Winding Down ’17: Data & a Bitcoin Rap

Data first.  It’s easy to explain the market weakness over the past few days:  People may have done a bit of selling in order to put some cash in the bank for 2018.  Today, though, unless you’re trading options, the settlement in three days won’t be in this year…so we half-expect a minor rally.

About the only fresh data out is the International Trade in Goods and Services.  If this turns your crank…

“The international trade deficit was $69.7 billion in November, up $1.6 billion from $68.1 billion in October. Exports of goods for November were $133.7 billion, $3.8 billion more than October exports. Imports of goods for November were $203.4 billion, $5.4 billion more than October imports.

(Continues below)

 

A couple of other points:

Advance Wholesale Inventories Wholesale inventories for November, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $610.2 billion, up 0.7 percent (±0.4 percent) from October 2017, and were up 3.8 percent (±0.7 percent) from November 2016. The September 2017 to October 2017 percentage change was revised from down 0.5 percent (±0.4 percent) to down 0.4 percent (±0.4 percent)*.

Advance Retail Inventories Retail inventories for November, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $619.1 billion, up 0.1 percent (±0.2 percent)* from October 2017, and were up 1.9 percent (±0.5 percent) from November 2016. The September 2017 to October 2017 percentage change was unrevised at virtually unchanged (±0.2 percent)*.

God, is this exciting, or what?

The Bitcoin Rap

We continue to observe Bitcoin with a mixture of scientific curiosity and horror.  An hour before press time, it was trading around $14,000 each.

To be sure, there are still plenty of “True Believers” who are saying it will go to the Moon, or a million, but we aren’t so confident.

Take a look at this comparison of the pricing of Bitcoin with prices by the Dow in the run-up in the 1929 collapse and you’ll see why we’re concerned:

This is not to claim a direct correspondence.  You will see that the Dow run-up took place over a number of years while the Bitcoin run-up has taken place over a number of months.  Which gets us to an interesting line of thinking.

If the old University of Colorado Long Wave Econ group were still active, I’d ask the “old hands” this very important question:  “How much of the time-scale of such an obvious bubble is related to transaction speed?”

You have to remember that when stocks were running up in the 1920’s, the price of a stock would close at X and the news of that closing would be either in the evening papers, or the morning newspapers.  Out west, the afternoon papers might have the report of prices, but it would be the next morning before orders could be placed.

Upon rising, the 1920’s speculator would take coffee and the newspaper and study the market closely.  Then, if warranted, a telephone call to the brokerage.  But here’s another time-lag.  Brokers didn’t have instant to-the-trading-floor coms.  It was a telegraphed order, manually sent around by “runners” and then the traders would (or not) strike a price.  A good estimate under ideal conditions was about a one-day turnaround on transactions.

With Bitcoin, it’s a different thing:  One click and you’re in, or out, and then whatever the time is to update the blockchain (distributed ledger).

If things are going well, as was noted in an article this past summer, a transaction can clear in about 30-minutes.

What’s interesting “mental floss” is to estimate the “time compression” and wonder if that’s why the ramp in Bitcoin has been so fast compared to the 1920’s market.

I try to refrain from “talking my book” because even though we do exceptionally well when following our trading model, it was never designed to call tops, or bottoms, but rather it’s designed to capture the big moves in the market and it does that marvelously.

Still, one way to look at Bitcoin is to run a subscriber tool I built called the openbrain.xlsx spreadsheet.  It makes a SWAG at where prices should go in a “normal market” that seems to be following conventional Elliott Wave rules.

In this case, it’s not pretty, at all.  Remember, just a couple of weeks back Bitcoin was in the $19,500 range, and then collapses to the $11,060 range for a moment.  When we plug that in to the spreadsheet, it looks like Bitcoin MAY be about to enter a third wave down and that could end…well, you look for the Wave 3 targets here:

I won’t label this a “prediction” (yet), but in the event that Bitcoin takes out the previous low (the $11,060 momentary low) then the odds might be shifting toward a Wave III down wash-out.

There is still the bullish case, however.  So don’t let me rain on your empty digits backed by nothing but other digits…

The way THAT “much higher and to the moon” wave count could still play out goes like this:  We start from some nominal Bitcoin floor (no one holds up a flag at incept points) so I tossed a dart at $1,000 each, and then things rally like hell.  From whatever the floor is ($1,000?) up to $19,500…as a large Wave I up.

