Author: Mark St.Cyr

Mark is a globally recognized expert in entrepreneurship, motivation, business, sales and financial markets. He writes from a first hand perspective. His insights can be both cutting edge, or just a cutting through the clutter. Either way they come from first hand knowledge, and experience that is classic Mark. Visit www.MarkStCyr.com "Pragmatic Insights For Today's Business World™"

From Joshua To Jerome: The Facade Crumbles With The Final Horn Blow

For those not familiar the Joshua reference relates to the Battle of Jericho story contained in the old testament, where the city walls crumbled after Joshua’s army marched around the city seven times blowing their horns. It was the final blast which brought the walls crumbling down. Jerome Powell may find himself in a similar situation.

However, the interpretation of victory may depend on which side of the street from the Eccles Building one stands, for it is going to be hard to tell precisely who wins or loses should the facade of these so-called “markets” crumble in full view.

Let us not forget one very important overarching premise that has been canonized and prophesied via the mainstream business/financial media, Ivy League Ph.D’s, next-in-rotation fund manager cabal, et al.:

The central bankers of the world are today’s financial demigods with the Federal Reserve playing the position of pontiff and Holy See. Period, full stop.

I have said this and other similar statements before and I believe they bear repeating as to show just where we are today, for when it comes to days-of-yore type references – they’re more relevant than many would like to admit, let alone believe. Here’s another. To wit:

Not since the time of kings has so much power been entrusted to such a small cabal of non-elected individuals.

And wield that power as they see fit – regardless of the consequences – they have. i.e., just ask any saver about Fed. policy effects for clues.

However, 2018 has been shaping up to be a year where there have been some extraordinary changes in not just the imagined robustness of the facade we now reference as “markets.” But also in both the efficacy and strength of the one and only facade that has mattered to the faithful: The Federal Reserve itself.

To imply that this once impenetrable facade is looking rather shaky, I believe, would be an understatement. Hence my allusion earlier to where the final victory may lie, and with whom, is an open ended question.

Since the beginning of the year it has been none other than the retired Chair herself e.g., Janet Yellen that has contorted her reasoning from seeing no new financial crisis in “our lifetimes” to now seeing financial boogeymen everywhere (or maybe that should be singular?).

Just this past October Ms. Yellen expressed her concerns over rising deficits as unsustainable. Well ain’t that a bit quaint coming from someone who oversaw the complete adulteration and perversion of the capital markets by magically printing $4Trillion and amassing a balance sheet that was never intended to to be used or accumulated in any such fashion. 

I was left utterly slack-jawed when I heard Ms. Yellen use the line “If I had a magic wand, I would raise taxes and cut retirement spending.” One has to wonder is she’s that tone deaf, experiencing memory loss, or a combination of the two with a little bit of “I’m retired and can say whatever I want now” combination of all the above? 

The “magical” aspect of all of this is whether or not the “magical thinking” of central banking intervention in all its forms that brought us such mythical delights as Unicorns, IPO’s that make Bernie Madoff question why he’s in jail and more have been worth the price. For it’s also brought us  other such delights as, but not limited to, for there’s not enough digital ink to list them all:

Business models that not only don’t work, they can’t work – ever. Crony-capitalism so rampant that it makes many a communist country envious. Student loan debt that enables economics/business Ivy League professors to teach subjects that not only don’t work, but require their students to remain dumber than a box-of-hammers as to ensure they keep taking out ever-the-more and in ever-growing amounts to pay for these very same professors salary and retirement.

And if that isn’t bad enough, all while they lavishly acquire awards that are meaningless (e.g., Nobel®) and are jet-set’d and invited to speak at more junket styled conferences around the globe that would make a pop star envious. And I haven’t even touched on the regulatory capture either into this same industry, or the industry that is suppose to be in the business of “regulation police.” e.g. SEC.

Is it any wonder the term “magic” came so freely to Ms. Yellen? After-all, for years her and her predecessors wielded the most powerful of all “magic” wands known to man, its name was: QE (quantitive easing.) 

The issue here is Ms. Yellen broke that magic wand on her way out of the Hogwarts of central banking known as The Eccles Building. Where Mr. Powell has been left to both deal with the repercussions she laid out prior as the “horns blow” to ever the more increases and balance sheet tightening.

