Short Wave II: The Hillary Issue

Let’s talk about the Path Into Depression 2017/2018.

One theory – admittedly a bit conspiratorial – is that some market big wigs got an advance on the “Illary” news that broke last weekend.

As a result – holds the theory – a very few key Big Guns sold at the top – which is why the market declined like mad on Friday.

But there wasn’t much follow-through after the opening Monday. Instead we had a rally.

Classicists of Elliott Wave theory might make Monday the Wave 2 bounce. Which means there should be a Wave 3 larger down move as the week wears on. With Dow futures down about 100 points early on, it looks like an interesting bet – and yes, Ures truly is still short.

The reason is simple enough and I’ll use the S&P 500 levels to walk you through it.

The recent high was 2,186.48. The closing low was 2,127.81 Friday. Our subscribers, playing along with their copy of our “brainamp.xlsx” spreadsheet can look at where Wave II (Monday’s bounce) should have taken us: 2,164.07. The tape showed 2,163.30 Monday as a high so our “brainamp”” was off less than a point.

That’s looking backwards. What stretches before us as a “possible” is that Wave III will get organized today. If/when it does, the high case is 2,076, the low case 2,061 and change.

This ought to be followed by a Wave 4 bounce. High 2,127.70, low 2,116.47.

Finally (around election time?) we get a final (for this wave) wash-out the best of which is 2,058 and the worst of which is 2,021.65. I favor the latter number.

So this gets us into the election.

But you see, there is a bigger problem ahead.

What is all this decline (the one toward election, short of Hillary “going Lazarus” and rising from the bed and looking full of vim and vigor) is really just a Wave I of a larger degree?

Unfortunately, the long wave economics of the outlook hold this miserable possibility, so we can peer into the future a bit further.

Plugging the 2,186.48 high in, and looking at the Wave 1 down of larger degree as ending around 2,021.54, we can see how the rally in the next year (to about mid March) would bounce tyo 2,123.47 for that II of a larger degree.

Wave III (the sell in May and go away 2017-style) drops to a low around 1,834.43. This would be followed by a summer rally in 2017 but the fall wash-out could be as low as 1,722.78.

Or, because we have seen previous support and resistance nearby, why not call it 1,740 on the S&P?

And finally, yet another larger degree? Well, now we’re looking into the depths of the Greater Depression in 2018-2019 with the S&P down to 932’ish, or about half what it is today.

You can see why I didn’t bail out of my short position at the Monday lows…I think there is more downside to come.

Following a simple buy&hold approach to this kind of wave action has the potential to make some really good money. On Friday, my portfolio was up more than 6% – for the day. However, with the rally on Monday, I gave half of that back, but I’m a patient fellow.

Tomorrow’s Peoplenomics report will update the Aggregate Oscillator which is extremely useful in times like these because there’s no one system of trading that is 100% reliable. They all have flaws, so you have to trade “preponderance of evidence” – or pay a professional a huge slice of your pie. I’m not inclined to share that way.

So around here, we await the decline, which could pick up steam a bit, then we will trade out and re-enter for the next wobble-which-way. It doesn’t matter to us whether the market goes up or down, we can make just as much money one direction or t’other. The trick is being nimble and agnostic. We don’t fall in love with positions, we don’t believe any of the press reports on much of anything, and the odds are already in the 40% range that we will be in recession in Q4 or Q1 at latest based on factors which, again, we’ll cover in Peoplenomics tomorrow.

DISCLAIMER: None of this is trading advice.

What you do with your money is your business, not mine. I’m just telling you my thinking on markets and how my trades are doing (which usually isn’t bad, but we do get things wrong here and there…).

On the other hand, I have learned a few things about gambling in my casino adventures, not the least of which is money management. (The MBA is less useful, lol…) Just like a casino bet, you have your lines in the sand beyond which you don’t give more money to the House, and the same thing holds for markets. Tight stops in case you’re wrong, but let the winners ride with some guidance from projections and real-time data.

