot future now.

“Hey, if we sell them an 8K VR headset so everywhere in their 250-feet of living space can pretend to be somewhere else, hey wouldn’t that ought to keep them happy, huh?”

We haven’t drunk the Kool-Aid yet.

But behind the headlines, we can hear the tinkle of the ice in the glass pitcher being stirred.  And that face in the frost on the pitcher…wait, wasn’t he a news anchor back when we had local news on teevee?

How digital paywalls are quietly reshaping (and reducing) local news coverage.

So are inexcusable delays finishing Rural Fiber.  There may be Trump. But we still have bullshit bureaucracies. Useful to keep housing segregated, ain’t it?

Write when you get rich,

George@ure.net