Markets: Evolving a Fall MOAC?

MOAC:  Mother of All Crashes

Sorry if you are not a subscriber to our Peoplenomics.com website, otherwise, this morning’s missive might make a lot more sense.

But even here in the cheap seats, I’ve been telling you for nearly a year that we could experience a major Double-Top in this market.  To remind you, click over to the August 21st 2018 column and read “Markets: A 10-year Rally then “Double-Top?.

Because of the breakdown in Trade Talks, at least for now, we can begin to sketch out a few ways we could proceed downward from here.  Anything is possible, of course, but we have to consider all futures:

  • The Bull case that we have only done a larger 1 up since the Christmas Eve wash-out and we’re in a 2 now.  This would leave a bit run for the Bulls into late summer and then a correction in the fall.
  • The middle-ground case is the market is about out of “juice” – since 11-year runs are a reasonably regular occurrence.  We could go into trading dream land with nothing but short bursts up (and down) as the market “backs and fills” to build up strength for an eventual upside breakout.
  • The “nightmare” case is the one we’re hauling out for your inspection this morning.  And to see it, I’ve been up since oh-dark-thirty working on two charts that will put things into perspective.

This first chart shows you how while the US market blow-off bubble did not match up with 1929’s manic event, we can see around the edges some events (like the much overblown cryptocurrency rush) that may have bled off some of the “internal steam” that would have driven the stock market higher.  See here:

chart 1929 market vs 2019

If you like Elliott waves (and who doesn’t?) you can see in the 2009-2019 how the blow-out into the holidays last winter might be counted as an A wave down.  Logically, the recent highs could count as the B wave Up.

Except there’s a little nit in here:  The B wave can’t normally be highers that the top of the previous wave but with dueling algorithms, who the hell knows how the rules are being with flash-trading.

At any rate, when we then look at the markets (in an Aggregate view, which is our specialty – because it prevents hot sectors from distorting your overall view, as techs did in the Tech Wreck following the Internet bubble bursting in 2000), we can see a case for something a good bit lower than Christmas lows…Say, a 25-50% larger decline:

stock crash odds loom for fall

If you’re a Peoplenomics subscriber, you candownload and plug-in the initial decline data into our OpenBrain.xls spreadsheet on the Master Index page under Resources.  If not, you have the only two numbers needed for a SWAG as a C wave down shown.

Important:  We are NOT saying that a calamity of some type (like a nuke war between India and Pakistan this fall, for example) will occur.  However, the markets are leaning in that general direction, as we see it, presently.

Large Personal Problems, Too

OMG, let me count the ways!

  • EMP Risk: Not only would a major EMP event take down your stock portfolio, leaving you bust for how long(?) but online banking would disappear in the flash, as well.  Which gets us to the “How are your food stocks and do you have a garden in?”
  • Fallout Risk: While seems like every late-night half-wit comedian is trying to “thump Trump” there’s very little appreciation that somewhere with the federal government there is likely an analogy to our Directorate 153 thought-model.  We evolved this model a long time ago in order to understand how news events might play out in the event that a “Computational Future” was knowable (Oh, and we think it is…BTW).  So, when I write on the Peoplenomics side (as I did this weekend) about Nested Bayesian Investment Analysis, remember there is also a straight-forward way to model future historical events using the same approach.  Which is to say the future is nothing more than a messy swamp of nested, conditional probabilities.
  • There’s nothing to Buy: Run through the list and what do we find?   Housing is overbuilt – with the mass marketing of sexual orientations, not so many children, which is one plus for unchecked immigration.  Stocks are at absurd levels on a dividend to risk basis.  About the best you can hope for is a Greater Fool when you want to sell anything.  Gold and Silver?  Great if you have ’em, and EMP-proof, but merchants don’t have any way to accept it.  Treasuries?  Yock-sucko:  Lower for Longer just keeps the strategic investor from saving more dough.  Those holding higher rates, having laddered in on the way into the rate toilet, well, they’ll cash them in when bargains appear elsewhere.
  • Bitcoin?  $7,274 earlier this morning..which we view as the “hot money” that in an earlier time would have busted the market to the upside…
  • Climate Change is Toast: While the bobble-heads are parroting, NASA is getting more into the “colder” view we’ve told you to expect.  It occurs to us that one reason Trump may be willing to walk out of Trade talks with China is if the US has future-modeling capacity, if it food crops were gong to be in tight supply, would YOU want to promise them to China when you don’t know how the home front will look?  See stories like “Near-Record Cold “Highs” Mother’s Day” for a more even approach.  We laugh at the “frostbite due to warming” bullshit that people swallow.  God save us from un-skeptical mobs and social media revolutionaries. (SMR’s) all part of the descent into Digital Mob Rule (DMR).
  • And where’s the Housing Collapse Recovery?  Illusion?  Check CBS’ A decade after the recession, 40 percent of families still struggle

