Dollar was at 110 in late October, 10 year over 4% and Oil was 90. We are lower since then. I await the next spike move higher. it should coi9ncide with the next major turning point in the stock market. the street is inclined STILL to believe inflation has stalled. Just on the news of China I expect Oil to spike a lot higher and with it everything else. BUT so far it is in the doldrums.
Maybe we do have months to go on the upside. Hope it becomes obvious so the timeline is short in guessing the next drop.
"The prices paid index of the ISM manufacturing report “rose out of contraction to 51.3,” Jefferies said, pointing to signs that “the disinflationary trend in goods prices that was in place at the end of last year has run out of steam.”
"Fresh signs of sticky inflation pushed Treasury yields sharply higher on bets that higher for longer interest rates are needed to cull inflation. The 10-year Treasury yield topped 4% for the first since November, keeping tech stocks in the firing line and extending the slump seen in February."
"On the earnings front, Lowe’s Companies Inc (NYSE:LOW) fell nearly 6% after the home improvement retailer reported fourth-quarter revenue that missed Wall Street estimates and annual sales guidance that also surprised to the downside."
These data points does not paint a rosy picture moving forward. But hey the street knows what it is doing?
Fastest pace in over a DECADE! China emerges from lockdown and they are doing EXACTLY what we did.
So not only do we have spiking inflation data here in US in January we added another spike in February from China activity burst. From Goldilocks US scenario on stock market to Freddy Kruger Nightmare. Like the China Pandemic we prefer to ignore facts and obvious implications because it doesn't suit us.
I can only marvel on how long it takes for the street to accept a bullish outcome on profits. Me, like the pandemic, knew with certainty the sky was falling immediately. It actually took till the weight of a falling sky to start the slide. How long now? One week, one month or perhaps two?
Market chaos or just a normal consolidation? GOP in chaos or just a normal consolidation? head of FOX testified he knew the lies, allowed them to promote it and even fired anyone not on board all for the GREEN. Not a single thought about dismantling our democracy, our agencies within, and weaponizing the GOP to attack their own military and political opponents all for the GREEN. Outwardly declaring civil war on anti-white supremacy. Outwardly promoting attacking the democratic party in any means necessary. Even fighting among themselves siding with loyalty towards trump their dictatorial leader against any who dare to rethrown him. Civil war within the party, within FOX as each man for themselves. This after we learned that TRUMP still has a commanding lead on winning the GOP nominee. Seems like Hitler's atrocities was accepted and embraced by the people who wanted results and didn't care how it was achieved. The same with TRUMP! Everyone knows what and who he is. I mean every single person on this planet. Many rationalize and justify his actions because his general premise that Whites are being diminished resonates well.
Lets be absolutely clear. the USA political system is D-E-A-D today! Like a pandemic overseas you can pretend it will not affect you but facts and nature takes care of that assumption. If we already lost our constitution, way of life, checks and balances why pretend the economic situation is any better? In BOTH cases it is only a matter of time where sobering reality bites our ass.
In both cases the same people that understood the tsunami affect knows what will happen. Most do not. Denial and ideology are strong mechanisms to keep both in a state of suspension trying to delay the inevitable. It will fail as likely as throwing a ball in the air and wondering if it will come down.
I marvel at the cartoon like antics like the road runner suspended in mid-air over a cliff. We know the end result but oddly enough most refuse to accept the laws of nature. When will this nation be thrown into chaos and civil war? When will the economy succumb to stark realities and painful decisions on inflation related issues?
BOTH ARE HEADED FOR A SHOWDOWN. But when and how deep the discomfort. I am a pessimist at core and have actually been too optimistic on my assessment over the years. Scary situation I am in.
Seems LOGICAL to assume the last day of slide hits 3915 area, another known support zone. I find it peculiar that the current rally is off an assumed earnings recovery with slowing inflation. Now that the dozen or so data points clearly show weakening income, spending half as strong as suggested and inflation spiking once again and yet the market absorbs this reversal as nothing more than a slight headache to earnings picture.