That would make the recent correction a Wave II down which in turn foreshadows the mega-upside wet dream of Coinsters:

You can argue that the recent pullback was to right around where the Wave II SHOULD have gone…and I won’t argue the point.

Typically, the “great arbiter” discussion in this column.  Instead, it’s the breakout or breakdown.  Unless you just have to spend it today, waiting a while may be the smartest thing to do.

In order for the BitBulls to hit their $35,817 minimum up-side expectation for Wave III, we first need to sail above $19,500.

BUT, if instead, we break through to the downside, and see prices like $$10,900 and lower arriving, then it’d maybe be time to find the next bigger fool than you. That’d be a good level to become a BitBear.

As always, we just watch with horror and amusement. World events are likely to drive.

The GOP: Winemaker’s Party?

Not following?  Wine is all about sour grapes and we saw this in the NY Times that got us thinking that way:  “Roy Moore Sues to Block Certification of Alabama Senate Election Results.”

Earlier, the Alabama secretary of state dismissed the Moore petition to delay…so the Courts are the only recourse.  Just for the sake of absurdity, maybe we will see an Obama-appointee hear this one.  Popcorn ready?

In Fairness to Trump

You did see where Pew: Trump media coverage three times more negative than for Obama?

When I tell you of crooked media, it ain’t all smoke.

Not Enough SJW’s, Already?

Oh, spewers of guilt, organizer for activism, loonies of the left, here’s the big story of the day:  Physicists are trying to create the perfect snowflake.

We don’t have enough?

At the deep, spiritual level, I thought it clear to students of zennly-news that like-attracts-like has been demonstrated this week in the Northeast:  So many perfect snowflakes and so much perfect snow.  (Auummm…)

Sorry if I’m drifting.  Let’s plow forward.  Chill.

We Are Not Alone!

Forecasters warn Britain may face coldest night of the year.

And with the coldest cold EVER being reported, where are the global warming pimps when we need ’em?

Seems to me, a little hot air would be welcome about now.

Climate change?  No.  IQ drops?  Hell yeah.  Look up the word average.

Comments

Winding Down ’17: Data & a Bitcoin Rap — 46 Comments

    • From what I am seeing we will see the Japanese yen collapse on 11/19/2018. I see 2 2vents for that date. The the Japanese bond market collapsing /yen going into hyper inflation is so large and over shadowing I’m having a hard time seeing the other event. Could be a major EQ, and Iran keeps coming up lately into my view.

      The US stock market collapse I have for May 19th,2019. With the US dollar also going into supra inflation. There will be a great diaspora between fiat currency’s and the markets. And a huge flight to crypto currencies.

      I see a huge data breach involving Or related to Bot coin /hack at coinbase.

      I was wrong about the Sony blue ray being over taken by HD DVD.. And that has me pausing about Bitcoin cash..

      Although BETA max never overtook vhs.. hard to explain.. I still see etherium as the best alt coin.. I know that bitcoin will be replaced by something else..

      I see great emotional sadness/depression/outrage in the world around these dates.

      I stay out of the politics because it all reminds me of WWE wrastling.

      Anyway, that is what I see.

      Have a good Day.

      Doing much much better. :)

      Off to grab 18 gears!

      • Kinda got my ass kicked. I picked a fight with some witches on their site. Kicked their ass and well
        ..spiritual warfare is what it is. Lol

  1. Oh, it looks like Trump did an interview with The New York Times without his advisers/handlers present.

    Upset stomach time.

  2. Bitcoin looks to be tracing out the pattern of that Seventies Gold Bull Run that ended in January 1980. Prechter has a great chart of it in his book At The Crest of the Tidal Wave.

    I think Bitcoin is headed down a bit further BUT if $10,000 holds then the upside targets of $30,000 and HIGHER could be in the cards.

    The LONGER it takes before Bitcoin hits $40,000 to $50,000 the better odds of it hitting $100,000. So, if it keeps going up into March but doesn’t reach $40,000 or so, then the high for this cycle may not be in until late summer/early fall.

    If you are into Fibonacci sequences, the rally in Bitcoin started roughly 377 years after the Tulip Mania. And, if Our Favorite Crypto (NYSE: OFC) can hold on for a bit longer, that could put the MAJOR top in by 2037 which would be 400 years after the Tulip Mania peak.

    Also, 2018 would be 89 years after the 1929 high. So, if stocks only have a “minor” flash crash, then the REAL fireworks could be in Bitcoin/Cryptomania.

