Fresh Inflation Data – Waiting for Flameout

The strategic question all investors – regardless of where you roll the dice, BTC’s, stocks, commodities, ForEx and such –  is when (and how) does this puppy ‘flame-out?’

To be sure, since the Christmas Eve washout, our Aggregate Index (which averages multiple market benchmarks) as soared from 19,841 to the Wednesday close to 25,377.  Since you may not have a calculator handy, that’s a 27.9 percent gain.  And  that is not even using other people’s money.  That’s what you could have nailed if you put your 401K dough into something as stodgy and boring as the S&P 500 index.

Ah, but making ‘big  imaginary money in the rearview mirror is always easy.  It’s the going forward that’s tough.

As you know, our outlook is that the market will go up at least until the middle of August – and maybe even into the fall a ways.  But, sometime between August 15 and May of 2020, we would expect a large decline to get underway.

And yet, here we were – looking at pushing the S&P to a close over 3,000 (not just a toe-in-the-water intraday peekaboo) – and then out comes the CPI report:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in June on a seasonally adjusted basis, the same increase as in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6 percent before seasonal adjustment.
Increases in the indexes for shelter, apparel, and used cars and trucks more than offset declines in energy indexes to result in the seasonally adjusted all items monthly increase in June. The energy index fell 2.3 percent as all of the major energy component indexes declined. The food index was unchanged as the index for food away from home rose but the index for food at home declined.
The index for all items less food and energy rose 0.3 in June, its largest monthly increase since January 2018. Along with the indexes for shelter, used cars and trucks, and apparel, the indexes for household furnishings and operations, medical care, and motor vehicle insurance were among the indexes that increased in June. The indexes for recreation, airline fares, and personal care all declined in June. “

The all items index increased 1.6 percent for the 12 months ending June, a smaller increase than the 1.8percent rise for the period ending May. The index for all items less food and energy rose 2.1 percent over the last 12 months, and the food index increased 1.9 percent. The energy index, in contrast, declined 3.4 percent over the last 12 months.  

The problem with all of this data is that even when you thin you have a clear vision of the future, you’re bound to get out too early, thus losing the final part of the rally.  Or, you will get out too land.  In which case, pencil out what a thousand point down day would cost if you can get out even then

Which gets us to where the markets may go next.

For the bearish types, there’s The Week trying to explain in “Investors are fleeing stocks. So why is the market still rising?”  And adding to the bearish case is there’s one of our favorite people, “Art Cashin, wearing ‘S&P 500 3,000’ hat, warns of rising recession risk.”

On the bullish side, there’s J Powell of the Fed saying that he’s open to a quick rate cut as conditions develop.

Now here’s the thing you have to keep in mind.

There are generally three kinds of investors.

One type get classified as pattern day traders.  Under FINRA Rule 4210, these people keep at least $25,000 in their account at all times and they can pop in and out of stocks at their pleasure but they understand settlement rules, margin, and that sort of thing.  (Saw a feller like this shaving this morning…)

Then there are “swing traders.”  These people don’t like the poker table so much as the craps table, to put it in casino terms, because there are some situations in craps where it’s an even-money deal with the house and if you know the Martingale concept you can sometimes get luck.  Other times you bust.  A lot of day traders would rather be swing traders because it’s a little more relaxing that watch a one-minute chart of fast and slow stochastics along with short term OBV all day.

Then there are “position traders.”  They look as something like our “slow money” average on the Peoplenomics side of the house and they go long when the market’s in a longer-term big up move (like the one we’ve generally been in since 2009, with a Christmas break last year and such).  When the market is below the long-term average, they roll into cash, sleep like babies and way for the world to stop being so manic.

The question, therefore, is what kind of Trigger Puller are you inherently wired for?  If you don’t like gunplay, you look for a hired gun who has a lot of notches on his belt.

If you like to make slow decision, a long term average may work. A little ‘faster on the draw’ and you’ve got the temperament to be a swing trader.  A little more and you’re one of those caffeine-jacked, blood-shot eye types who’s got a Deringer under the table and is just waiting for the market to step the wrong way and a position will be shot…

The funny thing is there’s a simple question each investor needs to think through:  How much work for how much reward?  The slow money, position holding, ‘widows and orphans’ would have carded almost 30-percent since Christmas.  Do that for 30-years and you’re talking real money.

