Split Decision Woes, Be Very Afraid

We have been a bit more glum than usual, lately.  We have, you see, been working towards an outcome in markets that we’ve been eyeing on our Peoplenomics.com site for several weeks now.  It’s the “bad news sinks in” result that we fear will be the eventuality right after elections.

The idea was (and still is) that we would see the major market decline since September counts well as an Elliott  “Wave 1 down.”  This would logically be followed by a “Wave 2 rally.”  This is what the manic rise counts as.

Since it is a typical Wave 2, the optimism is nearly as high now as it was at the nominal top in September.  (September 6 in our aggregated markets work.)

We had postulated the decline would meet with a furious rally that would take us to the bottom of the just-broken mirror trend channel.  Shortly there-after, things should really hit the fan.  That’s still in our future.  But, with the pre-opening futures today, we ought to be hitting precisely on the bottom of the trend channel mirror.  Which, in major market declines can be the “kiss of death” for markets going forward.  Kiss the trend line, roll over and die..

You will see (as our subscribers have) that we were in a major topping process.  There is a case this was a top of a larger 5  which is along the lines suggested by Robert Prechter of Elliott Wave International.

However, there is an alternative, that so far fits the data better – and that’s the count offered by my friend Robin Landry which we went over in detail on Peoplenomics.  “It’s a 3, not a 5.” 

Let’s us pray:  Because, if it is, we will bottom sooner than later – have a recession, not a depression, and oil and gold will scream to all -time highs in the final BIG WAVE V.  If not, are you ready for the Second Depression sooner?

Differences on this macro point aside, we will run fresh models after the market closes today  for Peoplenomics readers Saturday.  For now, just look at the chart snippet above:  A is the top of the trend channel,   B is the bottom of the longer-term trend (where a 3 or 5) and C – where we expect to close today – is the “mirror channel” of the upward trend.

Notice the blue line has a “tail” of several days on it – which is why it goes off to the right dead level.  The red line is a 9-day moving average in our work.  And yes, this has been a fine time to be long.  Yet we have NOT taken a position.  We mistrust politics and politicians.  Why gamble when in a few days we will have a clearer view?

We expect there will be wreckage – a possible democrat house and a republican senate.  Gridlock as never before.  Finger-pointing while America collapses; attacked from division within that has been nurtured for years and invaded from without supported by a domestic Fifth Column:

“A fifth column is any group of people who undermine a larger group from within, usually in favor of an enemy group or nation. The activities of a fifth column can be overt or clandestine.  (Or in the US, political – G)  Forces gathered in secret can mobilize openly to assist an external attack. (Sanctuary whats?) This term is also extended to organized actions by military personnel. Clandestine fifth column activities can involve acts of sabotage, disinformation, or espionage  (and illegal voting?) executed within defense lines by (not-so) secret sympathizers with an external force.”

Global socialism wants us – the USA – gone.

The chart above should scare the hell of you.  Because you can see that there is a major Wave 1 Down that not only looks complete,  but COULD – and this stuff is all a probabilities jungle – work out very badly for the balance of November and into the new year.  That’s because Elliott Waves offer a blurry view into the future.  It may not sound like it’s of much use,  but compared to the useless crap in the mainstream media?  Hell yes!  In the world of the Blind, the one-eyed man is King.

Modeling Septembers high to now as an Aggregated Index?

Notice in the “actual” column that I have annotated with a star (meaning pending, but it’s where prices were prior to the open when I ran this model).  This is about as close to a Fibonacci .236 as you will see.  We could go higher….382 or .5 would be dandy.

With Tesla stock “on fire” and hitting new highs without regard to our sour read of their financials, we see ample evidence that the “same euphoria levels” are happening in the Wave 2 that we saw before Wave 1 down.  Smacks of ’29, all over again.

Where MIGHT it lead?

A bit of math?

We would expect the S&P (based on futures before the Jobs report which we will get to in a sec.) to trade around the 2,762 area today (depending on the jobs report).    Since we have the Peoplenomics BrainAmp spreadsheet, we can quickly figure that the POSSIBLE bottom of five waves down would be a rounded Aggregate of 19,846.  Since we are near the 23,547 level this morning, it suggests a further decline of 15 percent.

Now, applying that to the S&P, where does that leave us?  S&P 2,327.

Again, NOT ADVICE – just some noodling and modeling.

Which can, in turn, be read a couple of ways.    One is that we will get some surprising good news and the logical stopping point at 2,520 on the S&P will hold.  OR, the Prechter count is correct (end of world is in sight), in which case S&P 1,540 might not hold and we’re into a full-on collapse.  Think in terms of an 80 percent or greater decline in pricing.

