Markets to Drop: Power Tool Shopping?

If you’re the typical American, transfixed in the headlights of a phone tied-up to useless social(ist) “cause media” – this may not worry you much, but it should:

The Stock Markets globally are down another one percent (very roughly) overnight.  And, when the US market opens in an hour, or so, we will expect to see the Dow bleed-off 200 points.

After that, in terms of expectation setting, we’d like to see a rally to the -125 range after hour after the open – or even a run to the break-even line before Europe closes.  But, overall, a downside of 200-400 today isn’t out of the realm of…

What’s going on?

Three things:

First, as our subscribers know, we are coming down to a crucial inflection point for the market with today’s opening (and we expect a close in the same zone, ideally):

As you may correctly infer, there are two trend channels we are watching.  (Remember, this is all based on our proprietary Aggregate Index work in markets – an outgrowth of a couple of decades of long wave econ research.)

The first trend channel to observe will be the black one.  A good bounce here – which is to say we don’t close but a fraction below it (if at all) would give hope to our preferred assessment of the future.  Namely, that we could avoid the summer train wreck that some people are hyping.

That’s the two black lines.  Now comes the lower trend channel – the blue lines.  If we go down there, then the S&P could be down in the 2,550 range in short order, and while there’s still “Disaster Avoided” outcome, it will definitely be “worth keeping your seat belts loosely fastened like we do here in the cockpit...”

The rough air at this point has the potential be shake everyone up and maybe cause some injuries.

Second point?  Using the 10-year Treasury Note as a proxy for an aircraft storm-scope, with the display on Yahoo Finance under the symbol ^TNX, we observe that since the Federal Reserve (the Bankster arm of “government”) raised rates, in fact the exact opposite has arrived in the bond market.

If we look at the “weather pattern” of bonds as some tough Elliott wave turbulence, a break down to lower lows in bonds would be prompting us to pull things out from under the bed.  We’ll be ready to move in with dust bunnies…

Which has what to do with Power Tools???”

Right!  (Third point!)  Just getting to that.

The long and short of that is simple:  When the delta (differential) between US exports and Chinese imports has been highest, the cost of Chinese power tools (via Northern Tool, Harbor Freight, Amazon, and others) has been extremely low compared to other goods.

Now, we look at several sobering notions:  The US really does have a crappy-to-shitty trade relationship with China.  We essentially charge tariffs on color TV’s and not much else.

Clearly, the Trump Administration knows the power of the US consumer market (and our voracious appetite for ever-more consumer crap) so they are negotiating for Fair Trade and not the Globalista trade lay-downs of Clinton, Bush, Obama, et alia.  Puppets of the Globalist Billionaires Club.  (It’s always about the money, right?)

Which is why – if both of our trend channels break, you might want to stock up on all the power tools you’ll need for the Second Depression, along with all the electronica needed to support your personal future.

Oh!  Also a grand time to be picking up a useful skill, too.  Something that people will use in good times, or bad.  Trades like plumbing, electrician, even garbage collecting may not seem really “sexy” but ask yourself: “If app development was around in the Roaring Twenties, how would it have fared in the Dirty-Thirties that followed?”  (Pass the pipe, bucko?)

We hold certain truths to be self-evident…and for this week that means watching a couple of key trend lines and idly thumbing through deals at the Chinese power tool emporiums.

Madness on Bordering, Redux

Here we go again.  A Reuters story that caught our RSS attention headlines “Trump says illegal immigrants should be deported with ‘no judges or court cases.

This should leave the swamp-critters in a total frenzy:  It will reveal to the world that “liberals” (really radical) think all people who physically get into the country automatically get the Constitutional promise of speedy trial, and all that. Trump obviously figures the Constitution applies to citizens not wall-scalers and drug-mules.

On the other hand, Trump’s latest bait says no, if you illegally break and enter you don’t get to stay.

The problem is a scaling off what goes on in radical  and conservative states.

In radical states, if someone breaks into your home in the middle of the night, the ONLY defensible action is to call 9-1-1 and hope the baddies don’t do physical harm to you or your family.  In other states, like Texas which is a strong “Castle doctrine” locale, the magic words are “fear for your life.”  makes a convincing case and out comes one of the pistols from the nightstand.

Like the recent lop-sided idiocy about “children in cages” (and Obama policy that was buried by the radical apologists, and their dimwit too kind press, this one is another emotional dandy.  It should keep the public all worked-up, and thus docile and dumb – unable to focus on real issues – for the next month, or two.  JFD  (*just freakin dandy.)

Another distraction for the radicals to sell in the fall elections – which will be funded as always, by the rich.  Don’t get me started on the buying of elections in ‘Merica….

Speaking of Immigration

Didja see this one? “Algeria abandons 13,000 migrants in the Sahara.

