Depression Warning: Is it a “1-Down” or a “4?”

These are interesting (trips-to-the-bathroom-inducing) times to be trading the markets.  Another 500-odd Dow points to the downside Thursday reminds us of several points average people will miss.  If I may?

  1. We are reminded that the fiercest forces of all are Mother Nature’s.  The remnants of hurricane Michael certain underscore that.
  2. Political assumptions are all mostly BS and group-think hyperbole.  Although some speculate the market decline this week is the investment community realizing that Trump may lose “control of Congress” in the elections just three weeks off, the reality is that more than half the so-called republican party has been ready to sharpen their axe in Trump’s back the whole time.  I don’t call the turncoat imitation republicans the spineless Jellyfish Party without cause.
  3. Economic in America still depend on the constant growth model in order to survive.  If we don’t have a “hot new industry” up and coming, there’s nothing to grease the skids of growth and hiring.  Fact is, both the devastation in the Florida Panhandle – like the Houston debacle in the rain – will overall fuel growth.  In a real sense, natural disasters are where America rocks it.
  4. Depressions are never far off, however.  We are seeing stories already about the coming of robots as human replacements – and for an example look no further than the stories about how Las Vegas workers could be replaced. If We the People don’t DEMAND an income-tax equivalent on human-replacement technologies, we are doomed.  On the other hand, adjusting the income tax rate on robotics could result in a kind of “adaptive technological economy” that might work over time.
  5. Failing to keep the infantile system we have in place now (with the “watered-down purchasing power scam” called “deficit spending” we will surely live to see it “all end badly.”

That’s a kind of broad brush top level view from an historical-economic perspective.

Future history is written  daily, though, so we need to drill-down a bit and size up the playing field and see what’s immediately in our path…

Futures are pointing toward a +300 or even +500 point day.  The market has come down one hell of a long way in a short period of time.  Conspiratorially, there are plenty of people I know on the fixed-income side of markets who send me notes saying (in so many words) “I told you the rich democrats would try to crash the market ahead of the election because Trump has tied his future to stocks…

That is actually not a bad view, but democrat conspiracy believers may not enjoy our nearly 70-years of perspective on things.

The point is that Markets NEVER go straight up OR straight down.  They tend to come down 2-3 times faster than they go up.  But, they always do so in fits and starts.

As a result, the waves become semi-predictable.

Take today, for example.

Here’s what the daily trading data looks like in our proprietary (Peoplenomics) view of the markets:

If you follow Elliott Wave Theory at all, you can see how things are working out quite clearly.  The recent rally since the lows early this year, suggest that we are in a final fift5h wave advance.  You can see the wave 2 bottom and a green line off to the right.  As long as the present move does not go below the green line on a daily (but more importantly weekly) closing basis, we see the strong possibility of a blow-off high that will lead to new all0time highs in 2019 – about May, or so.  That’s based on market history and embodied in the Wall Street adage “Sell in May and Go Away…

On the other hand, if we rally in here, but fail to hold and move up to higher levels than the top of the 3, then yes, this would stop looking like a 4 and it would turn into a 1 down of a larger-degree move.  Would that be bad?  Of course.  But, even so, it would not be the “end of the world” – at least just yet.

That’s because wave counts act in a semi-predictable fashion.  And while you may not subscribe to our website, I’ll give you a “freebie” this morning:  We will now likely rally until we get up to the bottom of the blue trend line above.  This rally could take several weeks to work out.

The Punchline?

About the time we get to the blue trend line, we will arrive in three week’s time at Off Year Elections.  And the markets will be in an incredibly graceful period from a technical analysis standpoint where they could break either  way.

In other words, it’s beginning to look possible to me that the election outcome will decide which way the market rolls for the next three or four years.  If Trump loses the Congress, then we know what will happen:  The demagogue party will attempt to impeach Justice Kavanaugh, the budget will become contentious and a train wreck.  Political correctness and innuendo will prevail, and the Obama-style division and conquest of America via Sanctuary Cities, the new faux Socialism (with doesn’t work any better than the old way) will be promoted deeper into the culture, ensuring we lose out broader views, clarity of independent-thinking and ability to adapt.

Then, come 2020, all the demagogues have to do is find the perfect FDR clone because by late 2019, we will be into the second Depression head-on.  People will be manipulated into demanding change.  That’s  the Wave 1 down scenario that lurks.