He was appointed as her successor to carry on and hold up the fort. He may find out buried deep within his job description a fine print clause was added where he was also appointed to be the subsequent bag-holder. But I don’t think it’ll be just his to hold as these remaining chapters are being written.

The Fed, so far, has done six of the most consequential monetary policy moves with the seventh now about to be trumpeted. For those keeping track, here’s how I count these six:

  • Three interest rate hikes.
  • Three times the balance sheet reduction question could not be denied

In regards to the balance sheet, first: it was actually verified (or the markets first concrete view) in February. Then for the second: the incremental rate and process was allowed to progress throughout the year. Then for the third: in Oct. hyper-speed into $50Billion monthly was implemented with no dissension rather, there was unanimity of support via even the most assumed “dovish” of members

And here we stand with the seventh “horn blast” about to be trumpeted with what everyone is expecting to be another .25 interest rate increase. The question this time is, not will they do it or not, but rather…

What exactly happens if this final vibration of the year is seen as that which brings the entire facade of these “markets” crumbling down?

Is it the markets’ walls that are crumbled never to be rebuilt? Or…

Is it the once unquestioned insurmountable fortress walls of the Federal Reserve and its policy edicts that are turned into rubble?

The problem for both is this: Once the faith of the faithful is lost – so too is the power of any magic that once enamored them.

© 2018 Mark St.Cyr

2018: The Year the Cult-Of-Celebrity CEO Died

If there has been one major change when it comes to the C-Suite, it is this: The days of being a flamboyant, globe hopping, cause célèbre espousing, holier-than-thou, Wall Street minted CEO is dead. Period, full stop.

And it couldn’t come quick enough.

Over the past decade there has been a shift in perspective of what a CEO both does and means to a company. But also, what a CEO should and shouldn’t do when it comes to their position and title. To say the lines have been blurred for what used to be prudent business decorum is a gross understatement.

In regards to CEO and understatement, to not include the entire C-Suite, Boards and more would be just as much of a trivialization. For it appears that getting into the upper levels for publicly traded companies has something more akin to becoming what was once called “the rock star life” more than being an actual rock star. i.e., why dream of being a rock star when rock stars now dream of being CEOs? 

This phenom coincidentally seems to have reached its zenith at around the same time the Federal Reserve concluded its “rock star fueling” artist development program known as QE (quantitative easing.)

Funny how that happens, no?

To stay with the musical analogy, there’s none more illustrative than the complete and utter collapse of facade for two of the stage’s once fervently held and unassailable members of the C-Suite pop act known as Facebook™. e.g., Mark Zuckerberg and Sheryl Sandberg.

As of late every-time Mark has had to appear in some setting that demands he may have to speak extemporaneously, he appears more staged and animatronic than an actual robot.

In his most recent performance at an E.U. grilling it appeared at the very end (time stamp starts at about 1:30:00) as if not only his sync track file was corrupted, but also his mechanisms for movement.

It is absolutely painful to watch, for it shows just how scripted before hand he is. His mannerism in those last two minutes tells one all they need to know. i.e., there’s no there there.

When it comes to Ms. “Lean In?” Let’s just say she’s leaned out when it comes to demands for any follow-up stage performances. i.e., I think A Flock of Seagulls may be more in-demand and command better ticket pricing. But that’s just me.

The once ubiquitous 21st century golden-girl model for C-Suite activism appears that not only has her once iridescent shine dimmed, but it’s dimmed so much that people she once clamored to be around, such as Former First Lady Michelle Obama, now cavalierly disses her once one-hit-wonder pop hit “lean in” with critique such as:

“…it’s not always enough to lean in, because that sh*t doesn’t work all the time.”

Can you say “Ouch!?”

You have others falling from grace such as Carlos Ghosn of Renault-Nissan™ now accused of improperly using corporate funds to fund a lavish lifestyle. Lloyd Blankfein former CEO now Chairman of Goldman Sachs™ the once ubiquitous face of Wall Street across any-and-all mainstream business/financial outlets appears to be on more milk cartons than any media outlet of late.

I wonder how long before the title of “Chairman” also includes “former” as the 1MDB debacle shines more of a spotlight than what he sought at conferences and television studios. Hint: see Jon Corzine for clues.

