I’m just adding this latest observation to my ongoing commentary, because it appears from the looks of my inbox, text messages, phone log, you name it – the only thing people seem to want to know is: “What’s your opinion about the ‘markets’ now?!”
So, for those that want to know, I’m putting up the following observation because I feel it could be one of those “Mark The Calendar!” type moments. To wit:
The above is the S&P 500™ represented via one hour candles/bars intervals as I type this (i.e. 12:30ish PM ET).
So as Rod Stewart once crooned “Every picture tells a story don’t it?” Then the above speaks volumes.
As always I’ve been fielding calls and notes from others asking me “Are you still sticking to your call?” since the “markets” continuous rally on Friday. My blunt answer has been: Yes.
Here’s the reasoning…
As much as the “markets” have rallied since the March lows when the Federal Reserve threw even more extraordinary measures at the already inept extraordinary measures it’s been stoking for months prior. In regards to what they call “market structure via technical analysis” again, said “markets” aren’t doing anything more than rallying from a deeply oversold (caused by a panic) condition fueled by extreme monetary policy (aka money printing ex nihilo) the likes the world has never before seen.
This so called “rally” seems extraordinarily powerful and unstoppable based only on the mere fact that both the sell-off, and reaction of policy measures to it, were extreme in and of themselves. However, with that said, from a sheer technical analysis viewpoint: They are doing nothing different than what takes place normally after any relatively forceful sell-off.
It is only the extreme size and scale of this latest one that is different. And this is that moment in time where everyone can get fooled. Repeat: everyone. (Need I remind you of the term “Autopilot” and what happened next, just as I said it would?)
So now with the above said for context I feel it’s only fitting to use another of those so-called “experts” that has some form of mainstream business/financial media guru/cult following when it comes to the “markets” and in particular stocks. e.g., Prof. Jeremy Siegel.
On Friday Market Watch™ (a publication I’ve also been quoted in which is why I’m highlighting it as to not show bias) ran the following headline featuring Mr. Siegel. To wit:
And there you have it. Only one of us will be correct, but the implications are enormous.
If I’m wrong? I’ll be the first to say: I couldn’t be happier.
If he is?
Those that took this as a “expert opinion” are going to be something, but it ain’t gonna be anything to do with happy.
In regards to this sudden, newly found, certainty from this segment of experts that were shocked (shocked!) weeks ago when their interpretations of higher highs into the stratosphere came crashing down. Remember: the “markets” fell apart in February before, again, sorry to repeat myself, but it’s far too important to gloss over – before anything called “Corona…” was widely known or understood.
You had others (i.e. the buzzer-banger et. al.) in March doing entire show segments touting how not to worry because “The market has it wrong” to then watch said “markets” collapse thousands upon thousands of points in free-fall. Again, remember?
Like many others I was waiting and watching the futures “market” with total incredulity as we awaited for what was sure to be one of the worst payroll reports in history. As we awaited the “markets” rose, and rose, and rose higher the entirety of the overnight session into the actual report.
Then, once the report was released, not only was it the worst ever recorded, but (and it’s a very big but!) the “markets” rose even higher, and are still at those highs as I type this. On a side note: Now you know why I’ve used the term “markets” (e.g. with quotation marks) for years to the screams and howls of the so-called “smart crowd.” Today signifies de facto why it fit so perfectly.
So it is with that context I want to post a line via an article over at ZeroHedge™ that pretty much sums up everything. To wit:
While economic fundamentals ceased to matter about a month ago when the Fed went nuclear and not only injected trillions in the bond and repo market, but also directly backstopped the corporate bond market (with many expecting it will do the same in equities), there is something utterly surreal and terrifying watching futures equity surge just as the US reports its worst jobs report in history, which it did moments ago when the BLS reported that in April, the US lost a record 20.5 million jobs, (not quite as bad as the 22 million expected but at this level what does it matter) the biggest drop in history, and 10x more than the 2 million jobs lost at the peak of the Great Depression.
And that dear readers is why I knew I had to change my focus, as I said before: Only fools would try to give rationale (i.e., great earnings, great P/E ratios, blah, blah, blah) for the “markets” doing this, that, or anything other. So I leave that task to the buzzer-banger and the rest of the mainstream financial/business media. Because they seem to be doing a bang up job of proving my point.
I was just on the phone with a colleague asking me what my latest thoughts were as to the what, where and why gyrations currently transpiring in the “markets.” I’ll put up my latest thoughts (prior can be found here) using a chart that pretty much does what the old adage states. i.e., “A picture tells…” To wit:
The above is the S&P 500™ using one minute bar/candles intervals as I type this i.e., 11:45ish AM ET. It pretty much speaks for itself with the supplied notations. So, for those that want to know, that’s what I’m keenly focused on. The implications should it fulfill have the potential to be literally: ground moving. (Remember: no one knows, repeat: no one!)