On the other hand, if the spineless Jellyfish Party wins, we will likely see what?  Well, more than half of Congress will still be anti-Trump – because of the half-assed imitation “journalists” who can’t report unbiased FACTS to save their souls.  The Trade redistributions will continue and the Fed Stealth Inflation – commenced under Obama to paper-over the Housing Bubble collapse – will continue to run its course.  Gold and Oil (and anything else of tangible value (real estate and so on) will continue to soar…and though lots of people will whine about prices…the slow rise of the market will continue.
Driven not so much by “free markets” but because if there’s 5 percent real inflation, then the markets will go up 5 percent per year for maybe another year, but more likely 9-months.

I don’t mean to get all philosophical about this, but it’s important to look at the longer view and to try to keep your wits about you.

We know Elliott Wave 2’s can be Fibonacci Numbers, so a 31%, 50%, 62%, or a 75 even 80% retracement rally could continue through elections.  By then, we really ought to be around the blue line (overhead resistance if this is a Crash, or moving above it, if not).

This is NOT INVESTMENT ADVICE, but a simple discussion of how the Market’s may at times telegraphy our shared nominal reality to come.  But, at other times, when the future is less clear or certain, the markets will reflect a reality that could turn one way – or the other – and still deliver a valid wave count.

This is not a perfect view of things, but it’s worth what you paid for it and it’s based on a non-corporate and almost apolitical view, save my bias against people who water down the purchasing power of our earnings and who deficit spend when we should be in a balanced budget mode.

Our subscribers will have a leg up – because of a spreadsheet on the Master Index page.  It let’s them put in a wave 1 move and then consider various bounces and outcomes. Not that any will come precisely to pass.  But, as is said “In the land of the blind, a one-eyed man Is king…”

We therefore expect a small wave 1 up into options expiration Thursday and Friday, then a small wave 2 down of the rally, then a Wave 3 up to the “blue line in the sand” around elections.

See how easy it is to “see the future?”

Hot Data: Import Prices Rise

From Labor:

Prices for U.S. imports increased 0.5 percent in September, the U.S. Bureau of Labor Statistics reported today, after declining 0.4 percent in August and 0.1 percent in July. The September advance was led by
higher fuel prices. U.S. export prices recorded no change in September following declines of 0.2 percent and 0.5 percent the previous 2 months.


Import prices advanced 0.5 percent in September, the first monthly increase since a 0.9-percent rise in May. The upturn reversed the declines in each of the previous 2 months. Prices for overall imports rose 3.5 percent from September 2017 to September 2018 and have not recorded an over-the-year decrease since the
index fell 0.2 percent in October 2016.


U.S. export prices recorded no change in September following declines in each of the previous 2 months.  Those were the first monthly decreases since June 2017. In September, lower agricultural prices offset  increasing nonagricultural prices. Despite decreasing over the past quarter, prices for U.S. exports advanced
2.7 percent for the year ended in September.

Hmmm…so five waves up to options?

Which Gets Us to Next Week

Retail sales and Empire State Manufacturing come out Monday.

Tuesday rolls industrial production and capacity utilization.  Then Wednesday some Housing data will be along.

In and of themselves, nothing particularly earth-shaking is expected.  Besides, if the market is in “double-A fuel dragster burnout rally into options” whatever the news is willo be spun to support the drive to the decision point around Elections.

The rest of the days news is rather boring.  I’ve considered picking up a Bobcat skid-loader and going over to Florida to lend a hand and make a buck…were I just 50-years younger, right?

Which Means What?

Working today on some articles for an upcoming Prepping series called ICOD – In Case Of Depression…

Remember, even  if this is NOT a sustainable rally – the mostly likely date for a mega crash is not until 55-days or so from the most recent All-Time High.  Which means we have until November 26th, or so, to get ready.  Have everything wrapped and prepped by Nov 20 if the Jellyfish lose congress…

My sense is that IF the demagogues (and not the Jellyfish) win in November, there would be a Thanksgiving period Terrorism Event (likely a false flag) in order that the demagogues would have plausible deniability for economic collapse.  Got to have a sock-puppet for the media.  So, something like a group of pro-gun, conservative white guys would be ideal for public manipulation.  Maybe even a chance to roll out the FDR clone.  Sheesh…I  gotta start taking my “alternative future/contingency planning” meds again.  Will hit the package store today to pick some up….

I’m not the only one, though.  Our top comment of the day so far from readers”

Aaaaand for those that need their dose of conspiracy theories this morning there’s the infamous 1988 cover of The Economist saying 10/10/2018 “Get ready for a World Currency”.  With the markets tanking on the very day how much fun is that?  There are other videos better than this but this is all I have time to find right now:

See how much fun we could all have if we just take the mark of the digital beast to come…

Playing the Public Heart

BMW says trade war could hit 2019 results by up to 500 million euros.  Toughski Sh*tski – if they were made in the USA by Americans… know what I’m saying?

