We might have made a little lunch money this week. The reason is the market declines from Friday the 13th have been amazing.
I mean besides Damning pic of a weak leader: Devine (nypost.com).
The real driver is taper talk at the Fed. Seems the party-punch spikers have figured out that sobriety has to come along some time:
“With respect to the path of net asset purchases, respondents to the Open Market Desk’s surveys of primary dealers and market participants expected communications on asset purchases to evolve gradually, with signals anticipated over coming months regarding both the Committee’s assessment of conditions constituting “substantial further progress” and details on tapering plans. Almost 60 percent of respondents anticipated the first reduction in the pace of net asset purchases to come in January, though, on average, respondents placed somewhat more weight than in the June surveys on the possibility of tapering beginning somewhat earlier. With respect to the pace of tapering, respondents continued to anticipate that the Committee would take a gradual approach. While market participants discussed the possibility of an earlier or faster-than-proportional reduction in the pace of net purchases of agency mortgage-backed securities (MBS), most survey respondents appeared to expect the timing and pace of tapering of net purchases of agency MBS and Treasury securities to be similar.
With the Fed making up $1.5 trillion a year in this market (and GDP), making them the virtual sole reason for “all-time highs” their action wags the dog big-time.
Elliott Wave Disaster in Charts
Saturday on the Peoplenomics side of the house, we’ll dig into this a little deeper, but here’s how our graphical Elliott visualization looks based on the early pre-open futures today: (90 min to the open, Dow was -350 in addition to Wednesday’s 382 point slump)…
While you can study Elliott wave counts all day (and this is a good starting point, as well as over here) my one bitch about Elliott has always been the numbering system. Numbers versus letters are used to denote wave counts and in the era of graphical processors, that seems like a real waste.
So back when, I simplified by…well, skip this…we’ll save that for the PN report.
Just look at the chart and learn: Three yellow (large boxes) and under that are three light green, then within that are three darker greens, and then, within that the fifth wave (which wrapped up on the 13th) was comprised of three red waves.
How Far is Down?
The second tool is our Elliott wave estimator spreadsheet which may be found in the Peoplenomics Master Index.
The idea is that wave relationships are definable. Whatever the first wave down is, the second wave bounce is usually (insert matrix with values from .31 up to .8) From there, the third wave declines must be larger than wave 1 down. Which bounds things off the wave 2 rally.
When three down is done, the wave 4 rally comes, and then the five down. Which must be greater than the 1 down, with the exception of a failing 5th wave and so forth.
This doesn’t mean keeping your meager trading dough is any easier. I think of it as insurance.
When I look at the headlines (Kabul, economic, viral) and rumors (Joe’s job, shortages, supply chain collapse) the wave boxes give me an idea where things will head.
Unless we get a nearly miraculous Wave 2 going into the holiday weekend in September (something muted is reasonable to expect, I think) and it puts in new all-time highs, then the odds of us just being at the middle of a Wave 1 down increase.
So, what’s the Point? Simply this: In historical terms, the time from all-time high to crash lows often runs about 55-days. That means the nail-biting, ready to panic (shit bricks) decline could come around Thursday October 7th.
Even if you’re not a subscriber and don’t read the litany of disclaimers, this ain’t investing advice, and all that? Just circle it as one way the Future could come to slam us. Which means that’s a prepping window to be extremely mindful of.
New all-time highs will round-file that outlook. But, until then, plan for the worst and pray for the best.
U.I. Claims Data
We were expecting things to level-out in this area. That is, the four week averages might have started to stabilize. Here’s what we got.
Aha! Right in range.
The unemployment problem isn’t entirely the fault of people sitting at home not wanting to go back into the workplace agar dish. Part of it is supply chain issues and chip shortages.
Which brings us our morning headlines to gnaw for fundamental analysis:
And I found this one interesting because of how it could impact housing: Supply Chain Disruption has Potential to Impact Building Finishing Businesses | Monitor Industry Risk with BizVibe | wfmz.com
That Was So Much Fun…
Why don’t we look at the Philly Fed outlook, while we’re at it?
“The survey’s current indicators for general activity and shipments
declined from July’s readings but remained elevated, while the new orders indicator rose. Additionally, employment increases were more
widespread this month, and both price indexes remained elevated”
See here’s what’s going to happen (we think): The Fed will have to raise rates earlier than expected. The backlash to Jabs will increase. The fear-mongering will grow, Afghanistan will get worse. China is set to take Taiwan pretty much at will. And the House busted all hope of economic progress by overspending on leftist favorites instead of reindustrialization which is what we need.