Remember Jeff Immelt? You remember the CEO extraordinaire that was going to guide the U.S. back from the abyss with “shovel ready jobs” as he headed that task force for the prior administration, don’t you?.

Oh right, there was a problem with all that. “The problem,” you ask? 

A complete waste of time and tax payers dollars that turned him into a caricature of what a CEO should represent. Much like he did with G.E.™. i.e.,  Mr. “Wait, what do you mean there was a second plane always following me like the president, for years? Is that what that thing was? I thought it was just a big bird that maybe fell in love! Wow, who signed off on that!?” Immelt.

How about “Ol’ Uncle Warren?” Have you noticed he’s no longer appearing in as many sit-downs with the salivating media as of late? Funny how that timing thing works when he may be losing as much money as his once unassailable credibility of “investing prowess” and/or recommendations now that the Fed has opened the drain of QT (quantitate tightening) i.e., you don’t have to be swimming to watch investment advice/dollars circle down a whirlpool.

There are others, Jeff Bezos has now suddenly found himself routinely ensconced as the new “whipping boy” when it comes to CEO’s with presumed wealth and power.

However, as that wealth gets hit with that same “whipping stick” aka QT, so goes the once Teflon® coating of can’t do no wrong for Amazon™. Hint: if share prices continue to fall, look for calls of “unlocking shareholder value” (e.g., break it up) to be said more often than a holiday-sale commercial.

Then, of course, there’s Tim Cook of Apple™. Suddenly he’s very concerned about government not regulating tech. i.e., Privacy.

I believe it’s a valid and arguable stance. However, at the same time he’s taking to stages and proclaiming that it is his duty, along with others of his ilk, to decide that it is they that will decide what is and is not hate speech.

Again, all while he cheerleads using Apple’s corporate persona, heft and coffers to openly solicit money via iTunes® to provide resources he will arbitrarily cut off to others to help fund an entity that many see themselves as an operation for spilling “hate.” e.g., Southern Poverty Law Center™.

This latest hypocritical, tone-deaf aberration of how and what are the duties of a CEO are now legend via his latest declarations. i.e., He declares one thing yet appears completely oblivious to his own actions. Here’s just one:

When it comes to “hate.” He himself has created more conflicts to this subject starting with the possible hostile work place environment situation for a hypothetical 50% of Apple’s workforce. And that’s not hyperbloe, let me explain…

If you are openly calling for donations for a cause you as CEO has declared is now the call-of-the-times via employees and more – and some decide not to, for any reason. You instill possible situations for peer pressure, or worse, retaliatory measures via co-workers and/or management that may hinder job performance or advancement. Not to mention 50% of your customer base.

To make clear: When you implement anything political 50% is the hypothetical starting point. Which is why politics doesn’t belong in business. Again, period. See Nike™ for further clues.

I would look for Mr. Cook’s award roster and speaking engagements to follow Apple’s share price. i.e., lower, possibly much. For as Apple-the-stock goes? So too does Mr. Cook’s value as CEO let alone “Celebrity CEO Cause Célèbre Speaker.”

Then of course there’s non other than Elon Musk. All I have to say is this:

Once investors stop trying to embrace and follow (I mean that literally!) the publicly weed smoking Musk with his music, wine, and pill popping recommendations of coice. Tesla® may be in for a far rougher road than any suspension innovations may be digitally adjusted for. The reasoning is simple:

The hangover will be legend.

Just ask an aged rock star. That is, if you can still find one.

© 2018 Mark St.Cyr

I Would Be Remiss Not To Point This Out

As I’m typing this I have watched the usual players across much of the business/financial media salivating to explain this sudden surge that took place in the “markets” from the lows created in the overnight session to basically end the day almost as if it never took place. I would caution you to remember one very crucial fact: They never expected such a thing even possible to begin with.

Again, what I’m hearing and reading goes something along these lines:

See, this market wants to go up! Once the market digested the news that the arrest (e.g., the daughter of a high ranking Chinese CEO arrested in Canada to face extradition to the U.S.) was possibly not that consequential to the trade deal and buyers stepped in and blah, blah, blah.