Johnny Depp ‘felt bad’ for JK Rowling over casting backlash.

Useless Newsless

Examples today include:

Hold on to Your Fascinator! Windy Windsor Threatens to Ruin the Royal Outfits at Princess Eugenie’s Wedding.

These states still don’t see attacks on LGBTQ people as hate crimes.

My point?

If you didn’t see “headlines” for this stuff, would it impact your life?  No?  Didn’t think so…

OK, off to play with the new Beverage Antenna that my buddy the Major and I got done yesterday.  Measuring about 15-dB of front to back ratio on both 40 and 80 meters if your a ham radio-type…

Moron the ‘morrow…,

20 thoughts on “Depression Warning: Is it a “1-Down” or a “4?””

  1. George

    “Failing to keep the infantile system we have in place now”

    That system was put in place by the theives of Jeckal Island over 100 years ago. The J.P. Morgan types who know no bounds to their avarice!

    Fiat money and an IRS to feed stolen “Taxes” to a privately run central bank that charges us a fee to create currency out of thin air.

    It can only end badly.

    I fear for my Grand Children!!

  2. I think this system of “watering down purchasing power” was put into place long, long ago. Look to the times of Judas Iscariot.

    The story foes back in the day Judas Iscariot gave away 30 pieces of silver. The recipients found it to be enough silver to buy a defunct clay mine.

    Capturing this moment an American silver eagle can be had for $16.63.

    $16.63 x 30 = not much land at today’s value.

  3. The Jellyfish will probably lose Congress, but my preference is that they do not. But,if they do, the blame is on the dumb as a sack of marbles President they helped elect. Everyone…Please read Bob Woodward’s new book. It will enlighten you.

    The Blue Wave would not exist if any other Republican would have been elected. Any other President would have passed the tax laws. Any other President would have ridden this surge in the stock market and economy wave. Any other President would have demolished Obamacare. None of it was Trump. He couldn’t murmur five consecutive words coherently about any measure he signed.

    It’s Trumps mouth and fat Twitter thumbs that has caused this so-called blue wave, anger and divisiveness. Nobody and I mean nobody really likes this guy and they are all scared to death about the future of their party because of him….and yes, the GOP have become Jellyfish, because they won’t stand up to him and bring normalcy back to politics. They are spineless and would rather sadly sit on the sidelines and watch their party crumble, rather than shove this 5th grade brain, tax evading, silver spoon sucking, living on daddy’s half billion dollar loser out of town.

    It’s sad…The GOP is better than this.

    • Looks like George is Brought John back the troll this time he is a payin troll who does nothing but bash the president.
      Put some soap in Mark’s mouth may be as old as he is he’ll learn some manners yet

      • There is no cure for ‘Trump Hatred’…it is a non curable disease….that devours closed and hardened ‘small minds’…..leaving the patient maladjusted to a civil society….imo

  4. Au contraire, George. If the Dems get the House, it would be idiotic to Impeach Trump. Remember Clinton. The rebound would kill them.

    Duh. Any Conservatard knows this. Double Duh. What you guys (rightly) fear is the House’s SUBPOENA powers. And so, the dishonorable disinformation campaign continues.

    But like the Catholic Church, or Volkswagen, you can’t sit on and cover up corruption. Best, Mike.

  5. A beverage antenna, damm ..sure have come a long way from Cambell’s soup cans and a string. What do y’all call the new beverage cans and a wire – Redneck Radio, Rural Wanderings,…”this is the palastine pistol coming to you live! from somewhere east of the Pecos River”

    MHO,Deficit spending is an illusion when you own the printing press and worlds reserve currency. See vodoo economics from Rockin Ronnie Ray Guns era. TRUMP is keenly aware of this, it is part of the “show” try to get over it.
    FACT – JP Morgan had very little $$ when he died, all his wealth actually belonged to…wait for it…Rothchilds. I suspect peeps like oracle of omaha(buffet) have similar “deals” today.
    ROE v WADE taken down and pushed down to the Sates to decide on whether or not they want to profit from selling unborn baby parts & pieces for big $ every single day, cept Sundays…some reason they have a problem with infant slaughter on Sun day. Just like Roe v Wade being taken down, the FED and IRS are in the killbox as well.
    A lot is at stake in this here WAR for our SOULS, and you all just thought it was about, Abortion, LGBT rights and Environment (PARIS Accord = Multi Trillion $$ New World Order Scam to suck $$ from USA).
    Off to battle the machines,I am afraid the market is going to do a”Johnny Cash” on Monday and am preparing accordingly, as my fav long playing Juke box tune by Johnny Cash says..”down, down, down in burning ring of fire”.

