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F.T.T.W.T.K. Update

(For Those That Want To Know)

I thought an update to my ongoing commentary was necessary after a discussion I had with a colleague today. That discussion revolved around the idea that “This market sure is strong, are you still of the same view?” to which I responded: “By ‘strong’ you mean what? Because from my view it is anything but.” To which I then proceeded to explain what I was watching and can be expressed by using a chart of today’s “market” including today’s price action.

However, before I do, let’s use both a prior and latest I used a few weeks back for some context, first. To wit:

(Chart Source)

The above depicts where I first thought something would resolve only to nullify that presumption, then resolve precisely in the same manner only from a larger and higher point. Remember the “Diving board” analogy I used? So it begs the question: Where are we now? So to answer that, let’s do another “picture” shall we? Again, to wit:

(Chart Source)

The above is the same as the prior only notated, including today’s close. The issue here is, to address my colleagues assumption of “This market appears strong.” I would say, from a purely technical view – it looks anything but.

As a matter of fact, as one an clearly see, we are a lot closer to that first “Your Spidey senses should be going off!” than we were over a month ago when I first pointed it out. That area is noted above as “This is the area…” for those that haven’t been following along since I started this running commentary.

So there you have it. Will it, wont it? No one knows. But what I do know is this…

It’s getting far closer to where I said it would – then someone who said “We’re never going to see it again.” should be feeling comfortable.

As always, we shall see. Although that may be a lot closer than far too many ever dreamed possible.

© 2020 Mark St.Cyr

As I Was Saying

When past becomes prologue.

Below are two excerpts from two different articles I wrote back in 2018 that are as relevant and prescient today as I wrote back then. The first deals with the topic of when it comes to advertisers. The second as it pertains to stock valuations and their impact on the broader zeitgeist.

First: Advertisers and their sudden calls for leaving social March, 2018. To wit:

Because if it was working as sold? Advertisers wouldn’t be so forth coming, stating they’re now pulling ads away. i.e., If those ad dollars were producing results in-line with their expenditure? Businesses would be very hush-hush, in a much more wait and see mode of operation on what to do next, if anything. That’s a very big tell-tale sign, or clue that should not be overlooked, in my humble opinion.

The only reason a business (generalization, of course) cancels any type of advertising that is working, with great fan-fare, or decry of public outrage, is that in doing so, it is seen as a greater sales tool – than keeping the original ad budget expense.

Or said differently: This is the perfect excuse to soothe jittery boardrooms or executives to no longer spend precious ad dollars on social, and possibly try other avenues or venues. The reasoning is simple:

If there are going to be less content providers via FB’s own censorship, along with a full-blown user revolt? Then, much like IBM found itself in-the-blink-of-a-cursor back in the final go-go days of the dot-com era. People began getting fired for not seeking IBM alternatives rather than just going with the assumed “competitive brand leader.”

FB is in this double whammy situation in my view. For like I’ve also argued: The moment Wall Street’s current ads-for-eyeballs model or projections are seen to be in jeopardy against the backdrop of a stock, that’s for all intents and purposes, “priced for perfection?”

It’s over.

Just – like – AOL.

“Facebook’s Latest Excuse Is Just The Excuse Advertisers Have Been Waiting For To Leave”

Here’s the other from September, 2018 in respect to the implications to “markets” in general, again, to wit:

Could we see a replay of 2008, but instead of Bear Stearns then Lehman type of events, we something similar in-kind with FB, then Twitter™ or, vice versa? What happens, for whatever the reason, investors (or algos) begin dumping, reminiscent of the dot-com era?

What happens then, when the central banks of other countries find their once profitable investments which were  perceived as once “no-brainers” to sure-up their own national finances begin dumping? Hint: here’s just one for your consideration aka Swiss National Bank.

Social media along with search (e.g., Google™ the “G” in the “FAANG” family) has been the benefactor of another great idiom that was once unassailable to the BTFD crowd along with their “it’s different this time” brethren-in-arms. e.g., The “ads for eyeballs” metric.