Maybe it is, maybe it isn’t. But here’s what I believe is far closer to an explanation:

The initial reaction had more to do with a confluence of other things. The arrest was just a triggering for the move to start, not the entire cause. And the subsequent buying may not be for the reasons being touted.

But here’s what I do know. And it is a very poignant observation with implications that may end up being the start of something far worse than the so-called “smart crowd” even realize.

Here’s what I’m currently focused on and I feel it is demanding attention to be paid. To wit:

(Source)

From a technical perspective this latest move, a move that is near identical in its formation across a myriad of other markets, is a near text book example of what one would use to show how an initial move down that occurred with size and speed then followed with a subsequent fast rebound can fake out most analysts. The reason is simple:

They (much like you’re hearing right now across the media) think the rebound means something it did not. i.e., people want to buy. Hint – it usually is for other reasons entirely and it provides the perfect opportunity for those initial sellers to sell even more dragging in additional sellers while simultaneously making all those that thought “This is it! BTFD!!” wrong and turn them into panicking sellers.

This is where things can feed upon themselves creating a “doom loop.” That’s why this needs to be pointed out, for that’s precisely where we might now be teetering. And the reasoning is manifold.

As I iterated above, this pattern or, market move is nearly identical across all sectors. What that implies is that everything is in lockstep. And if that is the case? Everything is in peril. Or said differently: A wave of selling in the broad indices could turn into a tsunami of panic selling across entire sectors and global markets. Not hyperbole.

If you look at the above chart you don’t need to be a technician to understand what I notated. All you need to do is watch for the “markets” to suddenly reverse and start heading lower, once again, and just how low they go. For that’s the key. Below 2620 with follow through is the trip-wire-zone for lack of a better descriptor.

Again, what that oval on the chart represents is what is known as an area that via certain technical formulas would satisfy a technical view that a reversal has high odds for it to develop and would be in order should they do just that.

The reason why this is important to watch is because you may not understand the technical terms, math or such – but that’s what the machines use. And if the machines think they’re important, need I say more?

To be clear: I’m not saying this will happen, I’m saying that the odds of such a thing are very high in nature, along with if they come to fruition the resulting gyrations could be of a force no one is prepared for, let alone, considering.

As always, we shall see. But one things for sure…

We are going to know very, very, very (did I say very?) soon.

© 2018 Mark St.Cyr

A “Not To Scare The Children, But” Update

As is usually the case I have been bombarded with questions from friends and colleagues about my thoughts on the current gyrations in the “markets.” This is in direct contrast to the flip-side of my usual, as in: when the “markets” are vaulting higher and my phone doesn’t ring – I know it’s them.

So with that said, I felt it was appropriate to update what I said way back in February. Here’s a bit starting with the chart I used, again, back in February. To wit:

Will it play out this way? Hint: No one knows. However, with that said here’s the underlying premise coupled with a probable conclusion.

As you look at the above chart remember this…

Everyone, especially the so-called smartest of the smart paraded on media argued the above “cliff dive” was all but assured to not be in the cards. And there it is, and now sits in the #1 position of history as the most points lost – ever – in a single day, coupled with, these same people said that based on what they perceived as “all baked in” any and all QT (quantitative tightening) worries, i.e., “The market knows, it’s prepared, the economy is strong, not an issue, blah, blah, blah.” Or, my now personal favorite, “If you’re holding cash, you’re going to feel pretty stupid” That came from none other than Ray Dalio as he appeared with the fawning mainstream business/financial media press at Davos. Or said differently: If you’re not all in on stocks, you’re stupid.

Then the above happened, and now, it appears he’s changed his mind.

Funny how that happens as soon as The Fed. went from lip service of reducing the balance sheet, to full implementation as Janet walks out the door, is it not?

Then again, what do I know. Just ask the “experts.”

“So where are we today and how much have my first inclinations changed with the most recent action,” you may ask? Good question, for that’s what the most repeated theme of questions asked were like. Here’s the short answer of which I repeated many times:

“Why would I think or change anything? Were you not listening when you asked me last time? Are the ‘markets’ not doing the exact things like I said they might?”

