Money on Rails: Options Beat-Down, Busting the 50?

Well, well, well…  We’re about ready to make a sizeable bet on the S&P 500 busting or – under – the 3,000 level before the election.  Because as of this morning’s future’s pricing, looks to me like we MAY be about to start another wave down.

Let’s Chart This Out…

(This is the kind of stuff we delve into on the subscriber side – so if you know a subscriber, you owe them a beer, right?)

This will require you to engage some brain cells.  You need a brain in order to make money in stocks.  Especially when the markets are so crazy.  This is only an IDEA NOT TRADING ADVICE.  With that agreed, you may continue to this morning’s studcy material which is explained point by point in the discussion below this chart:

Refer to the above and the following remarks:

  1.  This is the upper trend channel.  When markets are moving, they tend to remain within a 2 standard deviation trend channel.  Refer to Raff’s book for advice and concepts.
  2. This is the lower bound of the regression channel, as I view it.  This channel will at times exceed the 2 STDv range because I use an Aggregated view of markets, not a single index.  Sub indices, like the NASDAQ, will vary outside my expectations because of manias such as the FAANG phenomenon.
  3. This is a possible top in the market recorded September 2, 2020 at Aggregate level 32,253.34.
  4. This is a potential bottom for Wave 1 down. 29,672.58 marked Sept. 8, 2020.
  5. Is the possible bounce high of a B wave ( or 2 down, depending how it works out).  This MAY have been 30,415 on Sept. 15th.

A. IF this is a 1 down, then we can infer the size of a pending…

B. Wave down as these are often in the vicinity of at least 100% the size of the A (or first wave) in a directional change.  And they can go more than 200%.  Most normals are 150% to 180% of the A wave with some real affinity for Fibonacci 161.8% levels.

Ure welcome.

Tactical Outlooks

Some index options expire at the close today.  As a result, we might see a decline since the Aggregate at the August index point was 30396.45.  With the futures down going into the open this morning, we would price at about 29811.24 if we were to close at future’s levels.

In  other words, people who bought in August on blind hopium would loser their assiums.

There was a decent rally last index expiry into the equities expiration the next day – but this is only something to noodle on.  The Monday following the last options week was up a couple of hundred points in the aggregate.  May not mean anything now in any of these, since the trend channel was busted to the downside.

Balls-of-steel helps.  Or the dueling trend lines which saving my bacon and “bought the Dom” for us this week.

Fresh Data

Sinking in today: Disappointing “Retail Fails.”  That and the Fed decision to announce effective lower bound outlook through 2023.  Which – when you get down to it is tantamount to saying “We’re going to keep making up money, buying up mortgages and bonds and all kinds of other shit to keep this turd afloat.”

Which would (in more testosterous times) cause non-consensus real corporate leaders to scramble and bail.  Although we do see some layoffs beginning to swirl about.  Over the past week, you may have noticed…

All of this is laid out as foreplay for what?

The Weekly Job Data

Tends to be a somewhat “noisy” data set, but check this out:

“In the week ending September 12, the advance figure for seasonally adjusted initial claims was 860,000, a decrease of 33,000 from the previous week’s revised level. The previous week’s level was revised up by 9,000 from 884,000 to 893,000. The 4-week moving average was 912,000, a decrease of 61,000 from the previous week’s revised average. The previous week’s average was revised up by 2,250 from 970,750 to 973,000.
The advance seasonally adjusted insured unemployment rate was 8.6 percent for the week ending September 5, a decrease of 0.7 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 9.2 to 9.3 percent.”

More up and down in this series than a porn movie, swear to God.

We will see how the market digests this and other data.

“Other Data?  Like What?”

Oh, like this-here Housing report just out:

Building Permits Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,470,000.  This is 0.9 percent (±1.4 percent)* below the revised July rate of 1,483,000 and is 0.1 percent (±1.5 percent)* below the August 2019 rate of 1,471,000.  Single-family authorizations in August were at a rate of 1,036,000; this is 6.0 percent (±1.3 percent) above the revised July figure of 977,000.  Authorizations of units in buildings with five units or more were at a rate of 381,000 in August.