Oh well, I am losing money trying to guess when we breakdown.
Throw in the towel!. Nothing, i men nothing seems to break the controlled slide. it rebounds at all support zones either right below or above it.'3970 was it today. like a magnet. My guess is Monday is the last day of the slide, or possibly today. In order to fulfil my assumption that we will see new lows on this cycle Monday has to CRASH! Highly unlikely given the ease at which this market is manipulated.
3970 to 3570 is a 400 SPX point move. I don't even think we can muster a 100 point move down. How the market resolves this slide as shallow as it is to resume the upside is beyond my imagination.
Looks like we manage to crawl back up? Man this week was BRUTAL on the economic front. Seems not to matter.
ideal setup: 3850 area close Friday. Over the weekend all the goldilocks scenarios shattered and a huge miscalculation on future growth as income not keeping pace with inflation nor is spending. The extremes in labor will force the FED to raise rates and right now 6% is already factored in, according to my calculation. Once the street realizes all their options they should panic over the weekend.
Fibonacci turn date is Monday, an ideal day for such a watershed event. I rolled over my bets for Monday and Tuesday.
IF we close around 3850 by close today i feel comfortable with a watershed event on Monday. A 300 PLUS SPX drop on Monday is my expectations right now. I think we finally see the 3500 area hit. this was the original lows set late October. Under no circumstance do i see a good weekend review of situation. My steep drop has to occur MONDAY or not at all!
Surge in prices while income and spending cut in half of expectations. In other words the worse scenario possible. Imagine rising rates as the consumer is being chocked with inability to keep up with wages. It now doesn't matter what the FED says only what they do. They seem to be behind the curve in taming inflation. A quarter point decision, if data stays this strong, will NOT be met with cheer.
Today we should drop over 100 SPX points nd a set up fro Mondays bigger drop.
SPX needed to close above 4017. End of down cycle no later than Monday. Friday the core PCE index can spike and we should get a yawn. Inflation si now a non-issue as long as everyone sees the Fed Funds rate never hitting 6%. BUT the really important numbers are Income and Spending for January. Both assumed to have SPIKED! It better have. if it is a miss the market will move depending on how much of a miss.
Count on 8:40 on Friday, 10 minutes after the reports to determine how the day will go. Most likely UP or sideways BUT a bad miss here will shake this market to the core.
The last 5 days now suggests that the market is about to absorb rate hikes and inflation as long as it stays below a Fed Fund Rate of 6%. Today seems just another reminder that inflation is real, here to stay and accepted by business and profitable. I guess they see this as th 80's when profits and inflation went up. Watch the difference between then and now where the last 40 years has proven profitable to make risky bets at a low borrowing cost and predictable increase in asset classes.
Only question i have is WHEN will it IMPLODE?
This move, now day 5, has been so orderly and precision targets that an 80 SPX drop from 4010 area should place the lows today at 3930 area. Will there be a day 6? Will we even close lower today? Strange that no one can answer because this move is so unpredictable. No capitulation, only readjustments. ONLY a bigger move than 80 SPX points will change the dynamics.
4020 line in sand! SPX trying to rally here. A failed day should cause a big drop tomorrow. BUT so far the line in sand is holding? The street trying to be convinced that much higher inflation and fed funds will be OK with stronger employment and spending. Good luck with that! It can last a few more months but after the drop will be precipitous.
Frustrating market. Extremely controlled moves and nothing break from the assumed support resistance zones. Time is running out for the BEAR.
I suspect even hot PCE numbers coming up Thursday and Friday would do little to cause this to drop hard. HARD is the ONLY scenario i see. If we are still in a bear market the market should EXPOLDE down to reveal it here. if not than we are in a Bull Cycle for another few months or more.
I can ONLY see a slide to below 3800 in next 2 days to confirm the Bear. Anything less is a correction. But so far the move suggests nothing of the sort.
