Extra-strong coffee this morning as we eye the futures market with only one question in mind: Will the Trend Channel hold?
Let’s throw on some theme music (“ Lifetime Piling Up” works…) and drop back over the past couple of weeks. I’ve been saying both here on the free side, and also on the Peoplenomics.com subscriber side, that we are due for a medium to largish Wave IV down.
The problem with wave counts is that while they often give you an idea of what to expect, they are oftentimes inconclusive as to timing. With futures down over 400 on the Dow earlier, we look to the music sage Jesus Jones who summed it up: “Right Here, Right Now…”
As you can see, the early futures had us dropping to the bottom of the trend channel. Where this gets to be a horse race is whether (or not) we bounce and go up for a fifth wave into April, sometime.
Remember, we’ve derived something of a soft pattern in the 65-70 week range. That is, when there’s a bottom wash-out (March-April 2009) you get a lot of Big Money come in and hold for at least 52 weeks to lock-in the long-term gains rate. Then..10-20 weeks on, it’s somewhat reasonable to expect there will be a pullback because smart money pockets reduced-tax winnings, and leaves the casino. Selling at the top to (pardon me for being blunt here) idiots.
We can toss out some date-ranges to at least think about: If we pull back here, then get some “good news” and the market then rallies, which is what a 5th and final wave up really ought to do, then a top might come in the range of March 16 (basis a 65 week run from the weekly Aggregate low the week of 12/17/2018) to perhaps April 20th (basis a 70 week run).
This is not investment advise – anyone willing to listen to a crackpot in the woods ought to have their head examined, for sure. On the other hand, a confluence of events here might be penciled in as a “short streak of good news” for a month and a half, then a resurgence of horrible, hand-wringing, scary news.
Looking into the future, imagine that there’s some positive news out of China. An announcement that “things are well in hand…” in a few days (which we’d be very suspicious of, BTW!) followed by an orderly end of the senate trial, but no removal for Donald Trump, followed by some glowing economic reports to splash the last bit of “feel good” going into a major top.
Oil would firm, precious metals would firm, the BTC crowd would rub their hands gleefully, and few would notice small moving pieces. Although our news analyst up in Canada did: that this NoCoV2019 outbreak happened to coincide with turning on 5G in Wuhan…
At any rate, I’ve got a possible market high (ever so lightly) penciled-in around Tax Day. And from there, America may be set to enter “perfect storm” territory.
What would that look like? Think about what could go wrong:
- Democrats would be furious that their coup to throw out the 2016 election will have failed.
- We notice John Bolton keeps popping up in headlines like “Trump Tied Ukraine Aid to Inquiries He Sought, Bolton Book Says .” Color us skeptical of Herr Bolton, since the book hype appears in the distinctly anti-Trump NY Times AND it’s a Book and that’s Revenue. So repeat after me (again): “Everything’s a Business Model.“
- Bernie could be “big-shotted” out of the July convention.
- We can;t help but notice that America’s leading succubus is back in headlines for a Sundance film.
- Oh, and Bloomie’s got deeper pockets than all. Thus, when someone outspends Bernie, and he gets his socialist ass properly kicked, we expect the old October Revolutionary tactics to roll and America gets Bern’ed by radical sofas’s (socialist-facists). Project Veritas already has the threats on tape.
- About here, let’s toss in advance warnings with Q1 earnings that “due to (blah blah) the outlook for the balance of the year is dimmer...
- Maybe it’s also time for the Fed’s Repo Depot to begin weaning the just-bailed hedge fund off the financial teat which, here lately, has been milked at double-D rates.
- Hmmm…what else? Well…what about a re-flash of virus news out of China? You know – got a handle on it, covered up, then BLAM – back at us. Only this time lock down all international travel.
- Which then sequentially craters hotels, car rentals, ride-sharing apps. and also takes down the food and beverage industry and entertainment venues. Now pension and hedge funds are slammed to the ropes.
