Investing in the stock market is a lot like flying an airplane. You fly for hours and hours – like on one of our transcons – and the scenery rolls by. Beautiful up in the Rockies, but boring as hell in flyover country. But then? Moments of extreme stress. Like landing in a 28-knot crosswind at Hannibal, Missouri, (KHAE) for example.
Now hold that thought. Bored then scared. Trading this market has been similar. A long way from the 2022 lows (that followed the Nov. 8, 2021 all-time market high). Like the boring part of a cross country flight. Wave II’s can be pretty outsized.
However, the smooth part of the rally from October 12, 2022 looks, in many ways like it’s at the end of its rope.
If you inspect our Aggregate Index chart, right half, you will see there is a macro Wave II (1) up (comprises of and a, b, c, d, e), followed by a II (2) down and now (even with a big rally into the close today) we will effectively have filled the A<E requirement of Elliott wave counting, with the rally Wednesday that laid in an Aggregate close of 39,290.
Next, let’s consider this wave structure in context. On the Peoplenomics side (Master Index page where there’s 20+years of older reports) I cobbled up a spreadsheet several years back. The idea was simple: If you knew the first wave of an Elliott move (up or down) you could estimate where things would lead over time. Lots of time – like several years’ worth of time.
Which looks like this, in terms of where we go from here.
There is nothing in provable rule sets that requires any specific target like the 80 percent retracement level for Wave II. It could go up TO (but not over) 100 percent. However, should Wave II be over, then as soon as the low of Wave 1 down is broken, we will be into Wave III down and that gets ugly as hell – halving of markets.
Which MAY be telling us Gobs about the Future. Like a) Joe Biden and democrats will lose both the Senate and the Oval in 2024 if this count doesn’t change. What’s more, Wave IV (the rally after the nosebleed decline) could last anywhere from a couple of months to over a year. As you can see, since the 2022 lows, we have been rallying for 282 days, as of this morning!
Then the Global Shit blows up in 2025-2026 when China, Russia and the U.S. start “trading city-pairs.” Won’t be pretty. Nor will it be a time to visit NYC, Moscow, or Beijing.
About the rest of today? We could rally up a couple of hundred points today – and extend up to the top of the 90 percent retracement. But then problems loom all over the place.
But like I said in the headline, looks to us like “Today Doesn’t Matter.” Neither would another wave extension to Labor Day. X-wave as a Biden/Powell Hail Mary? I don’t put nothing past no one these days.
Beginning – when we look at the Waves, that odds of this July being The Big One may not happen. More likely, because of the structure of decline, is that we get a “little Bad July” and then a Big Bad July next year.
Now, there are several reasons for this view. First is work of G.A. Stewart on The Age of Desolation website (and do buy his book which is infinitely more useful for long-term study). The problem is that we have “future visuals” (Stu’s work, Jessica Adams, and M. Zimmel to name three) of an American Civil War somewhere in here, and that becomes a welcome mat for the Global War (visions).
Logically, the most likely time for an AmRev2 would be around the time of our horrific elections in 2024. You can imagine a scenario where we slide into uncivil war and then (with the urban parts of big cities going wholly dysfunctional as famine comes along due to the economy and turmoil. Which would it make sense as a last gasp for the U.S. to city-pair trading nukes shortly thereafter? Well, um, yeah….BUT…
The Little Bad July
After a manic high, a manic low is almost predictable. We have Av 9 next week, but will it be the Big Bad July, or just a warmup action.
There’s a prayer that the market could MAYBE have up upside Monday. Bu7t we already have a strong hint Tuesday’s going to suck when the Case-Shiller housing report comes in: Robert Shiller says rise in US house prices may be coming to an end (cnbc.com). That sure reads like an 18-point font clue.
Fed decision comes next Wednesday.
The problem the Fed has is that the rally in the stock market has been largely driven by the falling value of the American dollar. It takes more paper, when the paper is worth less to multiply out the same.
But cowering on higher rates, the dollar’s getting jammed and it’s just making the inflation worse. The Fed’s other side of the bread is the Public Debt to the Penny which we anticipate crossing the $33-trillion levels shortly. From today’s present $32,569,914,975,378.20, it’s not that far off.
Let’s pencil this out, shall we? What’s 5 percent interest on the debt? $1,628,495,748,768.91. We see elsewhere that ” Individual income taxes amounted to 2.63 trillion U.S. dollars in 2022, whereas corporate income taxes totaled 425 billion U.S. dollars.” We are still a little way from runaway compounding, but you can sketch what a $45 trillion and 10 percent rate does? (End of the Financial World)
We are not the only ones staring at near-term future and getting worried: Even this long-time bull is worried about cracks in the tech-stock rally. – MarketWatch.
Now Let’s Talk War
The BIG data points for the week are Biden’s calling up some Individual Ready Reserves for deployment.
And in the Ukraine mess, the cluster bombs are due to land in Russian held areas from today. Next week, we expect Russia will move up to the “next thing in their inventory.” Cluster munitions in Ukrainian hands, being deployed in field, White House says | Reuters.
Meantime, the Greek website War 24/7 is covering Russian response: Waterloo in Bakhmut: Hundreds of Ukrainian soldiers die en masse in suicide missions in Klisivka – Tombstone… And as the “thiurd day of hell in Odessa bombs on, Revealing video: Russian Stand-off gliding weapons – The camera “catches” for the first time two FAB-500-M62 bombs with flight control and correction kit!
Elsewhere, we’re reading war making promises such as promising in this article not to use cluster bombs on Russian home soil. Can you believe it?
But So is Everything Else
Yeah – world’s as crazy as ever. (You really need examples? Ho boy… )
Let’s have the foxes look regulate the henhouse, shall we? Amazon, Google, Meta Microsoft agree to AI safety rules | Fortune. This is right up there with the democrooks in the Senate lecturing the Supreme Court on ethics, lol. We have the best government money can buy.
Ask Hunter, did you say? ‘Ultimate white privilege guy’ Hunter Biden may be hit with 10 criminal referrals: Comer (nypost.com) Gads.
Yes, we absolutely agree with DeSantis on this point: DeSantis to Newsmax: ‘Nobody Is Entitled,’ Trump Should Debate. Hell yeah. So should Joe Biden. We like to inspect our pied pipers. (And grifty codgers…)
It’s not just the heat – or the propane fire near the Phoenix airport – it’s something else slowing super fine pitch semiconductor production in America. TSMC delays Arizona plant because of US skilled worker shortage (qz.com). I’ll have more in ShopTalk Sunday this weekend, but yeah, China’s kicking our ass on infrastructure.
ATR: Tourism Hereabouts
Seems like everyone around town – Palestine Texas – is talking about the new Hot Date on the calendar here: August 5th. Day of the annual Neches Wilderness Race. Bring your own canoe.
Also if you’re in the area, Home | Texas State Railroad has train rides. Or for the grownups only? Wines in the Pines- Texas State Railroad (visitpalestine.com).
On that note, off to the never-ending list of stuff to do here. Peoplenomics tomorrow, ShopTalk Sunday…Yesterday’s column was….wait for it: Yesterday!
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