So we likely get a crash this fall, a tiny recovery in January-February, then China takes Taiwan in March or April (if not October this year), all the fine pitch chips go away, and since Biden has killed energy independence, energy costs will scream higher and that will drive food up, too.
At least that’s the simplified libretto read du jour. Only question is whether a bear-killing rally on fake good news can be ginned-up going into Labor Day. Since we’re in a wave 1 down in markets now, the wave 1 down will scale the wave 3 debacle in mid or late October, give or take the pre-Labor Day rally hype. And Taiwan weather.
Wait for it…
You’ll get sick of me telling you this, but I will say it until someone else in the media starts talking straight with us: America – having sold-out its core manufacturing base to China – is faced with a dismal mess because we don’t make the goods consumed here. China sneezes, America gets Covid kind of thing.
Which we’ve “addressed” by re-inventing racism (RIR) and handing over our capacity for critical thought to left-wing stooges in colleges an universities.
In THEORY, universities are supposed to be supply source of the best and brightest ideas to lead us into a better future. That’s NOT happening.
I know this with certainty because? I track the MIT Solve competition. Used to be lots of useful ideas there. Not any more: Industrializing hate is the order of the day as ALL the highly touted “solutions” offered in the present crop’s highlight page are social justice warrior issues.
Click over here and see for yourself.
- Digital Inclusion Finalists
- Equitable Classrooms Finalists
- Resilient Ecosystems Finalists
- Health Security & Pandemics Finalists
- Antiracist Technology in the US Finalists
- Indigenous Communities Fellowship Finalists
Makes me, oh…you know…not too excited about the future. (We have owned our tree farm since 2003, after all. Not like we don’t grok the environment…)
I don’t see life extension, food production, colonizing the Moon, going to the stars, fresh free drinking water and organic veggies for all on the list. Don’t see border control, how to rebalance the exploding federal budget. No signs of a global universal language or consciousness research. To our limited gray matter, these seem a better use of the best and brightest.
Nope. What I see is (pardon me) social justice woke bullshit that at the end of the day looks like Re-Inventing Racism and capitalizing the weather in the midst of a biowar. Your view may be different, of course. When you’ve made it to the 70’s a lot of childish behavior’s pretty obvious.
Social Justice is the prime mover towards Civil War II.
Dennis Prager’s assessment last week was uncomfortably on point: Dennis Prager | The Left is Destroying Western Civilization | YouTube.
Is there no hope? To find out track San Francisco DA faces second recall effort as residents ‘fed up’ with progressive ‘zero consequence’ policies. But don’t hold your breath. Lot of “canary stories” – like the Gruesome recall.
Sorting Through the Trash
Just freaking jabulous: Nursing homes will need to get staff vaccinated or lose federal funds, Biden says – CNN. Communicable news network?
You’re an America Idiot and you can’t see bullshit. Try this anyway: Gen. Mark Milley Addresses Questions About Afghanistan Intel (mediaite.com). But don’t you dare read Russia was ready for Taliban’s win due to longtime contacts (apnews.com) because that would mean the Russians are (a lot) smarter than our own fried agencies.
Blow now available in Cancun:
Fred’s Wet Spot is worth mentioning too for the NE-centric MSM, anyway.
Climate Change Histrionics: Court Blocks a Vast Alaskan Drilling Project, Citing Climate Dangers -(nytimes.com). Which part of an Obama appointee killing energy independence is surprising to you?
Talking to God or practicing medicine? In A Message To Americans, Pope Francis Says Getting Vaccinated Is ‘An Act Of Love’. I’m still a hater by this measure.
And Amazon seems to have figured out the paperback issues with my newest book…
Buy ’em by the thousands. Cheaper on Kindle, though.
ATR: Move Over Seattle
Around the ranch: We just passed Seattle’s average annual rainfall (36.2 inches) by blowing through 45-inches here in the East Texas Outback. Turns out, one of our long-term strategic decisions (made in 2002 to move to where there’s enough rain for farming) has been a “winnah, winnah, chicken dinnah!”
We do pretty damn well at being right. But it’s the “timing of rightness” that’s the bear. Gotta work on that one, next time around.
Write when you get rich,