My, oh my:  Where is the radical outrage on this?  Oh, could it be that because Algeria is a Muslim nation, the arrogant press gives ’em a pass?  Is that it?  Tisk, Tisk…

What If It Was Race?

By now, I’m sure you’ve read about how Maxine Waters has opened the latest Trump bashing front.

Read “Maxine Waters orders MORE public harassment of Trump aides: ‘God is on OUR side!’” and you’ll get the idea.

Clearly, Maxine supports the owner and staff of the chicken joint that refused to serve a member of the Trump administration over the weekend.

But hold the phone.  This is where we see the duplicity and double-standards of the radicals in play again:

While we’re pretty sure that the Left would be correctly incensed and sharpening up the guillotine had the issue been racial identification and discrimination, since the issue in play is political identification and discrimination, well, that’s OK.

Now here comes CNN with “Transgender woman says restaurant booted her.”  Bet me she can sue, but the Trump staffer….double standards all over, do you love America, or what?

It’s morning’s like this I ask “Has America completely flipped the f*ck out?

No drugs needed:  We hold some Truths to be self-evident.  A good squeeze on my forearm with the ViseGrips and on to the next story, then…

Housing Tomorrow

Somewhere in here, I need to mention that the Case-Shiller housing data will be along tomorrow morning.  So today’s market action may turn on that news release depending if good or bad.

Front-running the S&P data? House Prices Continue to Rise, but House-Buying Power Still near Historic Highs, According to First American Real House Price Index.

Computational Futures

A few of the RSS pings from our website (which we feed to the word-frequency analysis engine in the Nostracodeus software…)

Attention Bikers: Harley-Davidson will not raise prices to cover tariff costs. The backstory is when the EU ups tariffs, it will drop Hibbly-Diblitzen sales a bit but their EU pricing will hold.  (We put this into the “For Now…” tickler.  Since we are replaying the last economic long wave bottom, trade will make EVERYONE crazy.)

Severe storms and heavy rain for the Plains, Hot dry weather continues across the Southwest. It’s called a drought if you’re not keeping up with class.  When you marry a “drought” with a “recession” you get a “depression.” But that gives us more to write about…

I got up super early this morning, so off to breakfast and then hit the treadmill.

Dow futures down 169 at click-time, but let’s get a read after the opening “amateur hour…”  Oh, one more:  Bitcoin $6,186.  Another mania in passing.  Want some fried tulips with that?

Moron the ‘morrow, as it were…

26 thoughts on “Markets to Drop: Power Tool Shopping?”

  1. From: New York Times :On Thursday, the gap between two-year and 10-year United States Treasury notes was roughly 0.34 percentage points. It was last at these levels in 2007 when the United States economy was heading into what was arguably the worst recession in almost 80 years.

    • Re: R. Sebastian

      The 07-09 recession was not due to the interest rate, but due to the housing bubble collapse. And then the bailout of Wall-Street and the banking community by none other than yours truly Obama.

  2. RE: “Has America flipped out”

    Dennis Prager calls it a “soft civil war.” Not with set-piece battles and Pickett’s Charge, but with widespread political violence and parallel efforts to reject current political authority (sanctuary cities?).

    Do not underestimate what is happening.
    Once you start yelling “you are all a bunch of baby killing nazis for taking children from their mothers at the border,” there is not much room left for reasoned debate.

    When you take debate off the table, you are left with only three ways to persuade someone: lies, intimidation and violence.

    Lies are already in play (Time Magazine cover, everything on CNN). But we have seen through the lies, so they are no longer persuasive.

    So now we see intimidation:
    Sarah Sanders being ejected from a restaurant.
    The Florida AG being protested at a movie.
    The Homeland Secretary being protested at her home.
    NBA coach Kevin McHale being threatened with losing his job for attending a Trump rally.
    This would have been unthinkable a generation ago.

    When this fails, the only thing left is violence. And the left (BLM, ANTIFA, looting) has become increasingly comfortable with violence.

    Prepare accordingly.

    • Prager is a reactionary fool – clearly not understanding what a ‘Civil War’ entails . . . Remember the late sixties – early seventies? That was closer to a ‘war’! Or perhaps during the ‘Great Depression’ where there were ‘haves’ and ‘have-nots’ . . .

      Don’t yell fire unless there is one!