Now, I have to apologize if this is a “bit much” and a “bit early” on a Monday for firing so many neurons, but like resource depletion, the collapse of Western Empire will not be put on hold.  The attacks are mounting and will continue to do so. Damn democrats, climate, and open border nonsense, anyway. Starting with LBJ.

That’s the Big Picture.  I don’t like it, but we each get (on average) about 28-thousand days to play the “Game Life.”  You makes your bets and you takes your chances.

Still, it’s worth remembering the casino is crooked and just as Europe will become majority Muslim at some point, so too, the southern US is in the process of being over-run.  The political leeches just won’t level with the people because they’d be drawn and quartered if they did.  Prevaricating lying scum is too kind a term.

Wars Logically Follow

While we’re reading in the UK Sun how “TANKERS ATTACKED Saudi oil tankers including one bound for US hit by ‘sabotage attack’ amid Iran standoff — Two tankers suffered ‘significant damage’ after being attacked off the UAE coast,”  remember that large wars take “ramp-up time.”  Our carrier group will be on scene when?  Next week?

We see genuine risk of Iran attempting to close the Strait of Hormuz, but we’ve seen that one coming since the late senator Scoop Jackson warned us of it in the early 1970’s.  That was back in the day of moderate and civil centrist democrats.  Not like today’s “social Molotov throwers.

We continue to see India and Pakistan as the greater risk, though as the trading of barbs continues.  In the latest tensioner? Pakistan to review its airspace ban for Indian flights on May 15.

Quipply

Hats off to CBS for some actual reporting in ““Massive fraud” by generic drug makers an “attack on the American people,” Connecticut AG says.”  Stronger pills to come as the off-shored junk comes back up to snuff?

Hire once, quit twice? Amazon Offers to Pay Employees $10,000 to Quit Their Jobs and Deliver Packages Instead. Also of note is the payoff Amazon is reaping from robotics as Amazon rolls out machines that pack orders and replace jobs.

Uber‘s IPO hasn’t worked out too well – yet.  See the NY Times business report under DealBook Briefing: Uber Bombed. Now What?.

Where’s the Beef Dept: Exclusive: Impossible Foods raises $300 million with investors eager for bite of meatless burgers.

On that,. off to the kitchen and a few kilocalories (!).

One reader asked how the refrigerator repair worked out.  So farf, so good with 11% humidity and 41F on the middle shelf in the fxridge and -7.8F in the freezer.

We sure like to chill…but we’;ll have moron the morrow, anyway.

Dow futures now down 474.  Is this the definitive video of the day?

34 thoughts on “Markets: Evolving a Fall MOAC?”

  1. G – don’t do it..again. Levered ETF’s are money losing tools, know U R a Toolslut, but them levered ETF’s are bad news for investors and capital preservationists. How about opportunity to get long at better entry prices?

    IndoPak Flash vs. M.E. Flash ? funny how same dam Intelligence Svcs ( chaos creators) are behind the scenes “false flagging” the hell out everyone-everywhere.
    W.T.F. is wrong with these “things” ? cant call them “people” or “human” ..animals? That kinda gives a ugly, foul and filthy name to the Animals, no?

  2. Some not so funny things about the escalating tensions with Iran are (a) Iran is allied with Syria, (b) it funds Hezbollah and Hamas in their armed provocation of Israel and (c) serves a valuable strategic puppet and arms sale client for Russia. Remember also that Russia has huge oil production and market interests of its own and thus has zero problem with Iran cutting off supplies to the West, as such a move will plentifully pad Putin’s pockets.

