Reader Note: We will be posting this morning in pieces because of a power outage here in “the outback.” When storms roll through this part of East Texas, we will occasionally get power outages as tree limbs fall and so forth. While people like to decry the use of “smart meters” there is an upside to them: By the time I hit the online reporting facility of the local power company, our outage was already logged on the outage map, other meters sensed, and the company had dispatched a crew knowing that 424 homes in this area were without power as a result.
While it’s true that excess RF can be bad for humans, and we are frankly skeptical of coming higher duty-cycle transmitters (as in 5G systems), and while we know that Alexa is always listening, there’s an upside to all this new-fangled automation and technology: Reliability.
Back to point: In spite of our solar system, and extensive back-up power system, there will still be times when (like now) when we’re back to basics an only one internet onramp.
So…we post in sections…. Refresh this page through the morning and you’ll get a sense for how our workflow progresses…
One Last Rally?
The fear in the market Wednesday was almost palpable. Someone you know did one of his “two-hour lunch money specials” and pocketed enough for a nice dinner out without any long-term exposure.
Trend Channels 103, Gann Lines
(101 was earlier this week here, 102 was up for Peoplenomics.com subscriobers Wednesday). Let’s take another look at the Aggregate Index the past few weeks and where things might head today based on early futures pricing:
Pay attention to the dashed lines. While we drew the primary trend channel bottom (connecting A with B and extending it off and up to the right) there was another line that could have been used – the upper dashed line. W.D. Gann is credited with this one. A Wikipedia contribution picks it up from there:
Gann described the use of the angles in the stock market in The Basis of My Forecasting Method, a 33-page course written in 1935. The legitimacy of Gann’s techniques has been seriously questioned. Calculating a Gann angle is equivalent to finding the derivative of a particular line on a chart in a simple way.
“A Gann angle is a straight line on a price chart, giving a fixed relation between time and price. For Gann the most important angle was the line which represented one unit of price for one unit of time, called the 1×1 or the 45° angle. The value of a commodity or stock following this angle will for example increase by one point per day. Other important angles were the 2×1 (moving up two points per day), the 3×1, the 4×1, the 8×1, and the 16×1. In addition to these value increases, the corresponding angles for value decrease are just as important. When several of these angles are drawn in a group, they are often called a Gann fan, which is usually drawn from a price bottom or a price top.
As with other forms of technical analysis of stock price movements, the Gann angle model contradicts the weakest form of the efficient-market hypothesis which states that past price movements cannot be used to forecast future price movements.”
There are a fair number of soft ware renditions of the concept, “dynamic Gann lines” or DGL. Like Elliott waves, they are not conclusive, but they will give an astute trader ideas of where the market could head next,
And, since this is the day Index Options expire, we wouldn’t be surprised to see the market have some “spread” between today’s action and tomorrow’s equity options close so the “commercials” can cover and make a few bucks on their index options.
The Fed Problems
Overblown, or losing control? Depends who you listen to. Perma-bears, of course, will worry the “old shoe” about how the Fed shouldn’t be allowed anywhere near the Nation’s money. On the other hand, J. Powell’s press conference following the rate decrease yesterday made it clear the Fed would do what it needs and for now, he’s thrown cold water on the notion of the U.S. employing negative interest rates.
Stories like “Why is the NY Fed pumping billions into the money market?” and “Fed loses control of its own interest rate as it cut rates — ‘This just doesn’t look good’” are worth reading. But, a simple Elliott count continues the possibility that we could have one more run up. Subscribers can worry about the larger ascending triangle, though, and we know how those end. Badly.
Meantime, I sure like cash until things settle down and the larger direction solidifies.
One somewhat prickish comment this morning asked “Where’s the insightful view of the Fed screw up?”
You won’t like our answer: As a nut case and conspiracy observer, I can only remark on the very “coincidental-ness” of the NY Fed mess. Because it is a highly technical operation, plausible deniability is strewn all over the place. But old friar Occam (with his razor) has a different take.
Since the Fed rate cut cited only scant evidence of any economic storm to come, we get to wondering if there might not be “implants” in the NY Fed – just as there were implants in the U.S. Dept of Justice. You know, running the administrative Xamboni machine so Hillary could slide…
As we extrapolate it: A few “deniable” mishaps in the NY Fed and the confidence in the economy craters…and now you’ve got the makings of a decline, for sure.
