Stock Futures were falling in the pre-market on this first trading day of the New Year. Why, if things keep going this-a-way, old Ure will put enough in the Lunch Money Day Trading Account (LMDTA) to buy lunches for the month. (If I don’t pig out, but that’s a different issue.)
Although the pre-holiday hype was all chipper and cheer, a little closer inspection of Reality offers the idea that we have just done a possible final top of a massive Wave 2 from the lows of 2022.
Our Aggregate Index offers the idea that we may have peaked now, although we learned long ago, never to say never.
If you’re new to this stock market play, you need to read up on something called Elliott Wave theory in Wikipedia. Because, when you do, you’ll see the three green outlined boxes (we call ’em trading boxes) have the appearance of a complete 5-wave advance from the 2022 lows.
Probably the best (living) practitioner of this is Robert (Bob) Prechter, who runs Elliott Wave International. Bob Stokes had a pretty interesting article on the site recently. In which he observed that when it comes to Stocks: Check Out These Striking Sentiment Gauges. My late mentor on Elliott Waves always schooled me that “At the top of Wave 2, sentiments will be just as high as it was at the all-time high.”
Which circles us back to this morning’s judgment call. Is the Macro Wave 2 top finally really in?
Our first test should be along after a bit of weakness this week. That’s because having once gone above the trend channel, which acts like overhead resistance on the way up, now that we’ve bested the line, so to speak, it turns into support and may prevent the bottom from falling out.
Although I am not a fan of Bitcoin (don’t have a wallet, and I also don’t play in the middle of the freeway at rush hour…) there’s a real application of BTC in my thinking when comes to sorting out where stocks likely are in the long-term Elliott view.
We know, for example, that Bitcoin (a few days after the actual peak Nov. 8, 2021, was reported at $64,400 on Nov. 12, 2021. Then it fell to a low of 16,683 along in November 2022.
From this, we can calculate that the total decline was (64,400 – 16,683) for a total of $47,717 per coin. People who “kept the faith” in BTC, we think, will be judged in the longer run of history as fools. All bubbles and manias have these stairstep declines. South Seas, railroad stock bubbles, the whole lot of them.
Anyway, Elliott “rules” tell us that once you have a Wave 1 down, the Wave 2 will generally rally to various levels, such as 50 percent, 61.8 percent (the Fibonacci series bounce). 75 percent, 81 percent, and with a noisy distribution up to the 100 percent retracement level.
Since Fibonacci is a common one, you’d take that total decline (47,717) and multiply that times 0.618. Which gives you 29,490 call it.
Now, you add this to the low which was hit in November 2022. (16,683) and when added, I set a “mental flag” for BTC to rally to 46,172. See where we’re stuck lately?
Can BTC go a little bit higher? Oh, hell yeah. There’s 3-born every minute, adjusting P.T. Barnum’s quote for global population growth. But you won’t find us playing that game.
Central Concept of UrbanSurvival:
There are two ways to live your Life.
- Live for maximum gains. Or,
- Live for minimized losses.
Having quit smoking (based on the Surgeon General’s report back when), but my drinking of alcohol down dramatically (never a DWI and never touch keys to anything – even the riding mower – after even one swig of beer) you should be able to figure which camp we’re in.
If not, then today’s noise from the Pied Coiners includes hype such as Bitcoin (BTC) Bears’ $145 Million Bloodbath: $45,000 Price Surge Pulls Liquidations Up.
As we have held (and not wrongly) Government Hates Competition.
When the GovCoin comes along, you think competition will still be legal? You don’t know as many appointed and elected pricks, as I have met, apparently.
Say, here’s an idea: Let’s crash the stock market and have the Jeffrey Dickstein names named to keep our eyes off.,….what? Border? Taiwan? NorK? Nearly 200 names linked to Jeffrey Epstein expected to be made public.
Labor Dept. JOLTS report will be along tomorrow morning. Which pushes both the ADP and Challenger Job Numbers into Thursday. And that moves the monthly employment (farce) to Friday.
We see the sell-off this morning as a possible “Sell the rumor, buy the news” on the idea that if the economy really weakens a bit, then the Fed might be inclined to lower rates sooner than later.
We never place bets on such things, but we do keenly watch the buy rumor – sell news data for hints. Dow futures were down a couple of hundred with an hour to the open. Come on Lunch Money!!!
Judicial Reform is over in Israel, which may tie the hands of Netanyahu when comes to conduct in Gaza: High Court invalidates law for repealing the reasonableness standard.
Footsy games are underway east of there as the U.S. pulled a carrier group back from the Red Sea. And, as we predicted would happen in such a power vacuum: Oil prices rise as Iranian warship enters Red Sea. Which may slow down international commerce as Maersk pauses Red Sea voyages a day after Houthis attack ship popped over the weekend.
Ukraine’s still a mess (quick, feign surprise): Russia pounds Ukraine with 90 drones during early hours of new year. And the violence there continues into this morning as Russia hammers Ukraine’s 2 largest cities with hypersonic missiles.
By the way, there’s a thoughtful article on the Newsweek site worth considering: Putin Smells Blood As Ukraine Faces Growing Calls To Negotiate. Which gets us to watching the cheerleading liberal press which now faces the daunting task of making believe that they didn’t support borders for Ukraine but not between the U.S. and Mexico. Seriously, what liberal idiocy.
Which gets me to noticing how the commie-run media have dropped the Mexico caravan story like a hot potato since Slow Joe started trying to jawbone things? Tools!
Texas will keep sending illegal OTMs to left-wing open border cities as long as our state is being invaded: Migrants start flooding over the border into El Paso BEFORE huge 6,000-strong caravan arrives as it slowly snakes through southern Mexico – while busses start ferrying arrivals up to Democrat-run cities. Pobrecitos! Jeez, at least keep the OTM’s the eff out.
Take a number, please: Hispanic leaders warn Democrats: Voters are fed up with Biden. Get in line – it’s a long one!
Suppose the Don won? Donald Trump Can Be President From Jail, Fox News Guest Claims.
Clean-up day in Japan following the (data argues solar-flare driven) earthquake New Years: Japan earthquakes death toll climbs to at least 48 as temblors continue rocking country’s west.
New NOAA Solar Cycle Progression numbers have been updated for December. Has Solar Cycle 25 peaked and into x-flare land (in the chart, where they are most common on the backside of solar cycles)? Time will tell, of course…
Around the Ranch: National Hangover Day
We sure don’t “party” like we used to. A double martini and half glass of wine. Talk about moderation. Still, there’s a lot to be said for moderation and waking up feeling great. Try it.
If you didn’t. some after-the fact ideas:
- Drink a ton of liquid. You’ll need electrolytes. Gatorade, Pedialyte…
- Get some good food onboard – carbohydrates.
- Get some protein, too.
- Relax – light on coffee
Watch the blood pressure, too. I discovered, purely by accident, that my BP will be 20 points (systolic) higher two days after I have more than one (double) drink. But not right away, you see; it’s on a delayed basis. So, keep an eye on BP for a day or two after a ban one/good one… This isn’t medical advice, just common sense.
A good multi vitamin and a gallon of Gatorade can’t hurt, either. Use extreme caution with power tools and driving. I knew some (really wild, alcoholic types) years ago who could still blow a DWI even after 8-10 hours of sleep. This stuff takes time to clear.
Alcohol has some very good applications. but it’s also a dangerous drug. And it does (though debate rages) as much or more damage than a nice sativa.
But experience still says if you want to get a lot done in Life, focus on good inputs and nothing that slows the body or brain.
Write when you get rich and over the Scotch flu.