NO LANDING! scenario, a new concept that wall street adopted to excuse a rising stock market in these conditions. Got to hand it to the ingenuity of wall street. if you want to explain away a bubble do it with flare. Find reasons to accept a bubble as just a small bump in the road that will get smoothed out.
Economic activity pushed positive in services and manufacturing, no surprise. Housing still under water. Warning for the big retailer. Same old. Everyone is convinced we are in a BULL CYCLE not to be denied. Perhaps they are right. Everyone expects only a mild pull back here.
Boring.... Yup no matter how stark the evidence of a calamity in the making we stay calm and bullish. I suspect even a 200 SPX point day drop would not shake anyone's conviction.
BITCOIN has rallied to upper area of expected counter trend. Super majority of investors and analysist are calling this current move firmly in a Bull Cycle. Huge number of long term warnings but that can be for another day, or more likely months away.
I had a two story divide since October. One we should already be in the grips of a Bear long term cycle or we hold off for the first 6 month of this year before witnessing a gut wrenching BEAR Cycle. My deadline for the immediate drop is about over. next week is it.
If we manage to rally or hold firm next week I will expect a big rally till May/June. Never saw this coming.
Strange stuff. Bitcoin has and had multiple bearish candlestick patterns and it rallied. SPX has multiple bullish patterns and it managed to drop slightly. My timeline is once again terrible. We should have closed deep down Friday if we were about to drop hard next week. It is however unlikely we have to wait for the FED to actually reverse and drop the Fed Funds rate for there to be a deep drop.
Next week we get more indication of economic activity and more importantly a drum beat of confirmation that the FED is hiking higher and longer.
With the street oblivious to these announcement it must not care if the Fed Funds hit 6% or not. In the past it spelled immediate problems.
I marvel at the ability to ignore how to connect the next dot. I guess we wait till that dot is connected.
Not holding as well this time around but who knows how we finish. BITCOIN (NOT) breaking down from spike move. Concerning. Still need to see a 100 SPX drop today or i reduce odds of a deep drop next week. The streets complacency should at some point turn to concern and then panic. A break below 4000 should do it. I know I bet a rare almost impossible timing of a crash let along even having one. Today can be categorized as just a normal slip/slide in a new bull market. I am counting on the mass psychology going from same old move to one of curiosity and then realization that we ar still in a BEAR MARKET!
No matter what happens in this market for 2023 the past dozen years was so outrageous, so improbable, so matrix like from the political circus to the world stage on war and destruction to the economic calamities. So frequent and so accepted that anything from here on out would be treated as if we live in an apartment complex assuming all problems will be taken care of by hired hand. We no longer take responsivity for anything and don't even bother to register how problematic the situation is. Like being on deck of the Titanic when a iceberg tore its steel like tissue paper. Indestructible, fun sideshow, lets dance.
the next cycle should exceed all others in recent memory. the janitors quit and no one is willing to replace them. the mailman, garbage collector, train operator, hospital staff, taxi driver, home aide, restaurant workers, grocery clerks all decided to leave their jobs. WHY? Because they decided the work was too hard. The abuse was too much. A wild comparison to what is going to happen but as dramatic. Our lifestyle of complacency and leisure will be over and we are unprepared or even untrained to cope. I live in a coop where I got a call from the president asking me what emergency was going on in the apartment. Seems someone in the building saw fireman entering the building and going to the roof. Not a SINGLE person asked them what they were doing here. NOT ONE! They reported it to the coop member and expected everything to work out without any effort on their part. In many instances where there is clearly a problem or malfunction NO ONE reports it. Too lazy and assumes it will eventually get fixed. THIS IS OUR TIMES! The shock to the system and individuals will be body blow after body blow WHEN this all falls apart.
I am all cheer. Like i stated a long time ago when I presented the dismantling of our political system and assumed economic fallout I stated "I HOPE I AM WRONG!'. Please let it be my pessimistic over active imagination playing tricks on me.
