Welcome to the day denial wears off. Don’t know if you remember last Friday’s column: “Prepping for Lockdown 2.0 – Markets in Denial?” With 90-minutes to the open, Dow futures were down 450 points. Yeah, I know – we were way early on the variant impacts, but that’s how you stay alive today.
As we explained for our Peoplenomics.com subscribers Saturday, we’re facing a terrible Elliott Wave problem to sort out this week.
Here’s a picture of it updated with this morning’s future’s pricing as of 6:15 AM EDT. If you’re not into charts, see the pattern break upper right:
Here was my “first blush look” from Saturday on what might be directly ahead:
“Because we are not into Bear sell country yet, an extension to the downside is likely next week. From the second cup of coffee on Saturday, maybe lower Monday and then a turn higher Tuesday or Wednesday.
But, depending on how the Fed plays it, we could just go up Monday and then we’re back to moving higher still. Ahead of the historically normal data range for the annual market high. Which oftentimes runs from mid August to the first third of September…”
Things haven’t wavered since the second cup of coffee Monday morning, either.
The small arrow (upper right) points to a horizontal “first support” area and down (across and right from the 3 mid chart) is the “major panic if crossed line.”
Because, under Elliott, we would normally stop above the top of a Wave 1. If we go under this (and stay for a few days) then odds increase that the two yellow boxes are all there is… Circus is over, fear goes ape-shit.
The Good News, Though?
If I got my (yellow boxes) wave count wrong, you mean?
My consigliere, who’s work (from 1979) pointed to war with China somewhere around the 2024 area – based on his encyclopedic knowledge of nested and inter-dependent cycles – which continues holding up well – leans toward market conditions remaining moderate into next year.
It’s here that even though a short-nosebleed today (and into tomorrow) could be a minor wave 1 down, a third yellow trading box – minimally the size of the left-hand yellow boxes (1 plus 2) – could power a massive rally into fall 2022. Just in time to put the nails in the coffin of stocks. Which leads to depression then war.
Markets are now negotiating an inflationary outcome (higher) or deflationary outcome (much, much lower). The inflation scenario leaves a shorter Depression leading into the war, though. If it’s over now, have you got a fall garden planned?
MORE likely, to my thinking, is that the decline starts right now, maybe grinding down to the second major support level. From there, a rally (into spring 2022) comprise a larger Wave 2 bounce. Then second half of 2022 we depart for the trip down into the pre-War abyss. That’s the wave that kills the market, bringing the down into single-digits and the S&P under 1,000.
For now, the destruction of savings – which is the fertilizer of cyclical economics – hasn’t picked up speed. Pension funds aren’t banko, for example. When home prices fall to 25% of current (still massively inflated) levels, then you’re getting into Depression II in a serious way.
This (decline today) is foreplay.
Guess this is what makes investing a gamble. It’s always about whose bet on the future comes in closest to right.
Let’s see how hard the Fed hits the “borrow, reborrow, reborrow” button and feeds it to proxies… Bets on Turn-around Tuesday?
Social is [still] for Suckers
We’ve long held that Social Media is for Suckers. Today we have plenty of additional evidence to support that idea.
We might begin with “‘Most Wanted’ suspect caught after asking about reward money for her arrest on police Facebook post – ABC News. A Darwin Award candidate? (Didn’t use a VPN, huh?)
Or, we could skip right to “Revealed: leak uncovers global abuse of cyber-surveillance weapon | Surveillance | The Guardian.” Not just social, though: This spyware crap harvests phone numbers, text messages, photos, and more.
But, the real story with social media this month? The admissions that the White House has been flagging “problematic posts” (things said on social, that Bidenista’s don’t agree with). Leading to the Idiot in Chief’s specious claims such as “Biden says social media misinformation on Covid ‘killing people’ (yahoo.com).”
We need to be really clear on First Amendment Free Speech: What you write on social is (politely) none of the government’s goddam business to judge or censor or comment on. (Text of First Amendment here, for those having trouble keeping up.) President Piss-ant has NO legal authority to communicate with Social Media giants about censoring anything.
Anyone still using social media is, in our senior view, either a sucker or an anti-American stooge without a clue. Children supporting despots.
Surgeon general: Facebook’s efforts to combat COVID misinformation is ‘not enough’. Like the Yellow Pages: “never stop selling” campaign, ain’t it?
If you want to spend your precious time writing mostly useless self-aggrandizing shit (you’re too lazy to email) and posting selfies and bizarre videos so the Billionaire Boyz Club can get richer…have fun.
Suckers is as suckers does.
Rolling Stone Rolls Wrong
Long as Ure’s laying out Reality for you, we were shocked at the latest Rolling Stone Covid story today: Best Face Masks for Travel 2021: Comfortable Face Coverings for Plane – Rolling Stone.