    Finally, other than 2018 being 10 years from the 2008 Financial Crash (however, NOT a fibo. number from here), the housing market peaked in Florida (and the Toll Bros. stock top) in the summer of 2005.

    So, put these things together: there are gonna be some over-leveraged, 3rd mortgaged houses on the line at the Bitcoin top.

    Although methinks that the top won’t be in until Calpers gets in bigly…

    da bear

    When the going gets odd, the odds get better!

  3. I feel the need for–Clarity. If and when a global catastrophe takes down the electrical grids and the internet goes down with it, there will be NO Publicly available power – thus no electronic commerce of any kind..No FRN’s, Stocks and Bonds will be vaporized – electronic entry – no physical certificates to prove ownership, except physical FRN’s.

    You gonna Gold & Silver ? You gonna eat physical notes?
    Once power is restored, the Bitcoin Blockchain will just be recreated from last point of “joy”.

    Viva La Revolucion!

    • We believe in the old 40:1 ratio. One pound of gold, 40 pounds of ammo, lol Wait, maybe its 100:1 now….

    • I don’t think total grid failure would happen all at one time. I think if there was strategic areas that failed the rest would fail domino fashion.
      Gold. All I know is you can’t eat it. It doesn’t make very strong tools and its heavy. For me over a pound of coffee in tough times. I’m going for the morning jo.New York was bought over a handful of beads it all depends on what we value. in the event that it became the base for our financial system..then that’s a different story. Right now we use a promise that the dollar bill is good and tradeable.
      But then its just my opinion my wife always tells me I think with my stomach

    • That’s cute. You think that the power grids will be restored…

      From a local outage? Absolutely.
      From a hack-attack? Almost certainly.
      {Neither would affect cryptos’ blockchains, BTW}

      From a HEMP attack or a Carrington-type EMP event? Not in my lifetime, or yours, or your children’s, or their children’s.

      • IMHO surviving a Hemp attack totally depends on where it went off.. and how much you have done to secure your own source of power.
        America’s downfall which has been addressed in almost every study they have done.. is its a buisness model. We have put all of our eggs in one basket so to speak.
        we should be like a tree.. each leaf is dependent on the roots trunk branches etc. yet each leaf produces a small amount of power. our grid should be set up like a tree. instead our power companies build a solar power system they build a system to keep control and gain profits. Instead what I have suggested over and over is encourage small solar power systems don’t pay the owners a fee for excess power but guarantee rates wont’ go up for lets say ten years.
        when they build solar power systems or wind systems diversify it.
        Our Infrastructure is what rated D or F in most places because we have been so busy putting money in other places we have a crumbling system. Now if a hemp was to be done lets say over Niagra its affect would be minimal in Texas. but if they were staggered over each of our production area’s it would be devastating. We don’t produce the replacement equipment in america either it is produced someplace else and they have a waiting period of ten years.
        so yes a carrington event would be bad but it depends how far you are away from the source.
        http://www.empengineering.com/images/stories/emp-baltimore.jpg
        http://www.empengineering.com/images/stories/emp-long-beach.jpg
        Unfortunately money is what is standing in the way. the companies that could make the necessary changes without the excessive costs won’t I think it is because they feel they would loose control since everyone would be a power station of sorts. yet it would make our grid almost indestructible. we have more to worry about the crumbling water and sewer lines our roadways and bridges.
        I don’t have a lot of faith in our Legislators because I think they are lazy.. lets face it you have to be there to do something or to even read it.. but I don’t think they are stupid either. They are just caught up in the DC bubble and have given way to much power to the puppet masters rather than do the jobs themselves.
        They don’t read the bills.. Heck I have to have a dictionary when I read them I am sure they don’t want to sit there thumbing through a dictionary all day long that is why I think they should be writing them themselves. they just read the cliff notes in the front sales pitch add a hither and yon in for themselves and vote yea or nae depending on who is the best salesman

      • LOL LOL LOL LOL LOL… speaking of my stomach answering..
        https://www.pri.org/stories/2017-02-20/south-sudan-declares-famine-aid-groups-lament-man-made-tragedy
        Now I wonder if.. you went up to one of those starving people that have to walk fifty miles for a drink of water.. and said here is ten pounds of gold.. or you can have this tanker of fresh water and that truck load of food.. which one would they take.
        Me for an example my stomach says heck.. I am going to eat screw the gold.. I can’t carry ten pounds of gold fifty miles and if the guy there is the only one with a well what do you suppose he would charge for a cup of water.
        http://www.michaellamarr.com/grprices.html
        https://www.tchistory.org/tchistory/gold_timeline.htm

  4. George – In your ads, it says Buy Bitcoin instantly through the Einstein Exchange. I went to the site & you can buy full or fractional coins. Do you know anything about the Einstein Exchange since it is one of your advertisers?