A wild-eyed day trader (whoever  that might be) might be up 2-percent in the last two days, but they can turn around and lose 1.5 percent or even 3-percent on market whims.

The safest thing for most people is to hire a gunslinger and worry about the important things in life.  What’s on TV, who’s selling the cheapest generic of  Viagra, and did I buy a lotto ticket this week?

That said, if you pack a Deringer, can’t find anything on TV worth watching, don’t need Viagra, and know enough statistics to know after one lotto ticket the odds don’t change much, then you may be dat trader material.

There’s are groups that do an excellent job helping people who want to bet big money to get bigger money and get off the track.  Gamblers Anonymous, for example.

I don’t know what their views on day trading are, but it would sure be interesting to look at the psychological profile of a GA client and a day trader.  One of those intriguing “ We hope to get to it before check-out time”  problems on our research plans list.

For now, the Dow’s up (after CPI)  another 88-points. And the S&P could kiss 3,000 again…

Are you still feeling lucky?  Markets move too slowly if you’re trying to sort out a trend and too fast if you’re trying to lock in a gain.  There’s a great similarity to Roulette wheels, in this regard.  As all gamblers know, Roulette wheels distort time when the ball is ‘close’ to their number.

Iran Tanker Taken Down Averted

Iranian boats ‘tried to intercept British tanker’.  Like the old Ahnold line, we expect:  “They’ll be bach...”

Stormy Weekend Ahead

We had a nice shower last night (no, you perv, this is a  weather note!).  Got about 3/4″ of rain.  And with the action of the tropical storm off to our East, we’ve been watching New Orleans which is in a “water vice.”

Water coming down Old Miss from flooding and water rising on the Gulf side from the lower air pressure around the storm.

Why, already Bourbon Street is Bourbon and Water.  Which means this “Storm likely to churn into hurricane, looms on U.S. Gulf coast.”

That little blue (Freudian looking) squiggle in East Texas is  Uretopia so looks like no watering of the garden for us this weekend.

Trends to Track

With ICE expected to target thousands of migrants this weekend. we expect to hear a huge whine from the “It’s OK to break the law choir”  next week.

No, it’s  not.

Also worrying the libs Trump to announce executive action on census citizenship question.  They didn’t have a problem with the question on the American Household survey when their darling Obama asked it.  Oh, wait, it’s a Trump bash…

France is setting up for another revolution – taxing people to death.  As you may have seen they are planning an “eco tax” on jet flight departures.  Easily sold to the stupid, we suppose.  And now France Moves Toward Digital Tax, Stoking Fight With White House.”  Penny and email, anyone, dime a social rant?

If you have a peanut allergy, be sure to catch Aimmune Statement on Institute for Clinical and Economic Review (ICER) Final Report on AR101 for Peanut Allergy.

Amazon to spend $700 million to train 100,000 workers for digital age.

As a former ‘edumacator’ (vocational college director) I gotta ask how much of that will be course materials on Kindle?

Headlines we don’t understand: American scientist was “100 percent” murdered in Greece, coroner says.  They can do a 70% murdered in Greece now?

OK, off to top off the hydroponics and get some real work done. Moron the ‘morrow…

17 thoughts on “Fresh Inflation Data – Waiting for Flameout”

  1. Why do day and swing traders think that over time, they can compete with the technology of the quants and HFT’s? I’d rather bet on the “what number am I thinking of” game.

  2. I have watched thru the years the constant put down of say Trump that the public eventually gets real tired of hearing. But the dumbest thing we are seeing now is AOC attacking sweet Nancy. WOW

  3. George

    “we’ve been watching New Orleans which is in a “water vice.”

    I was born in the Up Town area of Nawlins as the locals call it. When I was in college I took a geology class. I asked the professor how much Mississippi river sediment, mud, was under the Big Soggy. He replied 40,000, feet until you hit bed rock and it’s compacting!

    You take that fact and add it to the fact that the portion of the tectonic plate south Louisiana sits on is slowly sinking and you get what the Music Man calls Trouble. Trouble in River City!!!

    New Orleans is very much like Venice Italy. Both have to contend with geologic and natural forces that will probably destroy both of them in the future.

    I no longer own property in the area having moved about 60 mile north to rural Mississippi to be able to live a more arid life in retirement and avoid empirical entanglements to quote Obi Won Kenobi.

