A couple of items on the stock market, best taken visually.
One is the overall view of how periodic advances and declines in the stock market line-up in similar ways. Nice way of saying “All collapses are self-similar” to one degree or another…
When is “The Top” Here?
This is a “What number will the roulette wheel stop on, next?” question. But…we can review history for some ideas about market behaviors after wash-out lows.
Example 1: 2001: Market washed out following the 9/11 attacks and was subsequentally closed for a few days.
- Date: Week ending 10/04/02 Agg Index 5538.05 Washout low:
- Date: Week ending 1/16/04 Agg Index 8515.40 Initial recovery
- Time to Initial HIgh 67 weeks
- Date; Week ending 8/13/04 Agg Index Low Retest 7615.36
- Time to retest low from washout: 30 weeks
- EXCEPT There was a 9 week decline from the 1/16/04 8515.40 level down to 8060.17 on 3/19/04
Example #2: Let’s apply the same logic to the 2009 market lows for comparison
- Date: Week ending 3/06/09 Agg Index 5209.51 Washout low:
- Date: Week ending 6/14/10 Agg Index 8641.36 Initial recovery
- Time to Initial HIgh 68 weeks
- Date; Week ending 8/23/10 Agg Index Low Retest 8236.55
- Time to retest low from washout: 10 weeks
A Reasonable Dart Toss Is…???
We know the date of the weekly closing low in the past year, or so:
Week of 12/17/2018 at Agg Index 20367.71
If we assume a 68-week run to “initial high” from the washout lows, that implies the high could come around April 6, 2020.
I’d like to see a pullback to the bottom of the current daily trend so the final run-up would be a fifth wave. That’d be graceful.
A ten week decline from there would put us down to a first low around June 15, 2020, then a rally into September with a bigly-hugely decline October and then Election Chaos is possible.
A Small January Pullback?
Under a sport called Elliott Wave analysis, markets usually move in 3 or 5 waves. And up move is called “impulsive” and a down move is called “corrective.” More details from Wikipedia here.
What is one possible Elliott wave count for the present market? It might looks like this: Blue trace to right is the bullish outcome. Red case is “Death to the markets in January” wave count. Blue track would be great:
Main thing is to not be in a hurry and take your time and get professional help and read some books.
Making Up Money
The main reason the market is going up is the Fed is presently inflating their money creation at the rate of 10.4% annualized in the most recent 90-day reporting window. The is seen as Table 2 of the Money Stocks report that comes out every Thursday: Book mark this for later reference:
Here’s what it looked like today: See the highlight?
When the Fed begins to rein-in the money, then look for the market to follow down.
Meantime, keep an eye on the Fed’s Repo Depot which is also watering the market to keep interest rates from rising: They put in an expensive cheeseburger less than $50-billion today. Book mark their site here for later reference.
2020’s Two “War Cycles”
Doesn’t have to be war, but the 72-year social change cycles often end in that.
Two we’re watching: One is India-Pakistan and there “Uttar Pradesh Police have geared up security apparatus across Ayodhya city on Wednesday after intelligence agencies flagged “possible terror strikes” by Jaish-e-Mohammed operatives.” reports India Today.
The other country facing “72” in 2020 is Israel… we certainly hope there won’t be an armed conflict in the middle east, but there’s a cycle at work here…
I’m still thinking HRC will reappear in an effort to recast 2020 as “Clash of the Titans, II.” Which would “Bernie” the rest of the democrat field, but who said anything about “fair?”
We are pleased, with odds of Trump exoneration high, that the mainstream media (MSM) is maybe returning to the idea of a “middle of the road.”
One hopeful sign is the Washington Post opinion piece ” Rachel Maddow rooted for the Steele dossier to be true. Then it fell apart….”
We’ll be looking for more signs the MSM “got it wrong” but don’t hold your breath. Although there’s not an impeachable offense in sight, yet, we have great faith in the rabidly anti-Trumper’s to make assertions and allegations and parrot them endlessly on the co-opted mainstream.
On that, a short report this morning (but this is plenty for now). Except to mention Dow futures were up 68 here in the middle of the night.
Next up will be Peoplenomics Saturday with a focus on “Knowledge Deficiency Mapping.” Some the MSM could do with a little more of.
Back to non-destructive pillow testing, and write when you get rich…