Unlike a trip to Reno, Vegas, any of the fine Indian Casinos (one of my favorites is Twin Arrows and the other is Mazatzal, both in Arizona) this is a game that can be played at home or work, at whatever speed you want: Leisurely buy and hold (within limits of the waves) or frenetic in and out day trading.

This is a lot of work though and you don’t make appreciably more money. I lost my Pattern Day Trader designation because the additional effort didn’t gain me anything.

If you don’t know what a PDT is, the SEC rule is explained this way:

FINRA rules define a “pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period. This rule represents a minimum requirement, and some broker-dealers use a slightly broader definition in determining whether a customer qualifies as a “pattern day trader.” Customers should contact their brokerage firms to determine whether their trading activities will cause them to be designated as pattern day traders.

A broker-dealer may also designate a customer as a “pattern day trader” if it “knows or has a reasonable basis to believe” that a customer will engage in pattern day trading.  For example, if a customer’s broker-dealer provided day trading training to such customer before opening the account, the broker-dealer could designate that customer as a “pattern day trader.”

Under FINRA rules, customers who are deemed “pattern day traders” must have at least $25,000 in their accounts and can only trade in margin accounts.  For more information on pattern day traders and related FINRA margin rules, please read the SEC staff’s investor bulletin “Margin Rules for Day Trading.”

If you even THINK you’re going to day trade (at this level) you need to go read up on IRS wash-sale rules and use competent software to run the Wash Sales rules against your book  (of trades).

As a practical matter, my average trade period is probably running one trade per month, maybe two. Far from the Wash Sale rules because I make it a point never to trade the same security in a 90-day period so we never get into things like settlement dates and such.

My suggestion? Keep an eye on the things that are really easy to measure and track. Retirement accounts where you can flip between cash, bonds, stocks, and such give you a lot of power and very little overhead. Just read the news and try to out-guess the Fed.

Speaking of which, when they meet this month, I don’t expect them to raise, but if Hill is down for the count, no telling what they will do.

As my pal Robin Landry says, we’re in a period which is not so much about making “a return ON” your money, but a “return OF your money.”

There’s a time to be an aggressive investor and then there’s time to live by “He who trades ands runs away, lives to trade another day…”

Like this one.

Reading the News to Make Money?

Why do people read the news?

After being in “the game” for 32-years (13 in the MSM and 19 on the web) there are still two competing thoughts:

One is people go news or events to see heroics or horror…like going to stock car races to see the thrilling crash or football to see if anyone blows out a knee (or fails to stand for the anthem and instead kneels).

[By the way, I’m insulted when someone doesn’t stand for our National Anthem…kneeling is not an acceptable spin.  I have started a personal boycott of the NFL until they come to their senses and return to being a professional sports organization instead of a political action league that has pounced on guilt-marketing and the myth of social justice.  — Look:  99% of social justice come from hard work and brains, sorry. Not pop sociology movements, and tenured leftists. FMTT.]

The other reason – and the one that makes the most logical sense is to a) stay alive and b) make money.

With this filter on, the passing headlines of this morning are vastly simplified:

IMF’s Christine Lagarde faces December trial in fraud case

Wells Fargo to eliminate product sales goals for retail bankers

$124 million payday for Wells Fargo exec who led fake accounts unit

Global Stocks Dip as Fed Fails to Soothe Markets

Hanjin Shipping secures $45 million, more may take ‘considerable time’

Rebalancing the Oil market will take longer than we thought: IEA

Meantime, in the Land of Denial

Clinton loyalists rip media over coverage of her health

Bill: This Isn’t Hillary’s First Collapse

Bill Clinton on foundation: ‘There is nothing wrong with what we’re doing’

Lawmaker issues subpoena to FBI for Clinton probe records

And through it all, what the right calls the Clinton News Network is still trying to tie the GOP to the Klan because racism is one of the few cards left to play while waiting for Lazarette to rise….

Pence declines to call David Duke ‘deplorable,’ disavows support.