    And that college professor I mentioned turned out to be the guy who had the first samples from the Chicxulub crater in Mexico which was the site of the asteroid impact that knocked off the dinosaurs.

    Odd are that he is also right that Nawlins is sinking also!

  4. In my experience, those that hired a gunslinger to manage their money went from euphoria, because of the gains, to depression when eventually the account went to $0.00. You need to manage your own money or use mutual funds. Getting rich investing for the average schmuck is not a horse race, but a systematic discipline over time. Put $25 to a $1,000 a month in mutual funds & watch it grow over the years. I prefer to buy individual stocks whose products are the future & hold them.

  5. I sense a great disturbance in the farce, G____. It’s as if millions of leftist globalist voices cried out in unison at the sound of a great pocketbook slamming shut, and were thereafter silent. With the reports of Jeffey Epstein being the proprietor of a series of intelligence service jail bait honey traps hitting the wires, and Jeffey enthroned in what amounts to an unfriendly supermax isolation lock-up fortress, I could see where wealthy leftist donors both private and state would be redirecting funds for retirement in global hotspots like a Venezuelan marina or a Paraguayan village retreat. Anyone fronting for domestic globalist politically criminal intelligence operations now has their bare butts flapping in a gale. For intelligence service(s) of any nation(s) to be using Epstein to recruit domestic US jail-bait for globalist honey traps looks like grounds for summary family-values termination of the enterprise participants. Do you think there might be an epidemic of gold star equivalents coming out of this enterprise? Have any notable public figures gone on extended vacation yet, or maybe just gone away? This has the potential to topple both public and private regimes, and is starting to look more like deep-state sedition than scandal.

    • That’s an entertaining thought.


      Gal in the city in which I lived after college was a long-time madam. I was friends with her top girl/procurer (platonic, you pervs!) whose specialty was convincing underage girls from poor families that they could make their fortune on their backs. Ms. Madam kept extensive video and photographic records, and boasted she’d never be busted, because she had too many records of cops, judges, prosecutors, Congressmen, and Senators, and several Governors. She got raided. Her attorney got raided. Several safe-deposit boxes, in different banks, under different names, got raided. She got sent away for a long time, and her 40 years of incriminating photos (and 8mm & 16mm film, and videotape) vanished, without a trace.

      The Feds have an audio record of Epstein assigning two girls to “take care of” Bill Clinton. Jim Comey’s daughter is one of the lead prosecutors. By the time the courtroom circus rolls around, that recording, and any other incriminating evidence against any of Epstein’s guests, will have been disappeared, leaving only evidence against him, and possibly a couple of his staffers…

    • I,N,T……..

      Epstein doesn’t have to worry about doing any jail time.

      The laws are different for people of his economic status.
      Not even considering he could name drop some pretty powerful names.

      • Trump banned Jeffey from his Florida resort. That is an indication that Epstein has nothing on the Donald. I don’t think Trump is going to let this get swept under the rug.
        Also note that while there are published accusations of Epstein’s link to intelligence service(s), the identity of those service(s) has not been named to my knowledge. Don’t assume there aren’t foreign intelligence services involved. Timing on the spat with a certain ambassador is suspicious. Gotta wonder about the timing of Potus shutting down Jeffy at the resort and development of foreign intelligence service operations against Trump’s campaign. Hint: It probably wasn’t the Russians.

      • “there are published accusations of Epstein’s link to intelligence service(s)”

        INT… you noticed how fast incriminating evidence dissapeared from the face of the earth over another incident a couple of years ago.. the one releasing the emails to wikileaks.. was mugged and killed getting coffee.. and one of the lead investigators in Haiti.. the same thing..
        My guess is his influence involves the alphabet.. with money comes influence and power… I still think that one of the investigators on a team checking out incidences long before the one a couple of years ago.. discovered just how deep and ugly it truly was.. and realized he couldn’t do a thing because there was way to much power and influence that would ultimately affect him or her. Their conscience got the better of them. so the best way was get the information in the peoples hands let them decide.It took lightning speed to deem it fake news and it was gone. ( I knew an anchor that did a story about similar things in the eighties.. we would jog together.. she was so scared she didn’t realize it but had been getting threats.. it was suppose to be a twelve segment story.. I thought she moved away because she was saying she thought she was going to have to move.. instead it came up in a conversation and I found out that she died in a freak car accident.. way to much power way to much influence)
        It all vanished as fast as a texas chili fluffy in the wind deemed fake news( heck I thought it was a made up story until I started to check out the people involved in the stories personal web sites.. it got uglier and more sinister looking the further you dug into it.all gone you would think they were saints LOL… I think Stu is one of the only ones left that has any of that archived..).. a few false flags for a slight of hand and all the incriminating evidence gone cleaned away..
        the truly ugly and evil in his income bracket usually gets to walk or do community service time.. well I can’t think of any in his income bracket off hand that didn’t walk..there were a few friends and colleagues that could release names that committed suicide, was mugged, etc. on their way to give testimony on a few cases. ..

