As our Peoplenomics readers know, we didn’t carry a short position over the weekend. There were already too many people last week talking about how a “Crash” might be at hand early this week.
That is still possible-to-likely. But as my late mentor Robin Landry schooled me “Markets will always make their waves…”
Considering the Dow futures were up nearly 170 when I looked, there will be some very disappointed bears when this sucker gets rolling today. Shorts will be run.
Although, in fairness, my consigliere correctly dinged me on my trading style. “Sometimes, you just have to make a position play and not try to short-cycle trade it. Otherwise, you can be out when the big move comes along…”
He was (as is too often the case) right. I penciled out that simply going short and staying there would have increased my gains another 5-10 percent (on top of our lousy 8.5% gain month-to-date). Position trades, however, bore the hell out of me.
Why, they’re like going to a casino in Vegas, putting a buck on the roulette wheel – and having it spin for a week or two. Sure, you might come back a Bigger Winner in two weeks’ time. But where is the fun in that?
Emotions Drive Stocks, Tides
But news drives emotions.
Thus, with some “Future Tracking” we can line up a series of scheduled events this week that could/should lead to our being precisely right about “October Ends Badly.”
Swing trading involved understanding and playing the Shakespearian “tide in the affairs of Men.” Friday was (to our odd way of thinking) like a minor low tide.
We assume you are aware enough to know that there are often two high tides per day and two lows. What you don’t have sink in, until you’ve lived on the sea for over a decade, is that the minor high and minor low are not the big deals. What you want to manage are the higher highs and lower lows.
An example: On a minor high, the current running in Deception Pass up in the Washington San Juans, may force the incoming tide to move along at 4-knots, or so. When you add this to the GPS boat speed over the ground, you can see where 11-knots is doable.
The run from a high to the major low? I’ve seen that during the tides run 8-knots in places during the spring and fall big tides. Even saw the onboard navigation computer (Nobeltec) register 15.2 knots over the bottom. (Remember, hull speed on our boat was only 7-knots.)
Which has what to do with investing? Um…feeling slow, today?
Tide in Human Affairs
The link between news and market pricing is not normally a direct driver. But there are times when news does directly galvanize. Space Shuttle disaster, the odd assassination, and when it comes, the first use of nukes.
Usually, though, news is a kind of second-derivative function. The news even happens, emotions flow, and then the market posts a reaction.
It often takes a day. Which (I know, less wordy, George?) in turn, frames events this week. Puetz Crash Window aside, policy changes take time. People hold to wrong-headed inclinations on bad hunches, even for a while after the tide turns.
In our modest meta markets work, the tide was decidedly going out – a damn long ways, too – once we crossed under the 200-day moving average. That kind of number rots the bottom out of the market, corroding buoyant emotions which ran high right up to the July 31 Wave 2 high which we called very shortly thereafter. A smart position player – seeing this tide – might have just entered a bear mutual fund and gone fishing.
Not us. We’re too stupid for that. It you “want to get off the mountain” you can take the chairlift down if you want. But the whole point (of skiing, if you’re not keeping up) is going downhill and having as much fun as possible. Which is how we approach trading. Money-skiing, if you will. Buckocross?
Emotional Events Check
Direct driver potential: Nothing until tomorrow.
The Bank of Japan is arguing rates today. Dallas Fed numbers mid-session. But in our “tide check” the emotional ebb won’t set in until the Case-Shiller Housing number. Market action today the close today will hint whether that will be a Buy the Rumor (sell the news) or a Sell the Rumor (buy the news) event.
For now, the early reading of our Aggregate Index was that we could rally all the way back up to the trendline here:
(Chart may be b/w because I have changed my display settings to rest my eyes for a few weeks…)
As an add-on to this, let’s take a look at how our “daily moving average crossings ” (or what you can call dma-x).
Notice, please the structure of the Wave 3 (1) (v) which we seem to be trying to complete now. One may be able to see the very small wave 1 down (at the minuet) level of play. Then a big-ass wave (iii). This morning being the tiniest of (iv’s) which maybe is why I didn’t feel like losing much – not being short over the weekend. Looks like another one for Spidey, huh?
The Tides we would like to see play could play off the Housing numbers tomorrow.
Axioms, Posits and Suppositions
- (a) Big Rally to just before the close today might mean a bummer of a housing report. (Coming in very hot and making the Fed rethink a raise Wednesday PM.)
- (p) A hot housing number would – at best – be followed by a “minor up tide” Wednesday morning (announcement is in the afternoon).
- (s) We can suppose a short position (pending on indicators) after a (likely) higher open runs out of steam. But we have had a series of down days, and the dma-x would sure become (even more) graceful if we have that minor (minuet) 3 (1) (v) (iv) today. Toimorrow afternoon, too and into Fed Day.
- Which may involve a little hamburger helper as McDonald’s stock jumps after profit, revenue and same-store sales all beat expectations – MarketWatch
See why we don’t offer financial advice. Just acting out King Canute and yelling at the tides. (In the affairs and markets of men.)
Doom Porn Surfing
This, being a “minor high tide” in the affairs of men, we should look for “positive news” about WW3.