But that metric is now in a serious, as well as precarious moment of fate and fortune or, infamy for possibly draining then dwindling many a fortune once made by it.

Again, the reasoning is both simple and should be self-evident: With social media platforms and others uniformly purging content providers, inevitably leading one to reasonably conclude that the followers of those purged providers would in-turn purge their social accounts. Where does the value for growth in these companies come from to sustain already exorbitant perceived levels? Let alone – for ever higher.

Insiders such as “Zuck and Crew” themselves have already purged $Billions of their own shares. And insiders across the entire “market” have used this incessant “buy back” via company funded debt to sell their own shares again – at record levels!

Should a sudden collapse in the shares of Facebook or Twitter happen in an out-of-the-blue type moment, similar in type as we in any of the last episodic scenarios witnessed in ’08 or the dot-com era, what does a central bank such as the Federal Reserve or others do?

It may not be the banks that are the initial impetus for a scare – it may come from any of these high flyers of the FAANG family.

Does a sudden run have a knock-on effect for the Swiss and its currency? Does that begin a rout elsewhere? And who steps in this time? The Fed? The EU? Can anyone? And where do you apply the “tourniquets?”

The Fed. may have authority to sure -up the banks in a crisis, but will it need to sure-up corporates in a rout? And how will it do that without backlash? Does it even know how? And more importantly would it work at all?

“”Will Facebook and Twitter Signal The Next Bear Stearns, Lehman Moment?”

The reason for the above is this…

At the time of those writings the entirety of the mainstream business/financial media was certain nothing could truly hurt the valuations of not just these two tech giants – but social itself. Then, the entire complex collapsed (along with everything else) and was only saved via the Federal Reserve and other central banks for which the Swiss National Bank itself, for all intents and purposes – doubled down, printed more, and bought more.

For those that don’t remember: Facebook (from 218 to 123) and Twitter (from 47 to 20) valuations were all but cut in half.

What happens if it doesn’t work out the same way, this time?

© 2020 Mark St.Cyr

Every Picture Tells A Story

As the great Rod Stewart belted out “Every picture tells a story, don’t it?” I would like to propose one for your consideration that not only speaks a thousand words, but does so in volumes that makes every empty shelf worthy of holding a large encyclopedia collection envious. To wit:

(Chart Source)

The above is a chart of Apple™ as of the close of the U.S. “markets” today, represented via one week candles/bars. I have noted the chart and they speak for themselves. The reason for this is very, very simple…

Apple is currently not a “nosebleed” levels, but on a sheer out of this universe trajectory. What I have done is place a couple of boxes with arrows to highlight points in time over the past, near 20 months, to highlight what was thought or said – and what has transpired. They are not exact moments, but close enough for horseshoes and hand-grenades type analogies to make a point.

And that point is this…

The first box highlighted with the caption starting as “Two ideas were…” represents a point that both Apple and the Fed thought they were both in control of their relative narratives. Both were made aware very swiftly that neither would be even close.

For Apple – they have yet to produce the revenue and sales numbers matching that first area some 20 months ago. The Fed would find the need to reverse all prior statements, then to finally embark on a QE funding program the like the world has never seen or even dreamed possible. And, just so it’s not lost here – Tim Cook has increased buying back Apple-the-stock and increasing its payout of dividends basically matching the Fed in time and voracity move for move.

And yet I’m the supposed one that “just doesn’t get it.”

The issue here is – what happens when everyone else suddenly does?

As always, we shall see.

© 2020 Mark St.Cyr

Why Joe Rogan’s Tap Out Didn’t End The Fight – But Intensified It.

