Financial topics

Investments, gold, currencies, surviving after a financial meltdown
Cool Breeze
Posts: 2935
Joined: Sun Jul 26, 2020 10:19 pm

Re: Financial topics

Post by Cool Breeze »

Higgenbotham wrote:
Tue Oct 04, 2022 9:45 am
Higgenbotham wrote:
Mon Sep 26, 2022 10:18 am
Now I will be watching for a possible move higher for a few days before a bigger move down after the first week in October.
Higgenbotham wrote:
Fri Sep 30, 2022 12:45 pm
Right now I think about what would be a conservative amount to trade, then I cut that in half.
This morning I'm starting to short into the rally. Slowly.
October surprise?

richard5za
Posts: 893
Joined: Sun Sep 21, 2008 10:29 am
Location: South Africa

Re: Financial topics

Post by richard5za »

Higgenbotham wrote:
Tue Oct 04, 2022 9:45 am
Higgenbotham wrote:
Mon Sep 26, 2022 10:18 am
Now I will be watching for a possible move higher for a few days before a bigger move down after the first week in October.
Higgenbotham wrote:
Fri Sep 30, 2022 12:45 pm
Right now I think about what would be a conservative amount to trade, then I cut that in half.
This morning I'm starting to short into the rally. Slowly.
I calculate the October month pivot at 3760. A few closes above 3760 could indicate a continuation of the bull, but I suspect that your strategy of slowly building up shorts is probably the right one.

richard5za
Posts: 893
Joined: Sun Sep 21, 2008 10:29 am
Location: South Africa

Re: Financial topics

Post by richard5za »

Higg, its down to 3725 as I write; looks like you may well have called it right

Phong Tran
Posts: 57
Joined: Sat Apr 06, 2019 6:47 pm

Re: Financial topics

Post by Phong Tran »

richard5za wrote:
Wed Oct 05, 2022 9:01 am
I calculate the October month pivot at 3760. A few closes above 3760 could indicate a continuation of the bull, but I suspect that your strategy of slowly building up shorts is probably the right one.
Yep, today looks like a definite impulsive down to start Wave 5. Pre-market already breaking 3760, the Fed stating that they're only in the early stages, profit taking and jobless claims and nonfarm payrolls coming up - those would have to be pretty spectacular to turn this ship around.

Took 5 tries to get over 3787-3791 and once above 3800, it got slammed back down hard breaking a lot of the support trendlines. I was thinking that wave 4 could reach 3820-3836 but the move was a 6.22% rise which was still greater than wave 2's 5.64%. New lows coming which should create a negative divergence in time for the winter bear market rally.

[edit] 3770 recaptured, looks like it could be another squeeze day

Cool Breeze
Posts: 2935
Joined: Sun Jul 26, 2020 10:19 pm

Re: Financial topics

Post by Cool Breeze »

Phong Tran wrote:
Thu Oct 06, 2022 6:07 am
New lows coming which should create a negative divergence in time for the winter bear market rally.
Either way, this is the general characteristic. My prediction is bouncing, new lows created as you say, and then a bear rally again into January, when the real SHTF.

Phong, what's your prediction, roughly, month by month from here til next June? Where will be the bigger relative highs and lows, if you had to guess?

Thanks.

richard5za
Posts: 893
Joined: Sun Sep 21, 2008 10:29 am
Location: South Africa

Re: Financial topics

Post by richard5za »

Phong Tran wrote:
Thu Oct 06, 2022 6:07 am
richard5za wrote:
Wed Oct 05, 2022 9:01 am
I calculate the October month pivot at 3760. A few closes above 3760 could indicate a continuation of the bull, but I suspect that your strategy of slowly building up shorts is probably the right one.
Yep, today looks like a definite impulsive down to start Wave 5. Pre-market already breaking 3760, the Fed stating that they're only in the early stages, profit taking and jobless claims and nonfarm payrolls coming up - those would have to be pretty spectacular to turn this ship around.

Took 5 tries to get over 3787-3791 and once above 3800, it got slammed back down hard breaking a lot of the support trendlines. I was thinking that wave 4 could reach 3820-3836 but the move was a 6.22% rise which was still greater than wave 2's 5.64%. New lows coming which should create a negative divergence in time for the winter bear market rally.

[edit] 3770 recaptured, looks like it could be another squeeze day
There are other considerations: 3rd quarter earnings will be reported from mid month. With respect to S&P 500 some 40% of earnings are outside of USA and with the very strong dollar might come in under expectation especially with global economies under strain.

And just prior to this will be CPI report on 13 October which is currently forecast at 8.2% versus prior month August at 8.3%. If it comes in higher than prior month there could be some "spooked" investors

Finally, I don't know what the boomers have been up to but their average age must be around 68 and they own a high percentage of North American equities and could also start panicking and selling?

There's a Chinese curse "May you live in interesting times"

Phong Tran
Posts: 57
Joined: Sat Apr 06, 2019 6:47 pm

Re: Financial topics

Post by Phong Tran »

Cool Breeze wrote:
Thu Oct 06, 2022 9:34 am
Either way, this is the general characteristic. My prediction is bouncing, new lows created as you say, and then a bear rally again into January, when the real SHTF.

Phong, what's your prediction, roughly, month by month from here til next June? Where will be the bigger relative highs and lows, if you had to guess?

