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:
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:
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.
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?.
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?