Back in April of this year I wrote an article outlining what I thought might be forthcoming in regards to Joe Rogan and his extremely popular podcast “The Joe Rogan Experience.” Here’s the opening paragraph. To wit:

“For those that may not be aware Joe Rogan of the popular podcast “The Joe Rogan Experience” may have just entered a political octagon for a fight he is truly unprepared for. The issue at hand here is this: Although Mr. Rogan is a trained MMA fighter and has probably met many an adversary or two with a tendency to not just bend rules, but break them when no one is looking (i.e., think cheap shot). His assumption that he himself can bend or break the rules of the political arena shows just how unprepared he truly is to this blood-sport known as politics.”

“Radar Alert: Watch For The Joe Rogan Political Tap Out” April 5, 2020

Although I was correct in the premise of there would be a “tap out.” What I did not expect was it would be Mr. Rogan tapping out of Google™. He showed rather than heel to the Silicon Valley overlords as to what he was going to discuss. He was willing to put his money where his mouth was and completely jettison one “broadcaster” for another. e.g., from YouTube™ to Spotify™. This was an extraordinarily unexpected move worthy for comparison with anything seen in the octagon by a Brazilian Jujitsu master. i.e., they never expected it.

However, here is where things begin to get interesting from a spectators point of view. The reason why is: when it comes to the octagon a tap out ends the fight and the winner is declared. Done. This fight? Let’s just say – not even close.

What we have here is the opponent (i.e. Google et.al.) believed there was no alternative for Mr. Rogan and he would conclude it himself soon enough, and just tap out. i.e., Acquiesce to either a neutering of his positions and/or demand a “hostage tape” style reversal be made.

Yet, the jujitsu move was made and Mr. Rogan signed a reported $100MM dollar deal with Spotify, taking most of his content with him. Both a daringly strategic and tactfully executed maneuver in my view. But it’s now fraught with danger for both Spotify, as well as Mr. Rogan. Let me explain…

As I iterated prior – this fight is far from over. And as a matter of fact it may be only intensifying.

This past Saturday began with a ringing-of-the-bell for “round two” across the Twitter™ universe where the demands that Mr. Rogan’s podcast be (wait for it…) cancelled. I know, right? Who knew?!

It seems Mr. Rogan was, once again, saying something that will not only be intolerable, but will unequivocally raise demands by the “cancel mob” that he be forthrightly cancelled. His sin?

Let’s just say it was the worst of the worst…

First: He dared say he would not only not vote for Mr. Biden – but would actually vote for Mr. Trump. A sin that is only eclipsed in Hades by those that drive too slow in the fast lane. I mean we’re talking sins that call for “special room status” here, if you catch my drift.

The second: This one could be categorized as a “two-fer.” On the same episode he dared not only state a word (warning: if you are susceptible to triggers, be forewarned here) but gave a possible rationale for using it. That word? “Men.” The offensive quote? “Because that’s what men do, we make fun of things. Anything. Anything that seems like you’re not taking chances. And that’s what the mask is.”

I know, if you need a moment it’s OK, I’ll wait. After all, he’s also questioning authority and efficacy in one fell swoop. Maybe someone has a few kittens they can spare and pass them around to the others. I mean, we’re talking scorched earth type rhetoric here, right?

Now Rogan is not someone who takes the virus lightly. He regularly has himself, as well as guest tested. The reason why the above should not be glossed over is where and why he said it. i.e., He was directly pushing back on his guest’s assertion (Bill Burr) of, “I just love how wearing a mask became like this soft thing that you’re doing — like being courteous.”

It is precisely that type of statement or premise which raises alarm bells to so many today, for it alludes to a possible bigger problem, with longer lasting effects, than what the virus itself may actually do. Or, said differently: So regardless of what the science may or may not show – you’re wearing it not because you think it’s effective – you’re only wearing it to conform.

I believe Rogan was right to push back, even if it was in his trademark style. However, with that said, this (all my opinion) will not be allowed to stand.

The issue now directly facing Mr. Rogan is whether or not the people at Spotify will, or will not, fold like the cheap suits many across Silicon Valley have demand most C-suites to do and cancel Mr. Rogan before he even gets started.