DOW my only index with questions has formed a wedge patter from one month ago. we are just now at the base of that wedge and trying to rally off of it. Complacency at extremes even as the analysis on Bloomberg showed concern. Individual investor is immune to any news simply because they are assured we are in a new Bull market and ONLY rate CUTS will derail this sucker. So far they are RIGHT! No ability to break below any major support zone and every drop is extremely orderly and predictable, as if someone has determined exactly where the next move should go.
If we don't show a breakdown TODAY the setup over weekend is just not there. I still can't understand how October came and went so easily without hitting minimum targets on the downside. For that alone i question my obsession on a crash.
DOW currently trying to push all the other indices up. Only one rallying hoping the troops will follow. For me this is THE day to determine of we can breakdown from here next week.
I have two factors during a slide that i use to determine if it has legs. One is a move from Bitcoin that confirms SPX drop and the other is a person that consistently sees what he wants and it usually is GREEN especially right before a big turn. To this day I can't comprehend how sure a person can be during a tsunami coming from China. You would think as an investor you would alter your strategy when something like a pandemic passed your by.
Re: uplata post# 27531 Thursday, February 16, 2023 10:00:24 AM Post# 27534 of 27542
sideways then down
but things are not as bearish as you would think
shane s fed juice guy says fed is qt again short term
follow lqd repo, jnk bonds to see if money flow leaving
20da ma dead head
pajama traders sold and RTH is buying so far
What I look for going forward. Perhaps i am obsessed with a crash scenario but here is how i see this unfold. Tomorrow is a big day for me. Make or break. I have to see a drop double what we experienced today by the close. Any other scenario puts my crash possibility in deep dodo. It can drop next week but not a crash IMO. I ONLY bet for a big slide since October. For me tomorrow determines if the street is ready for a crash. Need to see weakness thru the day and no mid-day huge bounce to offset late day drop.
I marvel at the ability to change narratives or refuse to connect the dots. In all instances I can only see a bad path dead ahead.
I better stick to this blog because i get too emotional talking to others that dismiss me out of hand. I do realize this is another big lottery guess. I MUST make it yet again as i did in October. The curtain is drawn and some of the FED characters are mentioning they might, just might bring larger rate hikes and longer. I guess after the blockbuster 3 events, JOBS, RETAIL SALES and CPI/PPI reports they had to say something?
Does anyone look back at history to see what happened each time the raise rates to hit the magic number of SIX? Why ask, they didn't look back at a pandemics path so why bother this. Anyone not thinking in terms of large rate hikes and long rate hikes just has to go back to bed.
Maybe, just maybe the street in unison has figure out that this market is SCREWED? No, maybe not yet. I watched this mornings Bloomberg reading of the PPI and the look was a classic ashen face, shaking of the head, not again news. Concerned and questioned basically why this market is still standing. No not literally but he raised legit questions and assumptions that made him think this day was not going to end well. But it did, they all do. As good as can be expected AND maintain a BULLISH stance.
So the market shrugs this off and pretends a Bullish Stance? I am only guessing we waited long enough and see signs that we COULD drop from here. But i saw that in late October as many others did. Will know if there is a chance of a big drop by tomorrow. It has to end badly but not necessarily deep down.
If i am wrong yet again i stop this nonsense trying to GUESS why the street can't see the obvious.
Continuation of WHY I SEE A CRASH DEAD AHEAD!
Bitcoin has been in sync with SPX for a while. The Crypto Trader has been warning for weeks that there is major divergence developing in Bitcoin. In recent day he saw a possible final spike move to around 25K and that should be followed by a huge breakdown, His track record has been spot on! We just got the spike move up yesterday!
Either we truly did bottom and despite all the negative fundamental news we continue to rally than i would obviously be wrong on TIMING!