It would be like sending someone into a crowded theater with matches. The idea isn’t to burn the theater down. Just have the person sitting next to you yell “Fire!” The rest takes care of itself. We therefore would have to eye the NY Feds internal personnel with some suspicion: Why screw up now? If that “screw up” could be made to look like Trump’s fault, even better. But just setting the boiling economy back on its heels would be enough to up dem odds in 2020. Seems a better scenario than “Oh, an accident…miscalculation…computer glitch…” or whatever.
Implants work – and so far, crooks at the top have a fair track record of success when viewed as a design template.
Oh, one other reasson to “love cash?” How would you like to have a power outage and be on the wrong side of a trade? EMP could do that, or, as this morning’s power problems continue…
No, EMP is not happening today to the U.S. as a whole, but until you get into a position where you considered holding a position overnight, only to take up and find the power off, you really don’t have a sense of how comforting cash positions can be. Long-term, the power will come back (at least it always has, so far) but the mind wanders. More coffee from the thermos?
As long as the world is tracking “normal” (or some approximation thereof) things like emergency power and redundant UPS’s and fully charged laptops don’t matter. But in some alt. future, there are outages that are widespread. And you do know that most cell phone sites are only good for 48-hours, or so, before the last-ditch trade-on-the0smart-phone stops working?
Breaking: Some Fresh Data to Munch
Not as good as a plateful of French toast with a side of bacon, but the Philly Fed numbers and US Current Account are out this morning.
“The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $8.0 billion, or 5.9 percent, to $128.2 billion in the second quarter of 2019, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was $136.2 billion.
The second quarter deficit was 2.4 percent of current dollar gross domestic product, down from 2.6 percent in the first quarter.
The $8.0 billion narrowing of the current account deficit in the second quarter mainly reflected an expanded surplus on primary income.”
And from the Philly Fed:
“Manufacturing activity in the region continued to expand this month, according to results from the September Manufacturing Business Outlook Survey. The survey’s broad indicators remained positive, although their movements were mixed: The indexes for general activity and new orders fell, while the indexes for shipments and employment increased. The survey’s price indexes increased notably this month. The survey’s future general activity index moderated but continues to suggest growth over the next six months. “
See why I lean toward the NY Fed as “losing control” meme being a plant?
Also worth looking at will be the Fed’s H.6 Money Stocks report out this afternoon.
Canada’s Leading Idiot
If you hadn’t figured out by now that Justin Trudeau was an idiot, you haven’t been paying attention. In the land of hockey and beer, however, we’re less than suprrised to learn that “Justin Trudeau Wore Brownface at 2001 ‘Arabian Nights’ Party While He Taught at a Private School.” How this was not known before is of interest; do Canadians not put their “pawns of real power” unders the microscope? We can only conclude that The Powers have run out of uses for Trudeau, so they have “opened his control file” which shoves him down the great garbage disposal of politics: Public opinion.
The Climate Hoax
Ah, just as we’ve been pointing out (especially with some of the reader-contributed links in our Comments section), the global climate models are a bust because they don’t handle the math right. But, if the heavy-duty math is all too much, try this on for size: “Doomsdays that didn’t happen: Think tank compiles decades’ worth of dire climate predictions.”
Yes, of course humans cause warming. But without all that frenetic activity (building the latest and greatest phone to run the latest and greatest apps and other semi-pointless human endeavors) the unemployment rate goes to 50 percent, Global Revolution (GlobalRev) breaks out and by the time that’s done, we will be down to somewhere around 1-billion survivors. Pick Ure poison: Economic collapse, revolution, and a mass die-off thhe hard way or a centuries long “death by degrees.” Which, thanks to young people seeing the problem as cast by the Marxists in Education, is why only the stupid people have high birth rates. More followers for the Marxist victim leaders , but I suppose you don’t need to hear that rap today…
Also Worth Knowing (AWK)
My, ain’t we special? Seniors will soon have their own IRS tax form.
Right again: A while back we chided the brain-dead media (BDM) in the case of an airline mechanic with a seriously Middle Eastern name for pandering that his (alleged) sabotage was over “union grievances.” Well, lookie here: American Airlines mechanic accused of sabotaging jet stored ISIS videos on his phone. Look surprised – and appalled that infiltrated media lies coming to light.
The Trade Wars drag on. But India meets criteria to reclaim U.S. trade concessions.
As we’ve been on back-up power so far this morning, I suppose it’s worth mentioning Imelda spawns tornadoes and brings life-threatening flooding to Texas.
(With the power off, it’s on to the throne room with a flashlight and then going through reader comments and approving them,,,)
Power came back on at 7:18 AM. Thanks to the power company for the reminder about how fragile the digital world can be for those not adequately prepped… Time enough to proof read now…
Write when you get rich,