Don’t think for a moment this is not a possibility.

Spotify is (again, my conjecture) nothing more than another creation of what I call “The Silicon Valley model,” which basically means: regardless of what revenues (if any) it makes – it’s basic model is its stock value. i.e., nothing matters other than how any metric can be spun to keep Wall Street invested. Remember: Spotify has only been profitable a hand full of times in its now 13 year existence. Think about that.

So, why is that important?” you ask. Let me put it this way…

What happens to the decision making process for business going forward at the C-suite and/or Board of Spotify if suddenly their once considered brethren of all that is Silicon Valley let them know through the “pipelines” that all ad revenues that comes via one, if not the largest ad buyer or placement service (aka Google) decided to “shadow ban” or out right nullify any ads for Mr. Rogan’s show?

How about if Twitter does the same? Then what about Facebook™? Think it can’t, or better yet, won’t? Au contraire mon ami…

In the politically charged environment we are now in Silicon Valley’s tech overlords have shown they fear no one. Period. Even in the face of a possible change to their protected status via the courts and legislature they show they could care less and are willing to openly antagonize even the President.

Again, doesn’t matter if you like him or not. The act to actually warn a sitting president that his speech is not considered “free” to be posted is shockingly brazen. Again, whether one agrees with that view or not is irrelevant. It’s a defiant act with ramifications to all that no one truly understands, let alone estimate.

This ideological difference coming from big-tech is not just a preference – but is currently a position they have decided to bet everything as to win the complete overthrow of the political, becoming the ruling arbiters of all they deem worthy. This is for control – and any fight for control means: total and utter destruction by any means (person, place or thing) that does not comply, let alone agree.

I now believe the thing to watch for clues is whether or not Mr. Rogan has successfully countered the initial move with a move of his own worthy of the record books. Or, did he quite possibly get himself into a position that may turn into something far worse?

Or said differently…

Did he deliver a move that seemingly countered an all encompassing choke hold, only to find that move places him directly into that same adversary’s cross-hairs for an even more efficient way to be taken out?

© 2020 Mark St.Cyr

Look Familiar?

Many of you have heard me say things like:

This pattern from a technical analysis (TA) viewpoint is doing precisely what it implies only it’s a larger representation of what happens on a daily basis, multiple times a day in many cases. It’s only the size and scale that fools the untrained eye and catches them off-guard.

Today is a perfect example of just that. To wit:

(Chart Source)

The above is a chart of today’s opening of the day session of the S&P 500™. Now here’s another, again, to wit:

(Chart Source)

Look Familiar?

As you’ll notice the structure and the subsequent bounce up is of the same size and scope as the top. The only difference is: The top is the last three days. The other is the last three months. Remember what happened next, as I implied would? For those that don’t remember, the upper depicts precisely that (a sudden drop out-of-the-blue) with today’s open. What has transpired so far today as I type this at about 12:00pm ET? Let’s see shall we? Again, to wit:

(Chart Source)

The above implies if the same type of movements happened in the larger pattern. Do I need to say more?

As always, we shall see.

© 2020 Mark St.Cyr

Remembering “Crying Towels”

I’ve had some very interesting conversations over the last few days, many of them have revolved around the premise that “No one could have seen this coming.” Well, that’s really a yes and no statement. Because much of what we are currently seeing taking place (e.g., the business side) is what was very easily identifiable to those that wanted to see. The only thing that was maybe undefinable was the when everyone else would. And it is that dynamic that sets up competitive advantages.

It’s not easy to be the one making these types of arguments when everyone at the time is convinced it will not only not end, but will only get better. It’s even harder when the entirety of the mainstream business/financial media (at one time that knew better) goes along promoting the absurd with even more delusion. Can you say “Booooo ya!?”

There was a time I used to do pro bono speaking events at places like “Entrepreneur Centers.” I stopped because it had become painfully obvious that no one cared to hear about fundamental business practices (let alone ethical!) that were absolutely crucial to not just build, but remain and grow a business.

