We hold to the curious view that there should be something come along in headlines in the next week that will drive the market lower. Our projections range from an S&P 500 anywhere from 2,396 all the way down into the 2,290 area.
This is never trading advice – as most of the gains this week in my personal account evaporated Thursday as the shorts were run by Wall Streeters who didn’t have sense to take off early. Instead, they ran the market up.
Still, the market is lower now than it was at the start of the year. The S&P ended the quarter a bit over 2,640. The last reading in 2017 was 2,673. The Dow, 24,103 yesterday was over 24,719 Thursday. And the techs? Therein lies the tale this morning…
With the NASDAQ composite closing at 7,063 and change versus the year-ending (2017) 6,903, it could be argued that Tech saved the day.
Well, not quite.
Two things to remember about tech stocks.
The first is Wall St. doesn’t always treat them fairly. For example, in the Tech Wreck (Internet bubble collapse) there was a period of three or four years when no broker would even mention tech since it had blown off $5 to $8-trillion dollars of market cap in the collapse.
The other thing to remember about tech is it’s a “growth speculation” not based on earnings and payback to us poor shareholder slobs. In other words, tech stocks bet more on a Bigger Fool coming along – which they do with some regularity.
So how to reconcile the numbers? Tech says Q1 was a gain, but the S&P and Dow…well, not good.
Our approach is to use an equal-dollar weighted approach.
Doing this, we see the US Aggregate Index at 22,300.90. Back at the end of 2017, it closed at? 22,362.
Several weeks back, we told Peoplenomics subscribers that it looks to us like the beginnings of a Bear market. Using our “all the money is counted” approach – instead of self-serving, stock promotion individual indices, we think a bear market is underway but is not-yet recognized.
While we’ll go over the (ugly) details in our Peoplenomics.com report tomorrow, what you need to be aware of this morning is that we have just ended a down quarter. Not only was the Aggregate Index down a fraction, but in our work, inflation really matters, too. So take it down a bit more for inflation.
What we expect is a rolling top – and not something that will be completely in view until October, or November, of this year. For now, it looks like there’s a “pitch” left for the boiler room houses (“Tech’s back!”) which we expect to be the mantra for the coming month.
Speaking of Greater Fools and such, did you see NYSE in talks to acquire Chicago Stock Exchange: WSJ?
Side money bet here: This could level the playing field on some of the HFT execution time gaming between exchanges…not something either you or I will notice even day trading. If you live in microsecond trading, this says “the system wants to plug a programming leak” – at least in our odd view of HFT.
Still, in our view, as social media admits to how much monkeying with people’s personal information they’ve engaged in, times will slowly shift and the small declines in Social users will increase. People aren’t likely to stand to be made fools of…and that’s what’s coming to light.
So, with this on the horizon, the only problem is “What will be blamed?” For that, we turn to the news flow for some ideas.
Boeing’s WannaCry run-in is a reminder to patch your systems. Is there still a super virus out there in the wings and is it already propagating? This is something to think about…
China is cracking down on VPN use – Businesses, consumers uncertain ahead of China VPN ban – which means the US Intel types will need to do something about them, too. Maybe gin-up a terrorism link to ban VPN’s?
And from our “Tell me it ain’t so” Zuckerberg disavows memo saying all user growth is good.
Stories like this one piss me off: The State Department Wants to Require Visa Applicants to Submit Five Years of Social Media Details.
Why pissed? Under the paperwork reduction act can’t State just dial in to the secret cross-agency files that everyone in IT knows exists? I mean WTF is all the money into Provo’s castle doing for us?
Is the real deal entrapment? To see if applicants are lying about their Social – when the government has it all, anyway? Stupid…absolutely frigging stupid. Mueller-think is going viral, perhaps?
This is right in line with the old courtroom dictum to all lawyers: never ask a question you don’t already know the answer to!
Russia Tests New Intercontinental Ballistic Missile, says Time this morning. Again, simple logic should scare the hell out of you: We’re playing embassy tit-for-tat and expulsion roulette with the Russians now, they have the lead in hypersonic war materiel, and now they have a new missile.
Axiom: People don’t building missile systems if there’s zero chance of using them. This is very much on our “track to WW III” model.
Also on the militarism front, remember all our warnings about how the “fifth column ” of politically correct, no excellence, selling average is OK lefties in the classroom is part of an American take-down plan?
Tell me how else to explain Army mulls tougher basic training for out-of-shape, undisciplined recruits? Less disciplined, fat, and expecting do-overs on everything…the feminization of American youth steams on.
China’s space lab set to fall to Earth this weekend. Please, not East Texas again – and in the shuttle crash…
Not sure where to slot this one: Amazon cuts ties with top Washington lobbying firms: Bloomberg. Will this “blow back” to the Amazon Washington Post sources run by the aforementioned lobbyistas?
\\Economy\ Final Bubble
With the end of cheap interest rates, one of the things driving the stock market has been mergers and stock buy-backs. See Global mergers and acquisitions reach record high in first quarter for the gory.
Tons of that.
Elton John says he has yet to receive his royal wedding invitation. It’s OK, neither have we. Deal with it, EJ.
India limits visits to Taj Mahal to 3 hours per person. Shit. We’re not going, then.
Split-shot Americano Tall with a double-shake acrylamide, half-shake of cinnamon anyone?
This being a holiday, no bills.
A chance to continue our non-destructive pillow research. After lunch, back to work on Peoplenomics for tomorrow…
See you Monday!