Thanks.
Hey Cool Breeze, most of my charts in the other thread highlight up to March 2023. I do expect the December rally to have wings, potentially rallying back to 4100 - 4250 on the SPX, based on USD weakening as the Fed jawbones their soft landing. Crashing the markets in a 1929, 2008 waterfall does nothing for them and can create a devastating deflationary spiral. And thus, I don't expect even the crash next year to be a waterfall crash (89%). It should still be substantial, most likely it lands around 2600 (March-April), bounces and finals at 2200 (July-August). That would mark A and then we would need another B and C. A strong wave B would be caused by capital escaping the wars in Europe and Asia and the mismanagement of government currencies and thus would flow into dividend, commodities and blue chip companies, not even so much to make money, but just to preserve it. I'm not 100% sure what C wave would be, but if i were to assume anything at this time, I would think that cost of living, inflation and years of stagflation would eat away at the markets ability to stay up. The CRB index should be having a bull market run though.

Cool Breeze
Posts: 2935
Joined: Sun Jul 26, 2020 10:19 pm

Re: Financial topics

Post by Cool Breeze »

Phong Tran wrote:
Thu Oct 06, 2022 10:40 am
Cool Breeze wrote:
Thu Oct 06, 2022 9:34 am
Either way, this is the general characteristic. My prediction is bouncing, new lows created as you say, and then a bear rally again into January, when the real SHTF.

Phong, what's your prediction, roughly, month by month from here til next June? Where will be the bigger relative highs and lows, if you had to guess?

Thanks.
Hey Cool Breeze, most of my charts in the other thread highlight up to March 2023. I do expect the December rally to have wings, potentially rallying back to 4100 - 4250 on the SPX, based on USD weakening as the Fed jawbones their soft landing. Crashing the markets in a 1929, 2008 waterfall does nothing for them and can create a devastating deflationary spiral. And thus, I don't expect even the crash next year to be a waterfall crash (89%). It should still be substantial, most likely it lands around 2600 (March-April), bounces and finals at 2200 (July-August). That would mark A and then we would need another B and C. A strong wave B would be caused by capital escaping the wars in Europe and Asia and the mismanagement of government currencies and thus would flow into dividend, commodities and blue chip companies, not even so much to make money, but just to preserve it. I'm not 100% sure what C wave would be, but if i were to assume anything at this time, I would think that cost of living, inflation and years of stagflation would eat away at the markets ability to stay up. The CRB index should be having a bull market run though.
Thank you, I agree generally speaking but am wondering if the capital flight can make things last a bit longer than March/April. I sort of agree that slow degradation with constant eating up up living standards and equities markets will occur due to the inflation no one wants or can stand, though the central planners do like it more than deflation. The marked inflation will eventually lead to "deflation" as the middle class continues to get crushed and vanish. This was always my thesis here, and both Vince and I have been right for years now and it has happened, and will continue to. When the deflationary spiral comes about because of the destructive inflation, guys like John will come out and act like deflation happened and they were right. I hope he has admitted we were right and this is what we always said, they just didn't have a full and comprehensive analysis over time.

Phong Tran
Posts: 57
Joined: Sat Apr 06, 2019 6:47 pm

Re: Financial topics

Post by Phong Tran »

Here's something I've been thinking about as well. The boomer generation's entry into the workplace basically caused the increase in capital markets and consumer demand in the west. As the years continue and the boomer generation passes away, their assets get passed down to their inheritors. It's fairly easy to say that since A caused B, that C would cause D which is a theory that I've read about before - that the retiring and dying off of boomers will cause deflation overall.

I'm not quite sure this is true. If the inheritors now have increased wealth and purchasing power from inheritance, are we sure that this won't continue to exacerbate inflation as money flows from those that would have reduced spending to those that would be more willing to spend it. As well as the fact that policy makers and politicians seem to have no desire in actually increasing supply, but want to control the demand side.

I think it's something that not many people consider, I know I certainly haven't read or heard much about it. I'm interested in things like that, just like I read that one of the reasons Genghis Khan was able to take over much of Eurasia was because he was blessed with an seasonally long period of good weather that caused the horse population to thrive and grow in abundance allowing his army to become superior horse archers. The butterfly effect and all.

Cool Breeze
Posts: 2935
Joined: Sun Jul 26, 2020 10:19 pm

Re: Financial topics

Post by Cool Breeze »

Phong Tran wrote:
Thu Oct 06, 2022 2:27 pm
Here's something I've been thinking about as well. The boomer generation's entry into the workplace basically caused the increase in capital markets and consumer demand in the west. As the years continue and the boomer generation passes away, their assets get passed down to their inheritors. It's fairly easy to say that since A caused B, that C would cause D which is a theory that I've read about before - that the retiring and dying off of boomers will cause deflation overall.

I'm not quite sure this is true. If the inheritors now have increased wealth and purchasing power from inheritance, are we sure that this won't continue to exacerbate inflation as money flows from those that would have reduced spending to those that would be more willing to spend it. As well as the fact that policy makers and politicians seem to have no desire in actually increasing supply, but want to control the demand side.

I think it's something that not many people consider, I know I certainly haven't read or heard much about it. I'm interested in things like that, just like I read that one of the reasons Genghis Khan was able to take over much of Eurasia was because he was blessed with an seasonally long period of good weather that caused the horse population to thrive and grow in abundance allowing his army to become superior horse archers. The butterfly effect and all.
I agree with you. I've also talked about how if you have less productivity, the supply problem doesn't go away, as you say. The answer to your question is how long those boomers and older live. It looks like we are entering a war/famine/bioterror cycle, so that will play a role in this. My feeling is that the war side will be there (at least a war scare/limited nuclear attack) far before we get to this deflation thing everyone keeps talking about.

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