Now some may take a bit of offense in the above thinking “Oh, that’s so rude!” However, I make statements like this not because I think I’m some form of market genius or holier-than-thou aficionado. I usually respond like this to others (to clarify: others I know well and that also know me as well) because, what happens more often than not is that they seek others’ insights not for insight per se. But rather, to help themselves bolster an already formed conclusion they want desperately to be correct. i.e., Some want the world to full of lollipops and rainbows therefore, they’ll only ask people whose viewpoint is lollipop and rainbow centric. Even though the world is anything but.

So here’s an updated view using a “picture” as they say in Silicon Valley. And as I used in the prior title: “I don’t want to scare the children, but…” Again, to wit:

(Source)

As one can see the only thing that has changed is that I’ve now simplified it.

Remember, this inclination for where we may be heading was made way back in mid February. Also, this viewpoint was derided across the entire mainstream business/financial media with proclamations that anything that could derail this “market” was already “known and baked in.” (See Ray Dalio quote above for clues.)

The issue now to be resolved is this:

Exactly’s whose “known and baked in” inclination will prevail?

Theirs? i.e. All the paraded and glorified next-in-rotation fund-manager cabal and their so-called brethren of “smart crowd” aficionados.

Or, mine?

As always, we shall see.

© 2018 Mark St.Cyr

F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…get this)

Remember all the hoopla made across the mainstream business/finacial media just a few days ago? For those that don’t here’s just a couple. To wit:

When it came to the Fed. and its Chair during his speech:

“Powell sees the global slowdown and knows that it could hurt us,” Cramer said in a tweet storm as the prepared remarks from the Fed chief were being debated on CNBC’s “Fast Money Halftime Report”by host Scott Wapner and a panel of traders.

“Powell is concerned and knows when he does one he has to wait — very big change in view,” Cramer said. Powell “took himself off the table as a reason for a longer” market meltdown, Cramer added.

When it came to the “truce” at the G-20 as of yesterday evening:

“If you want to understand what’s working in this market, you need to think like a Chinese bureaucrat — not like a portfolio manager — a Chinese bureaucrat who’s trying to make President Trump happy,” Cramer said Monday on “Mad Money.”

From my article Sunday: “When The Wrong Conclusions Can Spell Disastrous Resolutions”

It is here where the true problem now arrises:

Did they blink? Or, just wink?

The resulting “market” reaction as displayed on Thursday and Friday seems to show it was nothing more that a “wink” as to maybe allow some form of front-running narrative to take hold of and help prop the markets up from a bad month-end scenario while also helping the mood going into the G-20. 

From My Article Saturday: “So The Question Is…”

And that question appears to be answered as I’m currently typing this, again to wit:

(Source)

And for those wondering, the answer is yes. As of this writing nearly all of the so-called “off to the races” surge via the “blinked” as well as G-20 calls has been wiped out. 

It’s quite possible all of it (if not more) may be gone before day’s end.

But what do I know.

© 2018 Mark St.Cyr

When The Wrong Conclusions Can Spell Disastrous Resolutions

If one perused the mainstream business/financial media sources for headlines on the concluding G-20 summit looking for details, one thing is pretty hard to miss: there really aren’t many.

All you’ll find is something akin to “a cease fire” followed with some rumination about how both sides (U.S./China) seemed to work out some form of detente on continued open-ended political issues.

As far as trade? Well, it seems we are still in the exact same space we were before the meeting. In other words: nothing’s really changed.

As a matter of fact, if one wants to throw up an analogy of precisely where we are using one of the supposed agreements such as China’s assertion of a U.S. respecting of its claim on Taiwan. e.g., One-China Policy. It would seem a fitting description for what is taking place would be “round one” has concluded in a scheduled 10 round match. i.e. both have only gone to their respective corners to await the next “bell.”

Or said differently: they both still want a piece of each-other – literally. 

This so-called “truce” on tariffs seems to look an awful lot like what we see (and will continue to see) when a U.S. warship navigates its way through what both sides differ on for interpretation as “international waters” via the Taiwan Strait. i.e., full of fraught and danger where the slightest miscalculation or unintended misstep that has even the slightest intonation of something akin to a “bell” could have immediate global consequences.

One of the curious aspects of this so-called “truce” is just how little proclamations of something along the lines of “A great deal!” we’re hearing. Actually, the silence is deafening, which should be screaming warnings to anyone trying to pay attention. For if there was really something to celebrate, even if it was only superficial in nature. Is there any doubt the U.S. administration would be hell-bent on declaring it?

