The stock market is already AT NEW HIGHS – it just hasn’t hit the news yet because individual indices – like the Dow – have not confirmed.
That’s where our Peoplenomics.com subscribers have a leg-up on other investors. You see, we use something I developed long-ago to get at the Truth of Markets – which is often not apparent in the headlines.
I call it the “Aggregate Index.” The reason for the Index is simple: I was thoroughly disgusted with the (lying) in the securities industry in the post Internet Bubble collapse era. There we were – with between $5 and $8-TRILLION of American investments wiped out – and yet the securities industry papered-it over!
It was a con job on a massive scale. Unfortunately, it was easy to pull-off. See, prior to the DotBomb, everyone was referring to the “techs” as “leading the way” into the future. But, when the NASDAQ cratered, it became a bastard-child of “the Street” and no one referred to it any longer. Why should they? It was the all-time turkey for many years. The Dow and the S&P were touted as “safe.”
Here lately, the FAANG stocks have resurrected the NASDAQ and today with about what, 60 points from yet-another record, we think this is a slam-dunk.
The way we were able to pierce the veil of stock-talk gobbledygook was simple: We evolved a US Aggregate that modeled equal numbers of dollars into multiple indices. That allowed us to offer clearer insights into the market because every week, when the US closes and weekend settles around the world, there’s a window when all the global “Hot Money” stands still. Say cheese!
Realizing this, and taking weekly pictures of it since 1999, has given us a unique view. In fact, again yesterday, the US market hit very close to another AGGREGATE ALL-TIME HIGH. Tuesday was IT so far.
As a result, in my view, in a few days the individual indices ought to pop, as well. I think before the end of the month.
Before I tell you what will happen next, let me show you why this matters in the longer term. We are Replaying 1929.
The present era is eerily similar to 1929. In fact, as you can see in this chart (shared with Peoplenomics.com subscribers yesterday) you can clearly see the case for a pending blow-off top of the US market.
This is NOT FINANCIAL ADVICE – just my view of the dta.
What do I expect NEXT?
Glad you asked! The next logical thing (though the markets are far from logical, lol) is for a rally strongly into next Thursday. In my work, there’s a case for maybe a small decline (or not) a week from tomorrow and following into Monday the 20th. But then I’m expecting the final blow off highs to roll in through August 23, or so.
How does a blow-off work?
The mechanics of a blow-off are simple: We have, at the moment, a fair number of investors who have been waiting for the market to collapse. New All-Time Highs take this outcome off the table.
The Chicken class? They cite fears of trade wars, Trump’s removal from office in the webolutionary coup (which won’t happen, at least yet) and the “sum of all fears” – climate, Tesla, blah, blah, blah…..
As soon as the new highs are recognized, the “chicken money” on the sidelines will come pouring in. That’s why – in 1929 – you saw the last big wave of sucker-buying at the top. I believe the odds are moving better-than-even that history will repeat itself sooner than later.
Is today different than 1929? Well, yes and no.
Sure, the Fed has better computational models and there’s a lot more in the social safety net area for people in general, but the long-simmering fear of a Second Depression hasn’t gone away.
As I’ve been writing (mainly on the Peoplenomics side, for the people in the expensive seats – $40-bucks a year, lol), we already see government having prepped for an almost-inevitable financial train wreck by setting up the “pilot programs” that will become the modern analogs to the Works Progress Administration and the Civilian Conservation Corp of the first Great Depression as we sink into the second.
People in government have known for a long time that in the Second Depression, we need to have an “instant works program” on ‘hot standby’ in case the economy craters. There’re just too many triggers and pot holes to avoid: Big oil money, the drug cartel, trade wars, and financial institutions that claim Too Big To Fail st5atus (TBTF) in order to hold-up Congress by taking the whole nation as financial hostages….all roads at some point lead to collapse.
“AmeriCorps is an initiative of the Corporation for National and Community Service (CNCS), which also oversees the Senior Corps and the formerly-funded Learn and Serve America. It was created under President Bill Clinton by the National and Community Service Trust Act of 1993,”
Clinton didn’t “see” anything in particular…but congress did – and we have long-postulated a long-range continuity of government office that quietly models the future and lays out options.
There are also monetary reasons for collapse to be considered. The US dollar has less than 4-cents worth of purchasing power left, compared with the power of a pre-Fed 1912 dollar. Those, BTW, were convertible to something fungible – gold and silver. Not since Nixon. And no, there’s nothing fungible about the energy pissed away mining cryptos…don’t delude yourself.
Thing is, these are AmeriCorp programs mean with a stroke of a presidential pen, they can ramped-up, almost overnight.
But that’s getting ahead of things. Right now, as of yesterday, our Aggregate Index closed within 12 points of Tuesday’s record high. Summer optimism should push the indices up more.
We’ll be the quiet folks on the sideline muttering occasional KAH-CHING!
Tops Don’t Happen Evenly
Take March 24, 2000. S&P Closed around 1,527.46. The NASDAQ had hit its high 5,048.62 (on a weekly closing basis) two weeks earlier.
And, two weeks later, the Dow came within two points of a second high. But, then it was over.
We won’t spoil the models, but do pay attention to what MIGHT be hinted at in the red letters in the chart.
Simply put, our data says a “Paradigm shifter” is possible between the last week of August and third week of September. Not saying it will happen, but we also can’t rule it out and it’s significant-enough that we have penciled 60-days prior to the general election (November 6) as being a “hot date.”
We are starting to look for resolution of Mueller, et alia, around September 5-6. How it resolves may drive the market for a long while thereafter. And if not Mueller, sweeping government control on social media, perhaps?
The Digital Uprising has gotten TOO REAL and it’s not something that can remain static much longer. Government will not sit idly by.
Now, back to the morning’s noise flow.
Just out from Labor:
The Producer Price Index for final demand was unchanged in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in June and 0.5 percent in May. (See table A.) On an unadjusted basis, the final demand index increased 3.3 percent for the 12 months ended in July. In July, a 0.1-percent rise in the index for final demand goods offset a 0.1-percent decline in prices for final demand services. The index for final demand less foods, energy, and trade services moved up 0.3 percent in July, the same as in June. For the 12 months ended in July, prices for final demand less foods, energy, and trade services climbed 2.8 percent.”
After the data, futures were up 23 on the Dow.
Also Worth Headspace
Most of what passes as “news” isn’t. But here’s an assortment that may be useful:
Two currency moves begin: U.S. sanctions whack Russia’s rouble, Turkey’s lira free-falls. And read this backgrounder from Foggy Bottom: Imposition of Chemical and Biological Weapons Control and Warfare Elimination Act Sanctions on Russia.
Here’s a press release where they’re “singing our song:” Nearly Half of Americans Say Volatile Markets Are an Easy Way to Make a Profit: AICPA Survey.
And see this Reuters Factbox: China tariffs on revised list of $16 billion U.S. goods.
Last, but not least, of interest to cyclical economic depression wonks, did you see where Systemic Risk Council Opposes Federal Reserve and OCC Proposals to Reform Leverage Ratio and Volcker Rule?
“Excellent!” And moron the ‘morrow…