Was Monday a “Pre-Shock?”

There were a couple of factors that pushed the Dow Jones Industrials down 200-odd points Monday.  But, to our way of thinking, this is likely a pre-shock of a much-more dangerous period ahead for the market.

The softness in housing numbers and a not-so-hot 0.3 percent annual growth of GDP forecast by the Atlanta Fed, is not the kind of thing that gets people excited.  “Here…put money at risk and expect only principal in return…

Which gets us to this morning and where things could be headed over the longer term.

Matryoshka Dolls are a popular thing in Russia.  Nested dolls having what to do with the Market?  Well, that’s how Elliott Waves, work, too.

If the top is in for the bounce off the Christmas eve low of 2018 (when the Elves were cooking bulls for chow), then we will likely see a similar decline trajectory and it ought to be nested.

If the smallest of the Matryoshkas showed up Monday, and IF that was a tiny Elliott Wave 1 down, then today’s pop at the open might be a tiny 2 up and who knows how far it could go?

Thing is, though, the first nested doll is likely to be five small waves down  (a few hundred points more downside) and then a rally and then a (next doll larger) wave 2…

The problem when looking at markets is trying to figure out how the “dolls all fit.”

One idea is to think about how things would be for a pullback this morning,  another wave up (bigger doll) and then down into the first part of summer.  A rally in later summer would be peachy, too, As (unfortunately) would be a crash in the fall.

So we look into the crystal ball of news flows and try to understand how events will play out.  Was Monday a pre-shock or was it just seismic trading noise.

As one UCLA seismology expert has already shown, a template that works to find pre-shocks around earthquakes may be useful when looking at markets.  See Didier Sornette’s Why Stock Markets Crash: Critical Events in Complex Financial Systems.

By the way, I was trying to explain my rabid fascination with “template-mining” in life to colleagues this week.  Thing is, it’s like seeking the “ultimate quadratic” that will, when solved,with just the right terms, reveal all answers to all things.  The is just One equation. We’re just too dumb to find it and our division as peoples and specialization hinders the quest..

Template studies are like that:  What works as electrical laws also work (as thought templates) in economics when the terms are aligned.  And as Sornette showed, ditto the use of templates against noise from seismometers and  in Wall St. trading data.

I think that’s where we are this morning:  Let’s see if this is a tiny 1 down and this morning is a 2 up and then see what some implications are.  Because there’s also a good chance that the market will instead go higher.  In which case, the Monday action would have been a corrective move with more impulsive upside to come.  Buried in the personal schedule at the moment, it’s interesting watch the action from the sidelines.

The real issues to watch aren’t changing much:  Will there be a meaningful Trade Deal, will Trump survive the gauntlet, and will India and Pakistan go to war this summer?  Answer the wrong way to these and there’s a house of cards with U.S. Economy written on it.

Gold dropping, by the way, says the Fed’s L4L (lower for longer) rate approach (super-accommodating) is ending inflation fears and we don’t know how far down is, especially if consumer discretionary fails if the job number suck this week.

China, meantime, is also getting in the L4L line trying to stave off recession.

Dear Global Warming Fanatic

Are you still in denial?  Here is this morning’s NOAA/Weather.gov warnings map.  See the unseasonable freeze warnings along the Gulf of Mexico?

We apologize for the facts. 22F here in the Texas Outback today and Denver had the coldest in 60 years and all…But it’s weather and you’re a tool of political machinations far beyond your realm. So GTFU, pah-leaze.

Financial News for the Day

Not too much to it, really.  Europe is up a shade, so the US rally could build on that.

In the economic data flow, PMI will be out 45-minutes into the day with December new home sales about 10 AM and then we will get a look at federal budget (madness) numbers around 10 AM Eastern.

The flow of news will be picking up tomorrow through Friday.

AWK (Also Worth Knowing)

We have a twisted way of living here in the Outback.  As part of our “PSRP” (personal stress reduction program), we don’t waste mental processor clicks (of the amygdala after Neil Salde’s work) on things we can’t change, leverage, or use.