Too many warnings at a time when the markets were in good standing. the longer this went on and we couldn't break out the more i was convinced a dramatic drop is due.
jxyzobrien Re: haha11 post# 27535
Thursday, February 16, 2023 10:21:29 AM
Post# 27536 of 27541
joked yesterday most devious thing the market could do
gap down hard then rally hard
sectors are not selling
and ticks > 0
I am comforted in knowing, like the onset of the pandemic, this counterintuitive investor ALWAY, I mean 100 percent of the time, calls a BULL Market as an obvious fact and silly to dare to think otherwise. Pandemic? Transitory inflation? You would think that after so many horrendous embarrassing calls at the exact reversals he would keep his EMOTIONAL opinion to himself. 100 year pandemic back? Who cares. 50 year highs in inflation already? Who cares. Surging job market after a year long bout of steep inflation? Who cares. Surging CPI/PPI after told we were in a disinflation? Who cares. January Retail Sales, like the JOB Market, SURGED. Who cares. I can't think beyond what my charts tell me and don't wish to. I love to paddle my row boat without bothering to look where i am going. The river will get me there whether i look or not.
I was asked why next week a crash date. Two reasons. One, the deadline to CONFIRM this is a BULL market after the October lows should not exceed the end of this month establishing all indices breaking above their initial move off the lows. DOW has not. The three Month mark usually established a new set of LOWS if still in a bear market. Hence the urgency. Breakout or breakdown for the DOW before end of month.
The other solid reason is Fundamental. We excused the rally off October with a slowdown in inflation trend thinking it is permanent. We assumed Transitory was back in style. Earnings was a bust. Expectations a bust. Only projection out NINE MONTHS gave the excuse to stay bullish by discounting current P/E ratio. So logic would dictate that this whole market new Bull cycle has to establish lower inflation, solid earnings, no deep recession, no resurgent inflation. AND above all EF HUTTON is now Powell. his word is from the mouth of God. he says Disinflation BUT my bad JOBS is a minor stall. We will have to raise a wee bit longer. Stay calm. Then we get what? SPIKE in Retail Sales two and a half times higher than expected on top of the explosive jobs report? Hmmm. Maybe just maybe Powell had some hidden reason to be so sanguine. But wait what's this CPI/PPI SURGED ALSO! I'll keep my trust in Powell because he is GOD! No? Albright because if i don't trust him i will freak out!
We did close near lows of session, we did drop from 2:30 on. We also stayed very very very controlled. I mean just open the pressure valve a wee bit in last 1 hour and half. Hope it is enough for the street to FORGET Inflation and move on. Fed funds surely is about over despite these nagging problems. minor, so so minor.
I STILL have no clue if MY CRASH scenario is valid. I usually never do the first 2 of 4 day drop. it does have to fall in that period and do so with less and less resistance. That part we shall see.
This market has been like Rumpelstiltskin. Sleep investors sleep.
TODAY determines if we crash mid-week of next. if the PPT can end the day in control we should avert yet another possible crash. Did so in October but now that the economic situation is 10 times worse their job becomes harder and harder till the dam breaks. And it will break. That's the beauty of the PPT holding back a dam break. Eventually it breaks. The FED is right now forced to raise rates more than 50 basis points and likely keep going till the market crashes.
For a market that looks ahead 6 months they sure need to see their eye doctor. Like a pandemic that ALREADY hit our shores.
I marvel at the ability to see a sinking ship as a temporary inconvenience. NOT only did the JOBS Market SPIKE but so did both the CPI and PPI. Retail Sales also went 2.5 times higher than expected. So what does the street do about sticky inflation and disinflation? Rah rah rally!
Times like this I question how we as a human race survived this long. Perhaps it is I that is wrong. Yup that's always a possibility. Perhaps my call about dismantling our political system some 7 years ago was right but came to the wrong conclusion? yup that's possible. Perhaps the SPIKE in inflation and earrings will work out just fine. Yup that's possible. Perhaps the look on the Bloomberg analysts face at 9 AM was priceless as they shook their head trying to stay calm and explain away the reason we should hold up just fine. if we don't end the day at the lows and 100 SPX points lower i will myself shake the head and wait till the street GETS IT!
