Don’t look now, but markets are getting into some really hairy straits.
While there had been hope earlier in the week that a rally would grab hold and save the day, hopes were dashed Thursday when the market blew down 368 Dow points and more than 65 on the S&P.
It just wasn’t a good day for the Bulls, at all.
Technically, if you look through the lens of Elliott Waves, you’ll see a very challenging pattern in all this:
The big green numerals offer the view (one of many, we don’t offer advice) that Wave 1 down was from November 8th highs. Long decline – down until about March 13, or so, in our Aggregate Index work.
Then Bulls found their mojo and we rallied like hell putting in an Aggregate close of 37,923.73 Tuesday. Since then, Bulls have run into headwinds.
This does not mean – for sure or certain – that we’re in Bear Market country by conventional measures – but it our work it’s not very promising. A 10 percent – or greater – decline seems possible.
As we edge toward the open, some buying seems to have come into the futures. So that vaguely possible mad rally into Orthodox Easter weekend isn’t off the table, yet. With Europe getting its ass kicked over there this morning, the Bulls face long-term disaster, though.
Good News Search
Worldwide, supply chains are being weaponized by major financial interests. Some recent examples include:
- Shipping problems out of Asia
- Port regulations slowing offloading in SoCal
- Rail reductions (2021) out of SoCal
Then there’s the matter of labor talks. Last month, we noticed ‘Completely demoralized’: US railroad workers pushed to the brink | US unions | The Guardian. Let’s also keep in mind we have a possible dockworker’s strike if a new coast-wide agreement can’t be hammered out before the summer deadline.
In short, the supply chain is breaking. While it’s easy to blame every Tom, Dick, and Harry, it may just be that upper limit of complexity we have talked about recently.
As part of “Peak ‘Everything'” the Association of American Railroads data report this week shows:
“For the first 15 weeks of 2022, U.S. railroads reported cumulative volume of 3,444,827 carloads, up 1.9 percent from the same point last year; and 3,910,355 intermodal units, down 6.8 percent from last year. Total combined U.S. traffic for the first 15 weeks of 2022 was 7,355,182 carloads and intermodal units, a decrease of 2.9 percent compared to last year.”
It’s not hard to work the math on this:
- Consumer demand is still mostly strong.
- People see inflation coming and are buying in advance.
- Russia Sanctions (supply chain warfare) are slicing us as much (and maybe more than Russia. (*Judgment errors in DC – look surprised?)
- Key labor contracts are being negotiated in an inflation upswing.
- Markets which peaked in Nov. 2021 are in position to begin a third leg down.
More next week when we get a month-end flurry of data. But remember both Tuesday’s Housing report and the hidden money supply are well in the rearview because of either hysteresis (time lag) pulling numbers, or (in the Fed’s case) keeping the people who are on the hook for financial collapse in the dark.
Our “turn paper into useable assets” approach to consider: Food is always useful. But think back to the hyperinflation in Weimar Germany – or more recently Zimbabwe or Venezuela. What good is a fine return on stocks if it doesn’t actually net out when purchasing food at the grocery store?
Surfing the Headlines
Not a lot to get worked up over, early: Orthodox Easter Weekend.
Tax breaks aren’t for ever, even if you have a mouse: Florida WILL strip Disney of privileged tax and self-governing status.
Thar she blows! Spain: Fishing boat with 3 metric tons of cocaine seized. There go the party plans…
Your tax money not defending America’s borders: Biden Is Set To Unveil $1.3 Billion More in Aid for Ukraine | Time
Let’s see who else Slow Joe can piss off, shall we? Joe Biden: China’s Xi Jinping ‘doesn’t have a democratic bone in his body’. Where’s the “shut-up bunny” when we need ’em?
Mandating politicians are still up to their plans: Los Angeles County to issue new COVID-19 health order that will bring back mask wearing on all public transit within county – ABC7,
Meanwhile, we found it interesting that the UK has not revealed its death of unvaxxed versus vaxxed data for a month now. Why? To0 many people gobs of shots were dying. See page 44 here.
Still uneven data, uneven thinking in government, and Some major U.S. airlines letting some mask violators to fly again : NPR.
And did you see where Coronavirus: 3 shots of Chinese inactivated vaccine effective against Omicron variant, say researchers | South China Morning Post (scmp.com). We read all vaccine efficacy reports as sales docs, not so much medical.
Now that we’ve wandered into medical realms…
ATR: Ure’s ER Adventure
Back to bed for another 40 winks this morning. Up late last night after an aid buggy ride to the local ER.
I’ve been dieting and part of that has been losing my appetite. But when, after my customary before dinner beverage my appetite (for a perfectly done prime rib!) didn’t report for duty.
EMT son G2 thought that was odd – and he spotted irregular heartbeats. Rather than take a chance, he called the aid unit and for the next couple of hours, I was poked and prodded.
Seems on the monitors I have a small “bunny ears” in my QRS complex. A co-pay later we were on our way…
After all the labs (and I was tough to stick since I was slightly dehydrated) there was no heart attack and BP was in bounds. Some observation time and it was home again. Troponin sticks (high sensitivity) were clear.
Near-syncope from dieting and ETOH? Friends, sell your distillery stocks! Back to measuring red wine…
This will lead to a cardiologist workup next week, though I can’t say I’m looking forward to that. As I have written many times, if you have to sign a waiver that says – in effect – “You’re doing this and it may kill you and you can’t sue…” is suspect.
I promised to go light on the coffee and ETOH is back to zero. Thursday had rolled from 2 AM with four cups of high octane plus a half cup of cocoa with even more caffeine. Almost no food. And I have known since my algo building days that too little sleep, a large rum, and sniffles due to pollen can screw up the ticker rhythm a good bit. Passed that one to one of my daughters, too, sad to say.
You go enjoy the market – I’ll come back and look at how things are playing this afternoon into the close. For now, dialing back energy levels, drinking water, light breakfast and 40 more winks is the plan.
Oh – and I did pre-write ShopTalk Sunday and Peoplenomics this weekend will be just the charts
Fingers crossed…and consider yourself read-in.
Except I almost forgot to mention! Our dandy ER nurse (Gina) had her wedding video from last weekend go viral on TikTok – with more than 1.6 million views. Congrats to her and her new Mr. Dancing Easter bunnies in tutu’s wasn’t something I’d have come up with… viral is as viral goes.
Big day ahead for Elaine: This is odometer rollover day for her. 43 to 22, you do the math. It’s an unspeakable topic around here.
Write when you get rich,