I apologize to subscribers, as this is the type of thing that more properly belongs on our Peoplenomics site ($40-bucks a year), but there’s a time-sensitive development in the futures market this morning that is worth kicking around.
If you’re not a subscriber, there are several things you need to do to keep up with the grown-ups. First (besides saving up $40 bucks!) is to read at least the Wikipedia entry on Elliott Waves over here. Then, read a couple of not-too-hard to follow books on trend channels. I really like Gilbert Raff’s Trading the Regression Channel: Defining and Predicting Stock Price Trends. Last, but not least, is Edwards, McGee, and Bassett’s Technical Analysis of Stock Trends. Just under $80 bucks, but you will find all kinds of useful information.
If you still need more reading material, a further $76 investment in knowledge will get you Technical Analysis Using Multiple Timeframes. These contain many baseline concepts that may improve the odds of making money investing.
Impeachment, Viruses, And Markets
There are many ways to take the present market conditions. One old saying offers the guidance that “Markets Climb a Wall of Worry.” Impeachment and viruses…what could be better fear-fodder?
Which doesn’t explain as much as the Fed pouring oodles of cash into the market to bail-out hedge funds, but I’m pretty sure we’d be in a full-on Crash and Onset of Global Depression right now, if the Fed cut off all that roll-over of repo’s to the Hedgies.
As a result, however (that is, saving the Hedgies and to heck with Banks, who were trying to screw the hedgies), we may be near the end of a long market up-wave with perhaps another year, or two, of upside yet to come, though that remains to be seen.
Hong Kong had its ass-kicked overnight (-2.8%) so globalism’s got the jitters, fo sho. But, there’s also an impeachment sham running in the U.S. Pardon us, while we remain detached from the craziness.
This chart, based on my work on Aggregated Markets, showing the problem, is an easy to follow in a graphical way. About 6-month’s worth….
One of the problems that many people have is “visualizing” how market action is “nested” in trend and wave counts.
Let’s start with the Biggest Trend first. As you will see (looking at the GREEN boxes) the left Green is a wave 1 up. There is a decline from the top of (i) to the bottom of (ii). From there, a larger than the first box move has taken place.
This move may not be complete. It is, when you see the box sizes, why I have been expecting a Wave (iv) down and then a final (v) up to “finish the green box” (or larger trend). Yeah, I got grief for going short too early…and that’s just one of my problems in life: I’m often several weeks or more ahead of turns. But, the case is here that a Down move of some magnitude is quite possible.
Yet, before this large (iv) begins, we need to see “completion” at the next level in. Which gets us to the YELLOW boxes. As you can see at this level, the Wave 1 up of Yellow was smaller than Wave 3 up, so it looks like a valid count to me. And even though the 5 up of the Yellow boxes looks a lot larger than the 3 up, that’s permissible under Elliott and common in commodities where the fifth waves are largest, many times.
And then we get to the latest subdivision: This is where the RED boxes have also got a “complete-looking” wave count going. That is, like the Yellow boxes, we see the same kind of small 1, larger 3, biggest 5th taking shape.
The Green 4th down should not take out Dow 27,000 or more than a few points below S&P 3000…because if it does, then the 4 down (Green) would turn into a 1 down of some larger degree and that could get ugly. But, I’m hoping, not until late summer. If the September 2019 highs are support, all’s still well and the odds of higher highs and a “green 5th” are ahead.
Not Financial Advice!
This is offered ONLY AS AN INTELLECTUAL DISCUSSION, NOT TRADING ADVICE. I do not pretend to be a money manager; just someone who watches the longer waves in the economy (4-year and longer cycles) because these, too, tend to act as “nested waves” behavior.
The obvious analysis, however, is really an “In your face:” The market is in a technical position where a major decline (Green boxes) to put in a “4-down” before a final runway rally into late summer ahead of the election, is looking like an interesting outlook.
We are certainly in “Expect the Unexpected Land” and we will only know in the fullness of time what the moving finger will write.
Nesting History Surrounds Us
History, too, has these “nested cycles.” The main one my consigliere worries about is the 72-year War Cycle.
You know that Pakistan and India are on the brink of either war or large social change in relations, and this is 72-years from their India-Pakistan Line of Control (LoC) being set-up
In fact, there’s a video this morning on Facebook about Security Concerns in Punjab as fears Pakistan is pushing in militants.
The BIG nested historical nightmare comes in May when Israel hits the 72-year mark. Since such occasions are often marked by war, we do not expect this to be a peaceful summer. Nor, do we believe that Iran is “standing down.” It may look that way for a while, but we think there’s more to Aryan instability than meets the eye.
Disease Cycles, Too
And in another headline that has us concerned, even with our pneumonia shots, there’s the report of the Novel Corona Virus spreading now human-to-human in China. Beijing is telling people to avoid travel into the affected city.
As a result, the World Health Organization and other agencies are ramping up to figure out how to stop the outbreak. No, we don’t know if the US pneumonia series of shots oldsters (like us) get will be effective, but that becomes a very important thing to keep an eye on. Preemptively, Russia Screens Chinese Travelers Amid Coronavirus Fears.
Trends to Track
An armed society is a polite society: No problems at the big gun rally is Virginia Monday. The media hype was non-stop, but overblown. Look surprised.
Globalists meeting in Davos will get another earful of the Climate Child. President Trump, somewhat more rationally, we think, is still skeptical: Davos: Trump decries climate ‘prophets of doom’ at World Economic Forum. In one of our discussion comments, a reader noted that “predicted highs” are being raised in order to make people think it’s getting warmer. But when “forecasts” are met, it’s ignored. Selling predictions (even wrong ones) is what climate is all about. We’ve been warming since the glaciers withdrew.
Still, as we read Davos, climate is the globalists only financialization game left. Which accounts for stories like Europe can lead the world in green finance, UBS chairman says. Remember the packing house lesson: The herd is usually wrong.
On simmer for later this week: Index Measuring Americans’ Financial Satisfaction Over the Last Decade to be Released Thurs., January 23.
And :cultural appropriation” is the new buzz-theme amongst the Political Correctness Police (PCP). To wit: What high fashion is doing about cultural appropriation.. Show of hands…anyone buying this BS?
Next thing you know, racial and ethnic groups will be demanding copyright royalties: Italians could be a penny per pizza, Mexicans could get a per a pair for tacos, and China would want a penny for Chinese food. Meantime, the Ure clan would not fare well on our cultural appropriation revenues from scotch, haggis, and bear claws… Nope, at some point the “victimology bullshit ends.”
We’re turning into a World of On-Lline Scammers…WOOLS is what every sheep becomes. It arises when everyone trying to get one over on everyone else.. Yet somehow, it’s hardly surprising since Babel II is what the internet has become… Digital Mob Rule is here…Just because you haven’t been lynched yet, doesn’t mean you escaped the Mob…Be patient. You’ll get your turn, eventually…
Social Media is a digital Noose. Remember who warned you….
Write when you get rich,