I’ve been inundated with questions for my perspective on the current meat shortages based on my prior positions (CEO, etc., etc.) and acumen within the meat industry. What is currently seeming to propel all this is the most recent news that Wendy’s™ is either limiting, or not making available: hamburgers. ergo “Where’s the beef?!” jokes and memes galore.
However, what’s really perplexing many is the fact that why can Burger King™ or McDonalds™ have it and not Wendy’s? To them it makes no sense. Here’s why…
Wendy’s does not use frozen patties for their burgers. i.e., It’s made (or ground) fresh from the processors and delivered in that same state. So if the processing plants are either on reduced capacity or shut down entirely Wendy’s would be effected with near immediacy, unlike McD’s and BK which would have frozen stock to continue to pull from.
I know this, because years ago, I worked in a plant (I was in charge of their roast beef division) that processed Wendy’s burger for the surrounding franchises. That was many moons ago, yet I believe that it’s still the same. If it weren’t, they shouldn’t be having this shortage, at least not yet. But seeing that they do, and so quickly as others do not, seems to answer that question.
There appears to be more than enough (due to current cold storage levels) frozen meat available to the restaurant industry because of the current shut down. (i.e., No ones really drawing any and more and more gets added to.) But as far as fresh?
It’s going to get a whole lot worse for everyone over the coming weeks and months.
Wendy’s is a precursor for what’s in-store. Or should I say: what’s not?
It has been announced, and subsequently rolled out in varying forms, that Facebook™ (FB) has, once again, changed its algorithm. Maybe you’ve missed this since you’re not a “creator” or “publisher” of content. Maybe, you are only aware of their latest intro into media domination via their latest offering for video conferencing. You know, “free” to anyone and everyone. That is…
As they’ll more than likely gather all recordings (e.g., personal and corporate), feed it all through some speech to text bot, then sell any and all information to the highest bidder. You know, like your competitors. But hey, you’ll have probably given the OK on the “Terms and Conditions” check box you dutifully read. And after all, who wouldn’t or shouldn’t trust Zuck and Crew with all that info, right? Right? But I digress.
So it’s in that vein I would like to give you what’s the-just-of the latest in regards to this change. Hint: If you’re a publisher or brand pushing content or running ads via all the latest and greatest (or what’s been left of it over the years, which ain’t been much) crushing it styled advice on how to use social media? It is – once again – crushed. As in worthless. My opinion, but I’m sticking to it, for the facts bear up on my side (and have been for some time), not the so-called “gurus.”
Basically what FB is stating is that content from “friends” will be what is preferred (i.e. code language for what they decide) to be pushed into ones news feed as opposed to publishers or brands that push ads. That’s a drastic oversimplification, but it pretty much sums it up. How can I be sure of this you may ask? Great question and its because of this…
The entire FB community of those that have built their brand and more on FB are, once again, freaking out. Why? Hint: rhymes with getting their content and ads crushed from sight rather than anything “crushing it” used to invoke.
My only question to most of these so-called “influencers” is this: Why are you freaking out? Didn’t you see the warning signs? It’s been over for quite a long time. After all, if it weren’t? Explain this…
And for those of you that, once again, bought into any of that “wealth” advice? Sorry to repeat myself, but once again…
This is just a follow up to my ongoing commentary to the “markets.” The reason for this is to illustrate something that confuses many people when I may be looking at something and saying one thing, as the “markets” seem to be doing the exact opposite. This is usually followed with the assumptions that my initial observations were categorically wrong. i.e., The “market” is going up, not down, therefore…”
This is totally understandable for those not well versed in what is called “technical analysis.” And it is in that light I would like to show you what is currently taking place in said “markets” in real time with a few charts I’ve noted, so you can see for yourself, this patterning or phenom (i.e., going up doesn’t nullify going down). To wit:
This reflects the first observation I made about a possible “Signal.”
This shows the progression notated with additional comment and feature.
This is the opening moments of the S&P 500™ today as I type this with additional notations.
“So what does all the above mean, exactly?” I can hear you say through my monitors. And it’s a good question, for it is this…
Even though the “markets” have risen over the past few days it’s done nothing to nullify my thesis for where I see things possibly going over the current days, weeks or months. As a matter of fact, with today’s price action so far…
It further confirms it.
As always, we shall see. But for those that wanted to know, that’s about it.
Yesterday Chair of the Federal Reserve, Jerome Powell delivered his remarks and took questions via teleconferencing. To say it appeared a bit odd would be an understatement, for this reason:
The reporters (many seasoned veterans) for some of the largest media agencies in the world, with budgets that spend $Millions to keep or acquire some of the best lighting, makeup and set designers appear to look less “put together” than your average wannabe in some mom’s basement.