    • Also the leaders of those factions have openly said they were infiltrating the USA posed as …refugee’s

  3. Why George I’m sure your intelligent to know that the “art of the deal” is a dead fish floating,as any kind of a trade deal would have been done long ago,oh China may toss the orange clown a bone or two so he can at least save some face but any meaningful agreement was lost long ago as China simply devalues their currency by the same amount as the tariffs

    I see now the bankruptcies of farmers has even spread to Wisconsin as the blow back from the sanctions has hit the dairy farmers, as they play the sanction games, with the EU dumping their products which use to go to Russia now being dumped on the U.S. market driving down the products of the American Farmer.

    I wouldn’t worry to much about the Straits of Hormuz and Iran closing it,well unless we are stupid enough to attack Iran for Israel, then all bets are off for it will bring Russia and China into the affair.

    Of course the invasion from the South was/is all about cheap labor and driving down wages and still is, along with off-shoring and off-shore accounts enacted by the Reagan/Bush administrations just another nail in the American middle class’s coffin.

    The other side of the coin on a wet cold Monday morning with more rain to come.!!!

  4. George,
    1. Every comedian IS making fun of Trump. That’s a fact. And the fact also is…he is the best material comedians have ever had in the history of Presidency’s. There is no conspiracy or Directorate involved here. In fact, I can make the argument that the comedians aren’t that creative with their own material…Most late night guys are just repeating the stupid stuff Trump does, and when you hear it in a different perspective, we laugh, because Trump is such an out of control, Dumb and dumber Clown. The thing is…it’s a real nervous laugh…I mean this idiot is our President?

    2. Housing is only overbuilt where Trump made promises to his base he couldn’t keep. Why? He pulled funding away from the Small business administration in rural areas and gave it to the big banks so they can privatize things like water districts and double the cost of water to those same rural areas. Those areas are now short on opportunities and cash to buy simple things let alone a house.

    There is still a HUGE housing shortage in the Bay Area, Seattle, Portland, Orange County, And large metros where there is tremendous growth. Bay Area unemployment is just over 1%…which is statiscally full employment. They can’t build housing fast enough.

    3. Bitcoin…Totally transferred 80% of my liquid portfolio to Bitcoin, Bitcoin cash, Ethereum and Lightcoin a month ago. My son…a big Crypto proponent, convinced me to take the plunge. Really only left some to buy Uber…which so far has really disappointed…but I am “”riding” that out…pun intended. That crypto transfer has really planned out well for me and of course my already comfortable son.

    4. Climate Change is definitely toast as a brand, but that doesn’t mean we stop our campaign to halt pollution. Our biggest threat is our air quality, polluted oceans, and increasingly polluted ground water due to the roll back of EPA guidelines. Do we want Flint, MI scenarios all over our country? Do we want Beijing’s air quality? If we want to boost housing and the ability to buy more stuff, then we need to shift the paradigm and switch to alternative energy. Make solar panels and wind turbines in Alabama, Mississippi, Ohio, Indiana. Open up Tesla and other electric car plants in Tennessee, Kentucky and Missouri. Drill to tap into thermal supplies and energy in California, Washington and Wyoming. Already, alternative energy emplyoys 14 times more people than the fossil fuel industry. Yet, alternative is only 15% of the energy we use as a country…except California, where it’s over 90% and a huge job creator. Imagine how many jobs we could create if we can reverse the trend to alternative energy? Imagine the cost savings for consumers on utilities that could buy more stuff.

      • The Dems are going to be hard-pressed to make things better for the gentrified set?

        Hashed out in small doses, it superellipses the soul back to egg hatching a “tale of two cities” featuring Huxley’s utopia and dystopia. Alien, but not. One grok’s the wisdom of the late Danish philosopher-mathematician, Piet Hein who described the divide as not between haves and have-nots, but rather between knows and know-nots.

        Sigh, oh soma, steering us so right from the haight. Where art the summer of love?

