(Tacoma, WA) — The art of “seeing future” is not a difficult thing, although much woo-woo is attached to it: Since about 90 percent of life is prescheduled, we can actually make very short-term forecasts of how the future will roll out with some degree of confidence
Let me show you what I mean:
Let’s turn on the stove – and you stand next to me as I put my hand on a hot burner.
See what happened?
Cues led you to believe that I am stupid enough to do that to make a point: (I am!)
We have expectations about future based on what we are told about it in advance.
The actual arrival (seeing as I’m crazy) is fairly predictable.
I now place my hand on the hot stove and 300 milliseconds hater both my hand and my mouth are moving. The word “sheeitt!” lingers in the air along with a faint burned filet scent.
Another 500 milliseconds (to full second if you are slow) later and you have observed and started to react to the expected future thast was just realized.
Had it not been expected, even longer reaction times would have been noted. You processing time is cut based on pre-event biasing.
The key points being a) that the future shows up for some, faster than it does for others (who have some burnt skin in the game) and b) your reaction is tempered by expectations.
As luck would have it, the stove used in this experiment was virtual (VR) and I am still able to type…
Using our Substitution Method of Learning, we will now replace some of the terms of our experiment and see where it leads.
I am going to place my hand on a hot:
- Democratic convention
- Federal Reserve meeting
- Housing Report
- Durable Goods report
- International Trade report
- GDP report
- And last but not least, the Friday Farm Price report and…
- The H.6 money stocks report.
- Let’s also leave a place-holder for “out of left field” events.
\We have anywhere from today through Friday for all these “hands” to fall on the hot stove. And, as we previously noted, the future will show up (and already has) for the people who are making many of these decisions.
Which is to say, someone at Case Shiller already has a very good idea of how tomorrow mornings’ Housing report will come out since they are already working on data collection.
What we do next is simple: We score each of these events before the “hand goes to stove” based on what we have read. We will use 100 to indicate a totally large, positive event. And zero will b e the most negative. If the week ahead were going to be unchanged, the expected score would be 50.
What you see is a slightly negative outlook.
This is what drives me to stand aside this week until the market drops 100 points – or more – at which time we will reassess because our other futuring work over on the Peoplenomics.com side offers the prospect of the S&P going above 2,400 before the world begins ending. And since we have already forecast two windows for that, this week’s forecast is not particularly difficult.
Two final points:
One is that in order to see far out into the future, score it, and make an investment, you need to use increasingly long lead-time events.
Let’s say technical analysis points to the end of April 2017 for the stock market to put in its final high. What are the events that are known, scheduled, and which would support that kind of timeline?
For one, we know that a new president will have 90-120 days to ,make a first impression…so we can them look at the election as being an important multi-factoral – which is to say it’s going to ripple for at least four years.
This in turn leads to my second point: The only reason people read “the news” is in order to see what is happening and also to work on these personal scoring projects in order to “vote the future” into existence.
This then distills into: Read the news items that will help you forecast the future. “News” that doesn’t work in this direction isn’t worth your time, sorry Kim.
Read three versions of a future-oriented story and you can make an intelligent guess.
Ideally, this week will be down 200 on the Dow, but that’s because of how my scoring for the week looks and the technical picture using our brainamp.xls spreadsheet.
This doesn’t mean the week WILL work out this way, but an intelligent bet might be on that part of the great roulette wheel of life.
This Leaves Only Scoring Inputs
The email-laced let’s screw Bernie around the DNC and Debbie Gonnermann..
On the FOMC try this.
Durable goods insights? You can find data like this.
A news search site (Google News, Bing News and the like) will give you plenty to read – and score.
Which then =brings us to the Dallas Fed survey which will be posted over here about 10:30 AM today.
Last, but not least…when you look at the futures, they haven’t come to the same slightly negative outlook I have for the week, but give them time.
The vast majority of investors are neither willing to work hard, not as thorough – not to mention organized in their thinking – about the one thing that matters when investing:
We ought to see Friday if they were correct, and if so, I need to update my score weighting… But it not, then this morning’s discussion will have been useful and we will be down 100-300 Dow points for the week.
P.S – Quake
We had a shock from a solar storm hit this morning, so we expect a 6.5 quake in the next 24-hours, too. It’s only rock n’ roll, huh?
A shock-like feature was observed in the solar wind parameters on 23 July around 14:50UT. Solar wind speed increase abruptly from around 390 km/s to 460 km/s, with Bt from +5 nT to +13 nT. Bz was near -9 nT around 15:40UT and 16:40UT, and near -11 nT around 20:05UT.
Whether we get the quake is problematic but it seems to be a risk factor. Your weighting may vary. 48-96 hour window.