Everyone on the planet now watches 3250. That level is the one where we were right before the vaccine news came out.
Over the course of time the level which is said to be „the buying opportunity of a lifetime“ by financial porn media gets lower and lower. In spring 22 it was 4200, then 3900, then 3600, now it is 3250. Next one will be 3000. Below that we enter the free fall zone. At that time I expect real mass capitulation to start, means folks will REALLY start hating stocks, ALL stocks and will start to cancel their monthly ETF savings plans, which they haven‘t done yet.
An interesting footnote:
Folks in Non-USD countries don‘t see the total mess in their stock indeces yet cause they are calculated and published in their local currency. Example DAX: One wonders why it didn‘t fall much further yet, given the energy crisis and so on in Germany. Now go and watch the DaX in USD… it even gets better with the Nikkei: Thst one in Yen almost looks like a bull flag on the monthly and now go and watch in USD…
Now imagine what happens to Nikkei and DAX if the horror upmove in USD would start to reverse even only a little bit. That‘s why I have no doubt that we will see the 8k handle again in DAX within the next 12 months.
WHY DO BONDS TRADE LIKE CRYPTO
Because they occupy (nearly...almost) the same space on the Greater Fool Asset Curve.
(A curve they never taught at University ...but exists is real world economics).
Bonds used to be rather safe assets...but their position on the curve depends entirely on the actions of central banks.
When the CB's print and inflate they move bonds out along the GFAC....towards the position that crypto currently occupies.
The theft of bond value....in the form of inflation is a close substitute to the lack of an income stream that is the characteristic of GFA's such as crypto.
So bonds in an inflationary environment behave as synthetic GFA's.
As they go out along the curve the volatility increases....
Bonds have gone form the Low Debt Low inflation quadrant or "Frame"
To the high debt high Inflation "Frame".
As they have gone from one frame to another they have gone from safe to risky.
It's the frame that determines return and risk of loss.
Thats why determining what frame an asset lies in is crucial to any rational investment decision.
The frame bonds occupy right now is the nasty loss making one.
If you look above on this page, you'll see I edited the post I penned last evening. It was my lead-in to a new chart series for silver and the ^HUI. I have nothing on gold at this time because it would reveal too many of my thoughts...and I'm not going to help anyone that would be short the metal(or the stocks). After I feel this topic I'm about to discuss with fxfox is exhausted...I'll pick that back up. No worries...plenty of time.
I don't believe fxfox realized at the time the importance of the question he was asking...and anyone(and I mean anyone) who asks a sincere question from me...gets a complete answer. I was not attempting to rebuff in my response....just delay... because I wanted to give the question my full consideration.
Although...for the purposes of this illustration...I'd ask that you perhaps take a closer look at the SPX and call it 4750? After a good long glance...I feel you'll agree.
When the market minions were crying that "3900 is the line in the sand", what did I say? 3900 is of no consequence...it's 3750(then 3600) we should be watching AND even I was amazed at how fast it fell. Going back a little further...the low we made in mid June? Even before we rallied...I said 4160 would be the entrance to the band at 4250. Anything above...they will not be able to hold? Well...how many times did they struggle at 4160? I lost count. Did they hold 4250? No.
Now...we're in the battle at 3600. I'll reiterate for those who haven't had the benefit of reading the older posts...that the fall of 3600...I feel is the close to 2008. Once past this area...the likelihood of cruising this ship on down to 3250 is highly likely and as I've already said...3500 closes that argument once and for all.
So. Why 3250? I've mentioned many times I felt the "Back to the Breakout" area at 3250 in the SPX would be a nice parking spot since we're following 'one step behind' the Nasdaq. Seems logical. The Nasdaq has already parked at its respective "Back to the Breakout " area at 11k...has it not?
After the first 1x period is complete...and you obtain the "Back to the Breakout" area...you would then enter into a period of rest and...after a nice long rest period...you would then enter into yet another decline that would match the 1st leg.
I mentioned this 'generic" model based on what I was seeing in the leading issues(NFLX, PYPL as examples).
What we don't know is what is going to transpire at 3250.
I wanted to hold these cards close to my vest, but I think everyone who has an interest should be aware of certain possibilities....
Possibilities? Doc's comment yesterday was spot on. Normally in this situation...once the magnet has been touched and you've completed the bottoming pattern...a rally would ensue. After the rally completes...well. That is where my Greenspan Ramp comment comes into view.
Which leads me to...
The "Twin Peaks" Formation Reference Chart I posted on April 28th.
Take another look? Go on...take a real good look.
It's all there. 4,250, 3,750....3,250.
These are my thoughts...
"From the peak at 4750, you've done nothing more in the SPX than PARTIALLY fulfill the first leg down INTO 3250 from the topping pattern of the 2000 Nasdaq Crash."
The call for patience..
Going forward...I am patiently waiting on 3250. It's at 3250 where I believe we'll get a 'very solid' picture of what this market has in mind going forward. A continuation...to the MAGNET. Or perhaps a "Twin Peaks" variation?
