Short – and Hopeful
Big Picture stuff first, then data: As we advised our Peoplenomics.com subscribers Wednesday, there is still a case for the markets to move higher into early next spring. Sell-In-May Ultimate Edition.
We have a template for such a possible final blow-off: 1929’s final thrust lasted 91-trading days from final pre-peak. We don’t know (yet) if the
‘final low before ATH” is ahead or behind, now.
My pure Bearish nature suspects one more low before final launch. Not advice, but projecting a drawdown of markets to S&P 3,000 level before New Years. This would set-the-table for a 91-day Miracle Rally. Through April 2021.
That would be marvelous “frosting on the cake.” It could then end with the Chinese Reunification with Taiwan and the (real) Wave II of Coronavirus. Which, in turn (with perhaps some ‘off-stage help’) could be twice as bad as the present mutations. We look to dead minks and Danish courts for guidance along with other potential mutation incubators. (Minkubators?)
The reasoning for my going short for a few hours was simple: Long-ago I came up with a simple way to become fabulously wealthy but it requires too much actual work. Still, when I don’t use my technique, I can drop 10-large faster than anyone. To keep sharp, sniping for lunch money is useful.
The idea behind my irrational approach is simple: Make 1% gains – if possible – dozens of times per year. Law of large numbers thing. That one way the “Texas Hold-Em ” inclined gambler can mathematically stay “in the game.”
Since 1% intraday price moves are all over the place, the idea is to harvest a ton of these. It helps, of course, to be directionally agnostic. Playing video poker is, in my humble, one of the best short-term trading trainers out there. It’s less about “the market” (or the ‘deal’ of ‘shuffle’ so much as the money management decision-points.
Call it a casino – and not “investing” – and play it like poker. The real assets of life are not the ones on paper.
ToT: Powell’s Resume Day?
Might he Turn-On-Trump? Keep a close eye on Fed boss J. Powell in coming weeks. Like the talk he’ll be giving this morning.
Powell’s exactly right (and we figure with coaching from Ben Bernanke at Brookings) what America needs is jobs.
That ought to harmonize with the Biden Commissariat, but you never know. Powell’s got his Fed term to 2022, but Biden – or more specifically Harris – might want more “Made Up Money” than even what the Fed has printed so far.
Thing about long-term economics is there’s got to be mass destruction of savings to “fertilize” the next long wave of growth. Still hasn’t happened yet, in our view. The analog to the Tech Wreck’s $5-8 trillion hasn’t vanished, the similarly large collapse in real estate values of 2009 hasn’t happened either.
So we find ourselves wondering if killing off small businesses will be the “deal” in 2021.
Powell’s “resume problem” is that he can probably see (as clearly as us) than with no stimulus yet (and none likely till Feb. 1 or after) tens of thousands of businesses will be shuttering.
As we see it, and in Elliottesque terms, we had Job Collapse Wave 1 down in spring 2020 with Lockdowns. We have been in a Wave 2 job rally (easing of lockdowns). Which means with (new/fresh) Lockdowns ahead, Wave 3 down of jobs ought to become clear.
I think Powell sees it. But since Biden’s not running the new administration’s econometrics (and people like Kelton, Warren, and Sanders will hold sway) Powell may have an incentive to “Turn on Trump” a bit in order to fix what’s really broken in America.
So, The Jobs Picture
Here’s more evidence that Jobs has been in a Wave 2 rally in the weekly unemployment filings:
“In the week ending November 7, the advance figure for seasonally adjusted initial claims was 709,000, a decrease of 48,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 751,000 to 757,000. The 4-week moving average was 755,250, a decrease of 33,250 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 787,000 to 788,500. “
When these begin to click up again, it will mean the start of Jobs Down Wave 3. And with it – possibly the market will follow. After all, we have seen some linkage between Jobs and Markets already.
Dow futures earlier were down almost 200 points. But part of that (as we mutter till blue in the face) is likely due to dollar strength. When the strength of the dollar vis-a-vis other currencies goes up? It means it take “fewer dollars” to buy the Dow or any other notional. Which makes it look cheaper. In other words, down.
If the dollar remains strong, it could stop BTC’s run at $16,000. There’s a fair bit of “slop” in how financial gearing works. Totally out of tolerance for machinists and Technocracy believers alike. Whether that’s crookery or merely a side-effect of Greed, or grease? Harder call…
Now to CPI Data
The Biggie is – of course – the Consumer Price Index report just out:
“The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in October on a seasonally adjusted basis after rising 0.2 percent in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.2 percent before seasonal adjustment.
