We need to begin by trying to understand what happened in Monday trading.
In fact, as Robin Handler over at the Options Signal Service noted: “Here we are at the 4th of April. I didn’t see anything unusual. Surprise the world did not react to Russia bringing back the Gold standard. Let’s see what happens tomorrow.” (Today-g)
However, just because we didn’t get a major write down in equity prices Monday, doesn’t mean it isn’t close at hand.
For one, our long-time contributor, The Economic Fractalist, made a nifty point:
“…Maybe Blackstone BX, a US real estate corporate represents the best proxy for America’s Asset-Debt macroeconomic system. From the 2009 low’s where money printing and QE’s became the dominant element of debt expansion: the fractal progression for BX is 40/81/41 months. Blackstone’s bell weather progression matches George’s Elliot wave qualitative progression. Expect equity valuation nonlinearity in a empirically observable nonlinear system.”
And speaking of Waves, and what-not, when we plugged in the pre-open numbers, our (not advice, more like sick amusement) Elliott view from last Nov. 8th’s high looked like this:
Anyone’s guess when this backed up mess begins to “let loose.” Could be today, could be in a month or longer when the annual “Sell in May and go away” shows up.
Still, whenever the Wave 2 breaks (*if it does) the downside range would be about 25-30% lower from all-time highs.
In the very short term, this morning in our Aggregate we modeled the day somewhere around 39,237. But before we toss out Wave 2’s top being in, we’d need an advance above the most recent high: 39,674 for the March 29 market close.
Higher still, obviously remains on the table. But, suppose, for a minute, that we just went through a small wave 1 down and a kind of “el menuetto” wave 2 bounce. Such thinking could support a decline for the balance of the week, which would not surprise us in the least.
As always, we offer this purely as one old reporter’s cynical opinion and not financial advice. We “pays our money and takes our chances” and expect you to do the same.
Data Point: International Trade
Explaining how this works is both pointless and useful at the same time.
- Worrying about trade now is stupid because Bill Clinton already gave China super computers which are helping to drive a coming surprise in Chinese nuclear weapons counts. Example story: U.S. Sees Rising Risk in ‘Breathtaking’ China Nuclear Expansion (bloombergquint.com). Which means Slow Joe and the democrats will have sold America down the river: Super-Power China, manufacturing for the serfs (U.S. residents) only so long as it pleases them before they subsume more of S.E. Asia and go on to occupy Australia in the long-term.
- On the other hand, Russia demanding use of Rubles (gold backed to an extent – depending on how convertibility would work out IRL) has now driven the Ruble to a higher exchange rate than before the Ukraine invasion. What we see – for now – is a polarizing of the money world to where funds are flowing into Rubles (going up) while also flowing into the U.S. because the drooler-in-Chief talks a fair line of bullshit for the pabulum-eaters in America.
- Thing is, at a personal level, when the dollar drops, it takes more dollars to buy a given share of stock, which makes the (reported) price go up which is exactly and precisely painful (Ure got short Monday). With a nice decline today, that trade might turn green (or at least not bleed down net account value so quickly). Still, Bretton Woods is dying. Russia siding with Gold and Energy is a very big deal. And the China-Russia axis doesn’t like cryptos, which are viewed as another Western con. Frankly, can’t say they’re wrong, however.
Which is why asymmetry in gains and losses matters so much. Back to this point in a sec. Chew on this in the meantime:
The blue trace in the chart says the obstinate, stuck, because China has us by the nuts line, just really ought to piss you off.
The imports and exports data are excellent examples of something we call:
The 20-25 Rule
How can government figures both lie (deficit improved) and tell the truth at the same time? Math at work. People who use numbers rather than common sense are typically liars.
Because? One of the hardest lessons from the Cruel Reality School of Economics is the 20-25 Rule.
Which simply says “If you have a 20 percent loss, it takes a 25 percent gain just to get back to even.”
We begin the example with a crisp, newly printed hunsky (a one hundred dollar paper). We “invest this” once through the slot machines of Wall Street and fine ourselves drunk, naked, and feeling foolish in the middle of the Casino. Because we forgot Ure’s 3% stop loss rule.
When the room stops spinning, we discover we still have $80 bucks left, so we pile that through the machines. Bingo! We hit on a 25% gain!
Whipping out the calculator (because the room is still spinning) we punch in 80 X 1.25 (*enter) and discover the answer is we haven’t made a dime all night. Maybe it’s time to find clothes, sober up a bit, and stop making fools of ourselves.