I will absolutely know if this drop is the real thing if/when we slide with no ability to rally thru the whole day.
I have no doubt the PPT is manipulating this market today. How it ends up will be interesting. if the street wants to ignore reality further they allow them to control the narrative. if they realize they must exit and now the PPT will be overwhelmed and a cascade affect will result. that why i give a 4 day window for a crash final move. There is NO reason to expect in 6 months to profit from owning stocks. i mean ZERO! the stage is set for a major disruption. But no amount of talking by me will change a thing. Let the games begin!
Betting here. Deep drop for 4 day plunge. I find it incredulous that the street clings to Powell's speech on DISINFLATION at a time when it is SPIKING hyperinflation. Kind of outrageous what the street will believe. UGLY if the street finally wakes up. We will know soon enough.
From January 9th - the first announcement of a SARS virus in China till February 20th the stock market was virtually unaffected. From that first day on we knew with certainty how such a virus spreads and what the likelihood it would become a pandemic. WELL before March 20th we also knew with certainty it is going world wide with knows deaths and contagious fast spreading.
I could NOT find ONE ARTICLE on any technical analysis that warned of the crash. NOT ONE! if you observe an asteroid about to hit NYC the implication was obvious. NOT with the pandemic. We not only didn't consider the implication we ignored the actual event 100 years prior. Imagine an asteroid hits NYC 100 years ago and the one about to hit was ignored? Absurd isn't it BUT it happened that way!
I ask ANYONE to enlighten me on the technical prowess that forewarned of such a crash. You see TODAY we have a spike in inflation not seen in 40 years. Disinflation for the last 40 years engrained in everything we do. A full year after numerous hikes Powell give us a speech on disinflation going forward yet the exact opposite is shown with real data points. In fact an accelerated move started January, so much so that we can't even comprehend the implications. JUST LIKE THE PANDEMIC. How can we have a spike in economic activity one year after the Fed hiked to a 40 year high? I am standing here somewhere between January 9th 2020 and March 20th 2020. Maybe this time is different? maybe the INFLATION DATTA in January was a fluke? A mistake?
I can't believe we can repeat the same mistakes over and over. But we are still a primitive animal in the geologic scheme of things. Hopefully we have TIME to grow.
We are in the mother of all BUBBLES! And no one sees it! Astonishing! there is NO WAY we survive another year. The CRYPTO Bubble is resurfacing today attempting to wipe out the past reality of an absurd concept. GREED is alive and well as INFLATION is alive and well.
I am the most excited EVER! Even more than the pandemic. Believe it or not. We are so screwed on so many fronts that if this was an actual war battle the end result would be like the atomic bomb on Japan or Gettysburg. Only question is when do we concede.
Powell's recent speech on disinflation proved once and for all he is a LIAR! he hopes the street ignores the recent spike in inflation after a year where we already spiked. heck if the street can accept a pandemic with bullish implications I know for a fact that all technical readings are garbage. I also know that when the street wakes up from a long sleep they will be carried to a winter ocean and dumped in the water as a wake up call. In other words when the next drop starts it will accelerate quickly into a crash. My best analysis.
Between NOW and end of next week February 24 we will have a full circle understanding of our economic activity. IF they all agree we should see the dollar spike, yields spike and OIL spike. Stocks should be the last to fall hard. It should however fall immediately after. I am simply amazed how we prefer such BS from Powell as opposed to our own eyes. DISINFLATION? really? I love the fact that every bad news since Powell's wonderful Pollyanna view can shrug off initial bad news and end the day with small loses.
I will NEVER understand humans ability to blindly go into a massacre. I must be a rare human that is attuned to bad news and picks it up quickly. TOO quickly.