Housing Starts Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,416,000.  This is 5.1 percent (±9.6 percent)* below the revised July estimate of 1,492,000, but is 2.8 percent (±10.3 percent)* above the August 2019 rate of 1,377,000.  Single-family housing starts in August were at a rate of 1,021,000; this is 4.1 percent (±8.7 percent)* above the revised July figure of 981,000. The August rate for units in buildings with five units or more was 375,000.

Housing Completions Privately-owned housing completions in August were at a seasonally adjusted annual rate of 1,233,000.  This is 7.5 percent (±14.2 percent)* below the revised July estimate of 1,333,000 and is 2.4 percent (±11.9 percent)* below the August 2019 rate of 1,263,000.  Single-family housing completions in August were at a rate of 912,000; this is 4.4 percent (±19.1 percent)* below the revised July rate of 954,000. The August rate for units in buildings with five units or more was 312,000.

Price of 2-by-4’s, it’s no wonder, huh?

And, of course, don’t miss the weekly Feral Reserve Making Up Money Confessional (FRMuMC) after the close today.

Philly Fed, Too

You ought to be able to sort this one out without help:

After all these numbers, Dow futures still down 280 and S&P down 45 and change.  McDuck suit time…though it looks silly, I’ll admit.

Fired Up

Son G II is back at his home fire department in Washington State after 24 nights of sleeping in an aid buggy after working fires in two states.  People don’t think much about the firefighters go through.  When was the last time you showered and washed your underwear, T-shirt, and socks in the shower?

I can tell you from experience (Pappy Ure was a firefighter) that now matter how many showers and changes of clothing firefighters go through, you can still smell smoke of a firefighter after 2-days, or so.

Fires drag on, regardless.  In California:

The big Beachie Fire in Oregon was 20% contained as of last night.  But the one G II just came off – the Lionshead fire east and north of the Beachie was still only 5% contained.

We’re figuring the fires will be bad at least into early October, and already, looks like some won’t be completely out for a month.

And to reiterate – when you talk to people in fire command positions, it’s more about the weather, lack of controlled burns to keep down the fuel loads and plain bad luck.  No, not climate change.  But it gives media who don’t actually work sources something to me-too on…

Speaking of fires:  Here’s CBS giving climate the hard sell again in “Wildfires and weather extremes: It’s not coincidence, it’s climate change.”  You know, if you talk to partisans 47-days before a presidential coup election you’re not reporting news…

Do ANY reporters alive ever talk to the crews or fire ops out West with an open ear and no bias and bullshit political bleed-through?  FMTT.

One of these days we’re going to wake up and there will be nothing left to blame Trump for.  And then we’ll have to revisit Nasty and Shifty and the Penny wise and pound stupid people on the Hill who misallocate the dough.

But, not until after the coup election, right?

Other End of the Spectrum

Puddle time in the South as the leftovers of Sally continue poundind the central gulf coast states with rain.

Sally leftovers are swelling the Alabama-Georgia border areas today (with some extension down into the Florida Panhandle.

Here’s what’s inbound right now:

That red “X” lower right is “Depression 1” (kinda ironic, eh?) and the latest recon says its upper level winds are conducive to development.  Which translates to expect it to become a named tropical storm by as early as tomorrow.

Put in Your Pipe to Smoke:

We are huge fans of supplements in lieu of medications for many things.  So we noticed Why GNC filed for bankruptcy protection despite vitamin sales boom.

Hybrids lookout: Plug-in hybrids called a ‘wolf in sheep’s clothing’ as study claims emissions are higher than thought .

And as we watch the march of socialism here, didja see where ‘Socialist Symbols Wanted’: U.S. Artist Wants Lenin Corpse in D.C.

Great!  Another one for my “things to boycot list.”  Where I reduced all the leagues to “sports” for the sake of brevity…

More on the ‘morrow and write when you get rich,

25 thoughts on “Money on Rails: Options Beat-Down, Busting the 50?”

