I explained this to you on Tuesday in the article “TRLM: The Red Line Matters” over here.
In that lil gem you will find this bit of advice:
“When the main Index (black line) crosses OVER the RED line, be LONG. When the BLACK line crosses UNDER the RED, be SHORT.”
Which is what makes Peoplenomics the best damn “keep your money and make some more” publication in existence at the $40 per year price-point.
Because here’s how the red line/black line relationship has changed this week – and as a “freebie” – I got up extra-early this morning and used today’s future’s price to project out through Friday…
The problem (to anyone with a nickel’s worth of brains and a few thousand of skin-in-the-game) is that you can see plain as day that the previous trend channel (those three descending lines) has been broken.
That’s OK – stocks will change directions of course – but the problem is what happens now?
As I see it, we have two cases to sort out.
One is that having completed the corrective move down, we will climb to new highs. And that could take the S&P 500 up to, oh, say 2,750, or so, in coming months.
On the other hand, in the coming week, or so, we stand the possibility that we will fail to make new highs, and if THAT nightmare plugs in, then reality will sink in quickly. In Elliott terms, the just exited trend channel will be a Wave 1 down, and what we are in now will be a Wave 2 bounce.
So that is your Thursday morning “gift.”
We told Peoplenomics readers yesterday what previous hurricanes have done, and yeah, verily, we’re going up the same path.
There are two things driving this bump: First is that the Hurricane (bad as the rains were) has created a huge amount of “pent-up demand.” This will lead to massive profits in the coming year, or three, in the housing and related stocks.
But the other thing is Trump’s talk about the Tax Cut Plan.
Yeah, sure, I know: “What plan?”
For now, it’s a wet dream. A Gloomberg article, we think, has it about right: “Trump’s Tax-Cut Bid Hits New Obstacle: Hurricane Harvey’s Costs.”
In the very short-term, we are wildly bullish up to the 80% retracement level from the all-time highs. After that? We may scamper back into cash with no notice or comment. When you have titanic forces (Hurricanes versus Tax Cuts) it’s like the old “Anything Happens Day” with the Mickey Mouse Club. Which, if you’re still asleep, was much more functional that what passes today for Congress.
At some point, insurance companies will need to begin to “dig deep” to pay off a bazillion dollars worth of claims. When that happens, the end of one trend channel (the one we just embarked on going up) will come to an end and a new channel, downward, will begin.
For now, our delirious subscribers will recognized that one in due course: When the red line is over the black line, it means the insurance checks are about to hit and hit and hit….
That’s when our economic future will be decided – insurance company liquefaction (which used to be liquification) and the primary agents of Dumbocracy played by the Fools on the Hill.
OK, that’s the first economic data point to be pondering and before we get to the Challenger job cut number, let me note that liquefaction/liquification is yet-another one of those “Mandela” words.
Since I’ve been hip-deep in writing my next book (nonfiction: Dimensions Next Door) you will want to spend some time looking at the phenomenon called “false memory” in Wikipedia:
“A false memory is the psychological phenomenon wherein a person recalls something that did not happen. False memory is often considered in legal cases regarding childhood sexual abuse. This phenomenon was initially investigated by psychological pioneers Pierre Janet and Sigmund Freud. Freud wrote The Aetiology of Hysteria, where he discussed repressed memories of childhood sexual trauma in their relation to hysteria. Elizabeth Loftus has, since her debuting research project in 1974, been a lead researcher in memory recovery and false memories. False memory syndrome recognizes false memory as a prevalent part of one’s life in which it affects the person’s mentality and day-to-day life. False memory syndrome differs from false memory in that the syndrome is heavily influential in the orientation of a person’s life, while false memory can occur without this significant effect. The syndrome takes effect because the person believes the influential memory to be true. However, its research is controversial and the syndrome is excluded from identification as a mental disorder and, therefore, is also excluded from the Diagnostic and Statistical Manual of Mental Disorders. False memory is an important part of psychological research because of the ties it has to a large number of mental disorders, such as PTSD.”
This manipulation of “false memory” by electromagnetic spectrum, is one of the later topics in the book which ties together everything from the Plain of Nazca to the Philadelphia Experiment, to UFO’s… 40,000 words and 105 footnoted sources into it, this is one of those books that even the writer can’t put it down. Which makes taking a break to write a morning column something of an inconvenience, lol. But we need money so we gotta check futures and there’s the matter of coffee….
OK, Job Cuts: 33,825
Press release from Challenger, Gray, and Christmas, please?
“U.S.-based employers announced plans to cut payrolls by 33,825 in August, a 19.4 percent increase from the 28,307 recorded cuts announced in July, according to a report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
The August job-cut total is 5 percent higher than the same month last year, when 32,188 cuts were recorded. This month’s total marks the first increase in job cuts in the past five months of this year. Job cuts have declined each month of this year following the announcement of 43,310 payroll cuts in March.
So far this year, employers announced 289,132 planned job cuts, down 26.1 percent from the 391,288 cuts announced through the first eight months of 2016.”
Next, a fairytale:
“Personal income increased $65.6 billion (0.4 percent) in July according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.6 billion (0.3 percent) and personal consumption expenditures (PCE) increased $44.7 billion (0.3 percent).”
“Ure an Idiot! That’s Great News!!!!”
And try this one as a capper, again from this morning’s BEA presser:
“Personal saving was $510.2 billion in July and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.5 percent…:”
Apparently, there’s enough Kool-Aid being passed around Wall Street: Dow Futures were up almost 60 when we looked. And since we’re on the long side thanks to our trading model, here, you want grape or cherry flavor?
Not only does the Houston Chronicle do a damn fine job of covering the explosion at a chemical plant in NE Houston earlier this morning, but they have something else the NE-centric MSM haven’t figured:
Click over here and look at their graphics work: A series of slides that will give you an idea of how big the impact from Harvey would be if it were to have occurred in other places.
We expect this will be ripped by the MSM, but damn-fine enterprising on the part of the Houston Chronicle that deserves recognition.
What Happened to Time?
When I was a kid (over half a century ago) I would read Time Magazine cover to cover to figure out what was going on in the world and what it meant.
Today? Not so much. I’m still interested, but here’s the kind of stuff they’re putting out: The Internet Is Not Impressed With the All-Girl ‘Lord of the Flies’ Remake.
Still, they have some good stories like Democrats Say Citizens United Should Die. Here’s Why That Won’t Happen but it takes a lot of discernment in a high-noise world to figure out what matters and what Time it is you’re reading.
Dividing and Conquering the Former US
We had to go look up who the judge was when we read the Fox report ENFORCEMENT ON HOLD Federal judge blocks Texas’ new sanctuary city law.
Yep, a Bill Clinton appointee.
There may be some hope, though. Maybe a few democrats are figuring out that internal collapse being pandered by the lefties in socialist media might not be such a joy-ride after all.
LOCK THEM UP Pelosi wants violent Antifa members in handcuffs. Take a number, Nancy.
Gosh, I hate to cut it short, but there’s too much on the docket to sit around yabbing.
“Mor’on the morrow… “