NEW YORK, MARCH 27, 2018 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for January 2018 shows that home prices continued their rise across the country over the last 12 months.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in January, down from 6.3% in the previous month. The 10-City Composite annual increase came in at 6.0%, no change from the previous month. The 20-City Composite posted a 6.4% year-over-year gain, up from 6.3% in the previous month.
Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In January, Seattle led the way with a 12.9% year-over-year price increase, followed by Las Vegas with an 11.1% increase and San Francisco with a 10.2% increase. Twelve of the 20 cities reported greater price increases in the year ending January 2018 versus the year ending December 2017.
Picture for that?
In 2009 an Elliott 1 down, then 2 up begins. You can see the (I), (ii), and (iii) up, now is this a (a) down (b) up or…. the mind reels.
So do futures…under 100 up, now…
This Day in ’29? Dow Dropped 1,153.19
Comparing the present period in markets with 1929 is a very dicey proposition because, well, times are different. But on what in our work allowed us to accurately call the major drop last Thursday will have us going short (likely) today, after we the past the “amateur hour.”
That’s because on our “equivalent day” in 1929 the Dow fell from 326.61 to 305.85. That’s a drop of more than 6% in a single day. Yeah – ravings of a wild man, but the same forecasting approach suggested a gain in the market Monday of 1.7%. In reality, it was up 2.84%, but we still managed a nice day-trade for lunch money.
The move was simple enough: When the Dow had popped up more than 500 points, I went short with one of the ETF triples. And when it looked to lose downside potential, I bailed. To be sure, it was a very small trade with a 1.6% gain.
But if you compound 1.6% 100 times in a year? Works out to about 4.89 times your nest egg in a year.
But such day trading is NOT recommended. People can (and do – like me) lose money on such trades. Still, just to show you the magic of compounding your investment? If you made 1 mere one percent per day and could do that day after day for 250 trading days in a year?
You’d have twelve times your money. That’s the attraction of day trading – fast money, big money. (Also fast losses, big losses…)
But, let’s get back to this picture this morning: Here’s some 1929 data for you – made possible by our Peoplenomics.com subscribers: Notice the Dow and dates – and you can do the percentages.
As you can see, the correlation is not perfect – in fact far from it. BUT it’s a good enough template that I was able to play the short side of the market and still make my lunch money on a day the market went up almost than 670 points.
I don’t know about you, but this seems useful. Trading version of “snow plow stakes” perhaps.
Which gets us to the headlines to be scanning for today. Since the “equivalent day” (today or tomorrow) saw a drop of 1,151 points last time around, a nice decline could show up any minute.
In the short time from my first look at the futures (+180 at 5 AM) to my 7 AM check, the futures were +120…so the depth of confidence just isn’t there.
Now let’s talk about why. Here are some kinds of headlines that could drive a big tanking in markets today:
Paul Ryan is on the verge of resigning over how the games are being played in Washington, now. His office says no – it’s a lie/fake news. Gators are turning on one-another in the swamp.
The Olivia Pope scenario keeps coming to mind. This takes some explaining. Did you watch the TV series Scandal? Olivia Pope is a fictional character – a political fixer – who ends up bedding the President and divorce ensues over how many episodes.
Our concern is based on the way that television is part of the “message is in the movie” – things like the prescient Simpsons episodes and the like. Three simple questions to consider:
First, is there someone (female, very good looking and smart) who could play the role of the Scandal Olivia Pope character?
Question 2: What would the real-life First Lady do in reaction if there was this kind of “cloud on the horizon?” If you need hints, see “Melania Trump seeks to shelter son from Stormy Daniels drama.” She’s chilling in Florida.
Third Question: What’s the market going to do if this crazy-ass scenario is in play? I’m thinking a 1,151 point drop would be about the right start, but then in the next week or three, we could actually go through what would be very much like a 1929 replay.
Bonus question: If the “messaging is in the media” already, and you know the plot of Scandal, then who in the Trump cast is playing the role of Cyrus Vance? (Have they left yet, or is this one pending?)
All…fascinating stuff to consider. A follow=through to the upside maybe this morning (depending on the Housing data), but look at all the other big pieces in play.
For one, the Chinese Yuan-Oil deal is now operating. China rolls out petro-yuan, shaking up oil futures market, says one report. But we think there are other drivers.
All kinds of bets are on about this story: “Train believed carrying North Korean delegation leaves Beijing.”
And might the buddy-buddy with the Saudis somehow play into how our dealings with the NorK’s plays out? Here’s why we think it may: South Korean president visits his troops training Emiratis. The SK’s are doing the training in the Sand Box? Shot of wodka and ViceGrips, if you please. Train (ing or Kim’s moving) – is the “future on rails?”
That core concept (future-viewing) is at the core of much of our work around here. You see, humans are not particularly innovative and yes, Ecclesiastes is right: No new thing under the Sun. (We’re going away from it looking elsewhere to check, too. Follow LightSail2.)
It’s all OK, though. Pretend there is no “bread and circuses.” Instead (trying to do something new) we are proud to say it’s now a “new candy bar and circuses.” That’s the human version of “progress” for you. And timed to arrive with CNN’s breaking “Bread’s crust not more nutritious than the rest.” More wodka and bigger ViseGrips, please?
Say, how about melt-resistant ice cream if the circus gets too hot?
The debate over Sanctuary City status is picking up steam in the L.A. times.
Civil War in California to come?
Back to the Important Questions
As for the rest of the news? Pales in comparison.
Escape Room Earth (ERE) got a few issues to deal with. And how are we doing? The rock group War nailed it in 1972.
Peoplenomics for subscriber’s tomorrow. All eyes on the headlines for the National Mood Shifter…