Take, for example:
Action in Gaza escalated as expected: IDF bombs near Al-Quds Hospital as officials refute claims it harbored Hamas – UPI.com. They would do what? Say “Yep, almost got us but not quite. Taunting in war is rare. Meanwhile, Israel-Hamas war: Israeli military operations in Gaza ‘will escalate’, IDF warns | World News | Sky News.
Has our favorite house plant set up Ms. Harris for failure, again? US does not plan to send troops to Israel, Harris says – Shafaq News. Supply chain and repair/maintenance back-end people, then?
And slow-motion invasion victim Europe has payback ahead, it’s feared: ‘Europe is the next stop’ Jerusalem Deputy Mayor warns of rising anti-Semitism as Muslim… – LBC
A.I. Jitters are an interesting “tidal” deal to watch. Biden to unveil ‘sweeping’ action to reduce AI risks (techxplore.com) gets us looking at the recent hard selloffs in tech and this is like a (time-reversed diode biasing) to make it seem like it’s not mostly hype, shuck, jive, and irrational bullshit in over-extended markets. Still, the crooks will be able to claim, “We knew government regs would come, so we sold back early…” Such BS’ers.
Life and Death Matters
Passings: ‘Friends’ Star Matthew Perry Dead at 54 After Apparent Drowning (tmz.com). “Don’t tub and drug” may be a learning outcome from this.
Stop Eating, Start Living Dept. (Not medical advice!!!) Intermittent fasting is safe for Type 2 diabetes – Tech Explorist
Studies have found: (Texas is #2 in this):Best States For Off-Grid Living: Top 7 Destinations Most Recommended By Experts – Study Finds. Like we haven’t been yammering about for how long?
Urban Readers are the list. Big Al (Alabama), Andy (Alaska), Mike in the castle in (Colorado)… I could go on, but the list is wrong (in so far as reflecting our readers. Maine over New Mexico? NM Mike pretty sure wouldn’t fall for Maine politics, though what NM has now ain’t much better. OTOH, we do have a lot of readers in Missouri which scored well.
BTW, I never did hear back from the Missouri Tourism board. I figured fame and fortune would be ours for the state slogan (“Missouri Loves Company.”)
Still haven’t recovered from the disappointment (close on the heels of my Nobel not-anation.
I just sent one to Delaware, though. See how you like it?
“You. Very Much.”
(Entendre vittles for brekkers, is it? With a shake of Winnipeg on it?) Yikes! Getting off path…where were we?
Around the Ranch: Indian Summer
Words and phrases mean very specific things. When you meet someone for the first few times, paying close attention to their word choices and contexts will tell you oodles about their brain power. Because our range of word-use actually defines the boundaries of our thinking capacity.
Sure, you might argue about emoting, or feeling, or being an empath and what-have-you. But, when comes down to it, if you don’t have the words, you don’t have a clue. Ditto with phrases.
Which gets me to the term Indian Summer. Which is due to be visited on us this week.
The British, known as erudite, pompous, word dorks – and hence the kneeler class here in the Colonies, have a silly notion (dating in this article from 1837 – What is an Indian summer? | UK weather | The Guardian) – that the only prerequisite to being labeled as Indian Summer is a period of cool and then a reversion to summery weather.
Learn from all those Indians in the UK back in the day?
Others hold that yes, it’s that, but it needs to happen between St. Martin’s Day (Nov.11) and Nov. 22. Again, cute story.
But the way it was told to me, by some elders at Frank’s Landing (in the day, covering the Washington state fishing dispute 1973-ish) was that Northwest native people were clearer in their thinking.
“Indian Summer isn’t just a warm spell in November,” I was told. “You need to have the warm period follow the first frost.”
By this measure, we may have Indian Summer in East Texas this week.
We have a freeze warning out tonight through Wednesday. Yet in the long-range forecasts, it looks like Sunday will have a high around 78 F, or so. Toss in a low around 60 and weather doesn’t get much better in our view.
Forecasts, or not, there was work to be done Sunday. That Chinese-made diesel heater in the lean-to greenhouse area needed to be checked-out in advance.
With absolutely no preparation – there was even a half-a-tank of diesel in the tank that had summered-over – the batteries were applied and Presto! Popped back to life just like it had taken a lunch hour – not almost eight-months – off.
The heater is lower left black (2 shoe) box(size) looking like half a kraken. While the blue cap in tomato row (center) is the fill pipe for the diesel heater fool (sic).
On inspection at bedtime last night, we had two small blooms om tomato row. Some banana peel powder should arrive today ($6 bucks on Amazon) and I am hoping to force out a few more blooms going into the (supposedly) warm weekend to come.
Meanwhile, I picked up a house coat (winter camo jacket) which was a decent deal deal on the Zon. Trying to work down the electric bill a bit. One way of doing that is to wear more clothing, spending less “air heating.”
We shall see.
For now, rain’s coming down like crazy and working in the shop today will involve not only the new winter jacket, but this is when those cheap cotton “string gloves” (the kind with friction dots) are the right “shop wear.”
The Bigger Winter gear remains stowed until we get down to 20 F, but if you don’t have everything you need to survive a week without power?
The time to prepare and test is while you can still order the gear you COULD need in the event the “basis of normalcy” fails badly.
ShopTalk Sunday is here, if you missed it. (There is no excuse, of course, but we won’t quibble. At least until we know if you’re armed.)
Write when you get warm, but the markets hot – and just right for a short entry ahead of Ure’s next bear raid.