Just Another Prescient Market Call

If you are visiting UrbanSurvival today and wondering “What the hell’s going on  with Markets…collapsing like they are this morning…” the answer’s simple.

You missed Monday’s column, or you would have already been braced for what’s coming at the (bloody opening) this morning.

I say bloody because we were looking at the Dow dropping between 300 and 400 points early-on.  And, unlike the lunch money short-side trade I did to kick the week off, this morning I’m on the sidelines.

Therein lies an interesting tale about trading confidence, if you want to hear it. Sure…

After warning Monday that we were “Eyeing Possible Global Collapse” my dentist called.  Not only do I have a tooth-cleaning session, but a crown needs to be made-up for a troublesome tooth.  Since that appointment will come right about the time “Big Money” will be placed on the market’s future (after the opening “amateur hour”) I’ll be out there in nitrous-land.  Not where you want to be tradiong from.

As a result, we went to cash Monday – no point being locked into a position even if for only 3-hours and not being able to react.  Losing money is not our deal. Besides, no market moves straight down…and I would refer you to our preferred global count which calls for a decline now, then a summer rally and then the sheet-hits-the-fan later on.

Write this down in Ure Trading Book:  Don’t play if you can’t pay 100 percent attention!  (Take care of your teeth, too.)

Second point:  Market’s don’t crash from Tops.  This assumes you noticed that the 52-week high in the NASDAQ Composite was 7,768.60.  Since we closed Monday 7,747.02, that was only 40-odd points from the index all-time high.  Hardly a place of concern.

What seems reasonable is for a lot of people to begin panicking. Nervous Nelly’s.

“Oh, I better get out right at the open,” they’re thinking “No point losing money if you can avoid it, right?”  That kind of thinking can lHence, my morning of nitrous is no big deal in the greater scheme of things.  If markets were 7 percent lower than they are presently?  Well that would be cause to reschedule the dentist visit.

But, it’s not.  There will be bigger market declines in the future, and it only takes a few of those 1987 and 2001-2003-type events (and let’s toss in 2008-2009 while we’re at it) to not only keep the wolf away from your door, but also land ’em on the endangered list.

I’ll take clean teeth, new crown and Door #2 tomorrow.

The market takes a bite out of people who don’t follow things closely, and in the afternoon rubble, we will sort it all out for our Peoplenomics.com subscribers tomorrow.

So much for the very short-term view.

Are we still at the tippy top of a long-wave economic disaster?  Well, now that you mentioned it… uh huh.

I took the liberty of updated our Global Index based on the overnight action in the rest of world (RoW) and tossed in the look-ahead future’s price in the pre-open.  Here’s what it looked like:

(Don’t look if you haven’t had your coffee yet!)

A little discussion is in order, ias we grope the uncertain future:

We are in a position where (from 2009 lows) we have done an Elliott I up (complex as a 1-2,1-2) then II down.  Then we had a really nice Global III up, followed- by the IV down and now we are (I hope obviously by now) in – or ending (iv) – of V.  Down is just ahead for the world.

If that is the correct count, then we could make one more run to the stars.  BUT, if that’s it for V, then our first stop will be at the red circle.  Be a fine place to bounce.  This fall? Who knows? The next few weeks?  More the stuff for the subscriber side.

The lower trend channel – as you can see – if where things get interesting.  Since the Elliott V already counts as complete at the big trend level, we might get a really solid bounce around the red circle.  But, once this is done, down to the yellow circle would make the most sense.

In term of the macro view of what may be coming, the run from year-end 2017 highs down to the red circle (Fall?  Next 3-weeks?) might be seen as a 1 down.  The II up would be the “rally off red” (the bottom of the long-term trend channel.  Then a major III down would follow.

That’s when we could drop down to the yellow level…

As always, this is not financial advice, only a view of how the long wave in economics expresses when everyone’s trying to make money.  All the time.

The What???”

Oh, boy.  Slept through Econ 605, did you?

OK:  Contrary to what NuThink in Education may tout, there really are semi-predictable long waves in the economy.  Lots of them.

The main one (though widely misunderstood) is the Kondratieff (Kondratiev) Long Wave.  Russian fellow, working for Joe Stalin, predicted the Great Depression and then that America would come roaring back.  Payoff for him?  Gulag time.  Thanks for the love, Joe.

The K-Wave as we’ve been tracking it since MBA days for me in the 1990’s, should run from 48 to 64 years.  A late colleague (Dan B) held that the cycle was very precisely fixed.  The data (which we find persuasive – including my consigliere) is that there’s a fair bit of wiggle-room.  Guidance not dictates.

Let’s take the K-Wave that ended with the “Trough war” called World War II.  (Yes, Vietnam was a “Peak war:).  The problem for K-Wave students is no one is quite certain from where you measure things.

A good point.  We might measure from peak to peak of the stock market.  But, this is fraught with problems because of inflation, confidence, regulation – a litany.  In other words, if I asked you “When was the absolute dollar purchasing power peak?” odds are you’d have no idea.  (This is the kind of question Peoplenomics concerns itself with.)