  1. “Sinking in today: Disappointing “Retail Fails.”

    ??????? Retail Fails…. and the west coast is a blaze of activity.. ( one of our trucks just came back from the Fires.. the guys tell of some horrific events) Building materials are so high and almost non existant… What affect will slowed construction have along with retail sales dropping on the total economy..?

    • Not to mention the Hurricane damage… if a house is damaged and you cannot buy the materials to repair it.. the cost of repairs and insurance claims have to be compensated for the increase in costs of repairs..
      I had some car repairs done.. on an insurance claim.. they gave me the check for the repairs and I was able to get the repairs at a more reasonable price.. the insurance company didn’t like that.. now if a standard two by four is four or five times the regular price.. claims would have to be four or five times the regular repair costs.. and as we all know.. when it runs into big money.. they don’t pay.. the people live in homes that cannot be repaired.. everything is disposed of.. and you now have homeless people that haven’t the funds to get reestablished anywhere else.. ( we had an engineer for deep water oil platforms that had this happen to him.. the double whammy was a huge rig fire)
      Could this all be the straw that breaks the camels back.?
      I bet they wished they had legalized marijuana LOL.. then they could still get cheap affordable building materials.. LOL.. instead of just securing some billionaires toilet paper quests LOL LOL that his companies couldn’t keep up with a while back ( I am sure he is long gone now from the days when he maneuvered a country to deem a plant that was being used by every industry to be illegal to use or have..) … LOL LOL

  2. “write when you get rich”

    Just wait.. Saturday I will be doing the HAPPY DANCE… you see I know I am going to win the LOTTERY….
    After all the money I have lost through the years.. I know that it has to be my time to win LOL LOL LOL LOL…
    The day I win.. everything will do the Zimbabwe economy tank and I will only have enough for a couple loaves of bread LOL LOL

  3. Did Occupy the White House kick-off today? We haven’t had a good White House siege since… Hoover. And Hoover knew how to handle protesters.

    • With massive violence expected after the election (no matter what the results), I wonder if DOJ and DOD have prepared for this. So far, riot response has seemed tepid at best by federal, state and local ‘authorities.’ You wonder whether Joe P. Q. citizen will be left with protecting lives and property in the resulting mess. I guess that’s what we get with over a trillion dollars a year spent between DOD and DOJ. They can drone Ali Baba in some shack in Afghanistan but cannot defend the streets of Portland!!

      • “With massive violence expected after the election (no matter what the results), I wonder if DOJ and DOD have prepared for this.”

        My best guess Stephen.. and one the way I view it that they have been preparing for..

        Massive gun grab and martial law..if JB gets in nm office.. you have the rioters and demonstrators causing violence mayhem and looting.. the push to seize guns. How many billion rounds did the Gov’t purchase a few years ago..even though theres the encouraging words being split out to demonstrators this could very quickly turn to another situation in a hurry..
        The economy collapse and how many millions in dire shape..who would they go to to get the resources that would be needed.. my guess is since one kut of two are on social programs and 76 percent recipients of another program that it would be prime time to seize resources from those in the upper classes.. another adolph moment could very easily happen.. then war.. since the resources aren’t there and war is the action that has been used for thousands of years..

      • ” I wonder if DOJ and DOD have prepared for this.”

        Not their job, and unless a State or Local official requests assistance, they can’t make it their job, without the CiC invoking Laws or Powers that would REALLY get the commie media up in his grill. Doesn’t matter. The communist and fascist street movements have cost Biden 12 points over at RCP, so they will quietly disappear and be replaced by some other “crisis…”

      • @ Ray – IT MOST CERTAINLY is the the job of the Federal government to take down terrorist groups like BLM and Antifa! I mean, we invested 100’s of billions building the Joint Task Force for this very reason. This is not a local problem, it’s a national problem that has local manifestations. The people running the terrorist infrastructure are not even Americans but global factions. So, yes, the Feds had better get their heads out of their butts and see the bigger picture before people are shooting it out in the suburbs with Antifa and BLM.