Also, we try to hold our commentary in check.  For example, HRC saying she’s definitely not running in 2020 is not to be trusted, but if true, suggests there is a God after all.

We will also not suggest that Bernie form the FOSC Party for (Friendly Old Socialist Codgers).

And, representative Ilan Omar continues to be a great divider sounding decidedly anti-Semitic.   Democrats to become the self-inflicted party?

That’s three reasons (as we count ’em) that the 2020 campaign will be framed by the GOP as “Are you an American or a socialist?”

To be sure, this will be cast by the ultra-libs as Macarthyism’s return.  But, as military affairs contributor “warhammer” notes, politics – especially of the Online Digital Uprisings sort are state-actor backed but out of the public eye:

“It’s old news that the Democrats keep alive by publicly declaring they are ‘not’ socialists while increasingly advocating decidedly socialist agendas.

What is increasingly apparent is more than a few politicians on both sides of the spectrum distort the truth.  Pro-socialist politicians are aided by news entities seemingly intent upon exploiting every possible avenue that will lead to the deconstruction the foundations of the American capitalist powered democracy, aka, the status quo, to the advantage of a few elites who mislead the masses into believing the playing field is being leveled to the advantage of the masses.

Follow on Twitter.  Like on Facebook.  Connect on Google+.  These are fundamentally socialist tools which deconstruct geographic and societal barriers to virtually level the collective playing field.  We are all encouraged to use them.  The founders and controlling partners for those social media tools are all billionaires.  The followers are brainwashed into believing that those who are not are ‘not connected are not with it.’

These are the tactics are classic psychological warfare, blended with the fundamental principles of raw political propaganda:  ‘deftly appeal to humanity’s loathing of those who are better off than ourselves.’  Yet some elite group in the ‘cloud’ holds editing and censoring power for these ubiquitous tools.  The decision of these closeted judges is always final.

We need to stop and comprehend precisely what is happening to us via social and networked media, be it ever so slowly and often subconsciously.  Tell a lie.  Make is believable, then keep repeating it. Eventually people will begin to accept and believe it.  When that lie can be transmitted to tens of millions in a nanosecond, ignorance is easy and deceit an increasing danger.

Sir Winston Churchill’s classic quote rings a clarion call to common sense for any free people:  “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”

And all framed nicely in our Monday headline “Communicable Hysteria.”

Licensing the Web? Still Coming

This brings me to a fine point that I made in my 2012 book Broken Web that you may find on Amazon.

The Internet, like an automobile or voting, or drinking or recreational drug use, is something for the “grown-ups.”

Licensing the web and requiring users of social media platforms to reveal their ages and prevent posting and such for underage, is just one of the critical moves in saving America from digital disruption that we need to get very serious about.

Just in the last week, we have seen ISIS remnants calling for  digital jihad and that should scare the hell out of you.

Although, I’m sure it doesn’t.  Far more “clickable” with lowest common denominator web use to click on the flash and flesh and trust others – more crooked than you can believe – to package your choices for you.

That is, sadly, the road to dusty death for democracy…

So, on that cheerful note, on goes the consulting hat again after a trip through the gourmet line in the kitchen.  Where Zeus the Cat somehow beats me to chow every day…

Moron the ‘morrow…

24 thoughts on “Was Monday a “Pre-Shock?””

  1. Clif High said in last night’s interview on Last Stand that we should know for sure next summer if we are truly in a mini ice age. He said the proof will be if we see snow next June and July. It it happens, he predicts the super cold will last over 400 years. He also thinks when the ice happens, it will crash the global economy.

    I was glad to see he is feeling well having just missed by the skin of his teeth dying last year from cancer.

    • The same Clif High that predicted a mass subsidence of the continents, called The Global Coastal Event, back in 2012?

    • The weather we see now.. Reminds me of the weather patterns in the seventies.
      We have just gotten soft with the mild spring temps the last few decades.

      I personally have greater fears over the ego and greed of a very few driven to fulfill goals that will set off a chain of events, rather than those of a normal cycle.
      I think that The few people truly pulling the strings are seriously placing the entire globe in a perilous position. A position that could bring the predictions made by nostradamus to fruition. All because of a burning desire of greed and power to boost their ego’s.
      The truly sad thing is all we can do is sit back and watch.

  2. Further to Warhammer’s post:

    It is alleged Karl Marx’s last words were: “I am not a Marxist”.

    V.I. Lenin is reputed to have said “The goal of Socialism is Communism”

    Communists always say they are not Communists. It’s one of the tactics used by Communists.

    We fought a Cold War against Socialism. I just can’t believe that we are dealing with this in 2019.

    • Steve ,Steve Steve my oh my my oh my…..
      You sure haven’t been paying any attention have you…

      IT IS IN THE PLAN…..sweet simple and easy to implament and operate but tough to maintain

      get the vast majority of the people to seek out public assistance programs to provide the necessities for their families..( right now one in three or one in two taking into affect the new stats)
      then promote greed and discontent between the haves and the have nots.. then take it away publicly showing that it is going to the haves..
      this gives them the power and support of the masses..
      ingenious simple and devilishly easy to do.outsource manufacturing taking away jobs, allow illegal immigrants to enter the usa to take away the service jobs already. force those citizens who will loose those few jobs to pay for the total support of the illegal immigrants. force those laboring to seek out public assistance programs.
      The plan is to promote greed and get those that could stop this from happening to hide their money and not pay their due share of the expenses instead of supporting their own communities then drop all of the responsibilities for operating expenses off on the middle class.


  3. Have to love the socialism Vs capitalism b.s. much like the black and white issue or communism, to be trotted out when convenient and put back to bed once its served it purpose, which of course is to divide the people,or lol perhaps like mind control or perhaps closer to brainwashing where they know just which button to push to hide what’s really going on.You know we are sunk when a little Muslim woman has more b*lls then the rest of those who make up our so called elected government, who are little more then pawns in the game,once you understand that you will know why there’s no chance of making America great again.!!

  4. HRC may not run, but remember Chelsea is old enough to run and ride Mom and Dads coattails. I wouldn’t rule out that they’re considering it.

    • ???? Why should Chelsea run…there’s a profitable venture for Haiti and I think I read someplace she makes several million a year from some buildings she has..
      Why take on all the heartache ..
      If its all about numbers and pieces of paper.. She’s set already..

      Then figure age.. Take a look at how being president affects their age. The stress of doing the puppeteers biding and keeping the public content is a massive undertaking..
      Just work customer service once behind a retail counter for a couple if weeks. Then amplify that by a hundred million.
      It will put a whole new light on the position.

  5. Regarding the web, I might be OK with pseudonymity, but definitely not the required open identification of each person such as Facebook demands. If a person posts, or tries to post something that’s seditious or clearly illegal, I can see having a path to identify that person for law enforcement followup. Otherwise companies, non-profits, other individuals, political parties and normal government should not be able to identify that individual unless he posts his identity. I’m sure with the many trap functions that the blockchain and cypher types have developed, an algorithm could be developed to provide privacy without sacrificing security. Something like the FISA court with a lot more transparency and accountability could approve breaking pseudonymity in cases where it’s clearly warranted. The same process would verify age – as greater than some specific number like 18 or 21, but not actual age or DOB. Random websites have no business acquiring this.

    I see no reason to restrict an internet ID to only one per individual. As long as the original application(s) are legitimate, let there be as many as desired. Charging a fee for each additional ID would limit excessive use. For some things such as “dating” sites, a single ID would be quite limiting. Throwaway ID’s that have an obfuscated connection to the original ID might be another option.

    The only real challenge would be to provide a truly trustworthy issuing agent and managing agent(separate) for such internet ID’s.

    For now, I’ll enjoy what’s left of the wild west. It has its benefits and pitfalls.

  6. “Because there’s also a good chance that the market will instead go higher.”

    How does this ELLIOT b/s work out for you personally? ;-(

      • Sorry George, I had a good technical response, but as it happens too often, suddenly, all the effort that I’ve written is somehow erased from my screen. I’m already too old to do it over again–but the gist of it was moving averages in conjunction with EWs. Thanks for listening!

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