You are now blessed with your own portable 20-25 Rule. Use it wisely. (Which means never unless you can’t understand stop loss orders…)
Bringing Back Racism
Since we don’t really have enough jobs (China makes everything either directly, or through wholly-own cronies), America has a hell of a time making much of anything.
To make up, democrat invented the Return of Racism. And it’s going very well for them. Our left-coast backup consigliere sent along a passel of indicators overnight:
- Rantz: Seattle professor claims physics is racist, white supremacy rampant in classrooms – MyNorthwest.com (A White woman and an “equity consultant” lol.)
- Oscar uselessivity continues: MSNBC panel says Will Smith slapping Chris Rock is ‘how black people relate to each other’ | Daily Mail Online. None of the Black people I know, act this way. I guess YMMV if you work for network with a view, huh?
- And more from the Daily Mail, which seems to have a better grip on America than the people who live here: Black Lives Matter secretly used $6 million in donations to buy luxurious 6,500-square foot mansion.
Fact is, no one has owned a slave in America for 157-years. Can we just move the f**k on, now? And no, not to gender, either. Sexual orientation marketing to gullible children isn’t an industry, either.
This backup consigliere also mentioned something about the high cost of protecting stupidity – no, make that Hunter Biden (if you can distinguish): Secret Service rents $30K Malibu pad to protect Hunter Biden. See how good Slow Joe is for real estate? Why, $30-grand a month will almost cover our bar tab out here. Just saying…
Speaking of Hunter, though: Miranda Devine and Bruce Golding are all over this one in the Post today: Hunter Biden grand jury witness was asked about deal with Chinese firm and ‘the big guy’. Still, had this been a Trump offspring, someone would already be impeached and the awful offspring wearing orange, if not the old man, as well. But, America still has the best legal system (big) money can buy.
I shouldn’t whine too much, the alternative if something happens to Joe could be even worst.
Over Traitor Joe’s
As if rumors of back-end money from China, laundering of campaign and influence money wasn’t enough, the Drooler-in-Chief is about to rescind Title 42 limits on asylum seeking at the Southern Border – which unlike Ukraine, doesn’t really seem to matter to the Ovalized clown posse. 18,000 migrants a day will cross border after Title 42 rescinded, House GOP says.
But, here’s the problem with the GOP – they are even more stupid than Zeus the Cat. Who explained “Democrats have cocked-up everything they’ve touched and 2022 will be a political bloodbath for these commies seeking re-election. But, read this, and you’ll understand how Stupid the GOP has become, too: “GOP eyes linking Title 42 to coronavirus deal.”
“Come on Cat, how can a feral Outback kitty make such an outlandish claim?”
“Well, Fatso, I know a bunch of pussies when I see ’em.”
Hmm…point taken. The incumbents in the House are desperately trying to slam through another “Corona Relief Bill” in order to have more of that “free money” (a payoff that helps cause inflation) land in stupid voter accounts before the righteous creaming of sold-out incumbents of both corrupt parties this fall.
We can hardly wait for the Honesty in Government slogan: “Vote for Me – I already got you four payoffs!“ We get the government we have because we’re just plain stupid and fixated by our portable Cyclops’ to notice.
Mass immigration is the cheapskate, short-range, anti-White, anti-Black, anti-Asian, anti-American, crooked economic alternative to a disgraced national sellout becoming a front and center discussion topic.
Anyone else remember the word Impeach?
The bleeding edge of real tech is “coming out” as our .mil affairs dude, warhammer, explains:
This weapons program was classified just a few years ago, US tested hypersonic missile in mid-March but kept it quiet to avoid escalating tensions with Russia., but Ukraine and. Mad Vlad has likely accelerated research, development, test and evaluation (RDT&E).
I’m not surprise the venerable and versatile BUFF served as the test launch platform. The USAF has multiple test units, including the one at Edwards AFB, CA that I flew with.
Hypersonic testing was based at Eglin a few years back. It could be moving out to Edwards, since the test noted in the CNN article occurred in the Western Missile Test Range off of the Left Coast.”
Know a young man who’s doing a PhD in hypersonics. Great timing on his part. Magic part is figuring out how to get a shock wave to be an asset to a projectile instead of a wall. Neat engineering area. I get laminar flow boundary layer nightmares just thinking about it.
OK – time to hit and git…
Write when you get rich(er),