    • My God are you out of your mind, do you really want to see us like China and its hi-speed rail 5G and all the rest of it, while we overload the hi-ways with bumper to bumper traffic so the auto companies and corporations can rip you off the junk they make,lol my God that’s almost like asking the government to outlaw compound interest, and we know that’s never going to happen,and now for my next dream.!!!

    • So…doing the math…if the fossil fuel energy sector provides the country with 85% of the country’s energy, and a workforce 14 times in alternative energy that size provides 15%…that would imply moving entirely to alternative energy would be an 80 fold increase in the size of the work force in the energy sector…and the cost of energy.

      • There are scalability efficiencies, but yes, alternative energy would increase the work force tremendously…in the beginning as the infrastructure is built out…just like the early days of cell phone and fiber optic build outs. Those technologies created a lot of jobs. There is a study by the Department of energy that details this. I posted it on this site about two months ago

    • California is 90% renewable? You mean, like for an hour, on a sunny day? Show me a source. As of 2017 I’m seeing 30%, with a goal of 50% by 2025.

      https://pv-magazine-usa.com/2018/07/03/california-breakdown-of-electricity-imports-upholds-statess-clean-reputation/

      Over half of California’s 30% renewable in 2017 was hydroelectric, so that puts CALIFORNIA at *less than* 15% being solar, wind, etc. And my source isn’t Fox News, it’s a tech company commending California for the impressive amount of renewable energy they are generating. You want to talk to us more about the President making crap up and exaggerating? I’m all about affordable renewable energy sources, but you’re a bunch of hot air.

      • Only 2% is coal generated…and that’s a fact. I guess I should have said green energy… The most comes from thousands of solar arrays, the thousands of wind farms, hydro, thermal, natural gas, and is captured in battery farms and distributed on an as needed basis… and to a lesser extent experiments on wave, lab manufactured bio-fuels, and other experimental power generation that the tech world is working on on-a daily basis

      • Natural gas is “alternativr energy” now? So you went from “90% alternative energy” to “only 2% coal”? Keep moving those goalposts, keep reaching.

    • Solar panels at the individual level have marginal utility as long as one is required to stay connected to the grid and pay minimum charges for that hookup. If you shut off service for six months, in most areas they will pull the meter and you may be at risk of having a municipality condemn your house. At best, the power company will require an inspection prior to reinstalling the meter and possibly require that the place be brought up to the latest code.

      As long as you must pay the sunk cost of connection(maybe $300 a year), you gain very little from PV panels unless you’re pulling massive power from them for some useful purpose. Of course, there’s always the redundancy, if it’s wired right. I suppose mining cryptos or heating your house(or both) justifies PV. Perhaps charging the Tesla does too.

      • That’s what a Tesla Power wall is for. I don’t have that, but I have friends and clients that do. They power by the sun during the day, which also will charge the power wall and live off of the power wall by night…rinse and repeat. Depending on the size of the power wall, they only have to tap into the grid during the deep winter months from November thru January when the sun days are short and the rainy days more frequent.