    • It’s a Google Ad. I just take there money. I’m quite egalitarian that way….Who was it said “I love people of all colors, long as it’s green…”

  5. George, I messed around with the calculator and I am deff not a math guy so I didn’t know how far to move the decimal. Plugging the numbers in for an 8 hour trading day, one day to make a trade (1920’s) vs 30 min’s to make of today (again the decimal) it’s either 33 min’s equals one day or it’s 3.3 min’s per trading day.

    • My head hurts when I try this kind of math, anymore. Grad school was SOOOOO long ago, lol.
      Thing is: Market opens at 9:30 and closes at 4, so that’s 6-1/2 hours. If Bitcoins take 30 minutes to clear, that means up to 13 trades in a stock trading “day.” Which would give us 13 BTC days per stock day. But Bitcoins trade 24-hours, so 48 trades per stock day…
      Peak 8/29/1929 on a weekly basis to bottom (6/30/1932) is ROUGHLY 1,097 days, but this times (.7142) because there are only 5 trading days out of seven in the week. This means 783 stock trading days.
      Which – if we break down – would put the Bitcoin bottom out (783/13) 0r 61 days from the Bitcoin high Dec. 17 which would put the BTC collapse bottom around Presidents Day which is when Korea should light off…
      There, all better now?

  6. A little note, If we replanted the grasslands we destroyed and put back the herds that used to be on them, we would return our carbon levels to the 1960’s levels. How come no governments are working on this when the top scientists have proven this as a simple answer?

    • Because, my dear fellow, we all know that government in NOT in the Solutions business.
      They are in the problem creation and maintenance business.
      It is in this way, they can scam the weak of mind out of taxes and increase their power of persons.
      Why, this is a bigger human macro trend than even global warming, lol

      • So that’s all getting ready to change watch open your eyes experience the change as it happens and you go like wow how did this ever because I had no idea that could be this miraculous but that’s the way things were

  7. The difference now from then and then 1900 early 1900s is that Trump is releasing everything he’s getting rid of all the old laws and he’s gone to read lease the new technology and the new technology will take us beyond Earth so we have the ability to expand with this technology and with the Bitcoin digital the difference now from then and then 1900 early 19 hundreds is that Trump is releasing everything he’s getting rid of all the old laws and he’s going to read least the new technology and the new technology will take us be on earth so we have the ability to expand with this technology and with the Bitcoin digital pattern because we can’t take tons of gold and silver out to pay the people who lives and explore the universe so it has to be a digital things something that can travel through the air and fill their pocket book up so the past is going down the drain really quick and the future is coming in quicker

  8. Okay look at it from this perspective what’s the run upscale on bitcoin compared with the stock market how many years has the stock market existed how many years has Bitcoin existed.

    The reason I’m saying that is there’s a difference there some where can you find it.

    One system is dying and another one is just giving birth

  9. the question George is what caused the Dow back in the 1920s to fall and if it’s still applicable today

  10. George, again weather != climate. ‘Splain to me how the glaciers on Mt Hood, Glacier National park et al have been doing over the last 100 years or so…..

    And yes, the Atlantic conveyor shutting down will make Europe a very chilly place. Despite the warm rest of the planet.

    • lol The Laurentide recession began much longer than 100 years ago…global wearming has been a slow motion move of climate ever since when?

      If I send you $10. Will You cool down the ranch by 1/2 of one degree for one day on that, please. No? …this is a money scam dude! If you believe Al Gore, you believe in the Easter Bunny. Al’s a clever shill who bought and paid for views that agreed with his and Obama’s and then they roped in the teachers and now it’s a paradigm. Marketing, marketing, marketing.

      When government ONLY PAYS FOR CLIMATE CHANGE STUDIES, care to venture a wild-ass guess at what the results will say?

  11. Brittan being cold, is a result of the Atlantic current slowing/shutting down bringing much colder winters to Europe…

    http://www.businessinsider.com/climate-change-could-shut-down-the-current-that-carries-warm-water-2017-9

    Brittan being cold is NOT a case for the climate not warming. Cold winters in the UK, would actually toe the line with Global warming. Personally, the excess carbon in the atmosphere probably is helping warm the environment all the while the sun is going into a cool spell. If that is the case, then using the tools available to draw down CO2, in the near future, so that when the sun warms back up, we do not get temps that make it hard for plants to grow.

