Oddly, Asia was not in the crapper and in fact the Shanghai market was up better than 2%.
Europe, on the other hand, is doing its damnedest to drop that much. In doing so, the U.S. will like fall 1%, or so, and that should set up a decline in China overnight. Back in serious trading days, set-ups like this would have me eyeing Asian ADRs (American Depository Receipts, stocks traded by proxy here).
Well, gee, ain’t this gonna be fun.
I suppose you wonder what’s going on. The answer is simple.
As you know, we recently hit a major trend channel bottom and we have bounced off that to the upside. The market now should march a ways up the slightly climbing trend bottom for a ways while everyone comes to terms with the idea that a Wave IKV bottom is really in.
From there, we should make a major move up to about the middle of the trend lines, then pull back, and then go on to new all-time highs.
BUT (and this is a big booty of a BUT if you know what I mean…) IF the market slams down through the bottom of the trend line and stays there for a while…only to come up to the bottom of the trend channel, then we will have to renumber the wave count.
In the “Nightmare on Wall Street” version of the future, we would discover that what seems to fit as a Wave IV was really the beginnings of a I down. And the recent decline to the trend was just a (1) of I down.
And if that’s the case, we would have to brace for THAT in turn forming an even larger 1 down…and pretty soon my friend Robin Landry’s work, that looks for a sub-1,000 Dow over time shows up sooner than later. Until the wave structure delivers some new highs, we are still in the danger zone where a Failed V could occur…so we will sit back and watch the herd to see which way they’re going to stampede.
No point trying to be in the middle of the stampede, is there?
Zika virus is a terrible new “left field” event. A few technical details from the WHO – which has declared a pandemic now:
Zika virus disease is caused by a virus transmitted by Aedes mosquitoes. People with Zika virus disease usually have a mild fever, skin rash (exanthema) and conjunctivitis. These symptoms normally last for 2-7 days. There is no specific treatment or vaccine currently available. The best form of prevention is protection against mosquito bites.
The virus is known to circulate in Africa, the Americas, Asia and the Pacific.
We were going to save the detailed discussion for Peoplenomics this week, but events are moving faster than expected, so a short discussion here is in order.
First, the headlines are all over the place about how this is a man-caused disaster – something the WHO is sugar-coating. Press accounts are more on point:
Now here’s the story that confirms that most humans are crazy. There is talk that yet-another genetically modified mosquito is being considered to offset this disease outbreak.
So here we got: There is a question over whether a genetically modified bug is at the root of the outbreak. If so, we are now considering doubling-down on bad ideas.
Hence, we are christening a new word to describe the world’s elites and governors:
The Oil market may be telling us something: International travel could be ready to collapse on this. Meantime, we await the Obama posse’s explanation of how open/porous leaky borders which bring in who-knows-what from who-knows-where are a good idea with public health perils out there.
The markets seem to be getting nervous again and with good cause. Extending Constitutional concepts and protections to non-citizens was, and continues, to be a very bad idea.
Iowa Results: Cruz Cruises, Confused Demos
The ABC quote attributed to Ted Cruz sums it up: New York values aren’t playing, anymore:
“This is a center-right country. The values of this country are reasonable, common sense. Their Judeo-Christian values are the reason our campaign is resonating and resonating among Reagan Democrats in particular is because getting back to the principles that built America and those principles bring us together.”
On the democratic side, voters seem equally divided on whether they want an old Bernie or Hillary.
This, fo-sho, will be a day to listen to Rush Limbaugh…
Just Out: Confidence Flat
Says the Gallup Organization: U.S. Economic Confidence Index Flat at -11 in January.
Auto sales will dribble out later, but down 250 wouldn’t surprise me, much. Futures down half that already.
The Leak Continues at Porters Ranch
Global Warming Notes
From the “Ice Age Now” site of Robert Felix, we noticed Vietnam – Record cold kills more than 50,000 livestock and poultry. .