  3. George, a bundle of contradictions this morning. 1. Sarah Sanders outraged about not being served, yet no empathy to others/gays not being served. 2. The logical extension of no due process at the border means that a citizen could be barred without an ability to even prove citizenship. The length of time until an immigration hearing is within the Republican Congress’ control. 3. Why bother applying all these complicated analyses to the stock market’s decline. Let me help: Tariff wars. Farms are losing huge value and crop prices are in free fall. Ditto to 10 million other American jobs dependent on exports. More money getting sucked out of the economy. And Harley now has to offshore to survive. Talk about unintended consequences from not thinking things through. 4. And another $2 trillion sucked out of working folks hands by tax cuts 90% for the rich. 5. Plus higher gasoline prices sucking more money from working families due to applying a different standard to Iran compared to N.Korea.
    6. Meanwhile, to get their minds off their pocketbooks, Trump is whipping The Base into a frothing frenzy over immigration. (Never mind that immigration was already at a 25+ year low and illegals commit less than 1/2 the crime of citizens.)
    Sad, really. Great team. Incompetent, lazy coach. Best, Mike.

    • Mike, you seem like one of the few level heads on the comments section. For instance, I am hearing distraction stories on the Time Magazine Cover. The right is crying and focusing on the actual girl in the photo, who admittedly was not separated from her family, instead of the bigger issue of at least 2,300 kids who HAVE been separated from their families since May. This is the Trump way. He successfully creates fear with his God fearing base. He insinuates that all immigrants are drug dealers and criminals….and, that they are coming in by the millions…when of course, the opposite is true. He has us convinced that Assad is an Animal while Kim Jong-Un, whose human rights record is far worse, is a good guy. He rules on fictional accounts, rather than factual reality. He creates conspiracies to cover up his own foibles. But when we challenge him…we become the bad guys.

      And, Democrats don’t have the guts to stick to their guns and fight fire with fire….except on the real news. (Not Fox)

      Maxine Waters is waging a war of sorts on Trump supporters and asking others to deny them service like they did Sarah Sanders. Many democrats are stepping back and saying “Hold on Maxine…Let’s not take the low road”

      Here’s the thing…We have a President that each and every day is cranking out some raw rhetoric about something or someone. He has called people Losers, Liars, leakers, lightweights, Little, Liddle, Low IQ, (He likes the L words evidently) flunky, crooked, crying’, Crazy Joe Scarborough, Dumb as a Rock Mika, Wacky, Flakey, Slippery, slime ball, Animal, Whack Job, Maniac, I could go on for days…

      So, why isn’t it OK for the Dems to fight back with their own crazy talk? No, I don’t personally agree with Maxine Waters…but it is her right to fight back and give our President a taste of his own medicine. If Trump and the GOP are offended…well..taking advice from the late President Truman…If you can’t the heat…..

      • abq Joe has put out the “Ure Alert” on you Mike.

        You and Mark have been continually testing the waters of the: East texas,above ground, “Ure Way or the Highway”,self designed,constructed,and stocked with..”Ure hatchery” shark/ catfish, blue lite genetically modifurd,
        Liberal(or any of those opposed to Obama)eating species

        Although that water may seem appealing as you are drawn into the heat of that “piney woods” timber, just remember the famous quote; “you’re going to need a bigger boat!”

        “What is important is not the quantity of your knowledge, but its quality. You can know many things without knowing that which is most important.
        There are two types of ignorance, the pure, natural ignorance into which all people are born, and the ignorance of the so-called wise. You will see that many among those who call themselves scholars do not know real life, and they despise simple people and simple things.”

        (Blaise Pascal)

        • Ure’s pretty tolerant of dissent. Reason? Mark has hope. In my (economic view) he’s on a roll as the Bay Area (and Seattle) are the poster children for the App Bubble…but more on that in this AM’s column…

  4. Working on a theory that the last 15 minutes of The market will predict the next day at the open. Just like when betting at a horse track, the smart money who knows which horse the fix is on, bets at the last minute so others can’t overhear & place the same bet. The market smart money does the same in the last 15 minutes as it prepares for the next day trading. I believe they are exempt from the free ride rule.

    • They were pretty wrong last Friday. or did they just try to mislead us? ;-( IMHO a trader shoudn’t read.

      • Bruno – Sounds like You took your advice & did not read my Saturday post on what Friday’s close predicted for today which was a bear.

        “The DOW, S&P, NASDAQ were all extremely weak in the last 5 minutes before the Friday close. Not a good sign for the Monday market opening (unless you are short). Could be the beginning of the summer slaughter.”

        • lol – you’re getting as good as me at this… from here looks lika retest of the low tomorrow and then a close 200 higher for the day…or more..l. mayhe tee of good housing data

      • You sure were correct looking at the SPXS. I was miss- informed looking at the FAS. (Those are the breaks in this business;-)!!!) Still looking for someone competent enough to trade for me for a 20% fee.

  5. The Dow hit a low of 777 on Aug.12,1982,the day that Henry Fonda died.Are his son’s indefensible Twitter posts the temporal marker we’ve been waiting to see for the collapse to take place?