Yes, there are some reports that the President has said a few things aboard AF-One after, but again, there has been very little other than that.

Same goes for China. Yes, a few statements, but very little substance.

What has also caught my attention is that it appeared as if there was some self-imposed moratorium on what would be said, until it was learned what China would report first.

Again, China’s first reporting was rather sparse on details and even more so on outlook. The U.S. seemed even more so with no incessant “Great, greatest, greatest ever…” being the clues for such a conclusion.

This G-20 dinner had all the appearances of some pre-divorce party where everyone’s happy to finally get the chance to openly air their dirty laundry face-to-face. But instead of receiving a check for the dinner bill they’re handed a statement for initial claims or pay-outs that will now be needed to finalize it all. See the movie “War of the Roses” for possible further insight.

Then we have the conclusions of “The Fed. blinked!” when it comes to the recent market surge that took place before the weekend.

When it comes to this conclusion, as I iterated prior, just because pundits were trampling over their own mothers as to get to any keyboard, microphone or camera to pontificate precisely the Fed’s meaning and intent via the Chair’s latest speech doesn’t mean they’re conclusions are correct. Maybe, they too are misplaced.

I am fully aware of the analysis that’s been touted when it comes to “this phrase vs that phrase” type argument. And yes, I agree many of them have merit.

However, with that said, here’s why my reasoning when it comes to whether they “blinked” or not. I still remain firmly in the “did not” camp.

If one remembers (or cares to might be a better question) back in January the “markets” supposedly knew everything they needed to know about Fed. interest rate intention and had priced it in.

Then we had an outgoing and new incoming Chair resolution happen in February. Again, everything about all of it was supposedly known and “priced in.”

That is, everything except what I’ve stated is the only thing that mattered: The reduction of the Balance Sheet.

The reason why I’m making this assertion, and why it matters more than anything else is that, when the “markets” could no longer guess or infer that that Fed. may not be as committed to it as they stated they were. And had actual proof that it was happening the result was what we now call the “February Scare.”

My conjecture, of course, but let me add a bit more to help bolster my case.

I have been consistent in my contention that the reason for the out-of-the-blue market reaction that happened in February was in direct correlation to the “market” getting its first true confirmation that indeed QT (quantitative tightening) had begun.

This was a “wait till you see the white’s of their eyes” moment, or set up for the “markets.” After all – they (Fed.) hemmed-and-hawed for years but never really pulled the trigger. (hint: remember “reinvestment?”) So why alter one’s strategy until confirmation. February did just that.

If one looks at any chart of the “markets” from that point on it’s clear to see the market mood remained lackluster as the new Chair reiterated for months that the “unwind” was on schedule and being followed as was laid out.

Then in-and-around late spring there were noticeable reports emerging (such as this one) that the Fed. may actually be changing its mind on its QT schedule.

Then, just like magic, the markets were, once again, off-to-the-races.

That is until everything that was supposedly “baked in” via fantasy-land type rationales i.e., interest rate hikes are good, trade wars are good, tariffs are good, et cetera, et cetera, met the cold reality that the Fed. seemed undaunted in allowing the unwind process to go into hyper-drive at a now $50Billion per month for the foreseeable future.

And yes, stuff like “hikes, trade war, and tariffs” were actually given as “nothing to fear” rationale across many business/financial media broadcast set. All with straight-faces. For as was always the go-to touchstone of their brilliance: “Just look at these markets!” was all the proof that was needed.

That is – until October. Now it seems all that “nothing to fear” suddenly became “all hope is lost!” That is – unless the Fed. blinks.

It is here where the true problem now arrises:

Did they blink? Or, just wink?

The resulting “market” reaction as displayed on Thursday and Friday seems to show it was nothing more that a “wink” as to maybe allow some form of front-running narrative to take hold of and help prop the markets up from a bad month-end scenario while also helping the mood going into the G-20. 

Did the Fed. (as in Mr. Powell’s latest speech) do this intentionally to placate the markets or, was this just a hopeful front-running fueled pursuit put on by Wall Street using the old “a dove flapped its wings – which means buy everything!” narrative to get shorts to cover and close out from red to green?

