First thing out of the chute this morning we have the ADP and Challenger Job Cut numbers to go over. These are in advance of the Federal jobs report tomorrow morning…
Down in the detail of the press release, this caught our eye:
“The pace of downsizing in August rose to the third-highest total for the year, as U.S.-based employers announced plans to cut 38,472 jobs…”
The next number – this morning’s ADP report focuses more on job-creation:
“ADP National Employment Report : Private Sector Employment Increased by 163,000 Jobs in August.”
That number is somewhat in line with expectations, but what we look at in the ADP reports is the drill-down detail summary:
What’s on our mind is whether this is a “buy the rumor, sell the news” set-up for tomorrow’s federal data? The Trump administration has gotten about as big a bump as possible since-election with the Bull Market Run. One of these days, it will end (all manic runs do). What will matter then will be the “character of the decline.”
Declines happen on a semi-predictable basis: There’s only so much elastic in price elasticity. Seen from the technical perspective, the daily data suggests that a major top may have been put in and that we could now slide down over the course of Fall.
Even with today’s small buliishness (Futures up 25 on the Dow), we’d rate it as only a calf. Mainly because of how the short-term data looks in our (admittedly odd) “aggregate” view of markets (using this morning’s futures pricing to gin-up a feel for the pre-open today):
What does this suggest? As you can see (subscribers to Peoplenomics get the wave counts on such), we can make out five waves up (to the top of the bolder trend channel). And, rather predictably, we have come down to just under the red 9-day moving average.
Remember, the place on the right where the line “levels-off” is a “tail on the data” – projecting it into the future so we get inspired to deeper thinking about what to expect next.
Today, we eye two possibilities. The first is that the Bull Market really is over and we are beginning a long series of Elliott waves down that should end around Thanksgiving. Having broken through the lighter colored, shorter-term trend) we could not be surprised to see a modest rally back up to the trend channel today by the close.
This is where things will get interesting. Depending on how one draws the channels, there’s a case that we could get one more major upswing (again, to October/November) after some sideways to down action here. The technical argument is that the Wave (v) didn’t hit top of trend channel and is should. That’s no basis for going long, though.
The more likely move would be to rally up to the short-term trend today (and maybe tomorrow) as an initial decline often does a “kiss and run” of the underside of a trend channel. If this happens, it can be a useful Elliott wave indicator: It can indicate that we have had a Wave 1 down, of some kind, and this is a 2 bounce that we’re starting for a day (to several).
What would logically follow, in this sequence of play, would be a further decline (perhaps 1.5 or 1.618 times the initial decline, then a bounce, and a final decline equal to the wav e 1 down or larger) and THAT would take out the bottom of the larger trend. And THAT would mean a trip down to the January-February lows in short order.
Still, we don’t see it clearly enough to put piles of money on either outcome. Sometimes “money in the mattress” is the best policy. It’s a slow lesson to learn, but there are THREE investment choices in all markets: Long (betting the market will go up), Short (betting the market will tank) and CASH which means you don’t like catching knives in mid-air.
Both additional economic data and the posse du idiots in Washington will drive, on the surface to distract people. Before we wander off to see how many clowns can get out of the Drudge Car at once, a note about a “character change” in the markets I noticed Wednesday.
If you follow market futures at FinViz with drilling, you may have noticed something odd in that there was a perfect split Wednesday between notionals (paper and made-up money taws) on the one hand and tangibles (things you can eat or otherwise consume) on the other.
It was back to a more normal spread this morning, but to me, it’s an important psychological indicator: It tells us that the market – when spooked – is looking at what’s real.
Speaking of creative fictions, we should also acknowledge that even after a couple of months of hype (summertime madness?) the Bitcoins were down under $6.390 today. With the wild parties of summer fading astern, perhaps some of the digitulip gypsters are ready for rehab.
We can only hope.
The argument is that Bitcoin is a more honest currency than the US dollar which got whacked again this week with an unexpected majors increase in the balance of trade deficit. The problem is, do you trust digital me-too’ers any more than computer hackers making up money at home? When Bitcoin’s been around for a few decades and expands a bit, we’ll reconsider. But, real governments (NOT Venezuela) are being most firm about Bitcoin being limited. For example, Unhashed reported “Confiscation of Bitcoin ATMs in Russia Leads to Outcry from Local Operator.”
When cryptos come – backed by a major government, we’ll reconsider. For now, it’s just a black-market with lots of press. Almost of spin on speakeasies of the Roaring Twenties.
Will Corsi Bring His Books?
Dr. Jerome Corsi has been ordered to appear at the Mueller Fishing and Hookers exposition tomorrow. Apparently because he knows Roger Stone.
But we think it would be really interesting is he were to bring some his books to read to the grand jury from, while reminding them that the Grand Jury was supposed to be a “people’s inquiry” into criminal matters. Until the Just-Us department quashed the “runaway” (get to the real bottom of things) grand jury powers with revisions to Rule 6 in 1946. See Roger Roots’ fine article at the Constitution Society website, where he argues “If It’s Not a Runaway, It’s Not a Real Grand Jury.”
Under law, the grand jury still has the power, but since the Just Us Department wields the power (Rule 6) the odds of a stand-up, independent Grand Jury foreperson are, regrettably. low. This is how “a ham sandwich could get indicted.”
Notwithstanding, the Corsi reads could be very damn interesting:
Partners in Crime: The Clintons’ Scheme to Monetize the White House for Personal Profit, along with “The Deep State: The Fall of the Constitution and the Rise of a Shadow Government and “The Obama Nation: Leftist Politics and the Cult of Personality.”
Our expectation is Corsi will fully cooperate with the grand jury. We hope so much so, in fact, that they won’t be able to shut him up.
We hope he can bring a book-bag.
The Larger (War) Perspective
I have this notion that the NY Times, by publishing an article purporting to be an op-ed from a “high ranking official” inside the Trump White House, may be giving comfort and aid to Russia in a non-apparent way.
Suppose, for a moment, that you had a strong US president and you were sitting in Moscow. What would be more fun (preparing for your upcoming retake of Ukraine to re-establish the empire of Catherine the Great and be remembered as Vlad, the Tsarist) than planting such a piece in the Times?
You can see in the headlines how this dissent has taken seed and is being carefully watered by leftists in media and some who don’t grok the overarching strategic view. Some headlines:
We figure Putin’s laughing his ass off. Biggest military games ion decades and the White House is offline with with rumors of a palace coup. Masterful chess play, huh?
So, thanks to the NY Times piece, everyone in the White House is a suspect and if you were sitting in Moscow, trying to break down the West, what could be better?
Well, except it does get better. Because the normally pro-government regulation of everything Left is suddenly defending Social Media. And the reason? It’s a critical tool for the left-wing Webolutionaries to make-up (manufactured) consensus.
Meantime, Trump wanting a strong Military and equality in trade is upsetting the world order. China says has to retaliate if U.S. implements new tariffs is just part of the story.
The real gamesmanship pivots around eastern Europe and stories buried by the White House Leaks hysteria: Even the highly credible Financial Times is now tracking “Ukraine: On the front line of Europe’s forgotten war.”
Forgotten by the MSM, maybe…but not us. We hold there is a reason for keeping America distracted and it’s the new form of warfare afoot int he world that’s we’ll roll out in Peoplenomics next Wednesday.
Moron the ‘morrow…