Since you're a fan of monthly charts...I drew this up very quickly. It's a small montage of the current monthly chart in the Dow...and a snippit from "Through the Looking Glass".
I'm going to post this without commentary other than to say the 60 min chart is "mirroring a fractal".
I want to leave you with two questions regarding this 60 minute chart.
1) Does it appear as though the decline made it to the magnet? If it didn't...about where did the decline stop?
2) The fractal is from the past...but could it also be from the future? Really wrestle with this. Give it time.
Well the Fed didn't do anything yet. Not above board anyway. BOE stepped in the doo doo the new PM dumped on their doorstep. So after two weeks, the BOE hitting the buy button ends, and then new issuance starts again I wonder how the Gilt market will fare?
Does anyone but me remember what a Monetary Weekend is? Not that I have a clue what the next monetary reset could be or if it will have a shelf life longer than an hour.
It's "Bonus Friday"!!
I mentioned above I felt like I'd seen properties that looked like pot grower's places... and that they'd make sense now in retrospect?
This place up in Willits, maybe about 2.5 hours north of the Bay Area, is one of those "retrospective" places....
If you look at the first seven pictures of this... 1bd/1ba... ... organic geodesic yurt hybrid (???)... it silently screams, "Professional Stoner." It's the sort of place where a guest wanders in circles because his buddy living there mischievously says, "Where's the bong? Oh... I left it in the corner..." and then giggles himself into hysterics while staring up at the soft, puffy ceiling.
Anyway... photo 20 reveals the tell-tale signs of water-tanks & PVC piping.
"But where is the greenhouse? Or the loops & plastic covering?" Those were the only "tells" I knew of pot farming.
Now that I've come to believe that "Stoned-henge Rounds" are an outdoor propagation variant, it all comes together in photos 24 & 25. This looks like a pot farm that was abandoned before this season, given the growth of non-psychoactive weeds in those rounds.
Meanwhile, if you check out the "Price Activity" in the listing, you'll note that this property listed as first "Active" in... October 2021... which would have been right after last year's harvest.
Interesting comp: ~$300K will currently buy ~160 acres in remote NorCal.
You know what I'm thinking...I'm thinking we oughta give up. Leave the whole outfit...everything behind. Go back to civilization.
I apologize to my fellow goldbugs...
I've decided to EDIT this post in favor of the discussion I just added below.
I'll pick up the discussion on all things gold, silver and the ^HUI as soon as that dialog is complete.
Because I feel the importance of the discussion I've added...cannot wait.
Gentlemen...you've been trodding on riches...for years.
Everything...in its own time.
The Nutty Old Man
Not exactly the farming I'm used to here in the midwest Jimi...but I do appreciate the stories.
As I've mentioned...I'm a fifth generation Nebraskan.
Back in the 1960's....half of our family up and left Nebraska completely. They now reside all over California.
I've flown out there many times. Even temporarily worked for one relative for a six month stint to help him keep his doors open. My relatives(and their friends) have always been very generous(and kind) people.
When I travel out there...it's hard to leave.
I am not a trader, so have little on that topic to contribute, but I am very glad to provide something - anything! - here for others, given the generosity of those here who have enriched my market understanding for years.
Okay, so I realized two things. First, last night I was wondering why I was encountering these listings all of sudden. And then it struck me and I felt very stupid for having been so slow: "Of course - it's harvest season! Right now!"
These properties are "all of a sudden" being listed because their associated final harvest has been secured and it is time to move on.
For today's episode, I move southeast of the Bay Area in the region affectionately known as, "the Road to Kirkwood."
Kirkwood is a ski resort - I believe the highest in local elevation, and therefore with some of the region's most reliable snow - frequented by Bay Arians of a certain stripe. It is not among the ritzy "Tahoe resorts" per se, because it isn't, in fact, on the lake; nor does one have to drive over the infamous Donner Pass to reach it. Kirkwood possesses precious little in the way of "après ski" but it has some exceptionally challenging runs: once on a lift there, a ski patrol dude told me that it is the preferred resort for all the seasonal workers looking to ski on their day off. It is a relatively unassuming but large & varied resort, and it is where the wife & I have primarily taken our beloved spawn to learn to ski.
Accordingly, I have kept an eye out for properties "on the Road to Kirkwood" that would serve the role of ski cabin, although now more out of curiosity than intention, since we will be empty nesters in due time, and the period for "amortizing" such a purchase with weekend ski trips with our sons has passed.
Anyway, here is a listing from yesterday, on one of the Roads to Kirkwood:
This one struck me, because of three things. First, the description indicates, "private property with rolling southern facing hills": that suggests "growers." Second, the description also indicates, "the last tenant left the a mess": setting aside the grammatical misuse there of duplicative articles, I once had occasion as a young, broke man to rent a home from someone who had grown pot previously in it (only learned this after the fact... interesting story, but I digress). They, too, had left a mess.
Hmm... stoners are messy.