Utter and complete personal financial devastation.  Wholesale destruction of savings.  This is why we have already paid our property taxes for next year; We don’t plan to be “caught out” by events to come.  Financial prepping makes us relax and not sweat the news flow….

Because, you see, based on this year’s high in the S&P and if the 2,327 range getting real in the next few months, then we would rally but then fall to (or through)  the 1540 level next year.  See why a recent Peoplenomics report was about the Global Depression of 2021?

Adding to the woes:  Robots are coming – they eat energy and jobs and pay no taxes.  We’re at consumer super-saturation – witness the overflowing storage industry.  There’s so much extra sh*t owned by people that they’ve got TV shows about it!  And House Flipping and other absurdities on a resource-constrained planet.  Now, toss in a false belief in paper with printing on it as being “real wealth” – when in fact it is more than 96-percent debt loaded. And if you haven’t begun to shake in your booties yet, divide the National Debt by the number of people working…since we’re the only people who can pay it down.

Math begins to make sense, eh?  No wonder delusional states are narcotizing their populations.  People “Can’t handle the Truth!”  Whatever.

Then we’d have problems or liars in office.  It’s the politics of obstruction by both parties – And we see this today as the most likely election outcome in the Tuesday elections – which if accurate will lead directly to the worst recession and then Depression this nation has ever suffered.

Two political parties – with the Nation on the gallows – and they’re playing race, blame, division, and selling hate….so nothing changes.  What follows will be ugly.  Be ready tdso be hungry.  Ready for violence because socialists and revolutionaries are about to light up AmRev2 – socializing of America.

it was grand while it lasted…and the media’s to blame.  Teachers are to blame.  Khrushchev didn’t bury us.  We’ve done it ourselves.  He just sent shovels.

Oh shit.  Not very optimistic, huh?  Pass the “sunshine vitamin D” (take with K7) and let’s open up that jobs report:

Last of the “Good Times?”

Just out from the Department of Labor:

“Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.

The unemployment rate remained at 3.7 percent in October, and the number of unemployed persons was little changed at 6.1 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.4 percentage point and 449,000, respectively.

Among the major worker groups, the unemployment rates for adult men (3.5 percent),
adult women (3.4 percent), teenagers (11.9 percent), Whites (3.3 percent), Blacks
(6.2 percent), Asians (3.2 percent), and Hispanics (4.4 percent) showed little or no
change in October.”

Now for our usual tear-down of the numbers:

Maybe more realistically CBIZ Small Business Employment Index Highlights Historical October Flattening Trend.

Also today, we have the Trade Deficit numbers and these are best sensed with a graphic:

There are several problems with the economy that the politicians are not being wholly honest about.  The first is that trickle down doesn’t really work.  See the Brookings Institution’s view over here.

The second is that making up money to fund the federal debt will just create more inflation.  So, tes, the democrats want to raise taxes and that makes some sense.  BUT the problem with them is all the PC, white-shaming, gender-change marketing, and open borders they’re rolling into their ideology.  Neither party is being candid.

I could go one for hours about the sleaziness of is all, but you’re likely as sick of it as we are.  We will just be watching the polls, trying to estimate how bad the future could be in gridlock and – if the polls today look that way – we might consider a short position because for right now, the markets have the “feel” of a Wave 2 rally and when those end, the larger down Wave 3 can begin.  November 8th or 9th in our crash prediction work, but we shall see.  2,520 or 1,540 seem like the battle lines to come…and both are a frightening drop from today’s “Urephoria.”

Reuters is less pessimistic in Forget gridlock, Republican win may be better for stocks.  I just seem to win more betting on stupid.

Snips and Quips

Speaking of Tesla:  Tesla seeks to reduce tariff impact for Model 3 by making cars in China.  Stock bubble fuel or water on the fire?

Sour Apples, anyone?  Apple warns on holiday sales, sending value below $1 trillion.  Where’s the 7% solution when needed?

Not climate change, just fall as he hit 39 at the palatial Urban Outback Office this morning.  East of us Storm threat spreads up East Coast.

Looking for that bug-out retreat still?  Johnny Depp relists Kentucky horse farm for lower asking price.

And if you’re still in the workforce “The 401(k) Is Turning 40 Years Old. It’s Past Time We Change How Americans Save for Retirement.” is worth a read.  Don’t listen to the politicians who offer “free retirement” though.

Nothing is free…not even America.

