The hints have been all over this site for a while: My Friday morning memo began “Ready for a Rally?” and yea, verily, this morning the Dow futures are up 200 and my position in SSO was up 2.39% in the extended hours session overnight.
Meantime, a skeptical (and I can’t blame him) reader sent in a comment about all these “experts” who are saying the end is nigh. I explained it’s not really fair to line up a list of experts, as it’s hardly a fair match-up, since they are going against a lone nutter in the woods…
But, you see, they are all missing the point (and missing Peoplenomics, I might add).
The game that is in place right now – this very instant – is to pump up the money supply so that the market will have to go up. I borrowed this little snip- from the Fed’s current H.6 money stocks report.
You do see what it says for M1 inflation for the most recent periods?
Meantime, the Velocity of Money at M2 has collapsed (see chart over here) which is why a gallon of milk isn’t $9 bucks….yet.
I am screaming at the top of my lungs that “This will leak into the stock market, dummy!”
No two ways about it: You can’t stick your foot into the monetary carburetor and not have something happen in the market. This is precisely what we will have a marvelous run at new highs over the balance of the summer.
The way this should work out, we should begin to see the roll from long term bond positions into stocks. That’s because when you have oodles of money, it tends to bring with it, the scent of INFLATION. And nothing scares the bond weenies more than what? (Inflation!)
The reason for this is perfectly logical: The interest payment on a 2% bond is a hallelujah glorius thing when the prevailing bank interest rate is 0.025%. But what happens when the USA economy, already moving up 2.2% moves to 2.5% or even higher?
In that circumstance, the following events must occur because of how systemic linkages work.
Real things will go up in price. Examples this morning? Oil. Coming: Beans, Home prices will firm. Rents will rise shortly.
Bond prices will decline because interest rates are right now, this very instant, likely putting in a long-term double bottom. We are due for a small bounce because of the election…then we should get one more bite of the apple going into the greater depression of 2017-2018.
As the stock market begins to scream, shades of 1929, we will have a stock bubble develop.
I Love bubbles. Remember when I green-lighted Bitcoins down in the $300 area? Wave movements are predictable. Bitcoin is kissing $750 this morning. I think it could double from here…depending on your appetite for risk.
A while back, I built a simple tool for Peoplenomics readers….a simple spreadsheet into which you can put your first Elliott wave move, and it will then tell you where things should go next.
It is not perfect, but think about the lows in February and then think about the highs in May, wasn’t it?
That is your Elliott 1 up. Since then, we have been in an Elliott 2 down. I expect the bottom (for now) is in because in the larger context, we are in a IV. When you are in a large IV, you can go back to the large II and see how the wave action worked. Since Wave II was a five-waves advance, when II is a five, IV is usually a three wave deal…oh, and did I mention that’s done? We should be going much higher from here, I believe. This is NOT FINANCIAL ADVICE, I’m just telling you how I print up money on demand.
So yes, I’m “in the money” on my latest (modest) trade (SSO) as soon as the twanger goes off in New York. Made money in our Wave IV short using DOG, too. But from now through the rest of this week, I’m patiently on the long side, because when a bunch of “experts” start telling me the world is about to end, I fade the noise and look at the Fed data asking “How could they all be so dumb?”
Inflation – the magic wand of liquidity -has been waved by Janet Yellen. I told you before it is effectively the Fed endorsing Hillary Clinton.
Yet most average people won’t or can’t see it…which is fine because if there are enough average people around, being only slightly better than average is one hell of a profitable place to be.
So stocks are going up: You will maybe make a little money, but the prices of goods will follow along, too so be sure to set some dough aside for Uncle. Our short-term trading techniques generally miss long-term gain requirements, but it’s not a bad thing to pay short-term gains. In fact, I wake up every morning praying that we’ll be able to pay even more income tax because for every dollar I pay, I get to keep two.
There. You have the memo.
“Shall Not be Infringed”
Dummycrats and old repugnants will be arguing this week about gun control. Nothing will happen, so drop by for the next mass gun attack in, oh, about October, or so…just in time to press guns into the ballot decision. We seem to get such violence about once every four months, or so.
The Weather Stories Do Matter
The weather is hotter than blazes, except where the blazes are hotter, which brings us to a discussion of California fires that are still growing.
Yes, it could be global warming, or it could be the weather war that’s ongoing. (scroll down to the weather war heaters map to see where they are)
The real deal point for humans is governments are going to shake-down humans in order to save the global economy and higher food prices means more control for those who claim to “own the land.”
Which is government. Try not paying property taxes for a few years, if you doubt me. Watch soybean prices. Research how soy products make populations easier to control, too.
Meantime, I keep thinking about an interesting weather trade: Buy a home in Phoenix when it’s 120…sell to a wannabe snow-birder in about November after the first snows up north.
Another Hillary Personality Expose’
Here we go again:
“EXCLUSIVE: Hillary Clinton once called disabled children at an Easter egg hunt ‘f***ing ree-tards’ and referred to Jews as ‘stupid k***s’ while Bill called Jesse Jackson a ‘damned n****r,’ claims Bill’s former lover…”
More in the book Hillary the Other Woman.
Meantime, 25% of voters are reported undecided. I’ll leave it to you to pencil out how many of our countrypersons are stupid.
Isn’t that what you call it when the US Attorney General decides not to include the words Islamic terrorism removed?
Once again, the government has gone crazier on political correctness trumping factual accuracy. Which is just another reason America is deeply deluded and troubled,…
Still More Distractions
The Brits are having a day of mourning for the recently killed MP. This, ahead of the BREXIT vote Thursday.
Well, there you have it: The world is no more sane today than when we knocked off Friday