Our work in ‘matters economic’ are of more than passing interest. Already, even before the US markets opened, I’d made a “new Camry-sized bet” about what I thought will happen in markets today. It would be inappropriate for me to reveal the specifics of that trade because it might be construed as “financial advice.” So I won’t.
But let me sketch out for you the major problem that the USA and the G20 are facing, whether we like it, or not.
I’ve told you many times that I’m a fan of combined methods of predicting market behavior and that one of the major tools in the kit is Elliott Waves. First laid out by Ralph Elliott, the basic idea is that the markets “stair-step” up, or down, in a series of either three or five waves. For your reading list: R.N. Elliott’s Masterworks: The Definitive Collection.
Now here’s the problem which we’ve been focusing on in our chart studies over on the Peoplenomics side of the house. (No advice there, either, but more details and play-by-play.).
When the housing bubble collapsed, bottoming out in the spring of 2009, the world took heart and advanced until February of 2011. That was our first global Wave 1 up.
Obviously, a second wave followed and this one was down, bottoming in September of 2011.
As one would expect,, Wave III up came along and worked it’s way to a climax in April of 2015.
But alas, there was a fourth wave, as like Wave II, it was corrective, so down the market went until the bottom of Wave 4 which we pegged in February of 2016.
There are many features of our Global Aggregate work that should be mentioned.
For one, the first was up was “complex” This is Elliottese for Wave 1 being of the 1-2, 1-2 form. This matters terribly to us because one of the “soft rules” in Elliott studies is that if a wave 1 is complex, then the final wave 6 may be simple. (May work with waves 2 & 4, also depending on market…)
Which gets us to the final blow-off (globally in our work) that has run from Febr4uary of 2018 (wave 4 low) to the all-time high in the Global.
Should I tell you when that All-Time-High arrived? Let me give you a hint. Think back to the middle of January of this year.
Quite predictably, at least in our odd way of considering things, we then turned down…
In our global study, a first wave down took us to about March 23. We don’t run this index but twice weekly, and because of how money flows work in the real world, only the Friday USA closing numbers mean anything because there’s a brief period each weekend when markets pause. It’s the best time to take a “snapshot.”
Well, since March we have rallied quite nicely…Until May 18th. This is when things began to get interesting. You see, the May 19th rally did not better what we counted as Wave 5 up…so for now, it appears that a major global high is in.
Now to the two problems we’re tracking on the Peoplenomics side.
The first problem is how synchronized or entrained the US markets will remain if, indeed, this is the major move down (a 3 down) getting organized?
It’s not our preferred view, however. That’s a kind of “fat lady heard singing clearly and loudly” view. Instead, it would be much more elegant for the Global to experience only a modest decline, say for a half-dozen weeks, and THEN hit the top of the Wave 2 down around the end of August.
That, my friend, would set up the massive global blow-over in the October-December timeframe – traditionally a period when if markets are going to collapse,, there’s an “insert here” market from mid October until the Turkey Leftovers run out.
Still on the table is this first question: Can a possible rollover of German leadership (of the megalomaniacs of EU super-government) really derail the whole world? No, not really. But it may be blamed for a major erosion of Europe which has been stupid long-enough to facilitate a second (and by all appearances a successful) Muslim version of re-conquest. The Battle of Tours overturned, after how many years? I digress.
The “ideal case” – and I may remind you of this in August, is that the world should rally and the coordinated pumping of interest rates and money should present a last-gasp final burst of energy to cap off the global Wave ii bounce.
The Grim Reaper alterative is “No such luck, Bubba…we’re going hard down right now.”
Just as poker is both a game of skill and chance, so too is playing the market. Elliott Waves are “disproven by quants” but they haven’t tabled anything better; A few experts (one of which makes an occasional post in our Comments section whose initials might be GL) see indications from their work in fractals, as well.
Oh, final problem to consider: How much inflation can the global economic system withstand in all this?
Understand that if the market looked like it was doing down to, oh, 50 percent of it’s all-time peak, if you halved the purchasing power of money – thereby doubling the observable price of stocks – would anyone be the wiser?
Look around the country and see what people are doing with their lives? There’s a strong case to be made that even as the “number of loaves of bread” that could be purchased with a paycheck was falling by half, people these days are too dumb to figure it out.
For us? We’ll just keep trading with a target of making a single 2% gain per week. Because, thanks to the magic of compounding, one can make a modest few hundred percent annually.
The downside of my method is it’s all taxed as regular income. But the answer is clear enough to see: Would you rather pay a lower gains rate on turning $100 into $110, or the regular rate on turning $100 into a couple of hundred?
UrbanSurvival continues to profess living below one’s income and prepping for an uncertain future. At the same time, we’re huge fans of leveraging what assets you to have into something meaningful. If that weren’t so, we could have named the site UrbanSubsistence.
People who follow social media don’t make money.
People who follow markets stand a much better chance. You’re welcome to make your own choices, though. It’s what makes life a horse race.
Still, I spend 40-hours (and more) per week watching markets. When I read Computer game addiction: ‘I spend 20 plus hours a week gaming’, I got to thinking…Is Ure Addicted?
Madness on Bordering
Meantime, commies for their mommies? “Billionaire Slim, America Movil, could profit from election of Mexican leftist.”
Haven or Hell?
And yes, more hints about the FedGov under Obama trying to “set up” candidate Trump seems to be leaking out: “President Trump Ally Roger Stone Reveals Undisclosed Meeting With a Russian National.”
More on the ‘morrow, then… If things get really unruly in markets today (Yes! Chrome that Camry!) then tomorrow may be Peoplenomics a day ahead of schedule….depends how far “down”: looks today.