      • “IT MOST CERTAINLY is the… job of the Federal government to take down terrorist groups like BLM and Antifa! This is not a local problem, it’s a national problem that has local manifestations.”

        Yes, it is, but the laws by which they’d be “taken down” also protect them until we can prove they are breaking them. A terrorist from Corvallis, who’s throwing Molotov cocktails in Portland, is strictly an Oregon problem, unless someone can trail his funding across the Oregon State Line. Federal authorities can nail him on tax evasion or an inter-state charge, or bust him if he rains jelled petrol onto Federal property (but they have to catch him in the act for this.)

        For the street crime, the Feds can’t touch him, and only the Portland or Oregon police can. When the Portland prosecutor’s orifice(sic) typically holds no rioter for any charge less than murder, the guy who tossed that bottle last night will be right back tossing more, tonight.

        The best agency on the planet for investigating interstate crime is the FBI, whom we are using very sparsely, frankly because Mr. Trump does not trust them. The agents are, nearly to a one, awesome. The command hierarchy, however, are lifetime government bureaucrats who can not be fired, and it is from this cesspool that Comey and his ilk demonstrated they could commit high treason, and not be held responsible for their actions.

        Personally, I believe Wheeler and the City Council, and prosecutor Mike Schmidt are as, or more guilty of insurrection than any of the kiddies in the streets. Unfortunately THEY are breaking no law, and since Democrats in Greater Portland outnumber Republicans by a 4:1 margin, even if Portlanders “throw the bums out,” they will very likely just replace them with a new crop of bums…

    • Glad they caught one. There was a picture of three of them dressed up as firefighters displaying an Antifa flag in the woods somewhere a day or two ago. Anyone catching that ought to take a page out of “Yellowstone” and make them dig their own graves where no one would ever find them.

  4. Woe, woe, woe is wall street..

    Woe is the Lib. western states.

    Woe is the coup plotters, planners, participants.

    Must be time for the “Neph’s” to show up in masse again (elongated skulls) and start spreading more good news about the “light”, fearing god – bwahahha, and all the other psycho bullshit keeping U self contained in their Prison System…baabaabaabaabaabaabaabaabaa

    Hey its not all bleak and smokey – Bitcoin is on Sale this morning around $10,700 FRNs to the BTC, cept for G – because……..NO Bitcoin 4 U! unless of course U know Satoshi san otherwise known as Al & company.. where did I leave miene Die Glocke?

  5. On Greg Hunter a few weeks back, Bo Pollney said there would be an ‘epic’ event on September 18th or there abouts. He did not say what the event would be – markets, wars, etc? In any case, I know this tidbit and $5 may not buy you a cup of coffee, but Pollney has had a few big ‘epic’ predictions come true. His last one was in (I believe) April when oil went negative.

    So, make what you want of this.

    • Yep, Stephen. I mentioned this back when that last video came out. Also about some of the videos from, I think, Pastor Coverstone with his prophetic predictions on mid-September turmoil but I’ve been so danged busy I haven’t noticed that we’ve already arrived at those times. It would seem that even Antifa and the BLM people have been taking a breather lately OR it’s just a matter of the “news” agencies not reporting on them. Either way, today ain’t over yet and tomorrow ain’t here so stay tuned! Disappointment would be the best result but, then again, this is 2020 after all.

    • “Do the fires stop at the border?”

      How do the best lobsters know to stay by Maine? The conditions.

      I would love a DEW. Hook it to the power ports in my car. Tool around town, Zzzzt. Zzzzt.. melting stop signs and what-not.

    • From a wildfire standpoint, there’s not much in Mexico to be burned. Canucks, despite their limp-brained PM, do a reasonable job of forestry management because lumber is a much bigger deal in Canada, and a much larger percentage of the Canadian GDP than ours. Understand, too, the State of Califusion is 30% more populous than the entire country of Canada and half of all Canadians (and 80% of Canada’s loony lefties) live in Metro Toronto and Montréal — thousands of miles from the Pacific coast…

  6. ““Wildfires and weather extremes: It’s not coincidence, it’s climate change.” ”

    I’d love to see CBS interview Indians from native West Coast tribes, about fires which occurred before an Anglo first walked barefoot in the wash of Sutter’s Mill.