More tomorrow both here and on Peoplenomics.  Have a great weekend and now off to blow leaves around… My $20-buck rebuilt carb and fuel system on the backpack blower is working like a champ…  What a life, huh?  High-end economics and manual labor – it’s the American Working-class Way…

23 thoughts on “Split Decision Woes, Be Very Afraid”

  1. I refuse to get into the Debbie downer plan that the polls are right! We might be heading for some bumps in the road, however, money talks and it is all about the perception of where the economy is for the people. Very few people take the deep dive into the economy. They look at; if they are working; and of they are paying their bills; and if they have some left over. Everyone knew the economy was a drag on our country during the Obama years with his “new normal” of decline and never reaching what every other president had done before him, 3% GDP. It may be smoke and mirrors but the numbers for the public is very optimistic and better in years. The House and Senate hold and aren’t flipped to Dems. If that happens next week then I will be feeling worse than do reading your article today. But I am staying hopeful, until reality hits me in the face!! Have a good weekend, vote early and often!!

    • Wayne – Before you wax about the Obama year’s economy you should look where the economy was on 1/20/2009 and compare it to 1/20/2017.

      That is if your mind and opinion aren’t already set in stone and you aren’t immune to facts and empirical evidence…which I doubt.

      • Wavecrave, here are a few facts. Obama called the anemic GDP growth the “new normal” Paul Krugman went as far as to say that 3% was “impossible” to achieve even if a dictator had full power over all policy. GDP had been falling every quarter for a year or more at the end of the Obama reign and was 1.9%.

        And the Fed kept interest rates at 0% because the economy was not “strong”, their favorite word. Something turned very quickly and now rates are being marched higher every time the Fed meets with a press conference … in the last meeting minutes they used the word “strong” something like 50 times to describe every facet of the economy after years of very anemic growth.

        Now Obama is trying to revise history, which remind me, where is my old medical plan, where is my $2,500/yr savings? It’s like Obama’s boy, Jonathan Gruber said, they are counting on the “stupidity of the american voter”.

        I am no republican, but if you think the Dems built this economy, you might be who Gruber was talking about.

      • “These jobs are not coming back! What kind of magic wand does Trump have?”
        — Barack Obama, June 2016

        Truth hurts – Obummer could not fathom Trump bringing back jobs – Now he claims credit for something he denied could happen. What a piece of “work”

      • Setatcos: I remember when Obama said (& this was pre Obama Care) that your insurance premiums would go down $2,000 a year with his changes just made. Mine went up $2,000 & showed me what Obama was all about. A liar.

  2. George, in the Peoplenomics report of Oct 27, you wrote about the possibility of when everything free-falls including the price of gold, silver, crypto coins…real estate… EVERYTHING.

    Today you wrote about possibly having a recession, not a depression, and that oil and gold will scream to all-time highs in the final BIG WAVE V.

    Does this mean everything goes down in a depression, but if it is a recession gold and oil will scream higher?

    • Yeah – this is the crux of the problem I outlined Wednesday comparing the Prechter V is over and we are in primary 1 down now vs. Landry’s view (which fits the data better) that this is a large IV.
      If the Landry view is correct, we still have a couple of YEARS of V to move up before the Big Collapse.
      Seems to me the market has done a small down today, may make a high Monday through Wed of next week around the .618 Wave (2) in this morning’s data…and then drop down to the 2,520 area AND FROM THERE we will see a resolution the Prechter-Landry difference. IF it’s the Landry view that prevails (end of Nov we see 2,520 and then rally, we will have a political muddle-though with split congress and business will get in one more run and THEN we’re all toast.
      But, as always, we take these things one wave at time and I made $600 in a “lunch money trade” and am back on my wallet until this little b or ii finishes, then I will snipe at the top likely next Wednesday when a Post Traumatic Election Election Rally could finish the larger bounced we’ve been in since recent highs…

      Hope that makes sense – but more on the PN site tomorrow…

  3. Hopeful the republicans keep both house as well. Polls are driven by assumptions and the flyover public is angry and scared imo.

    George, agree that trickle down is less than perfectly efficient, but what Trump has done (on purpose or not) is drive unemployment so low that companies are giving raises because they are competing for workers. Yet we do not see cost push inflation. IMO that because of productivity, robotics, immigration etc that are bleeding some of the pressure off. We will see inflation when energy races ahead and maybe we get in another little war. Interest rates and pensions are the next big economy killer imo. Holding on to my gold and silver.

  4. Hmm..was my November prediction for last year just a year to early???
    I had thought the beginning to the great slide would happen then..I’m just thank full that I won’t be screaming for several minutes as I leap off of a skyscraper after I discover the sheet of paper with numbers on it are quite a bit similar to insurance policies..they should be printed on perforated rolls of soft paper ..

  5. Voted for sixty some years and as far as I can see we only exchanged one crook for another and didn’t change a thing except to make it worse,stay home save the gas and take the grandkid’s out for dinner,that way you will at least be doing something useful.!!!