Third, photo 8 shows the usual telltale signs: a large plastic structure for holding well water and what looks like the remnants of a white plastic cover. Suggestive but not determinative. Then, photo 11 shows haphazard PVC piping... which is very suggestive.
Then, there are photos 13 & 14.
WTF are those? It looks like some sort of agrarian Stonehenge tribute laid out in a forest clearing. Maybe the messy renters were practicing Druids? And they mounted these round structures for religious purposes? Maybe Druids are simply messy because... it's part of their forest-clearing agrarian Stonehenge rituals?
So, I did some googling, and what do you know!? I don't think they were Druids! The photo below from here suggests the messy renters were very likely growers probably using a variant of a raised-soil trellis system in the forest clearing, where available soil was suboptimal.
I never knew about this burlap-rounds growing approach until I looked at this listing on the Road to Kirkwood. Pretty interesting! I'm persuaded it was a pot farm.
This revelation makes me realize that a handful of properties I've reviewed in recent weeks and thought, "Hmmm.... that looks like a pot grower's place, but the grow-area doesn't make any sense to me," will probably make sense now in retrospect now that I understand that this is a distinctive trend....
That's not a bad practice...
The monthly chart will never lie to you.
I've come up with a million scenarios in my head when looking at the daily...then I go to the weekly and those scenarios I've dreamt up in my mind start to fall apart. The monthly....usually drives it all home.
The monthly chart is like a good instructor looking over your shoulder.
The Aug candle in AAPL is now confirmed as we close Sep.
In this respect...what's true in the daily is true in the monthly.
"I will judge what I see this month, by the next month to follow..."
Although...that decline from the August 14 candle peak in the weekly?
Well...it's beautiful...but you might want to watch for support points from 130 to 140.
You have me on these movie quotes. I avoid modern movies. I have an archive of movies from 1928 to 1952 that is so large, well...trust me...the collection is extensive by any measure and I prefer to just watch the old stuff.
Although, Tom(Tom is my right hand man) got me a DVD of some Pi movie over a decade ago. Said the guy in it reminded him of me...that is until I watched the thing. The guy was a hot mess. I walked away wanting to either fire him or take a good long look in the mirror. I still haven't decided...
No more financial movies...they scare me.
My favorite movie is uh...let me see. I'd probably pick a Tyrone Powers movie for a top pick. Uh...While I loved 'Razor's Edge' because I'm also a fan of Gene Tierney(She's absolutely scary in "Leave Her to Heaven" and Clifton Webb IS an all time favorite of mine.), and I believe 'This Above All' was superb because of the ever beautiful Joan Fontaine...I'd have to go with...Nightmare Alley and Nightmare Alley would just barely edge out Laura. If my hand was forced...I'd have to say this is my top 5.
1) Nightmare Alley and/or Laura
2) The Razor's Edge
3) The Red Shoes and/or This Above All
4) To Have and Have Not and/or Key Largo
5) Algiers and/or Casablanca.
Why do I put Algiers on the same level as Casablanca? Because of its simplicity.
I also apologize...I probably should have called this a top 10, but...the titles I list and/or....for me are just too close to call and any list without African Queen...or since I'm a goldbug at heart...no mention of "Treasures of the Sierra Madre" really isn't complete. Maybe...I'll sit and think about it for awhile and come up with a top 10 instead.
I'd imagine most of these are probably free on youtube.
Nightmare Alley is a must watch in my opinion.
I always watch the monthly first. There you can really see things, even on the daily sometimes you forget where you really are.
Regarding those 5 tech stocks:
When we say that Tesla is tech than that is by a landslide the absolute numero uno.
I have a list of the top five tech companies I wish "would. just. go. away". You've nailed the top two with NVDA and AAPL. Never liked either of them. I'll give you one more....MSFT. The other two? Well...I may or may not have a financial interest. Smile.
My overall opinion of the top 5 entails nothing more than a dislike in the way they treat their customers.
My old friend(and neighbor) picked up a slug of AAPL(very late in the game), I preferred the old mantra...
"I don't invest in companies that I don't understand".
It was working for him...shareholders have been attempting to pressure him WHILE HE WAS RAISING CASH FOR A REASON!
I watch his issue...with great interest.
250K is my call.
I wanted to mention something. I've noticed several times you've referred to the "weeklies" or the "monthlies" chart. I wish more traders would give the longer term charts higher precedence...I do nothing "in a big way" until the daily, the weekly, and the monthly are all in agreement.
It's refreshing to see you mention these things....
Amazing dot bomb will fall to its monthly EMA 200 at 63, then go up to 100, built a giant H&S (good to see on the monthly) and then begins its death march to the single digits, meanders there FOR YEARS and then dies.
The SOX will get absolutely destroyed. As predicted a few months ago „we will see overcapacity in Semis wirhin tve next 6 to 12 months“, but I thought it would take a little bit longer, till q1 23 or so. That we already see it now is a catastrophe. I think one could even short it now and would get rewarded. That thing will go to 1200.