No, all anyone wanted to tell me was, “Unicorns are where it’s at, all that other stuff is obsolete because – it’s different this time!”

So, I stopped.

You may think this was an isolated phenom, however, let me show you how it was not…

Many have asked me over the years when they’ve seen one of my articles either here or re-posted elsewhere why I use the term “pictures as they call them in Silicon Valley” when clearly everyone in “the Valley” knows they’re charts, and have never heard them referred to otherwise.

Well, the reason why I do that is because back in the day (circa 2015) what I defined then as the “Silicon Valley Aficionado Set” used to take to places like Twitter™ and even the television/radio programs and “commentate” by snarky insinuation just how pathetic people like myself were.

One day one of Bloomberg’s “commentators” at the time (I notice he’s no longer on the TV that much anymore, scheduling issues I’m sure.) took to Twitter and used both me and my article as it appeared on ZeroHedge™ as one of those moments to show just how superior of thought they were. And in one of those better-than-thou responses this one used the phrase “I only read it for the pictures.” Hence, I’ve used the term ever since when those “pictures” proved out to show all that “intellect” they were sporting was a bit, oh let’s say, not to intellectual.

Yeah, I was rightly ticked off then as I am still. Not because I have thin skin, but because of the lasting scars many that believed this crowd had some actual “insight” and are now precisely where I said they would be – in a world of hurt. And Covid has had nothing to do with it. It’s been happening since the very time when they were ridiculing both myself and ZH.

Here’s what I was trying to put across in my article back in 2015. To wit:

This is the type of stuff only heard in tales of yesteryear. (I.e., the last dot-com crash) I mean, technological (i.e., coders) staff being let go? The very people responsible for the product and all its innovation, not to say; for the innovation that will be needed to turn around such an entity? Those are the people to go first? 8% of its workforce? You hear announcements like this from legacy companies not – “the hottest space in all of Silicon Valley.”

And this brings on a whole host of other meme shattering, break out the “crying towels” type arguments. For if it can happen there – guess where else it’s going to begin happening? Is ________________ next? Just fill in your current favorite high-flying Non-GAAP social darling on that line – for it’s going to happen at all of them very soon in my opinion. Much sooner than many now even think or ever thought possible.

“Coders” will gladly live in some single bed shared between 8 others apartment somewhere near the Valley. Heck. they’re now reporting stories how one can live in a shipping container on the cheap in San Francisco. Sounds fantastic right? Well, it is. As long as the dreams (and expectations) of landing the dream job in a start-up or similar where riches based in stock options and more are forthcoming or, dangled like carrots in front of wide-eyed dreamers.

There’s nothing wrong with lumping it out with the hope of future pay offs. I did similar things when I was young. It’s a risk reward thing and I champion those willing to take the chance.

However, you know what changes everything? When the meme of “Gonna stay here till I cash-in and then I’ll buy me a McMansion!” turns into the underlying realization that quite possibly – you’re going to end up living in a shipping container! Possibly forever if things don’t change.

Suddenly Mom and Dad’s basement looks like paradise, and the thought of leaving “The Valley” becomes more, and more front of mind with every passing IPO failure or failure to launch. Don’t let this point be lost on you. For it’s a tell-tale sign things are changing deep within when it can be noticed shipping container apartments or, communal type living begins to lose its appeal among this set. For when reality bites – it bites hard.

“Crying Towels”: Silicon Valley’s Next Big Investment Opportunity Oct 15, 2015

How’s that all working out? Well here’s two latest examples. The first is something you wouldn’t think possible in what is known to be the home of Silicon Valley’s uber wealthy: Palo Alto.

Remember when home prices (aka 2015) did nothing but go up for tech? Here’s what that looks like today from Palo Alto’s own real estate/newspaper. And yes, this is an actual ad. To wit:

(Image source via screenshot)

Notice anything peculiar? Again, that’s a screenshot of a real ad.

