Well, let’s try this again… The US markets had a bad case of news-granola induced runs yesterday, dropping 225-points on the Dow and putting our current short trade decidedly in the black, but as Peoplenomics readers know, the trading model still says “Long!” Confusing times these are indeed. As we slip and slide along toward a long wave Kondratiev 60-year cycle bottom, we can expect further declines but in an irregular fashion until later this year when the astrological signs experts (like Arch Crawford in that domain) and cycle gurus (like Peter Eliades) and Elliott sages (like Bob Prechter) are all fairly concerned.
Bbb’s article link there, by the way, is especially good since he explains how “Declining C Waves are Devastating, No Place to Hide Except in Cash” which if fine if you have some. Does the term “stack paper” mean anything to you?
There are some other strategies which are not particularly cash-intensive which we’ll cover in Peoplenomics this weekend as we continue our musing into just how bad Wave C could be as part of our continuing exploration of prepping based on economic needs now arriving.
Which gets us to this morning. We’ve got some hot productivity number to go over, just out, but before we do, let’s check the calendar because a small bounce at the open is almost likely this morning for mechanical reasons. Thursday’s close was when the option indices settled for the month. The close today will be where equities (the underlying stocks) settle.
It doesn’t take a rocket surgeon to figure out that if an index closes on Thursday down, a bounce Friday would let the commercials make some lunch money. But by late session today, we could be trending down again (depending on news flow, of course) but next week will really tell the tale as to whether this old market has enough juice in it to make another run to the upside. Looking at the MACD and a couple of other indicators, it’s a hung jury.
Although a “hanging jury” would vote for S&P 1,640 and maybe as low as 1,623. The folks like me who wouldn’t ever be picked for the kind of jury duty where financial fates are decided would scream for an immediate hanging down at the 1,540 S&P level and somewhere thereafter, a cycle low in gold of anywhere from 770 to 1,100 to follow.
But no such jury is likely to be empaneled, because despite the B-school theory, markets are no more rational than I am, so we arrive at the meaningful headline of the morning which is the productivity data:
Nonfarm business sector labor productivity increased at a 0.9 percent annual rate during the second quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 2.6 percent in output and 1.7 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2012 to the second quarter of 2013, productivity was unchanged as output and hours worked both increased 1.8 percent. (See table A.)
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.
While the markets digest this latest bit of news, the real key to the short term picture will come after lunch (east coast time, natch) and that’s when we may get a foretaste of next week’s action.
With this, the market looks to open not much changed, but with the metals firming reader Egor sent a note:
George – long time no type – hope this finds you well – watching market(s) priced to perfection go wobbly, weak in the knees and now find interest in the much un-loved metals market – so close and yet inconclusive – the PM thrusts are hopeful – a trader on Fast Money yesterday said someone took an enormous option position yesterday (a multimillion dollar notional call) – follow-through or fail?
Talking to Robin Landry about this earlier in the week, I don’t think either of us would be surprised in coming weeks for gold to sneak back up toward 1,400 before then beginning the downward long-term decline which should score a bottom between $1,100 to as low as $770.
When I first mentioned this, people threw rocks at me (gold was pressing in on $1,900 at the time) yet here we are, half way there and making money the old-fashioned way (slowly) still seems to work.
More after this…
Egypt in Collapse
Yes, it’s about to get worse as the Muslim Brotherhood (MuBros) are calling for a day of rage against the military government. With this will no doubt come more attacks on persons and property of Coptic Christians in the country.
Fearless Leader’s comments on the situation in Egypt seemed calculated to make everyone mad, seems to me: He didn’t cancel US arms sales (employment here, pushing the military junta in Egypt toward the Russians), and he didn’t offer any actionable ideas that I could figure.
So this morning the bloodletting continues with 600+ dead, and more turmoil to come. Yes, this is a civil war now, it’s just the MSM is under pressure to keep the lid on it, but there is enough blood leaking around the lid that it’s becoming tough to deny.
NSA Caught Out
The Washington Post re-0rt this morning that an internal NJSA audit found 2,776 cases where individual rights have been violated by the agency’s surveillance operations and that was only in the most recent year.
This one is easily fixed: Just grant NSA more snoop powers and presto! Away go the violations! Shouldn’t be too hard to accomplish given the rubber-stamp gang in Washington.
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Then we have the apparent conflict in common sense as, on the one hand NYC search and frisk is on the run while TSA is expanding its operations outside of airports and moving into public transportation in general.
Keep Your Terror Zipped!
A Utah man is under investigation for possibly exposing himself on an airplane. It has something to do with getting peppermint topical pain reliever on himself says the report, but the real message is clear: Keep your terror zipped while flying.
The Big Republicorp Game Plan
Here we go again…my favorite liberal sent me a note pointing out the Rachel Maddow show special on how republicorps are mixing up voting rights in North Carolina to virtually ensure a republicorp outcome in future elections.
And a hell of a lot more important than anything else you’re looking at today. The end of democracy, no kidding.
All of which would be worrisome, except that’s how the political pendulum swings. The republicorps are just taking a turn at machine politics, is all.
Related Reading: Mark Levin’s The Liberty Amendments: Restoring the American Republic is making waves and is worth considering if you need something more to read.
Quake Sniffing
It’s been a while since I put up earthquake charts… I was waiting until I was sure the new cloud server was stable (and it seems to be now).
Looking first at the small quakes long term (since 1963) the trend looks like this:
Next, when we look at the long-term large quakes, we see a gradual increase in play:
Other than a 2.5 on the Big Island of Hawaii, but more important there was a 6.5 just outside of Blenheim, New Zealand. According to this report, a bridge and some minor home damage was reported, but seems to me that by the chart we should be due for another series of large (7+ quakes) just ahead.