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:
- The Labor Participation ratre was up 2-10ths to 62.9% – a very strong reading.
- Not in the Labor Force droped by 487,000 – another really strong sign.
- HOWEVER: Of the 250,000 jobs claimed, 245,000 were ESTIMATED CREATED BY THE C.E.S. BIRTH-DEATH MODEL.
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…