Well, how about we measure from interest rate lows, then?”

Sure about that?  There were arguable lows in the 1931-1932 initial Depression bottom.  Then there were more lows in rates in the Secondary Depression bottom (1937-1939) and still more in 1942-1943 which was the bottom of the Trough war.  There was a time the war’s outcome was uncertain…do you want to count from there?

To an extent this is further muddied by the 2001-2002 work Ehor M.and I did on long-term currency cycles (83.5 year, or there abouts).

But all of it reduces to long wave interest rate cycles as a practical matter and if you flip over to a long-term view of the 10-year Treasury on Yahoo, click to the Max timeframe view, the peak in 1980 becomes totally evident.

America didn’t really need Jerry Ford or Paul Volker to actually do ANYTHING to “whip inflation now” (though it was a fine PR ploy for the sheep).  The interest rate cycle was primed to roll over at anyway – it was a cyclical peak.  A baboon could have done what Volker did…but not so sure about the Penn Rail turnaround.

Let’s agree for a moment that the half-wavelength of the K-wave is somewhere around 30 years.  When should the massive decline into a Second Depression have actually started, then?

Based simply on rates: 1980 plus 30 suggests rates should have bottomed in 2010…and oh, yeah, they did.  Accompanied by the collapse of the Housing Market Collapse.

Problem in history was the market breaks in 1920 and 1921 led into the 1929 crash – so are we on the precipice again?  We are tinkering with trade and tariffs which rings a bell.  Smoot Hawley summer of 1930…capiche?

Since April 2009, we have been rallying like hell, but that’s because of massive technology change.  The Internet (and the Dot Bomb collapse I predicted in the September 1999 paper “Death by Dot Com”) was a bump on the road.

Ure is not the only one with keen insight (be charitable, OK?):  There’s the matter of the Federal Reserve.  And when the economy gets in trouble, they have a dual mandate problem.  basically comes down to jobs and prices.

The catch in all this is that there’s no mention anywhere of sound money.  If you’ve got any economic sense at all, you’d go over to the Minneapolisfed.org website and run the numbers of the long-term government “Theft by conversion” scam that steals everyone’s money through Inflation.

There, you may confirm my work:  what cost $100 in 1913 when the bankster class seized the lawful duty of Congress to ensure the sanctity of America’s money, now requires $2,535.43 to purchase.

Or, if you divide that last number into 100, you discover that the residual dollar “purchasing power” today is 3.944 percent of what it was back then.  The rest has been eaten by compound interest.

Again, we get back to the question “Where’s the starting line” from which cycles are measured, then?”

Well, in terms of currency cycle work (and our 83.5 year math which is compelling, though the threshold of public recognition is lower than the 3-5 percent we postulated, so it might be a 93-year (or even longer) cycle.  What matters is that you can’t count years when money became more valuable as it did in several years during the Great Depression.

The only considerations worth worrying about today?

1.How far down will the market fall?

2.When it bounces, how much will I make?

Enough.  There’s no other story around that matters.  We are clearly in a replay of what Hoover was doing just before he ascended to the White House: dinking around with trade.

Which is why we still think Donald Trump is set to reprise the Hoover presidency…with the only question being “Can he avoid it?”  And, if so, in the first or second term?

The disclosure that the FBI had moles who influenced the outcome of the Hillary email investigation – and this Obama replay of DACA kids – which he skirted with the help of the co-opted NE liberal press establishment, is all merely another “interesting distraction.”

The only story that matters to your future is what kind of economy do we have now, and with robotics and such coming along, what will it be like in 10-years when the auto-burger store replaces all the lower-end of American food service?

“As you go through Life,

Make this your goal:

Keep your eye upon the doughnut

and not upon the hole.”

Money owns the future.  Not political parties.  See where the dynamics lead and hedge your bets accordingly.

Which is what we’ll cover in Peoplenomics tomorrow.

Nitrous, anyone?

Housing Rocks

Just out:

Breath deep the gathering gloom.  Nights in what?  It’s enough to give an investor the moody blues.

18 thoughts on “Just Another Prescient Market Call”

  1. George, I am firmly convinced that if you allocated 75% of your trading time to the bull 3x ETF & 25% to the short 3x ETF, YOU WOULD BE A RICH MAN.

    A trading Business Model looking at the market going up 75% of the time & down 25% of the time, would suggest this 75-25 time allocation. Plus, by not prioritizing the bull, 75% of potential profits are taken off the table & will not go into Big Macs for your to enjoy. You would weigh over 600 pounds (The 600 lb gorilla is not a prepper & has no fear. He acts in his best interest).

    You have a talent, give it some consideration, & get rich.

    • Smart observation, but nature may have different plans for US than becoming rich; As I’ve been telling my son: “You’d have crashed your Lambo amd/or your 911 long time ago, if we were rich ;-).”

