Tape-Painting Tuesday

Although our entry into a short position last week looked brilliant at the close Monday, the Dow is set to open up 143 this morning (0.61%) when we checked future.  But the S&P is looking to open up only 0.19%.  Likely the Plunge Protection Team trying to ensure the market doesn’t do our projected K3 and rolls to K4 and maybe up from there.  But we will await closing prices before deciding whether an extra spritz of Right Guard will be needed.

A number of colleagues have remarked on the Robert Prechter (https://elliottwave.com) note to his subscribers (“It looks Like a Top“).  Though colleagues are admitting that they are still skeptical.

The class assignment for the rest of this week is to observe how the top is formed.  Slowly.  If, indeed it is the top.

(Continues Below)

Bolstering the idea, however, we see that Bitcoins are back down into the $5,720 range after soaring to our modeled predictions which we’ve shared with our Peoplenomics.com subscribers.  Main thing is that the Bitcoins are showing some entrainment with markets.

While the Dow was down 54 points yesterday, our proprietary Aggregate Index was down 92.73 Monday.  What that tells us is that the broader market was much weaker.

The S&P was down 4-10th’s of a percent while the tech-heavy BASDAQ composite was down almost 2/3rd’s of a percent.

What I’m expecting today will be a first bounce.  While we have no idea how long it will last, the idea of the professionals would be to suck every last civilian possible into the fray.

In Elliott terms, the action Monday may have been the tiniest wave one down, today could be the wave two up, then by tomorrow or so, a larger wave four.  Possibly bouncing some late in the week, but a harder down next week, and so it could develop.

Understanding Elliott Waves begins with a studied read of Ralph N. Elliott’s classic “The Wave Principle” and once you’ve been through that, the Prechter and Front book, “Elliott Wave Principle: A Key to Market Behavior.” These, along with a read of “Technical Analysis of Stock Trends, Tenth Edition” (which ain’t cheap at $110!) are the three books we’re using as “investor education” materials in our forthcoming Peoplenomics Handbook.

Once you have the basics down, then you’ll be able to pick up and follow where our own work has taken us over the past 20-years.

Playing Investors Like Fiddles

Oh, it’s easy to see when the MSM rolls with Ivanka Trump says tax plan addresses needs of US families.  We just want into that $1-million dollar bracket.

The (not so fond of Trump) Washington Post is pretty clear: Don’t fall for the latest GOP trick: Republicans are still cutting taxes on the rich.

I remember the last time this happened.  Theory was that the rich would build more toys – and that would stimulate the economy. Mowing the grass twice a week and such.  It’s all so laughable.

Ultimately, the market is still in position where it could move (unbelievably) higher.  There was no “upper bound” to the price of Tulips in the 1634 mania.  Sure things (being mental diseases) run their course in semi-predictable fashion.

It all depends on what you want to use as your rate of play.  It’s like having a video game when you can shoot your opponent once every year or two, OR you can play NRT (near real-time) where first look, first kill and the fastest internet connection and best keyboard wins.

In stock trading the analog is we enjoy two “rates of play” as well.  Our longest model has been bullish/long since October of 2015.  Even if the market was to fall on its ass this week, it would take a decline of considerable magnitude to unseat the long-term, slower indicators.

But, like I said, rate of play figures into it.  As you might have imagined, we have “fast money” (pappy used to call it personal M1 and we have our “slow money” personal M2.

The “slow money” approach uses modest leverage (or outright ownership) of declining finite resources (like stocks of gold and silver or oil, for example).  This money bought gold in 2003 ($273 per ounce) [but just one round, lol] and silver in 2005 ($5.94-$7.04 per ounce)  [maybe it was two rounds…].

Other long term leverage opportunities come from buying real estate. Really a useful strategy for the young, you simply put 20% down on a home.  Then wait for the total value of the home to rise.

Say you put $40,000 down and buy a $200,000 home.  The inflation at 3% happens for 10-years.

That compounds to 34.39%.   So that house has a likely net to seller price around $268.780.  You’d think of this as “I put $40,000 down and in 10-years with no effort, I made another $68.700.  When you sell the home, in this example, you’d have over $100,000.

There’s no free lunch, of course, so you’d be paying more for the next home.  Since the founding of the banker-takedown of Congress’ mandated role in creating money, the purchasing power of  money has decline about 3.25 percent per year.

That’s all slow play.

Faster play is our other trading idea which has been long since November.  This one, too, has had a pretty good run.

Making a trade every 10-months ain’t exactly CoD gaming speed, but along the way there have been three distinct waves where money could be amplified.

The really sad part?

Everyone (almost regardless of age) talks about wanting to be rich and so on.  Yet, when you ask these people “What books have you read on markets?” the answer is usually “None…but I’m going to…”  Yeah.  Right.

Ask them a more grown-up question (“What level is your trading account?) and they will look at you like you have two heads, or something.

Few seem to grasp the ugliest fact of Life:  You’ll get out of it about what you put into it.

Put stupid in, you get broke out.  Put smarts in, get money our.  Seems pretty simple to us.  But then lots of things get simple when you’re on the way out.

Laughing At Bitcoin

I assume you know that North Korea is one of the world’s largest, if not the largest, of all counterfeiters?

When I read the DPRK (democratic people’s republic of Korea) tweet this morning, it was laughable: