Got out of bed this morning with an unusual urge. So unusual, that even after standing in front of the recycling station, it persisted. “What’s going on?” I wondered.
Then it hit me: The Typical Summer High seems to be in play and with the market’s action Thursday, our Aggregate Index was screaming more upside…for a little while longer!
How about writing a “gift” column from Peoplenomics subscribers for the Great Unwashed? Why not?
What makes this so interesting is that although we have a New High in our Aggregate, specific indexes haven’t gone higher. Yet.
Market Long Term Peaks
I mention this because when a major long-term market peak is coming in, the all-time records – at least for the present run – don’t usually come in at the same time.
Take the 2000 blow-off top of the Internet Bubble. The Aggregate Index (13,091 and change) hit week ending March 24, 2000. But the weekly Dow high was set the week of January 14, 2000 (11,722.98). When the Aggregate topped-out, the Dow was already down 610-points off the ATH (all-time high).
On the other hand, the S&P 500 was concurrent with the Aggregate peak (posting 1,527.46). The NASDAQ peaked a little earlier (March 10, 2000 on a weekly closing basis).
Which means? Early Dow peaks happen, the NASDAQ peaked two weeks earlier, and the S&P 500 was “most on time.”
Housing Bubble Results Different
The Aggregate actually peaked the weekend ending October 12, 2007 at 11,359.27. The Aggregate then declined, as people began to worry about Housing, until March 2008 (9,337.54) before a final attempt to put in new highs ended at 10367.46 week ending May 8, 2008.
At the 30,000 foot level, the peak (2007) was the nominal high. The decline into March would count under Elliott as a Wave 1 down. The rally to the “false high” in May 2008 might be seen as a Wave 2 rally. And after that, the track was downhill until March 2009 when the Aggregate settled to 5,209.51.
Inflation Distorts Judgment
The crux of the opening discussion is this: We may (IMHO) have already had our analog to the 2007 initial high. I’d peg that back in the week ending February 7, 2020 when the Aggregate hit 28,953.36.
Was this the “first (honest) high” like it was in 2007?
As of the Thursday close we sat with and Aggregate at 39,561.63. This is 17-months from what I think of as the “honest high.”
If we look at the February 2020 high as being “honest” and tack on 17-months to the “false high” we land a few weeks into the future.
That should do it. And it sets up?
The “Wheels Coming Off”
The inflation distortion of thinking will keep most people from seeing what I believe will be along shortly. If you have the sense to look at the amount of money the Fed as mashed into the markets from February 2020 (M2=$15,473.4 billion) and compare that with the most recent June figures (M2=$20,388.9 billion), the case is made (even without additional billions in July) for a 31.8% current devaluation.
As the money is “worth less” the flip side it is takes a lot more money to buy the same goods or assets.
Taking the February 2020 “honest high” we didn’t really launch into Unknown Territory until 38,160 on the Aggregate. But, remember, we have 45 days of additional M2 dump-in to factor.
Simplest terms? This could be a double-top.
As a Public Service:
Clip out the typical 55-days from peak to major decline chart, then, as follows (this is not investment advice):
This is not a prediction (well, except the yellow area is typically in the date-range of fall declines). Mostly, it’s a big picture timing discussion.
And I did buy a chess “slap timer” (LEAP Chess Clock Digital Timer Advanced for Game and Chess Timer with Bonus & Delay Count Down up Alarm) for the occasion. To accompany thoughts of “capturing money en passant.”
CV-19 is Terribly Deflationary
Considering the role of government in promoting “THE JAB” people seems to have run off to Conspiracy Land, parking their brains at the door in the process.
The Big Threat with CV-19 is it Does to America what the West did to the Former Soviet Union. Made it economically unviable.
You may safely guess government officials are crapping spike proteins when they read ‘We are backsliding’: Our pandemic momentum has been squandered (yahoo.com). Because it means Deflation is Looming.
Imagine CV-19 really digs in. Killer variant comes along. Lockdown 2.0. No travel, even though, for example, United airlines to require Covid vaccinations for its 67,000 U.S. employees (cnbc.com) and other cooperating industries.
Imagine 10% of the population is incapacitated. Another 10% will hold to principles and won’t jab-up. Quickly, CV-19 turns into an economic collapse when a certain threshold is passed.
In economic terms, this does what? Symptom check:
- eBay prices would begin to collapse.
- Home prices would falter and fall.
- The labor force would decline even more.
- Stocks would plummet as retail sales fall…
I mean, it’s a really ugly gob of stuff. But the biggest part is the National Debt would skyrocket even beyond where it’s going (as soon as a new debt ceiling) is ironed-out. We wouldn’t be surprised to top $30-trillion in national debt this year.
By the way, commonly quoted debt figures don’t add in interest that has to be paid, so the National Debt is really worse than people talk about. Maybe double?
As people die-off from Covid (as my dear friend and Elliott wave mentor passed this week) lots of homes will be coming on the market, downsizing and selling off assets could accelerate. And the government isn’t prepared for the combination of falling income tax revenue and increasing social demands that asset deflation will drag along with it.
Conspiracy Still Works, Though
One thing the data is clear on? When you consider the Black Death of 1347-52, the literature is pretty clear: It sets the richest 10 percent of the population up for huge gains from disease low points. Specifically, read Europe’s rich since 1300 | VOX, CEPR Policy Portal (voxeu.org) and ask yourself “Is Covid its own Global Economic Reset?” (Hint: “You don’t need the WEF “reset” plan if you have a lab…” is a lingering question.)
Meantime – insidiously – medical costs will do their depressionary work of destroying savings, too…
Not to put a bummer tilt on your week, so let’s jump into the federal Employment report just out. Because we’re isolated and focused on Civilization Restart around here. The Great Craziness is contagious and spread via social (media) contact.
Jobs: Someone’s Lying
Cue the Labor Department Job report!
“Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate declined by 0.5 percentage point to 5.4 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services.”
But wait! This week new jobs by ADP’s count were up how much? 330,000. Not the fed’s nearly million!
TOO MUCH! SOMEONE’S LYING. 613,000 is simply too big a difference. We didn’t just fall off the “standard deviation truck.”
Part of the gain was 224,000 jobs in the CES birth death model:
Lower right, 224,000 jobs, got it?
Number of people claimed actually working? 152,645,000. *(152.6 million, call it.)
Here’s how the lie works: Non-farm Jobs now are still below where they were in August of 2017! Four years ago!
See how this works?
Let the stock-hawkers crow. We’ll just hang with the data.
Oh, and lies? Our money is on ADP – let’s look back this fall and see what those (p) preliminary numbers are revised to. I’d bet on ADP because they run checks, right?
Dow only +73. Maybe not everyone is stupid.
Life marches along, threats aside:
Prime Home? Amazon Delays Return to Office to January.
Hey Tony! Tell us the fairytale about Delta less fatal, would you? More than half of COVID patients in Springfield ICU died in July: hospital official (yahoo.com). I’m getting pissed about losing my Elliott wave mentor and friend. Gain of function research was ego-driven stupidity, plain and simple. Resign, please.
Another reason he should quit: Southern border is wide open and yet he spews… Third Covid vaccine shot for people with weakened immune systems ‘very high priority,’ Fauci says? GMAFB. Quackery: Open border idiocy. And to have ICE spread ’em out all over the freaking country! Sure seems like a die off plan if you miss your meds…
Digital spy plans out: ‘Privacy Company’ Apple Plans To Monitor All US iPhones For Evidence Of Child Porn But, where does it stop? Kiddie porn, sure. But when does it drift into less clear areas like discussion vaccinations or asking “Why there were hearings into last summer’s riots while the Capital Hill protest witch-hunt continues?”
Soros remains a threat – funding defunding as he goes: Soros bankrolls group pushing to ‘dismantle,’ replace Minneapolis Police Department. Soros should move to inner city America instead of plush digs in Hungary. “Do as I say, not as I…” what? (Arrogant rich pricks annoy me no end. I know rich people who aren’t pricks, social disrupters, and actually help their communities, but don’t get me started…)
Biden takes the wrong side again: Multiple Utah counties oppose Biden BLM pick Stone-Manning over eco-terrorism ties. Utahans get a hat-tip for calling out Wrong-Side Joe. Naming a tree-spiker, huh?
Maybe Cuomo and Newsom can open a consulting firm? As Newsom says recall is unfair, effects will be felt ‘across the country’ (polls have him losing the recall vote by wide margins). Meanwhile for the New York grabbernor the New York state impeachment investigation into Cuomo is ‘nearing completion’. We’d love to read the promises made in that one.
We Slept Through One
Yeah….With all the distractions in ‘Merica (once land of the free, yada yada) did you catch what the Climate Nazis have pulled off in the Ugly Kingdom? Right off the BBC: Google Maps warns drivers about emission charges – BBC News.
“Google Maps will now warn drivers in London and other cities if they are going to enter a low-emission zone with fees or fines.”
What kind of bullshit are these weak-kneed kneelers taking over there? Bought into the “wife-beating credits” pollution scam? Don’t see that as a monetization and money-grab?
Pitchforks at the gate time.
Listen: We own a tree farm, don’t go anywhere, and have more solar panels than anyone we know. But if you think the American public (yeah, even privileged old White guys) are going to put up with more discounts for EV drivers? Guess again. They already skate on federal, state, and local gas taxes. Yet when confronted, they get on their “high and mighty.”
We know a crock (and weak-willed suck-ups) when we see ’em. China is still building MORE coal plants. The Brits education system has failed them. Magna Carta swindlers. Keep that shit overseas.
America’s still got balls and guns.
Write when you get rich,