The trading indicator, which Peoplenomics subscribers see twice weekly, has really ticked me off this year. I am *(as you probably figured) a dyed-in-the-wool bear who loves to make money on the short side of markets and who does extremely poorly when ‘gut trading” in a rising market. The Indicator, however, with a single weekly exception, has been resolutely bullish since last December and continues its long position, even now.
Historically, Fall has been a great time for markets to pull major dives and yet, at least so far, we haven’t exactly gone off the high board. While there’s a chance of a decline come Wednesday, we can’t help but wonder if some of the “enduring optimism” (financial snort) hasn’t been due in part to the busting up on regular economic reports thanks to the government shutdown when 83% of government couldn’t even get the regular statistics turned out…
I mention this because the Cost of Living report which has been previously issued around the 14th of the month won’t be out until Wednesday..
In the meantime, when it comes out, the market is likely to be further cheered by what will be (predictably) lower than expected inflation, despite the wholesale printing of money. There is, you see, a well-orchestrated international G20 print festival going on, and as long as the illusion persists, we may expect the following to continue as a consequence:
- Gold will not drop through the floor ($1,200) until the ravages of deflation become clear and the printing speed globally may prevent that.
- The Dow and US stocks will continue to climb as long as the money is being “watered down” while at the same time, falling yields are putting even higher targets (think Dow 20,000 and S&P 2,000) in sight.
- And electronic digital replacements like Bitcoins should be doing very well indeed. And they are.
So the Good Times should arrive once again this morning with the Dow set to tack on another 40, which will put 16,000 in sight for tomorrow, if not this afternoon, and even with a modest pullback at mid week, the mistletoe is coming along with the eggnog down on The Street.
Time to order your Stock Trader’s Almanac 2014 (Almanac Investor Series) if you’re a bear like me. It might help to jot down the license number of the bus that’s been running over us bears lately.
Us bears, that is, (like Ures truly) who are addicted to disaster porn and don’t follow our own well-performing systems that we developed to keep us from losing money.
One of my buddies called to tell me he was loading the boat on SDS call options (on the 2X S&P short ETF) for December.
“You are???” I asked incredulously…
“Well, January might be better, but I’m thinking that the budget crisis will come back and maybe worse than before…”
Maybe. But what’s going on right now is sort of living synchronized water ballet or parallel fed printers: The printing presses are getting warmed up in the EU and the if the German Court says the German people really can be put in debtor yokes to bail out Greece by an unelected government, well, then I’m afraid my friend won’t even get the license number of the bus.
If the republicans can learn to articulate, well, maybe. But absent that, the last go-round scared them and for all they are, they are not complete idiots and the budget “crisis” might be short-lived.
It’s a race, to be sure. But sometimes the best way to make money, is to sit on your wallet until a clear change of trend becomes apparent.
And it doesn’t seem to be on tap this morning.
Global Warming to Cooling?
We’ve been considering the notion of late that the transition from high solar output to much lower output of the Sun – the lowest in more than 200 years – would cause large temperature gradients, and with them, extreme weather.
The national coverage, like this report over here, don’t go into this global warming cum cooling issue, but we know from our required flying education in meteorology that high temperature gradients (between hot and cold) are one of the predictors of extreme weather. Toss in some pressure gradients and it’s a pretty simple matter to figure out when is a good time to go flying and when’s a good time to sit on the ground.
This morning, winds are strong and not much fun up in the Ohio/Pennsylachia area and out on the Oregon Coast. We are only a month, or so, from the onset of winter and the storms are a hint. So keep at eye out for temperature gradients and you’ll develop and eye for this stuff, too.
More after this…
Shaky Monday News
I assume you saw my 7.8 quake showed up, more or less on schedule, a couple of days late, this weekend? Can we relax? Lemme see…how’s about we start off with this which popped in from the Jakarta desk overnight?
Hiya chief!
Can’t say we don’t get good shows around here… Mount Singabung popping. [Hell of a picture! – G]
Sinabung is located in north central Sumatera near Lake Toba, which itself is the crater of a supervolcano similar to Yellowstone Park. I’ll let you know if the lake starts boiling. May want to seek a fresh planet at that point. Luckily, there are an estimated 8.8 billion of them in the Milky Way.
Sampai jumpa,
Bernard Grover
Managing Editor, Indonesia Bureau
P.S.- all the Philippine crew have checked in with minor damage. Most of the bad stuff is limited to the southern end of the country. Folks still say the 10,000 estimate is well short of the real situation and that likely thousands have been washed out to sea.
If you haven’t read on the Toba catastrophe theories about, this snip out of Wikipedia ought to get it onto your learning list:
The Toba supereruption (Youngest Toba Tuff or simply YTT[2]) was a supervolcanic eruption that occurred sometime between 69,000 and 77,000 years ago at the site of present-day Lake Toba (Sumatra, Indonesia). It is recognized as one of the Earth‘s largest known eruptions. The related catastrophe hypothesis holds that this event caused a global volcanic winter of 6–10 years and possibly a 1,000-year-long cooling episode.
The story continues over here at the Wikipedia site. So if you’re thinking Obamacare is a problem, just imagine the global impacts of another supereruption and picture how that would change people priorities around about what’s “important”.
Toba’s not enough? Well, how about the article this weekend “Volcano discover smoldering under a kilometer of ice in West Antarctica: Heat may increase rate of ice loss.”
Now close your eye and imagine that puppy going kah-blooey!
Kind of like Mt. Etna which is going off light up the sky over Sicily.