“But wait…there’s more!” as they say in late-night TV advertising.

How about San Francisco? You know, where people were paying bookoo bucks to live in a box in someone else’s apartment (or a shipping container!) as they awaited their “IPO riches!” to come in. Here’s the lead sentence from an article on Medium™ that says it all…

“The kids are jumping ship and they’re not coming back”

Below is the first paragraph, and I encourage you to read it in its entirety, because it’s a sobering look at just how far this city has fallen over the last five years. And for those that may be a bit math challenged or not get the drift, that’s precisely the same time since my above article.

It’s been coming. For the five years I have lived here, people have shaken their heads and wondered how long San Francisco could keep getting away with it. We’ve all stepped in human feces and kicked syringes to the kerb [sic]. It bonds us. We’ve all had to step to the side as a crazy meth head lurched towards us with intent. But, hey, stock prices kept going up and the sun continued to set over the Pacific Ocean and it’s been beautiful enough to somehow make the deal worthwhile. It’s a trade-off, we told ourselves. But then the glass shattered. It’s over.

Brendan Connellan: “The Bell Rings For San Francisco”

But then again…

What do I know.

© 2020 Mark St.Cyr

As I Was Saying

How I ended my prior running commentary. To wit:

It’s the exact same pattern as all the prior except we are now at a higher level. The second…

The exact manner in which this pattern calls for the highest odds to resolve is, once again, playing out in text book fashion. It’s so near picture perfect I can only, once again, repeat myself and say: uncanny.

I’ll finish using one last analogy to describe the above: Think of the prior as walking up the three meter diving board and all your friends sitting around the pool convince you to go higher to the five meter platform. You were fully confident at three, and even though you are only two meters higher?

It looks and feels a heck of lot scarier if you make a mistake there, does it not?

Here’s that “dive” as of about 12:05ish ET today. Again, to wit:

(Chart Source)

The issue with the above is this…

What does the afternoon bring: A “Triple Lindy?

Or a “market” that openly displays Fed. Chair Jerome Powell “No respect?”

As always, we shall see.

© 2020 Mark St.Cyr

One Of These Things…

I only have two things to say, and both are brief. One is to be taken seriously. The other? It’s a farcical joke so incomprehensible to anything resembling understood reality, one can no longer put it into words. The only thing one can do is laugh.

First the serious…

The MYTR Broadcast comes out of hiatus beginning next week. There are a few changes that you’ll need to be aware of as to access it, so stay tuned for details over the coming days.

Now the farcical…

Today the “markets” lurched higher, “So what’s new or funny about that?” I can hear you saying through my monitors. Great questions and it is this…

As the “markets” lurched higher today to close within a hares breath of its all time, never before seen in human history highs in February (as far as a closing high, it matched that). The National Bureau of Economic Research has determined (wait for it…): The U.S. entered into recession in February.

Here’s a snippet from the report. I encourage you to read the full text which can be found (here.)

This series plateaued from December 2019 through February 2020, and then fell steeply from February to March. Because both series measure employment during the week or pay period containing the 12th of the month, they understate the collapse of employment during the second half of March, as indicated by unprecedented levels of new claims for unemployment insurance. The committee concluded that both employment series were thus consistent with a business cycle peak in February.

NBER Report Monday, June 8, 2020

 

Here’s the short of what the above implies: Record high stock markets and recessions don’t go together unless something’s wrong, as in, very wrong. No matter what they teach at any of the Ivy League business schools.

Sooner or later something is going to go from cracking – to outright breaking. And when it does it won’t be anything to laugh about. No matter what some Ph.D comedian business professor says. Period.

Oh, and I almost forgot: The Federal Reserve begins its two day conclave beginning tomorrow. So borrowing the words from that intellectual luminary of yesteryear known to all as Alfred E. Neuman…

“What, me worry?”

© 2020 Mark St.Cyr