  2. that’s another piece to the retirement puzzle – not just medical costs but dental costs. Up here in Emerald City aka LatteLand (for those not in the know – that would be the Seattle area) a dental crown averages somewhere’s between $1,200-$1,800 – yes, for the crown only. A root canal -oh, around $1,200 as well. So, for one tooth – a root canal and crown will come in at around $2,400-3,000. And how many teeth does one have that might need a crown? And even if you got them earlier in life, they do fail and need replacement.
    And trying to find a ‘low cost’ dentist – good luck….around here you really do get what you pay for. Not really wanting to gamble with my teeth.
    I guess we could try to find a dentist in a lower cost area around here, but does one really want to have to drive 2-3 hours to get to a dentist, especially in an emergency?
    I do believe that many many bloomers and boomers have not saved enough for retirement – including me. It is kind of hard to save up when one has gone through a couple divorces, been laid-off or downsized, or, in our case, had two HUGE medical expenditures that had a lot of after deductibles and co-pays out-of-pocket dollars sliding through directly the providers. And that doesn’t even include the $ that we have had to spend in helping out our over 90-yo parents who have outlived their dollars.
    Yes, I do believe there is a huge and ugly stew brewing in the future – regardless of who is in the WH and what the markets do.
    And to those who say – move somewhere’s less expensive – sure, would love to – but then, what about the moving expenses, what about the relocation costs, what about the jobs that we do have here right now? Buy an RV and travel – have to wait until I get on Medicare cuz my current private insurance only covers the state I live in.
    Screwed in not a nice way.

    • To save on Dental Costs, do you have a local dental school where students do the same work for far less $.

    • God I’m right with you on that.. Had some dental work done and before I knew it .. I had spent just under sixteen grand..
      In the end
      People always think about how they’ll distribute what they have saved. Having o e of my many hats being working with patients.. You won’t..when my health took a dump everything I had saved had to be used..every dime..stocks all are viewed as income it’s out the door to..
      One man would go with his son and buy a two dollar bottle of generic Tylenol once a month..and once a month we were sent in to confiscate it and destroy it..one day he showed me his monthly bill for thirty. Night time Tylenol he was charged almost five hundred dollars.
      Policy ..it had to come from their pharmacy.

  3. George, now you have me playing Moody Blues in my head!

    Donuts are fattening, surely not a worthy goal,
    Conversely, consider deep the hole….

  4. George, interesting piece on economics today — well done! Again. But not get your warmth towards Trump: You not down with his tax cuts (even though they juiced stocks) nor his trade wars (which you often compare to Hoover’s depression). Surely it cannot be preexisting conditions nor even social security. Still, kudos (yet shame too) to Trump for identifying the issue (blaming ‘The Others’) that kept him in the game until Comey could deliver the knockout 11 days before the election. (Of course law enforcement tends mostly conservative! Geez. Duh.) Nor do you seem much worried about this us/them stuff, coupled with the perpetual lying (propaganda) and the war on the free press devolving into 1930s Europe totalitarianism, even in the face of a huge economic collapse. Am hoping you are right. Best, Mike.

    • It’s official, you are off your rocker. By any chance do you know Jon? Why can’t you just go away? Constant taunting is the sign of a bully. Go start your own blog and knock yourself out beating yourselves up.

  5. “If that is the correct count, then we could make one more run to the stars. BUT, if that’s it for V, then our first stop will be at the red circle.”

    Here we are again with the “If & BUT” ;-( that spoils so much; But, I respect UR intelligence! Personally, I’m positioned to hit the red circle, but in my heart I feel we could make one more run to the stars. Dilemma!

  6. Asia and Europe are along for the ride (their stock mkts are down also), thank Trump for throwing the monkey wrench(more tariffs) into the ‘engine’… For now this ‘exogenous cause’ will suffice for me, although ElliotWave.com analysts/writers will probably later refute that and say it was all according to the ‘Wave Model’….and Trump is blameless…


    Low unemployment actually prefaced the crash:

    New legislation (repeal of Dodd Frank) prefaces a crash (and historical Glass-Steagall):

    Trade Deficits:

  7. Looking at the 5 minute charts, the DOW, S&P, & NASDAQ all closed strong. Could mean a up open tomorrow morning.

  8. I am inclined to think… germany tariff for autos is 15% and US tariff for import is 2.5%.. that Trump is right. Uncle Sam needs the revenue, since the labor wages are beyond his tax reach. The businesses in Germ have a competitive edge as the tariff props up the selling price in Germ allowing the business to lower prices to force US competitors out of business.. Go Tariffs!!!!

  9. For the dental issues. You could always pack up go sit on the beach in Cozumel and see an American trained dentist who speaks English there.for the same amount as getting your crowns at home. I am big believer and consumer of medical tourism.

    • See targeti8ng of older americans in Cozumel area – espec people not poor
      Statistics matter!
      Pass on the Mexifloss

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