The 2008 analogue tape looks very interesting from where we stand.
Let's anchor it to the next two Fed meetings -- since that's all that matters -- and it suggests great things for May, 2023.
| SPX daily with 2008 overlay |
With a final backtest of the old support in August we would then selloff to new lows into October.
| 2008 analogue into Fall 2023 |
Stay frosty. Nuke scare in May? NATO is truly desperate and bankrupt at all levels.
You don't see it yet, but it's there. A couple of things will happen first.
After that, all bets are off.
Then it will be public, and the game afoot. Durham. Military. A true black swan -- who could have seen that coming? Who is prepared for such goodness? A stable genius caught them all, and now it is time to mete out justice upon them.
The bottom of the rally channel from the 2189 SPX low is about 2830 right before February opex. This is how we broke down in early 2020; we crossed the channel formed by the previous rally, bounced, and then fell all to pieces. The period from March FOMC to June FOMC should be an historic, dangerous time.
We will win and restore Constitutional government to our land. We will cement the tactical victory with dramatic shifts in the Overton window as pharma culls the herd. Sorry, no refunds.
| crossing the rally channel on the S&P 500 |
The S&P 500 will be in the neighborhood of 3100.
On my 10 mile morning walk today, I found your COVID-19 Vaccination Record Card on Market Street in Ballard.
You received dual Moderna shots in March and April of this year. You are 22 years old, Emily Elliott.
You will need this to enjoy basic human freedoms, to be employed, to attend concerts and sports events, and to visit bars and restaurants in the time you have left.
Please drop me a line at cgustafson at gmail dot com, and I'll gladly return this to you.
A walk to Ballard is a fine excuse to visit the Twice Told Tales bookshop; on my last visit I found a hardcover 1st ed. of Strauss and Cropsey's History of Political Philosophy, if you can believe it.
In darkest Ballard, I know!
Friendly reminder to friends that the results of the Maricopa County 2020 election audit are due out after market close this Friday, September 24. Chow down on me, hogs.
Zoom way out on $AMZN and notice its rise from nothing, a triangle, and a spike to the heavens. Everyone's rich in Seattle now and there are condos and ridiculous restaurants in neighborhoods that used to be quite dodgy, full of junkies with needles in their arms.
Is that spike a bearish wedge? Are its legs actually triplets and not 5-wave impulse moves?
A full retrace of this epic boom would bring it back to $26/sh.
What kind of crisis could bring this about? Where would other equities find themselves?
| $AMZN weekly bearish wedge |
Because they are herd animals and morons.
And then ...
Maricopa.
I thought I should be the first to bring this up, but a full deflation of this extended chapter of the Fed experiment implies a retest of the 1987 lows, or 218 on the S&P 500.
I understand this is rank madness and irresponsible bearishness, but the geometry is now in place for this, as are the domestic and international prerequisites and trigger events.
This is a 95% decline from yesterday's all-time highs.
The final leg down will run from the September FOMC to the November meeting, as they at first eschew, then embrace, policies needed to stanch the bleeding.
It's not a bug, it's a feature. The debt monster is out there waiting to deflate all the things.
It can't be bargained with, it cant be reasoned with, it doesn't feel pity or remorse or fear, and it absolutely will not stop... EVER, until you are dead!
| 95% decline from top to bottom |
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Support is at about 2960 on the low edge of the rally channel, at the Full Moon at the end of November.
 |
| 1970s State Street, Chicago |
The next panic phase comes around the December 8th "Safe Harbor" deadline, ending when the Fed meets mid-month and is friendly again. Trump will win; actually, he already has.
Q1 2021 is an epic disaster as all the idled mortgages and rents are due again, and the can can't be kicked. We can easily reach a 3-digit S&P 500 by the end of February.
| S&P 500 crossing the megaphone |
The worst-case scenario for the equity markets is a full-blown Constitutional crisis, keying off the Electoral College meeting 14 December. It is a real crisis, sure, made exponentially worse by all the leverage and insolvency loosed upon the world.
 |
| Titanic vs modern cruise liner |
This will only end when the Fed announces ambitious monetization and purchases of index ETFs at the January FOMC.
IMO this is the severe but brief deflationary shock that everyone on Real Vision expects to happen one of these days. But who will catch it?
| S&P 500 worst-case |
Thou preparest a table before me in the presence of mine enemies: thou anointest my head with oil; my cup runneth over.
 |
| Magnificent Mile |
| S&P 500 support is 500 |
It appears that the Biden campaign is about to implode, and take the Democratic Party with it.
Gee, that's too bad.
I guess we'll know if The Market takes this seriously if the /ES goes limit-down Sunday night. If it does, then I expect it to close 10% down at the 200DMA and burn 40% on the week.
If you've been in a coma or off smoking crystal with Hunter Biden, I'll let Rudy catch you up.
/pol/ seems to be a good place for timely coverage as well. And, of course, there is Alex Jones.
Donald Trump has just racked up another superlative! Best October Surprise ever ...
It looks like we finally retest the underside of the rally channel up from the March lows tomorrow. Madame Speaker Pelosi (D, CA) has a press conference early in the session, and I'm excited to see what news she has to share.
This fellow has an interesting analogue to the 1987 crash. Make of it what you will.
I guess this would presage a dive into the election, followed by a Trump win and a monster bounce. But reality will maul us by the All-Star Game.
| Such fun in 2021 |