Component indexes were mixed, with many offsetting increases and decreases. The food index rose 0.2 percent, with the food away from home index increasing by 0.3 percent and a smaller 0.1-percent rise in the food at home index. The energy index rose 0.1 percent in October as the index for electricity increased 1.2 percent.
A couple of discussion points:
- A bit of hyppy talk on the financial channels, so it’s cast as not the end of the world.
- The long-term trend looks like this:
But, we have to wonder what will happen to the Housing component when the eviction time-out ends? And if Energy prices start to rise…
While We’re Waiting…
…to roll with “Daytrader catching falling knives” other events pale in comparison to money. These rivet our attention:
Whatever happened to the Ant Group IPO? “Jack Ma’s stalled IPO is about more than Beijing saving face.” Wasn’t there an early rock song foretelling of this? “Ma, Ma, oo Mao, Mao, Ma, Ma, oo Mao, Mao…” (I still “hear this song everywhere I go…”)
[Decoder Ring for Children under 60: “Papa–Oom-Mow-Mow” is a novelty nonsensical doo-wop song by the Rivingtons in 1962. It peaked at number 48 on the Billboard Hot 100.” You thinking someone didn’t take his meds this morning?]
Marking time to Reunification of Taiwan “Trolls Get Creative After WHO Censors Taiwan.” We’re secretly “Winnie the Ping” fans.
Pardon Us for Asking: As Time rolls with “Donald Trump Couldn’t Be Prosecuted in Office. What Happens When He Leaves?” Ure is wondering if a sitting President can – you know – Pardon Himself? I mean “Excuse Me” is already in common law or use isn’t it?
The Battle for New York is Over. Texas seems to be a Contender. “Nasdaq, Other Trading Exchanges to Meet With Gov. Abbott.” Just so, Grasshopper. If George won’t move to the Mountain, the Mountains will have to move here, then…. (taken ’em long enough…)
The downside to all this is I’ve seen it all coming, though you may not remember it. But, here’s “the deal” from the memory banks.
Ure has a Flashback
Long ago – like when we bought our initially little 12.82 acre slice in 2003 (later added adjoining land to it) I told you I loved everything about Palestine, Texas – EXCEPT the name. Our closest analog to the Gaza Strip is the Mexico border and that’s 350-miles away.
I proposed (though no one took me seriously) that we rename both the City of Palestine and Anderson County Texas.
I would have renamed the city Tomorrow, Texas. (And as the markets meeting with Abbott shows, that would have been a prescient name, indeed.)
“Anderson County?” We would have renamed it Maybe County. As in “Where do you live?” “Maybe.”
Such that when all spliced together the brutal Truth of the Future would become clear to all: Tomorrow Maybe Texas. Playing in a world near you sooner than you might think. You go, Greg!
Around the Ranch
Quiet and peaceful-like around here. The whisper of breezes in the tall pines and the soft hum of the 3D printers…
Zeus the Cat has tired of sleeping in the armoire in our bedroom. (Zeke pushed some of my shoes out to make a nest for himself.) After figuring out that sleeping in the middle of the doorway between the master BDR and bath was a “free kick zone” he moved into the walk-in shower next. We’re not sure where his next hideout will be.
The Route(r) to Happiness
Sign-making projects loom around here – maybe for next week.
The sign on our front fence was dinged by the garbage truck turning around (they also nailed the mailbox, though on a different day – nice of ’em to spread the damage around). Split as it is, time to do something a little different…a new sign is in order. Rebranding opportunities galore!
I’ve come to consider my personal Wealth to be defined by the number of routers I own.
- Two DSL routers
- A ViaSat router
- A Formica 1/4″ trim router
- A Bosch 1/2″ 300 HP grown-up router
- A Bosche “Pony ” router for sign-making
- A Dremel router (attachment) for the real detail work
This latter is seldom used – I detest details, if’n ya’ll hadn’t noticed!
Signs are a lot of fun. People take visual cuing easily, too. Think of the role of signage at Disney World, for example. How would you know it was a Haunted House? Sign sez so… Though even the nature of human visual prompting is changing. Everything else has slipped the moorings, so why not?
Why, we’re so old that we remember when a sign reading “Women” on a door would keep all men out. Now, signs like that are becoming the basis for lawsuits. Says something about the direction of visual cuing in society, but it’s coincident to the collapse of fashion into blah-dom as well.
‘Nuff musings… 4,000 words (and that’s just the project list) plus 5-actual projects and a video call to do before martinis.
Write when you get Rich (or if Rich gets you, for that matter),