      • INT: It may not have been “foreign” intelligence. J. Edgar proved how valuable a commodity “control files” on jurists and members of Congress (and Presidents) could be. D’you suppose that lesson was lost over the past 50 years…?

      • Even I have a hard time believing that an alphabet agency would be operating something as messed up as a series of underage honey traps on US soil targeting elites, with a lifetime pedophile at the helm. Who would sign off on something like that? How would it escape oversight? How many insiders would have to be in the know and remain silent? Not even Hoover would have gotten involved in something this monumentally f__ked up. This is genuine madness.

      • Run a search on “inn0c3nt ang3lz” only spell it correctly. When J.Ed’s boys bust a beast or kinder site, they don’t take it down. They take it over and run it, logging visits and d/l’s. 20 years ago, they had a finger in nearly 95% of all such sites worldwide, including those based in Holland, Denmark, and former Soviet satellite nations. When you see the stat in NYT or WaPo that 26000, or 28000, or 31000 people were “busted in the past year” for trafficking in same, this is how they generate the leads for those busts. Many of the chatroom busts begin here, and “perps” are then led to chatrooms or IM/text.

        If you search this, I strongly suggest you run the search from a public WiFi using Tor and a MAC mask, or use a public kiosk. Simple curiosity can put you on a list you don’t want to be on — not kidding…

  6. Peanut allergies.

    I hate to be harsh, but if you believe the mainstream take on peanut allergies you don’t deserve to be in the gene pool.

    My RN wife has been a practitioner of NAET for over 15 years, has eliminated the peanut allergy in several people. And I do mean eliminate, like forever. Bee sting allergies too.

    The rule of thumb is that if you are taking prescription meds for allergies, for the cost of one years medication, a NAET practitioner will eliminate all of your allergies, but just forever. Did I mention they are gone forever?

    NAET Treatment got my wife and son off Ritalin, my other son eliminated allergies to wheat, dairy, soy and corn, and got me off antidepressants, I was allergic to B vitamins. She treated ranchers with hay fever and asthma so bad they had to stay out of the fields and under A/C in summer. They were happily making hay afterwards.

  7. I forgot to mention, was medically grounded a couple weeks ago. First run since was Grand Valley State to Valpo to Wabash to Evansville (hey, they ain’t Big-10, but small schools get visits, too.)

    Not important.

    What is: I took US 421 and US 231 down Western Indiana because it’s a more leisurely drive and I was still feeling the surgical aftereffects. I passed through over 200 miles of prime Indiana corn belt. Roughly half the fields had been planted. The ONLY places I saw corn which was more than 8″ high, were the Amish’ personal gardens (but not their fields) and a few farm fields near Lafayette, which were Purdue experimental fields. Purdue had corn which ranged from 16-24 inches.

    That’s it…

    My home got 9″ of rain over two days last week while I was in Manhattan, KS, and 3″ more, yesterday. I don’t know what the rainfall totals are on the year (my PWS crapped out in January, didn’t get a new one up and “webbed” until a few weeks ago) but I’m guessing they’re considerably above the totals indicated by the nearest NWS gear.

    I foresee a price bump in the fall, but nothing radical except for certain meats. IMO where having several hundred million acres less corn and soy is really going to manifest its ugly head this year is in fuel prices, and in meat, poultry, and again fuel, next year. I need to get to the ag-belt in Iowa and Nebraska, but haven’t yet had an excuse to go, and I’m kinda afraid of what I’ll see…

    BTW, for those who’re cartographically challenged, all the rain runoff from Western Missery to the middle of Pennsylvalia feeds into the Mighty, Muddy (guess which river) which then flows into what current storm surge…?

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