As Agitprop 401 advisor, I give that a D-.  A snooze through used news.

Problem is that America’s minorities are figuring out 50+  years after the Great Society that what the US approach to poverty did was bust up families and substitute welfare dependency for genuine equality – a crooked deal for every minority out there.

Quick:  Look surprised.

The good news is the Clintons do believe in borders after a fashion:  Stone Walling, isn’t it?

Oh well, nothing we can do about it individually.  So instead, let’s sit back with futures down almost 150 and make us some more money while this pig is still flying, shall we?

28 thoughts on “Short Wave II: The Hillary Issue”

  1. Stupid democraps to put the witch forward as their candidate knowing of her sickness. Donators may come after Billy ?

    • Even better – traitor Trump-followers back a clearly unqualified candidate who spouts off any garbage that’s on his not, very bright mind. He’s going to be in serious legal trouble after the election!

  2. clintoon with Parkinson disease is a big hill to overcome. Do the markets go way down to keep the clown in ?????

  3. SPORTS , prepare your core for 7 years or more
    INVESTMENTS , the rest of the world is getting tired of getting screwed around by the British EU American Empire–THE PAST WILL NOT BE REPEATED/ but the future is changed every moment by the knowledge our ET associates, have given us, in the past that used to be 25 years of advanced technology then 50 years then 200 years and now our technology is over a thousand years into the future
    While some of us will be able be able to travel to other galaxies
    Some of us will be content to experience the Garden of Eden on Earth
    Shockingly, the biggest leap in humanity
    Will be to be the release from all religions
    Once everyone knows that your soul never dies the body that you’re using right now it’s just for a little while
    And the time loop as there’s no beginning and no end
    As we go forward in time we can also go back in time and also we can go sideways in time and then the other one is in depth and time so it’s like being in the middle of a big ball you can go up down sideways or this away you can even take an angle
    Anyway how did we get off on this subject I’m trying to learn everything about the garden to Eden and we have been taught all these wrong things because we are the youngest Nation or other nations and other beings have the ability to do things that we can’t even conceive until we talk so we are very young and we’ve made a lot of mistakes and we will be recommended for those mistakes but we will learn and will come out of it better in the end
    May all beings be lovingly fulfilled
    So be it

    • when God created man what is she kidding Las Olas The 1947 GT gave us the information about erasing memory and we’ve been using that everyday every sense in the Montauk program

  4. I read your site not to make money but learn what might be coming same as I do your friend Cliff. I have no money. I just believe learning all one can is way to safe guard one life.

  5. are you asking me what matters most in life okay I’ll respond to that question

    We have human species in the water the oceans that are just like us except they’re little different they have adapted and that’s one of the things about our human Heritage is that we adapt to all situations

    • LOL this is the dumbest POS I have seen today.
      It’s a poll from half a year back and reported in June when the Dems had a candidate and were still smearing Trump with the race play.
      Now, I’m just an effing “deplorable” mind you… Fortunately no9t everyone is stooped and any idiot knows 19 month pneumonia is what?
      JUST ANOTHER CLINTON LIE, LOL My gawd, collect the whole set…start with that real estate deal and the body count and get up to speed bubba
      New Clinton Motto: I Can’t remember…

      • George – the poll asked people about their attitudes. I’d bet you dollars to donuts that the same people still support Trump and still have the same feelings.

        Trump’s message is exactly what Clinton said it was. I think the slogan Make America Great Again is not so subtle code for when whites held all the marbles.

  6. If you want to become rich you don’t have to have sex with your wife in a manner that you both agree upon sexually and also thinking this is what you want in your future asexual and orgasm is the most important and your future
    Bye bye have a nice thoughts concentrated on what we wanted and our future while we had sex we were able to achieve it and it happened before you know it properties that we wanted at really cheap right start appearing so that’s the way it works at the same token it could be used for for hurting people and taking advantage of people so

  7. Is being a racist or sexist or homophobic or xenophobic or Islamophobic deplorable?

    Which candidate do you think the racist, sexist, homophobic, xenophobic and Islamophobic citizens will be voting for?