It’s absolutely unfathomable to me that these organizations (not the least what it says about these reporters themselves!) would allow for such visuals or presentations at that level. It’s all just flabbergasting the amount of unprofessional, lack of self-awareness I’ve been witnessing.
I mean, truly: No one can be told (or suggested?) to adjust their camera angle, given a few basic lighting tips (i.e., from the set crew), have a simple logo’d back drop or similar (less that $100 everywhere) now this many weeks into this fiasco? No one?
Yet, with that said, (and I could go on and on, trust me) the real issue I would like to point out is that all during this conference Mr. Powell spoke and gave examples as if they were just now acting in relationship to the current crisis.
The problem with this was, not one of the so-called “experts” asking questions even seemed to allude to the fact that this all started well before, and was exacerbated, via the virus. e.g., the ongoing extraordinary policy measures underway combating the collapse of the repo-markets and more, prior.
Now it’s very possible I missed one as I was wiping down my desk and screens resulting from drinking coffee as I was listening to the journey into fantasy land. But I don’t believe so. There were many times I simply wanted to just shut the thing off, because as far as I was concerned, I heard enough (and was tired of wiping down the desk). Then came the final question and it made me glad I mustered up the strength to finish it out, because it says all one needs to know and something I have been saying over, and over, and over again for years.
The Federal Reserve is not maintaining the banking system purely for pragmatic reasons. They are now actively picking winners and losers. And if you happen to be one of the segments (i.e., prudent savers et. al.) that they don’t care about? Welcome to F U-land.
Sound harsh? I fully understand. So rather than take my words for it I implore you to watch for yourself and come to your own conclusion, as you should. Here’s the link directly to the Federal Reserve’s viewing page: https://www.federalreserve.gov/live-broadcast.htm
The question I’m pointing to begins at 44:40 (although you really should watch it in its entirety)
And there you have it. Not from me, but from the head of the Fed himself.
Remember: It doesn’t matter how you or anyone else feels about it, for they are unaccountable. i.e., They are appointed, not voted into office.
As I read, watch and listen to all the supposed “expert commentary” relating to their analysis on why the markets are “…a forward looking mechanism and are beginning to price in the recovery from being locked-down…” I grow more and more disturbed.
The reason for this is out of sheer frustration that much of this so called “insight” is nothing more than narrative drivel. Period. However, the real issue that irks me to my core is the amount of damage this will inflict on those that not only listen and believe, but then believe themselves to be “informed” and argue accordingly. i.e., regurgitate said drivel with vigor.
Regardless of how one feels about the so-called “markets” currently (that would also include yours truly) I feel there’s still a need to continue expressing my observations since I made what many have called “Are you f’n serious?!” call. So here in my latest for those that want to know. To wit:
What I want to say about the so-called “Sailing ahead to new highs!” rally that we’ve been experiencing from the prior “Oh my Lord it’s the end of everything!” collapse the myriad of “experts” never saw coming (unlike you dear reader) is the following…
What I would like to point out is what I’ve been trying to make others understand since it began, i.e., This is nothing but a relief rally, pure and simple. And once it’s over – it’s going to be OVER. So don’t get fooled. I could be wrong, and I hope I am, but from a pure technical aspect – this “market” is following what some might call “text-book movements.” And that in and of itself is quite alarming, for that means it portends what I’m calling for caution about.
The above is a chart of the S&P 500™ represented via 15 minute bars/candle increments. I took it at the opening of the cash market today. What you’ll see are different shaded areas. What these are are different Fibonacci sequence patterns. The reason why I’ve used them is because they are one of the most rudimentary analysis indicators used for gauging price movements. It doesn’t matter if you understand them or their usage, I do. And what I would like to draw your attention to is the little dark blue box on the right hand side.
The reason I want you to focus there is for this very important reason: That area represents what even the most novice technical newbie would understand – for its the most basic retracement area one would expect before a resumption of the dominant trend that created it, which for this example – is down. Again to reiterate: this is what is known as “A text book example.”
I have argued over, and over, and over again that it was not just possible, but probable we would retrace somewhere between the 50% and 61.8% before this so-called “new rally to the stars” was complete. The arrow shows you precisely where we now are, because that little box represents exactly that area.
Will it go higher? Could, just remember, there is no holy-grail and no one knows for sure. And if someone says “They do!” Don’t just walk away, but run and fast.
However, with that now said, from a purely technical perspective – all of the most commonly acknowledged highest odds of probability have now been satisfied, i.e., the math. And you would be quite prescient to remember these “markets” no longer run on human emotion, but by machines programmed via mathematical equations to mimic it.
It’s now all about how they see it.
Presently we just have to sit and wait. But I don’t think it’ll be much longer for some type of hand to be tipped. Remember: this is a big earnings week along with the Fed conclave.