Housing, Personal Incomes, BTC Projections

Hot off the press release:

NEW YORK, MAY 30, 2017 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for March 2017 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR 
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in March, up from 5.7% last month and setting a 33-month high. The 10-City Composite and the 20-City Composite indices came in at 5.2% and 5.9% annual increases, respectively, unchanged from last month.

Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In March, Seattle led the way with a 12.3% year-over-year price increase, followed by Portland with 9.2%, and Dallas with an 8.6% increase. Ten cities reported higher price increases in the year ending March 2017 than in the year ending February 2017.
The below charts compare year-over-year returns for Seattle and Portland with different ranges of housing prices (tiers). Upon tier level analysis from 2011 to present, both Seattle and Portland’s year over-year returns show housing prices in the high tier to be the most stable while housing prices in the low tier are most volatile.

And our favorite chart?

The real question is whether this is an Elliott 1 down, completing a 2 up?

Other Data:

As we told Peoplenomics.com subscribers this weekend, we are at the top of a trend channel in here so the most likely scenario is for a modest market pullback.  We continue to expect all time highs in August.

Tons of news this week, and we’ll get to this morning’s first batch after mentioning that ADP and Challenger job numbers will be out Thursday and the federal Employment Situation will be out Friday, so the new background could move things a good bit – especially if less than “high end of expectations” comes in.

That and the political mess in Washington where continued high-level leaks are ruining the Trump agenda.  Just the sort of thing we would expect the Obama “government in exile” to be promoting.

Let’s start with the real news first:  Personal Income and Expenditures:

“Personal income increased $58.4 billion (0.4 percent) in April according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $56.5 billion (0.4 percent) and personal
consumption expenditures (PCE) increased $53.2 billion (0.4 percent).

Real DPI increased 0.2 percent in April and Real PCE increased 0.2 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.”

And for the nonsensical numbers?

“Personal outlays increased $56.4 billion in April (table 3). Personal saving was $759.1 billion in April and the personal saving rate, personal saving as a percentage of disposable personal income, was 5.3 percent (table 1).”

In Europe,, the Eurostox 50 was down one third of a percent which would translate to down 8 on the S&P and down 66 (or more) on the Dow IF it carries over here.

Running Bitcoin’s Future

With BTC’s trading this morning in the 2,350 range, a number of readers have asked for our outlook on this modern-times Tulipmania equivalency.

Usually, I would toss in an unabashed pitch for subscribing to our Peoplenomics.com premium content, but you may have heard enough about that.

Instead, I will simply run a spreadsheet that was developed for subscribers a good while back.

Here’s the theory behind it:

When any stock, commodity, or currency is on a roll, it will oftentimes follow a set of “rules” about price behavior first observed by Ralph N. Elliott.  The Wikipedia background is more on track than I am likely to be this morning:

“In the early 1930s, Elliott began his systematic study of seventy-five years of stock market data, including index charts with increments ranging from yearly to half-hourly. In August 1938, he detailed the results of his studies by publishing his third book (written in collaboration with Charles J. Collins), entitled The Wave Principle. Elliott stated that, while stock market prices may appear random and unpredictable, they actually follow predictable, natural laws and can be measured and forecast using Fibonacci numbers. Soon after the publication of The Wave Principle, Financial World magazine commissioned Elliott to write twelve articles (under the same title as his book) describing his new method of market forecasting.^[3]

In the early 1940s, Elliott expanded his theory to apply to all collective human behaviors. His final major work was his most comprehensive: Nature’s Law –The Secret of the Universe published in June, 1946, two years before he died.^[3]

In the years after Elliott’s death, other practitioners (including Charles Collins, Hamilton Bolton, Richard Russell and A.J. Frost) continued to use the wave principle and provide forecasts to investors. Frost and Robert Prechter wrote Elliott Wave Principle, published in 1978 (Prechter had come across Elliott’s works while working as a market technician at Merrill Lynch; his prominence as a forecaster during the bull market of the 1980s helped bring Elliott’s wave principle its greatest exposure up to that time).