      • Go read Michael Savage’s new book – Scorched Earth. If you don’t get it by then, you might as well give up reading news.

    • Clinton, but she won’t win. She has destroyed Black families, women and their unborn children, other countries Brown people, she stood by her husband as he signed the repeal of Glass Steagall so Americans could get plundered by the banks and Fed, stood by him as he signed NAFTA and opened up our borders so banks and corporations could take advantage of more Brown people while some of those same Brown people could assault, pillage, rape, and rob all colors of American citizens. She was NOT for same sex marriage or equal rights until it became a wedge issue for her, and she has a history of murdering foreign leaders. She also stood by her husband as he not only raped numerous women, but was totally lied about his relationship with an intern and was impeached. She has proven herself in possession of a criminal mind. Now she is lying about her lack of health. She is not mentally nor physically able to lead this country. I find it deplorable that anyone would consider voting for such a despicable creature.

    • SDS – I usually don’t engage name callers re: Slick Willy. Your choice of words tells me a lot about your opinion and how useless it will be to attempt reasoning. Our choice of words divulges facts about us that we may not want divulged. Just be aware.

      That being said I’m not sure when Clinton muttered those words it was coded. What makes you think it was? Trump’s coded message to me is clear though, “let’s bring America back to a time when white males ruled.” A time before we were being invaded by brown people from the south and the east. To Ozzie and Harriet and Madmen days, the glorious days of black and white tv from the 1950’s. Things weren’t better back then.

      What do you think Trump means?

      BTW I’m not voting for either and I never voted for O either. I think Trump is a joke and Clinton is power hungry.

      • Anonymous – All unnecessary pettiness aside, I thought the video which I originally linked to above was self-explanatory, but apparently not, so even though it’s old news by now, here goes…

        Bill Clinton recently criticized Trump for using the slogan ‘Make America Great Again’, and said that any ‘white southerner’ knows what those words ‘really mean’.

        I was merely trying to point out Clinton’s hypocrisy, since he used the same exact words when he was campaigning for president, and again when stumping for Hillary in 2008.

        It’s about here that we should remember that Bill Clinton was / is / used to be? …a ‘white southerner’ himself, whereas Trump was born and raised in New York. (That’s in the north, for those playing along at home.)

        So who should have better understood what those words ‘really meant’ when they were using them in their respective campaigns?

        And by extension, who should have better understood which votes were being targeted when using those words in their respective campaigns?

        You could make an argument that Trump MIGHT be aware, but Bill Clinton’s own words make it a CERTAINTY that he was and is aware.

        As the video said… Awkward.

  8. An interesting article..

    What is funny is I didn’t know that bill was the drafter of the NAFTA treaty.. I had thought that Ronald Reagan and Bush Sr. were the drafters and only by negotiated compromise with a republican congress was it passed by congress. Could it be that they might be a complete vision by both parties to propel the wealthy and create a world of complete slavery of the masses.. Just curious.. of course this probably won’t be on the list since it puts a negative light on all of our legislators…. just a slim curiosity I have..

    • Interesting article? Uh…no, Hillary is much more cut of the same cloth as Roosevelt. Lett, populist, power-crazed. He’s why th3e 22nd amendment was passed. Almost lost the country in WWII by forcing Japan in…but history will judge. Still Trump is Hoover, make no mistake on that.

      • Yes he is…. what I think is our future lies with him it is in his best interest to make the dollar strong…what the rest of the one I think worries about is that he isn’t controllable by them because he is a part of the top one what could they do have their lobbyist firms bribe him with lunch money..and even though he’s vain quick to say what he thinks he would put our congress to shame by pointing out the stupidity of some of the bills they pass that they refuse to even read..for the people or for me at least he isn’t dredging up fifty year old issues. he’s speaking exactly what the population fears on today’s issues not some ancient issue that has been tabled by congress for decades that is popular with the people.

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