Just added the Housing Market Index. And drum roll please.... shot up in FEBRAUARY! The last bastion of an immediate recession was HOUSING!
IF that shows a reversal trend back up the FED not only has to raise rates 2 times with a measly 25 basis point move but should EASILY break OVER 6% on Fed Funds rate by then.
I know this dim witted market needs to see actual proof of what happens when a pandemic strikes so i guess they need to witness for themselves the devastation a 6% Fed Funds will cause.
Market taking the news with a yawn but the DOLLAR has no choice but to rise rise and rise again. Yields. well lets just say they are so undervalued that at one point a light bulb will go off and so will the rates go off their charts.
This can take a while to form a cash setup or it could happen soon if the next batch of numbers confirm that January JOBS was no fluke. Gee I think in simple terms. Like why is inflation going to moderate when the consumer is BUYING into it? In a BIG WAY! ALL we need to place the last piece of the puzzle is HOUSING. If that also ignores the rising prices baby we are in for it.
I warned forever that this cycle is a known pattern every 40 years. The perfect storm of pandemic, free money flown by the FED during that time and now a surge in economic activity. Add the 2 year delay with Chinas opening and we got a recipe for DISASTER!
Big question: WHEN? Do we have to wait for the FED to raise to 6%? maybe. I stated in my bipolar report months ago that we can either crash early in year or mid-year. The longer we wait the more dramatic the drop. 1987 here we come!
JANUARY SPIKES AGAIN! Retail sales over DOUBLE what was exacted. So much for disinflation. lets' recap: SURGE in jobs in January after an historically tight labor market and sending OUT OF CONTROL! The market is finally realizing that POWELL just plain lied.
Like a pandemic crossing our shores you don't stop INFLATION with a spurt in economic activity. BITCOIN however loves it. I will wait for BITCOIN to tell me when this sucker is about to blow!
BITCOIN has so many negative technical data points I am amazed it is still standing. I can only hope this will drop first. It doesn't even seem like it can hold up for the rest of the week. Watch all the big bad segments reflecting INFLATION. OIL, Dollar, Yields. This week we get a slew of data points on January economic activity. I expect it will be an eye opener and have all the disinflation camp packing up. PPI might actually be a big number.
A fast steep slide is ripe IF the complacency and assumption we are already in a BULL Market gets shaken up. I would be very surprised anything jars the market much higher this week. in fact the market is likely to slip/slide from here this whole week with a day or so of marginal gains.
We have only a week or more before all hell breaks loose. OR NOT! Been wrong before. Bitcoin holding up for now and the slide in SPX orderly and nothing like a reversal had the street concluded inflation is back. IT IS! Powell as usual uses WORDS to keep the herd in formation. He reiterated DISINFLATION BUT January was anything but. His TRANSITORY lasted months. this time around the street will not be as tolerant or patient.
I even believe the PPI will be a shock. if it is watch out below!
DOW high from first leg up since lows in October was made on 11/29 and has been sideways ever since. Three Month mark is usually the longest any wave needs to capture the last highs.
End of this month is deadline to breakout! I suspect we drop hard before that date.
Not many believe this is even possible.
AS EXPECTED. now that is not great news is it. The Powell disinflation theory seems flawed
the street accepts the news for now BUT any additional pressure on INFLATION would be met with impatience.
I think the news this week will be AS EXPECTED and a relief rally might ensue. No alarm bells by the FED means there is nothing to declare on the inflation front. They are once again leaning towards disinflation. Bitcoin while down is still holding within the support zone. If tomorrow is a dude count on the week after to supply some fireworks. Perhaps i am gun shy in pulling the PUT trigger but I don't expect a major revision to the CPI/PPI this week.
BIAS always determines how you view the world. Perma-bears and perma-bulls have an agenda to prove they are right. it supersedes all other considerations. ONLY a very rare person comes along with no bias and only uses a system with tweaks over a long period of time. That's usually why Pollyanna's capitalize on the Bull moves and Cassandras on the Bear. They lose in opposing camps. There is a decidedly strong statistical analysis that shows most people are optimists and see things in the best light.