- And in this, the Fed has to hyperinflate.
Did you happen to notice that gold and silver and bitcoin and…(list yourself, I’m not going to do all your thinking for you!) are going up? This is the Great Keynesian Hoax.
The price of goods is more or less constant (based on their utility value and demand curves). What’s jiggered and twisted is the purchasing power of money. Gold hasn’t change in utility value at all. It looks like price going up but the fact is fiat money is continuously watered down. People are such dopes, are they not?
We could go on... (We still think Iran’s got vengeance in mind, hack attacks on the web are a cinch, along with additional major data breaches, a new Business survey suggests US labor market may have peaked, blah, blah, blah and so forth…)
Main thing to keep an eye on is that the market may be a better indicator of future events than you ever imagined.
Optimistically, we drop to, or just under, the trend line the futures nail us to at the open. OR, we break down to the top of a Wave 1, but don’t go through it. (If we do, then listen closely because the financial end of the world could be at hand…)
In which case, in addition to isolation, you’ll want to have the guns oiled, the grub stores full, and keep the family Bible handy.
In the meantime, not too much other than virus fears and phony money woes to tank markets, but tomorrow we will see how durable goods and the Case-Shiller housing report look. Might they be good enough to spin things up after we kiss the line in the sand in the early trading today? Turnaround Tuesday, anyone?
And supporting a move to new highs might be stories like J&J scientific officer ‘pretty confident’ they can create coronavirus vaccine as outbreak widens.
We like to over-prep and then under-react. Our view is never to play for maximum gains. We play for minimum losses. Think radical, play conservative. Like poker, you see?
Kobe: Death by FIKT
FIKT is accident investigator-speak for “flight into known terrain.” Happens most often when a pilot is flying below instrument flight rule minimums and especially when a helicopter is “outside the flight envelope” and encounters a mechanical. Without altitude to auto-rotate (a non-trivial task under IFR conditions no matter what), terrain is encountered with predictably disastrous results.
Which based on reports thus far seem like what will come out of the investigation into Sunday’s crash that killed legendary sports figure Kobe Bryant and a daughter. Total body count in the Santa Monica Hills was 9 in heavy fog.
While You Were Distracted…
Retiring Border Patrol chief: Crisis at southern border demands action didn’t get much play.
Climate hysteria continues: Burning Trees For Heating Won’t Help With Climate Change: UK Think Tank. Really? They couldn’t figure it out without help? (Am I the only one who remembers the world was once full of trees? (Disclosure: we own and live on a tree farm!) Skip semantics and back to sequestration please.
We’re still in a low intensity conflict (LIC) over future energy. See Fresh Russian-U.S. ‘Skirmish’ Reported in Syria for details.
A follow-up appears after our Peoplenomics piece this weekend on FunVestments. In the NY Times read about how Collectors Are Spending Thousands on Video Games They Will Never Play.
And in today’s over-tweeted, over-shared, fake-liked, and brain-damaged world, try not to look surprised to learn that Cruelty To Animals Gets More Media Coverage Than Beheaded Christians. Not only should you ask who is making such editorial gaffes, (leftist journos with agendas selling their own brands of hate and shame) but you should also “vote with your wallet.” Avoid buying publications that don’t reflect more critical thinking skills…
Why read crap from people dumber than you? I’ve always been fascinated that the smartest publications are not the mostly widely read. In fact, usually it’s the opposite. Do we have a stupid gene that has been activated by phones, or what?
Ask yourself “Why do I watch/read/subject myself to ‘news’ if I can’t use it?”.
Because there’s very little that is personally-actionable on any particular day and the hysterical media is terribly over-built on a premise of neuron-free glitz and self-importance pretending to be useful. But, you already knew that, right?
The actionable news today comes down to “Buy more rubber gloves and bleach and BTFD if you’re a gambler. Too bad about Kobe.” How to make two dozen networks and countless websites out of that is a sociological mystery.
Write when you get rich,