There are also other analysts, such as Glenn Neely, that do not fully subscribe to Elliott’s wave theory, but have used it as a starting point to develop their own wave prediction methods.”

And one of those “other analyst types” is at the other end of your screen this morning.  What we have evolved is a combination of Elliott wave theory along with trend channel analysis, and a few other concepts (like aggregated market theory) to come up with “best reasonable guesses” about where markets will head next.

Now in the Master Index portion of the Peoplenomics.com site there is a spreadsheet called “brainamp.xls.”

A user simply puts in a starting point and the number representing the first Elliott high (or low) and the spreadsheet runs out the rest.  All you need to do is scroll down to see where the third wave should peak, then stand aside while a fourth wave (if there is one) evolves, and then enter for the fifth wav e conclusion.  And in this, once the target levels are reached, you back off.

All we need then are two numbers to forecast future history.

We see in a 2013-2014 zoom-in chart of BTCs here that the crypto was bouncing along in the $125 dollar range for a nice basing period.  Then it popped up to a (closing price basis) around $1,140.

That’s it.   That’s all we need to plug in because we are then told what should follow in Wave 2 (down), Wave 3 (up), Wav4 (down) and Wave 5 up to complete the bubble…er…run.

As you can see, the decline was more than 61.8% for Wave II down, but (this is where trend channels come in) once we saw BTC break over $400 and out of a price channel, we mentioned to subscribers that while we weren’t playing this (silly) game [except the money made is both spendable and taxable as gains] the next stop should be nearly 2,400.

Where do BTCs go next?

Here’s what the spreadsheet figures:

Or, to put it simply, to our way of thinking, a decent (tradable) pullback should arrive sooner than later and then there could be another decent run.  We’d expect that next high to come in late August approximately coincident to the all time high in the stock market we’re expecting around then.

This IS NOT FINANCIAL OR INVESTING ADVICE.  What we do is theory and the only place we ever trade is in our personal account which I manage extremely conservatively.  You do with your money what you will.

But that’s a quickie on where the BTC’s could go but remember the world is fraught with uncertainty.  A move by a major Western government to roll from fiat/paper into cryptos would likely skew things higher while a major hack-attach and code to bust the block chain would tank all expectations.

Also remember that the numbers above are based on reasonable closing prices not intraday spikes.

If you hear the scurry of little mice scampering off about now, those would be the subscribers who are using the brainamp.xls because they know that once we hit a blow-off top and have an initial pullback (see chart here), it is a simple matter to put in the BTC high,  then the low of the first wave down, and from there it will give the number series fro the stair-step down could be in now.

Feel smarter now?

Leakers Need Jail Time

While the carefully orchestrated leaks continue around president Trump, we notice that Fox is reporting that no, Jared Kushner didn’t propose a “back-channel” to the Russians:  The Russians proposed it…

The “government in exile” operation continues, however, and we’re mystified why the F.B.I. hasn’t started arresting people yet.  Then we’d find out who is orchestrating and oh, boy, won’t that be fun?

Still, the New York Times is trying to fan the flames by asking what was Kushner’s motive in meeting with a Putin ally?

Priebus Out?

That’s the buzz making the rounds at this hour.

Question is:  Was he a leak-source?

Free-Wheelin Texas

I’m still scratching my head at the bias in reporting on events at the Texas legislature.

Operation of the legislature was shut down by a rowdy group of protesters who don’t like Senate Bill4 which shuts off Sanctuary Cities.

The Texas Highway Patrol had to be called in…yet no arrests were made.

But now comes the hand-wringing part: A pro Sanctuary ban lawmaker is the target of liberal ire because he threatened to shoot another lawmaker.

The protesters disrupting the public order seems OK with press reports (like this one) but to defend in the face of perceived personal danger in a mob-like setting?  Well, we can’t have that, can we?