I know my faults. I see things develop in a negative fashion way before it actually takes place. I am a pessimist and have radar that tunes into this trait. I also know this year will go down as one of the steepest drops in history. We have just entered the Catch-22 scenario. Without a weak labor market the FED will do what it MUST. The housing market and inverted yield curve has historically been pretty darn good at determining a recession. IF we do get one this historically tight labor market should unravel, the earnings picture, while currently weak should turn decidedly negative. BUT the CATCH-22 is INFLATION. It will either exacerbate or relieve the pain somewhat. I believe in natural cyclical patterns and one is Inflation, a 40 year cycle. I presented the 12 points of concern already.
My ONLY dilemma is when does the street realize this. Like a known pandemic and known financial pattern that was completely ignored for many weeks. Mind boggling but then again we had a president that was the most corrupt incompetent destructive force on this nation to this day and is the front runner for the Republican nominee. No amount of technical prowess, scientific achievements, or learnt mistakes from the past will change this behavior.
Immediate market behavior. Irrational but that has no timeline to correct. Triggers. Only one I see as immediate is the CPI/PPI reports. Everyone agrees. Powell a few weeks ago reiterated the Disinflation argument. Is this PROOF that the CPI come Tuesday is in line or tamer than expected? I have concluded the exact opposite based on Januarys readings so far on manufacturing and jobs. Is there any argument ANYONE is using to determine the Tuesday results?
In conclusion: A decidedly LOWER reading Tuesday will allow for a surge in stock prices. In line would be muddled and higher will start the possible cash scenario. We are at a precarious position. A continued spike rise in prices even if temporary or the start of a long deep drop.
Not convinced we drop hard next week. Bitcoin is hovering at support still. Needed to see a more substantial rally and it is unlikely to occur Monday.
Plus the speech by Powell wouldn't have been made if he thought there was a data point coming out quickly with a spike in inflation. he used the disinflation argument again.
if the market recovered from the recent drop more convincingly and Powell made no mention of disinflation i would bet Monday night convinced we drop hard Tuesday. have no real idea and will probably not be proactive before the news comes out at 8:30 on Tuesday. Worse case scenario is the CPI is inflationary and the one hour before open is deep down and i bet anyway for a crash no later than Friday. It would diminish my return by a lot but that is the bet I would make even at absurd multiple (VIX).
Not going to affect markets with such revisions. In fact the labor market had revised most of the prior months with a higher labor force. Bitcoin is behaving as expected IF we are to see another attempted rally. Seems now SPX is also trying to rally here. TODAY is critical. I need to see a rally with no drama, no capitulation. If I get the rally today and Monday i will most likely bet for a sharp drop next week.
I wonder if it is possible for the CPI and PPI to be stronger than expected. Powell should have already had a clue. he reiterated the disinflation theme as he did with transitory inflation. He loses any credibility if the numbers are inflationary.
I have always looked at past patterns to determine if this time i can see a similar setup. ONLY thing i see is that most corrections happen within 3 months of the lows and they breakdown by then. ONLY the DOW has a 3 month window left at end of this month. Clinging to that last possibility. if that falls thru I have no path to determine end game. The Bitcoin situation has helped in my expectation for a very short term resolution. IF we hold up till Tuesday I will place a bet. Not a strong confidence till the report comes out and the reaction pre-market.
US: December monthly CPI revised to +0.1% from -0.1%
The Crypto Guy is giddy as his chart already shows a breakdown. he ALSO is not sure if Bitcoin (and by extension SPX) will first rebound before finally dropping hard. It should however he short lived. SO, either we drop from here or we regain some positive move between now and the CPI report.
Place your bet or wait till end of Monday session. Thank goodness no reports due out tomorrow that could scare off or rally investors.