    • RF – you are correct except for 1 – President Trump. He needs to expand the Republican majority so he can bypass the crazies in Congress (Schumer, Feinstein, etc). and get his agenda completed. This is a unique time for the people to join PT again & Make America Great. This is An opportunity to stop the liberals in their tracks in their quest for a Global Government. It will take them years to recover, maybe never.

      Get out & vote a straight republican ticket.

  6. Mark, what is Tesla going to do when the IRS $7,500 tax credit whittles away next year. Incentives drive electric car sales. Unlike the iPhone, which sells millions at an affordable price that can be put on a credit card, Tesla’s market is limited to the hip with money as long as they get a tax benefit (it is not their main car, it is a novelty & they look environmentally concerned). Mom & pop are in a Ford 150, Van or Toyota.

    My opinion is that people will tire of their,electric cars & fill up their SUV at the pump. TESLA & Musk are about 20 years to early. A gas shortage with high gas prices is their best hope, & that is not right around the corner.

    • ECS,
      First…Know your facts. The Tesla looks nothing like an environmentally concerned car. It looks more like a Mazerati or high end Lexus but with much better deign and site lines.

      The luxury car market is the most profitable in the US. In terms of luxury…Tesla led all large luxury car makers with 28,800 units sold…Mercedes was a distant second with 15,888…And that is just the top of the line Tesla’s$75,000 and up…This Doesn’t even count the Model 3….but that car runs so incredibly well…It will be a the number one selling car in America bar none by end of 2019.

      Tesla is fine. And the tax credit? A car is a car…I bought all kinds of cars in my 45 years of driving and had no tax credit. And…That was never even a consideration when I bought my Tesla. It’s nice, but only a one time thing anyway. People that buy cars in the $35,000+ car range could care less about a tax credit. They are buying it for”

      1. Looks (Tesla is just a damn fine looking car)
      2. Performance ( Model 3 is 0-60 in 3.5 seconds) Model s PS90 is 0-60 in 2.6 seconds)
      3. Status…(It’s the ultimate car for many)
      4. Comfort factor. (It’s roomier than any car in it’s class because there is no engine)
      5. Handling ( I said this earlier…it’s like being in a glider…quiet, smooth ride and incredible handling.

      Although I have the dual motor which more expensive, the every man Model 3 that is in production right now is only $35,000…about the price of an Nissan Pathfinder, Chevy Silverado, Toyota Avalon, Hyundai Azera and many more. All of those cars have around 15 gallon tanks and at $3.05 per gallon…that’s about $200 a month or $2400 a year. If you hold onto that car 5 years…Thats $12,000 in gas expenditures. The Tesla? It will run you about $35 a month in electricity..maybe. If I had a solar system like George…It would cost me next to nothing.

      You have been listening too much to Trump talk. I like facts vs. assumptions

  7. “Again, NOT ADVICE – just some noodling and modeling.”

    In my sparetime ;-) I have to translate all of your market info to IWM, TNA, and TZA (2000 minor stocks). I second your market analysis, though I may not be able to profit from it, because with age one is no longer agile enough. I think one can evade major disaster trading, by not ignoring 5 or 15 minute charts with the (right setup ;-)) that gives you enough needed confidence to know when to exit.

  8. George

    A year or so ago a fellow named Clif of the High clan proposed that the coming depression would be avoided by released of hidden technology. What would be called the New Electrics.

    Question: If true could that reset the economy and forestall disaster?

    Enquiring minds want to know!

    • Perhaps it was sunk in a global coastal…lol….
      The “new electrics” are pervasive computing – see next week’s PN report

  9. Another example of liberal inclusiveness:

    ALEX BLADWIN ARRESTED FOR PUNCHING A DRIVER IN THE FACE OVER A PARKING SPOT.

  10. Hi George,

    I just had one of those moments that you know so well.

    Yesterday it rained, so I used my blue mini umbrella that I keep in the car. When I returned home I left the umbrella in the garage to dry out. I brought the cover for it with me and put it on a place mat on the kitchen table. When my wife came home later in the day, she asked me about the umbrella cover being on the table (she doesn’t things being out of order).

    Anyway, this morning she went out and I went in the garage to get the umbrella. I came back in the kitchen and put my keys and the umbrella on the place mat, at that moment realizing that the umbrella cover wasn’t there. I assumed my wife must have put it somewhere else, so I go looking around the house but I don’t find it. So I go back in the kitchen and now I find on the place mat the umbrella, my keys, and the umbrella cover on top of the keys!

    WTF?

    John

Comments are closed.