      • I don’t know Mike.. the sad part in NM and Arizona is there is a company out there renting systems to people.. long term lease.. for some reason they didn’t realize that you can buy a system and have it installed cheaper than one years lease.. knew a guy that bought his.. he put it up and it paid for iteself in less than six months.. the family keeps the doors and windows open so that the dog can look out and he gets a check back.. now my argument is..
        IF..
        you want to be reimbursed for any extra power then you should be liable for any increases in energy costs.. the power companies should offer a freeze on utility increases to anyone wishing to put up a system for a ten year period of time..
        that is the time the companies around here have calculated it to be paid for..
        ( our first system paid for itself in five years at fifteen dollars a watt for a panel the last set of panels and equipment I got after rebates ran a little over three hundred dollars for three kw….. Now with the reduced prices of solar and the increased prices of energy.. who knows I didn’t even calculate the last set..I actually just got off of the phone with the wind turbine company.. my wind turbine is over fifteen years old.. I had it shut down because of a vibration till just last week when the grandson put up a new hub.. now I notice that the generator is making more noise it is still working good but the company thinks that maybe there is a little rust on the shaft or the bearings need to be lubricated.. the salesman though brought up the new and improved model they have… the price for a whole system under a grand for a 3kw wind turbine kit.. if I buy just the generator and use what I have three hundred..)
        If the power companies would promote solar and wind small solar and wind.. large solar and wind is an extremely complicated issue with a lot of pitfalls and infrastructure changes.. small on the other hand isn’t..
        My system produces 32 -38 kw a day.. average.. I don’t get reimbursed and my meter doesn’t run backwards.. my monthly bill on average considering I still have to pay for energy through the night runs about seven to ten dollars over connection fee..
        by promoting solar and wind.. they can strengthen the grid.. strengthen the infrastructure from a major collapse during a catastrophic event. improve national security because of that.. its a no brainer.. but they will never do that..
        a friend of mine was asking what he should do for his shop.. he is planning on putting solar up on his new shop.. he builds towers.. I suggested he build a tower.. with an inverted trapezoid reflector in the center.. from a distance it would be like the light house of Alexandria but he would get full sun from all of the panels..increase his output.. and a 200kw system would cost less than a million and put out a megawatt.. power his place and the place next door to him..
        I said I hope you put that up.. because the droolers at the power company cant put the vision of a tower in their heads much less an inverted trapezoid LOL..

    • “Already, alternative energy emplyoys 14 times more people than the fossil fuel industry.”

      This is also BS. This number only works when you add in all on the people working in the “energy efficiency” business. “Green energy” employees account for about 40% of the energy production employment. Are you and Trump related, or did you get the same “make stuff up” training?

      https://www.nrdc.org/experts/lara-ettenson/us-clean-energy-jobs-surpass-fossil-fuel-employment

    • Mark.. we all should be looking at what he is trying to accomplish.. rather than what some over paid group of misfits has to say..
      it is obvious.. the federal reserve has been kiting the country for decades now.https://en.wikipedia.org/wiki/Check_kiting

      our Congress has over spent like a kid in the candy store with a credit card..

      https://pocketsense.com/use-misuse-credit-cards-6314.html

      What really shocks me.. isn’t that a bunch of misfits are poking fun at the only one trying to save out country from financial ruin.. they are a bought and sold commodity in my opinion..
      but that people in your financial position can’t see it.. Your money could be worth Nothing.. at all.. he is trying to make it so that the budget figures match on both sides.. you can’t keep writing checks on a checkbook just because you have a hundred extra checks.. you have to have something in the bank for them to dip into.. even though the dollar isn’t backed by anything it still is the currency that we negotiate with today..

      its like the company whose daughter I worked with.. they would remodel millionaires homes and then not pay for the renovations.. I was asked if I had a financial hardware.. I gave a quick budget lecture.. ( no not me LOL) and then told the woman she could remodel my home and I won’t pay her either LOL….
      at some point in the very near future.. it will all have to be settled.. my guess is the only option for the usa if our legislators dont’ SOGOTP ( shizt or get off the pot) and do something.. that our country will go into hyper inflation like argentina or some other country..

      https://www.newsweek.com/zimbabwes-10-million-bread-84167

      https://www.citeco.fr/10000-years-history-economics/contemporary-world/hyperinflation-in-argentina

      Obviously.. you have to maintain your budget.. you just don’t build to be building if you cannot put the funds up.. Or are you in a position where that doesn’t even matter to you.. the king of the hill.. you whittle away at a tower long enough and the tower will come down..

      https://www.youtube.com/watch?v=kdPyzkNcLac

      the industrialists of old realized that you cannot have a strong top without a strong base.. so they invested in their companies in the community that they reside in..
      todays industrialists seem to think that hey its about ME.. and only ME.. so they invest outside their communities and will all be shocked when it does happen.. the ones affected the most.. everyone.. rich will be poor.. poor will be poorer.. the elderly dumpster diving like in greece.. young women selling their bodies for a can of soup..
      https://www.sfaw.org/newswire/2015/07/03/desperate-greeks-dumpster-dive-for-food-as-crisis-means-americans-may-face-severe-food-shortages-too/

      https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article174808061.html

      https://www.foxnews.com/world/venezuelan-women-sell-hair-sex-and-breast-milk-to-survive-as-country-crumbles

      that is coming our way young man.. if we don’t do something and soon.. at least DJT is trying..