  12. It’s not news that the news is three times more negative to Trump than Obama. But let’s break that down. You could say that Fox is three times more positive to Trump than they were Obama…and three times more negative to Obama during his presidency than the other networks. CNN and the rest of the media world has historically leaned a bit left, so no big discovery here. But in fairness, Trump does bring most, if not all of that on himself. If he would lay off of his Twitter rants and brush up on his English a bit, I bet we could all actually start enjoying ourselves a bit more. Life, the economy, technological breakthroughs, lifestyles, etc, has been good for nearly 7 years…and is getting even better. Let’s not let the Grumpy old men of DC ruin that for us.

  13. Thing is – as was mentioned in the article on snowflakes ‘supposedly’ no two are alike – and when reading about this in school over the years, it seemed like the scientists were totally miffed. How dare something not be totally regular all the time, and express ‘individuality’.

    Nature is wonderful in its complexity!

  14. “the wrong people –rebels,outsiders,nerds and techies got on the crypto currency boat while their insider/rentier “betters” blew it and are now raging bitterly on shore” -Hugh Hendry

    Everyday that Bitcoins doesn’t crash to zero is a day of pain for those who are butt hurt/ wounded by missing the cyrpto boat.

    FACT – you cant not survive the coming, to a theater near U, financial breakdown without Crypto Currencies.
    The overburden of Debt on our US economy is crushing the Velocity of money, which is at its lowest level since 1937. M2 is decelerating, bank loans and commercial paper are decelerating as well. Yield curve is flattening and the FED is tightening.

    My unsolicited advice, as always, Buy The F-ing Dip & Don’t trust, VERIFY!

    • On the other hand, try to remember that in a global collapse, the cryptos won’t keep the web up and without the web, there are no cyrptos

      • what you’re forgetting is we’re already out there we’re already out and space with got communities with got to me and people on Mars we got people traveling everywhere throughout space so it doesn’t solar flare that affects earth what do you think will happen do you think that those people that are out and space that represent us come back and keep everybody from Diane with the technology that they have which has nothing to do with solar flares I think so

  15. Robert Felix said on Coast last night that his long-standing prediction of a mini (maybe) ice age is upon us with the spotless Sun out for vacation.

    Let’s say the globalists got their wet dream of carbon taxation and are flooded with even more money. They have yet to clearly and provably explain just how they would spend all the moolah to turn things around.

    • Politicians NEVER fix anything. That is neither their job, nor their function. What they DO is “manage” things.

      If an issue is satisfactorily resolved, bureaucrats lose their jobs and the pols’ power is diminished.

      For the political class this is unacceptable, and is therefore never done.

      “Managing” a problem allows it to continue to exist, justifying the existence of the agency, department, or bureau which manages it, and justifying the ever-expanding budget for said agency.

      The reason Mr. Trump scares the entire political class is he is essentially a construction worker, with money. In building trades, one MUST successfully solve problems and complete projects. Trump the TV personality doesn’t scare them, although that’s the “straw man” Trump they all attack. Trump, the “guy who gets stuff done” scares the hell outta them, because that philosophy is the polar opposite of theirs, and incompatible with “D.C. culture,” irrespective of their alleged political affiliation.

      • Since “global warming” or “global climate change” is a fiction designed to separate highly-developed countries from a portion of their wealth whilst moving them toward global socialism, all the globalists would do with a carbon tax is ensure their personal wealth and position as a permanent ruling class.

      • Gawd I wish you’d talk to some of my readers about this Ray. Need to borrow a bat?

      • ‘Won’t work, George. “Global warming” (by any name) is a religion. The Believers are fanatic. Like any other religious zealots, they will ALWAYS view a differing opinion, an application of common sense, or even true and established scientific fact, as an attack on their core beliefs. Such “attacks” merely harden their resolve, not strengthening their religious beliefs mind you, but injecting “stubbornness” into the equation to the point they become incredibly intolerant of said fact, opinion, or common sense, and also of the people who could be so stupid as to have opinions which differ from theirs.

        They are geocentric flat-Earthers, and because whether the temperatures go up, go down, or stay the same, the GCC evangelists are correct, a Copernicus will never come along to save them from themselves. They will only see the light if GCC marches along to the point we sequester a sufficient quantity of carbon dioxide to kill Earth and everything on it — they’ll see it right before they asphyxiate…