  6. This sardonic humor has been foisted on us by the gods! The creation of a creature (the FED) at Jekyll island, very appropriate. We have seen the benevolent actions of Dr. Jekyll (QE and other stuff), now we will see the actions of his alter ego, Mr. Hyde. This is so ironic, hard to believe people actually picked that island to build an institution that has a Dr. JekyllHyde personality. The gods must be laughing like crazy!

  7. “Hate crimes” are stupid. A crime is legitimately measured by how much harm is caused to how many victims. IMHO, no victim – no crime. If you shoot a cop or a regular guy, the person is still hurt or dead. Again, IMHO, no difference(unless you’re shooting someone to stop his/her crime). If you violate a black, white or Asian person – no difference in severity, and no hate crime, simply a felony. Same if it’s a man, woman or child. All lives of law abiding citizens must be considered equal.

    Regarding unemployment – until a Las Vegas robot has the skills, appearance, feel and willingness of a courtesan, Las Vegas women have nothing to fear.

  8. The Elliott Wave Theorist has been calling for a major market top for the past year. If the Elliott socionomic-fueled analysis is correct, then the market is going to keep going down for the foreseeable future. My own take on this is that Elliott waves are a better tool in hindsight than for timing. Nonetheless, the prospect of an extended market dive due to a sudden reversal in social mood is real. There is only so long the constant euphoria can be maintained in markets of all types.
    So far none of the political and talking-head analysis of this week’s market turmoil has really uncovered a smoking gun. That all the “experts” are pointing fingers in every direction scores one vote for an old-fashioned investor panic due to an abrupt social mood change. Think bipolar Monday hangover. If the markets continue to go down with every wanna-be economist mouthing off his pet theory, then score another vote for the socionomics explanation.
    The amount of creative and unconventional investment buying in all the markets has been at or approaching record heights for quite some time. I suggest reading back-issues of the Elliott Wave Theorist going back to last summer for the background statistics if you don’t believe that. Euphoric buying sprees and stealth margin-buying are set ups for a market panic. Stir in ETF’s and stop-loss automatic selling, and you have a stealth financial WMD scenario in the waiting. Watch your investments closely.

  9. Increased market risk. The market for the last 1yr +, has been punctuated by low volume trading making high profit gains. The future market cannot support this. The current market will only offer nickel and dime gains. These small percentage gains will require higher volume trading in order to continue paying dividends. Higher volume trading has a much higher inherit risk factor than trading in lower volumes. lol

    The only politics involved is designating a scapegoat! lol

  10. An old ham friend… back when beer cans were steel yet… soldered together a stack of beer cans as tall as he could get it and installed it as his ‘vertical beverage’ antenna. I’m guessing that materials gathering was the most enjoyable part of the project.

  11. Brilliant, George! If this essay isn’t a “keeper” I don’t know what is? However, the tricky part will be to workout the ‘risky details’ between points 3 and 4.
    Thank you, I’ve already read it several times. ;-)

  12. ?????
    I don’t think it really matters which side is voted in during an election..
    The elections are split.. Half run this election half in the next..the puppeteers have a strong hold on the weaknesses of our legislators and legally can do what they want to persuade our legislators without any fears of retribution.

    That’s where the old saying takes one bad apple to spoil the bushel..well if half of the bushel is rotten and 98% of the ones up for election are guaranteed to keep their office..well its a no brainer to figure out SSDD applies..heck this year how many billions was gladly donated to our legislators.I truly don’t believe they enter Congress during their first term with the idea they are going to sell out the people..but they are in a bubble..really don’t spend any time in dc and the puppeteers have their total attention and money to burn to persuade anyone on anything..everything is for sale at the right price.(a quick and interesting thought on this but my sentiments and political positions could be changed for a lot less than they’re donating to the rat pack along with a trip to Disneyland lol lol)

  13. We love Trump,
    But he has to change the Charter of all Corporations ,
    because the Corporations are owned by the same people that own the Federal Reserve and most of them live in a different country . Trump needs to kill the Federal Reserve and print our own money and change the Charter of all Corporations.

  14. Sure would like a schematic on that Beverage Antenne. Checked Wickapidia and there was a description but no schematic. Also indicated one side (the shield) side of the coax goes to ground???? although it did not say coax, I suppose it could have been ladder line?? and gives no feed line length?? thanks OM JJ

Comments are closed.