Did they not read their own report from earlier this year? “N95 Mask vs. KN95 Mask Difference: Where to Buy Online? Which Is Best?. It was no contest: N95 is the U.S. standard and KN95 is a (lesser) Chinese standard. I mean WTF? Since when is style and comfort ahead of function when you’re talking dead as an option? There is no “1% dead.”
Meantime, along the front lines we find this a timely virus study to consider: 20% of Americans believe microchips are inside COVID-19 vaccines – study – in the Jerusalem Post. T
As long as “consent” forms are required, we’re in the “Get back to us when you don’t need the lawyers along...” mode.
Oh…and those (cowardly) Texas democrats who fled the state, rather than stand up and be counted on election integrity improvements, including expanded hours to vote, will be returned to the Lone Star with some fresh Covid victims: As of overnight Number of Texas state Democrats to test positive for COVID-19 rises to 5 (msn.com).
Wait! Didn’t Joe – Savior of Covid – keep them safe? Fighting to end filibusters in D.C. but using one in Texas? Hooligans or hypocrites – your call.
BOTH is the correct answer.
Early – Not Wrong
Although we canceled our summer and fall visitors last week, the reality of the virus re-ramp is still not fully integrated into people’s thinking. By the time that happens, our latest load of N95s (and Cottonelle, lol) will be in-house.
But that’s the critical lead-time that “watching the numbers” provides. A week before stories like “Japan girds for a surreal Olympics, and questions are plenty (apnews.com) and “Olympic athlete tests positive in Tokyo days before 1st game (also from apnews.com) hit phones, our prepping changes were in and done last week.
We are not the only ones looking at the CV-19 data flow and being concerned. A reader (who is extremely data-savvy) ran this out:
The problem (which we spotted last week) seems to be suggesting a large ramp ahead. In this (also student of the data) view:
“It shows a comparison between the last two weeks or so and earlier case rates, according to Johns Hopkins.
- The curve is currently pointing up and it looks a lot like 9 months ago.
- It shows the 9 month pattern of nested waves. Every other wave is 9 months apart.
The best framework is one that predicts. Bottom line, it’s predictable.
We’ll have a couple months of rise, probably less than the fall/winter totals, but the time frame is identical. That’s important to recognize. It means no matter the overall total cases, the authorities will have the same drawn out strategy of months of masks, months of news cycle, months of lockdown if needed. The calendar pattern, the timeline, will not change despite big or little “outbreaks”. This is never going away.”
We are always willing to revisit our recent hard decisions, but until the ramp rate reverses in a meaningful way (10% down 4-weeks) – not just levels off – we are in the “life preservation first mode” around here.
The 9-month periodicity is sure an interesting point, to notice, though…
Curiously, when I see stories like “Las Vegas café owner says he and his employees are ‘shocked’ by renewed mask mandate” I gotta think “Not enough people follow the data.”
Up in Smoke: 3/4 Million Acres+
In a table view:
Firefighter son George II was out on the 12,000 acre Red Apple fire last week with a brand new tanker unit. Has a remote controlled bumper-mount monitor…says it was a great tool… Drafting from a canal, too…
Not much in economic data to drive markets. Last week’s column headlined what we expected.
A few regular bond deals this afternoon. Tomorrow will be fairly quiet too, except for Housing Start numbers in the morning. On the Commodity board, the Lumber contract was down to $536 early today. So, no change in lumber prices over the last year then. Great news for the Home Handy-Bastard class. Bigger projects at lower cost this fall….
Will there be a pop in Housing tomorrow hyped to fuel Turnaround Tuesday? We could see it.
Corn, wheat, and the bean complex all up today, so no free lunch in view. O.J. was down 4.8% overnight, though.
Wednesday is virtually “newsless” but Thursday first time unemployment filings and the CFNAI come out. Given the biggest thing Friday is a purchasing manager number, this is a dandy week to relax, take time off from the screens and polish your beer-drinking and BBQ skills.
Smarter than Biden and the State Department: Gloria Estefan calls for international assistance for Cuba, tells US to get involved amid unrest. Of course, it’s obvious why Biden is sitting on his thumbs: Cuban Americans are largely conservative. Border-jumpers? Not so much. Arizona sheriff blasts Biden on border crisis: ‘It is an epidemic in my state. But at least in Maricopa, we know people can’t count, anyway….
Climate Hysteria, anyone? The Death Toll From Flooding In Western Europe Has Crossed 180, As Rescuers Dig In. Two reality checks, here: One is the largest flood loss of life in history was the 1931 China floods. No man-made warming, notice? Second is that floods and Dust Bowls come with long wave economic depressions…
Trump Bash Daily: This morning’s nominee: Donald Trump and Rudy Giuliani could face criminal investigation in Arizona over their attempts to overturn election. So, no questions allowed?
Summer Reading List: Recommended: Mark Levin’s American Marxism.
Singles advice in a press release? Online Dating Apps and Sites Market Outlook for 2021-2025, Report by TigersOfTinder.
Gosh…this is so much work, an appetite has arisen.
Chow for now and write when you get rich,