Count me firmly in the Wall Street shenanigans camp, rather than anything substantive out of the Mr. Powell.

With such a muted response for follow through on Friday after Thursday’s so-called “all clear!” given by many across the media, along with such a restrained response via an administration that is one of the most ardent self-promoters for arguing “winning!” at the-drop-of-a-hat. And even that is not a requisite. I’m concluding that the preponderance of evidence still requires the caution levels to be set at 11.

If we suddenly rocket up from here into year end so be it. However, just some sudden pop back to about 2800 is far short of anything I would describe as “all clear.” All that would represent is a getting back to the top end of what I call the “manic – depressive zone.” i.e., between 2600 and 2800 respectively.

The issue now is that if the markets can only get back to that area (i.e., 2800) and proceed no further. Once again the focus will revert back to all the “unresolved” issues and we may deflate back, once again, sinking towards the lower end (i.e. 2600). Then of course the question , once again, arises:

Does it hold, once again? For December is also known for something else…

It’s the month where winter officially begins.

© 2018 Mark St.Cyr


So The Question is…

Almost as soon as the “markets” closed I received an inquiry from a colleague asking me my thoughts and if they changed from my previous thoughts now that the “markets” resolved higher.

My answer was: “Absolutely not, as a matter of fact, I’m even more committed to my stance than previous.” Here’s why:

The “markets” closed basically well within a hare’s breath of the level I pointed out the other day. e.g., 2750 (actual my charts says 2759.99)

What did not happen, as I said should be what happens if the “all clear” signal from the Fed. was to be taken as every pundit across the media is convinced. i.e., “The Fed. blinked!” We didn’t rocket any higher making up any further prior lost ground.

All we did was basically vacillate all day with a few minor moves back-and-forth till the end of the trading day when everything month-end needs to be settled. Again, the “market” action was nothing more than what one would expect in any normal month-end close. i.e., nothing extraordinary or out of the usual.

As I stated both on my show, as well as in writings, we are still in what I call the “manic- depressive zone” of a market. And in fact we are only 75% back from the depressive side (2600) to the manic side (2800.) Again, that’s it.

What is the event to determine what comes next is on deck called the G-20. Should this meeting do anything other than be resolved in some sort of positive manner the area that I indicated that will be the first tell that we may be heading lower is still valid. We’ll see on Monday.

Here’s an updated and simplified version of the same chart I’ve been showing for the past few days. To wit:

(Source)

We should know by Monday morning if this first signal is still valid, may be even by Sunday evening U.S. time as Asia opens.

Here’s what I still believe…

We are either going higher in a manner that would make a Saturn V rocket envious. Or – we’re going lower in a fashion that would make a professional cliff diver think twice. Which way is still up for grabs, but what is almost as sure of bet that one can make it this:

We ain’t staying here.

© 2018 Mark St.Cyr

A ‘Where Are We Now’ Update

As I stated prior the reason why I’ve been updating my observances of the “markets” is because I believe we are quite possibly on the precipice of what could turn into a very extreme situation, not only rivaling anything we’ve seen this year, but since the original ’08 crisis. 

So with that said here are two charts I showed the other day and what and why I was watching. To wit:

Now here’s an amalgamation of those same two as of Thursday night after the markets have closed, again, to wit:

(Source)

Let me explain just a bit for those who may be looking at it and think “that’s not the same.” It is and it isn’t. What I’ve done is this, this morning I recreated them and added some different objects or drawings onto what I had done prior and watched to see how the market would play out and would it follow within anything I composed. The result price action actually astonished me.

You don’t need to be a “technician” or “chartist” to understand what I’m going to say next, all you need to understand is when it comes to this type of stuff that I do. Here’s what I’m noticing…

As I stated the other day, this entire move that everyone has been knocking over their own mothers as to get to a microphone, keyboard or camera and tout “The Fed Blinked, that’s it!” I believe have made the wrong conclusion for the wrong reasons, and that the move yesterday was nothing more than another exercise in month-end window-dressing using an obvious catalyst. e.g., The Chair’s speech.

Again, as I hypothesized, if their conclusions were correct then we should still be on some sort of rocket-ride, or at the least,  we should be at worst what is called “unchanged.” But we’re not. In actuality the markets closed red, as in down.