    Hint: Western tribes did controlled burns of the territories through which they ranged,

    every year as they ranged through them.

    The burn spurred growth of both flora and fauna, and did wonders to round out their diet and lodge time, hundreds of years before our government invented the “food pyramid…”

    • My senior in hs daughter had no idea. Political correctness has all but erased the native American.
      * Rivers, towns, geography, names have been changed.
      * When the “natives” actually showed up in N. America is hidden, as if they were always here.
      * Sports teams can no longer use the imagery.

      In another 10 years, kids will think Indian only means someone from India, and Native American means some a**hole with a MAGA hat on.

      Every reference to Native Americans is being removed in the name of political correctness, as if to speak it is exploitation. So ignore it, as if it never happened.

      • I was passing through a Navajo Reservation some years ago, yondering with my son. We stopped in at a cafe / trading post run by a little old lady. The only two other people in the place were a couple of Navajo who would’ve made splendid defensive tackles.

        When she waited on us, I made the mistake of referring to her as a “Native American.”

        “Ed Jones” and “Rosie Grier” were at our table in an instant, as the old lady told us: “Native American” is a bullsh!t term invented by an Eastern lawyer.


        I have since asked Apache, Chippewa, Miami, and even Seneca (damn’ pretty reservation, outside Buffalo), all of whom agreed.

        Most Indian tribes are only “native” by a few hundred years more than we. The Indian we came to know, assimilated and annihilated the “Indian” who was here before, as did that “Indian.” Study Navajo, Hopi, or Zuni lore and listen to the Medicine Man or Wise Man when he speaks about Those Who Came Before…

        There’s a whole lot of history I was taught, which isn’t ever even mentioned, any more, and my history education was sorely-lacking. I do recall a field trip my class took when I was in about the 1st or 2nd Grade. We went to the local “settler’s (and Indian) cemetery” specifically to visit the grave of an Indian “wise man” who negotiated the partition between Indian lands, and the areas where settlers could do so. He was respected and celebrated by all. When he passed, his headstone was erected by the settlers. In today’s money, his monument would cost well north of a hundred grand. We spent several days, learning the local history, and our discussion on the bus revolved around this man, and his relationship with the man around whose trading post, the town sprung.

        I honestly want to see what happens when some PC pr!ck suggests to Florida State or Central Michigan University that they change their mascot… ;-)

      • This lady’s lecture made a deep and lasting impression on me. The fact her grandsons (the two really big, well-muscled dudes in the trading post) could, and at her behest probably would, have snapped me in two, emphasized her diatribe. This is why I ALWAYS refer to pre-settlement American inhabitants as “Indians” now, and the PC crowd be damned…

        I have no problem with Anglicizing Indian words, names, or phrases. I have a big problem with “disappearing” them. Maybe we should change the names of Michigan, Indiana, Illinois, Minnesota, Dakota, Utah, etc., because some attorney might be offended at our use of “Native American” names. After all, the Utes had no more claim on parts of Utah than the Apache, so why should we favor the Ute and dis the Jicarilla? ‘Better to rename the State something else — I suggest “Despair…”

      • Ray, ‘Native Americans arrived in North America by a few hundred years more than we (European immigrants)’ again shows your ignorance on the subject (most of your diatribes are filled with over generalized misinformation)

        Natives were in North America 30k to 16k years ago:

        Affecting the Ojibwe the most:
        Latest movie about the Residential schools in Canada

        the list of injustices (eradication of food source – the buffalo), the reservation system (was your tribe ‘terminated’), genocide (to sell the Civil War, Lincoln promised Indians could be murdered and cleared off their land, Manifest Destiny of the West), goes on and on….

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