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?
- We are reminded that the fiercest forces of all are Mother Nature’s. The remnants of hurricane Michael certain underscore that.
- 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.
- 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.
- 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.
- 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 Peoplenomics.com 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.
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 Peoplenomics.com 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
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?
Examples today include:
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…,