This subtle distinction and now factual outcome calls caution into the forefront far more than some “We going higher” type of scenario.

The latter chart shows a few very key issues that need to be paid attention to. Here’s a short list:

  • The shape of that improvised channel on the lower chart is actually following the exact path of the first smaller one I posted on the top chart. The only difference is that I enlarged it to become more of an improvised mean reversion type with an inner segment. Again that segmenting is directly on top of the smaller one I drew in the above, which is why its so interesting from a technical observation.
  • The next is the area above and the line beneath called “no man’s land.” This I adjusted just a bit as I zoomed in to make it exactly 5 points higher – and five points lower encompassing the 2750 level. The reasoning was simple: Markets love big round numbers into months-end and this is considered just that. Also 5 points above or below are where usual resting stop orders are located. If this was just a melt up to get to that level using the attraction of these stops via hunt-and-seek programs, then stopping within and then either flatlining, or reversing, would be one more arrow in the quiver to the “it’s not all clear – it’s something else and it aint good.” And that’s preceicly what happened.
  • The last is this – as I type this – the futures or overnight session these markets are showing no signs of trying to levitate from their session lows. That is what I’ll call “another arrow…”

“So what does all this mean?” you may be asking. Good question and it’s this:

As of tonight (being Thursday in the U.S.) there seems to be more evidence to the contrary of what has been touted across the mainstream business/financial media and caution should be the order-of-the-day going into the weekend. I myself would put that caution level at 11.

Can it all turn around and we’re at new never before seen in human history highs before year end and maybe even by Monday should everything go just swimmingly at the G-20?

Absolutely. However, with that said I’ll just point out as we sit here currently the preponderance of evidence already displayed is beginning to make every one who touted “The Fed. blinked!” wrong. As in – dead wrong.

As always, we shall see. But not trying to do just that is not an option for anyone trying to stay ahead or prepared. And in business today, that’s just not an option for anyone who takes their business or profession serious.

The stakes are that high. And that’s not hyperbole.

© 2018 Mark St.Cyr

Thoughts On Twitter

I received an inquiry for my thoughts on Twitter™. As usual this comes with a recommendation to keep in under so many words. I decided to respond with the following…

I don’t need any words, for if a “picture” can speak a thousand words then the following chart speaks volumes. To wit:

(Source)

Usually there is a 24hr. embargo on such things (that is, if I offer exclusivity, which I did not), but I’m quite convinced they won’t use it, which is usually the case when I respond using such items as the above. However, as far as I’m concerned…

It says everything one needs to know or understand. Without saying a single word.

© 2018 Mark St.Cyr

An Addendum To The Addendum

The only reason for this update is because I feel it’s important. (Earlier Addendum is here)

As I’ve watched and read many a prognostication on the so-called “understandings” made in reference to the Fed. Chair’s latest speech I thought I’d follow up with what I’m looking at currently with the recent move now fully expressed for the day. Here’s two charts that are updated versions of what I showed earlier. The first is the futures. To wit:

https://www.investing.com/charts/live-charts(Source)

As one can see the move broke right through my original observations. However, where it stopped, or fizzled out as some might say, is also of interest.

As I noted the area notated as “no man’s land” represents nothing more than that. i.e., it means nothing unless the market breaks above with some real follow through.

On the other hand, not breaking through or not traversing higher into that realm says far more should it not. The reasoning is simple:

If Mr.Powell or as some commentators are now expressing i.e., “blinked” then there is no reason for this market not to pile onto this already hearty move. For if they don’t, what it shows more than anything is that my hypothesis of nothing more than another version of Month-end window-dressing has taken place on the back of an event that was used for a catalyst and has now run its course.

Who knows? No one one does. All one can do is watch for clues, but at least you now have something to watch for and make your own judgements in the overnight and before the open.

As far as what is called the “cash” or normal markets everyone thinks of when thinking about them here’s an updated version of the same one I posted  prior for that, with an additional notation. It pretty much speaks for itself, even for the non-technical watcher, again, to wit:

So there you have it, what may come no one knows, but at least here’s some frame work to go by, for as always…

We shall see.

© 2018 Mark St.Cyr