      • I get so frustrated at times.. I am sorry if I misspoke.. it just seems like everyone is so fuzking stupid that they can’t see the common sense of what trump is trying to accomplish..

  5. What’s less expensive than a false flag operation? A fake news release. Don’t believe it until you see it. Never believe the professional liars.
    I will take the “sabotage” event with a large measure of salt.

  6. Quote of the Week LOL

    “We have Pompeo, a malignant manatee looking to start wars in which he will not risk his flabby amorphous ass also parading his Christianity. Bolton, a mean sonofabitch who belongs in a strait jacket, at least doesn’t pose as someone having a soul. And the Golden Tufted Cockatoo, too weak to control those around him, preening and tweeting. God save us.”

    Fred Reed

  7. George

    “Also of note is the payoff Amazon is reaping from robotics as Amazon rolls out machines that pack orders and replace jobs.”

    Actually it’s a shift in the type of jobs Amazon will offer. Somebody has to load the machines with tape and boxes. Somebody has to do maintenance on the machines and fix jams. Somebody has to oversee the industrial computers running those machines and make tweeks to the software as conditions change.

    Those somebody’s will not work for minimum wage!

    For most of my career I was involved with the design, activation, and upgrades to factory automation systems. The goal was to provide human operators with tools that will produce superior results when working with large and dangerous processes.

    With that said I am not a fan of replacing humans in every way possible. In reality it can’t be done in a cost effective manner. There are lots of activities that go on before any automation systems is activated to produce a product. These activities can only be done by a human.

    Any CEO who thinks that a completely automated factory can be built is a Fool!

  8. “If you like Elliott waves (and who doesn’t?)”

    I don’t!! And this is no investment advice! Have you ever figured out for yourself how far ahead financially you’d be, if during your live time of investing you had followed a simple 200-period moving average applied to the investment of your choice, rather than monkeying around with this confusing double-talking EW-crap?

    I don’t want to rain on your parade, because I think you are brilliant with what you’re doing, except your expert knowledge of EW has worked to your own detriment. However, if you knew and deep down inside I think you know, we would be deprived of your cogent insights. ;-)

    IMHO, KISS (keep it simple) and don’t go for this confusing esoteric double talk, for your very own good.

    Thanks for listening, and you need Not print this!!!

      • Thanks Bruno, happy day! Answered some of my questions. Mega day for me. Ive been doing a super indepth study of esoteric workz whole working at the key arena construction project. Pretty interesting stuff. Grammatically speaking, it is interesting to note the how, why and what and who of this and that. Planetary influences and stars as such. I read quite a few man-u-scripts lately from the 14 and 1600’s. Mostly about prayers, wisdom, notes and key’s.

        It is a thinKing game, thats forsure. I do my best and hope for the rest. Looking at getting a new mustang gt. Maybe the luck of the irish will help me. Best guess, &c. Alrighty alright, writting the journeyman Chronicle’s.

        On to werk, catch up with ya later.

      • P.S. i go en extra mile, to see. I been seeing bunches, im super humbled by it, not even sure what to do with it all. Definitely making sum changes. Out with the old and in with the new. And some stuff IS the same. Recently let go a bunch of debt, exhange for something better. Definitely in a place i have never been. Everything is new and redesigned. Actually Superized by it.

    • I would sure LIKE to see one more run over summer…and I would not be surprised to see a pretty good bounce rest of week into options exp. Trade fears are overwrought. We can alt-source from Vietnam, Mayanmar, Laos and loads of others.

  9. George am still amazed at the caliber of your bloggers even the ones I disagree with. Very enlightening.

  10. Story 1 from msm:
    700+ US customs agents are being redeployed from the US/Canada border to the US/Mexico border.

    -may hitch up with-

    Story 2 from the ACLU:
    DHS is substituting customs law enforcement officers for asylum officers at the US/Mexico border.

    Hmmmm…say what? A proponent of “collective power”…@alex_mensing

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