  6. “morning’s like this I ask “Has America completely flipped the f*ck out?””

    Is there a time set for the beginning of the potential ‘new’ Civil War or are the few of us going to succumb? ;-(

    • Vote Republican in November & oust the Democrats so President Trump has a super majority to get immigration reform passed.

  7. What is happening today, is almost a complete disconnect from reality! Trump wants to send illegals back without a judicial hearing. What is so unfair about that? As legal citizens of a country we “PAY” taxes and work to support a system our forefathers (forepersons for those who pretend to be politically correct), where we are recipients of, receive benefits we PAID for, and still paying to support this system! (Reality check: Money does not grow on trees!) We are willing to share those benefits with others, who are not fortunate enough to be citizens, through legal immigration, a process to make sure new arrivals will appreciate our system and continue to support it.

    I REALLY detest those AID groups that support illegal migration through legal counsel, creating obstacles for authorities to exercise the law. If those groups are so concerned with the welfare of those migrants as they claim, they should undertake at their OWN expense, to process them through legal channels, obtaining appropriate status for them, provide food, accommodation, and employment. ALL paid for by those humanitarian AID groups. Only then I will believe in their humanitarian intentions.

    However, it is not the way it works. They generate a lot of NOISE to get MSM hype, to profile themselves as defenders of human rights, and then have the taxpayer pick up the tab.

    Today’s MSM focus is on separation of children from parents. Admittedly a sad situation, but who is responsible for this? THE PARENTS! If you and I committed a crime, we would also be separated from our children. We would be jailed and our under age children would end up wards of the state. Why is it so different with illegal migrants? Why hasn’t MSM looked into this and give BALANCED reporting? Maybe they don’t know how to do it.

    Its all done under the guise of FREEDOM!!!!! It is a human endeavor to be FREE!!! So it is said. Many times we hear groups/speeches exalting TOTAL FREEDOM! Have they considered what that really means? Unfortunately, total freedom is ANARCHY! It is only within the reasonable legal confines of the law of the land
    we can enjoy peace and harmony. Riots are a good case study of Total Freedom. You are free to loot as you please!

    Unless we smarten up and vote for people “who think out of the box,” and NOT vote for career politicians, we are well underway to “TOTAL FREEDOM” Today’s idea of a successful politician is “One who can tell you to go hell, and you actually look forward to the trip!” Unless this changes, we are DOOMED!

    • The problem as I see it is TV.

      Back in the olden days, 1900 and before generally speaking. Citizens and soldiers would just wipe out the illegals. Same with overseas.

      Here’s a good linky about Scalping Laws:

      “Between 1835 and the 1880s, the Mexican authorities paid private armies to hunt Native Americans, paying per kill and using scalps as receipts. ”

      Boom Time

      The years of 1849-1850 were the true boom time, but an industry like this can obviously get out of hand (if it didn’t begin by being out of hand). From the accounts it seems that no one in the South-west was safe during that year. The recent war with Mexico and the dark hair of the Mexican farmers made the peons easy targets when Indian scalps became scarce or too dangerous to acquire. Scalpers also began slaughtering any natives they could run down, including peaceful tribes like the Pimas and Yumas.

      And the Brits would just kill everyone – the Zulu’s for instance.

      “The next day 20,000 Zulu warriors[n] attacked Wood’s 2,068 men in a well-fortified camp at Kambula, apparently without Cetshwayo’s permission. The British held them off in the Battle of Kambula and after five hours of heavy attacks the Zulus withdrew with heavy losses but were pursued by British mounted troops, who killed many more fleeing and wounded warriors. British losses amounted to 83 (28 killed and 55 wounded), while the Zulus lost up to 2,000 killed”

      Try splashing wholesale slaughter across the screens today. People would really freak-out… unless we cashed-in the people who were freaking-out.

      • VOTING is what as gotten this country in the mess it is in….NO politician is held accountable…ever…. they are always running for ‘re-election….most are liars and thieves….and the good ones still call the bad ones their ‘ FRIENDS..the good ones need to PUBLICLY SHUN these ‘so called friends’…..the go along to get along…is always in play…NOT one elected official 9except Rand Paul)ever gets up to give a speech about the other politicians that are making laws and voting for them that are ALL outside of the powers granted to the federal government…the Constitution is dead to this CONgress and for the past 105 years…only lip service and lies are even uttered about our ‘OLD RELIC’….

  8. Basically we each are responsible for OUR own Health, Safety, and welfare. If you are hoping for some Government to keep you Healthy, Wealthy, and Happy you are being led down the path to personal destruction. Our Government now is a parasite sucking the energy out of our Nation.

  9. “Those who make peaceful revolution impossible, make violent revolution inevitable”. JFK

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