One Last Rally
We start with a call from my consigliore on Monday, a term I hope all Mafioso readers will forgive my applying to an attorney/CPA sort – no slight of sons of Sicily is intended. But the call goes something like this:
“Pssst…something just jumped out at me in looking at Chris Carolan’s work and Steve Puetz work: Crashes seem to happen around the 28th day of the 7th lunar month of the year…”
Oh? This is kind of interesting since the whole predictive linguistics project is lunar month based…go on…
“Well, that would be around October 14th this year. So the way I have it figured, something is bound to pop then. 28th day of the 7th lunar month was the Yom Kippur War in ’73, and it was the highest Defcon level during the Cuban Missile Crisis… and you know what happens 55 days before that?”
Let me guess…something close to the August 22 hot date in the linguistics?
“August 21st.” [click]
Well, OK…so hoping for a violent rally and a new high into option expiration this week isn’t off the table…it’s just a little bit delayed and it may start from lower levels hit in Monday’s trading…
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The stock market closed under our 9,200 Dow level on Monday, but not to worry: In his latest email to colleagues, Robin Landry offers us hope that we’ll have one more violent upside rally – and his work now includes the possibility of my favored outcome – a peek-a-boo over the 10,000 Dow level…
Another quick update since the Dow broke the 9200 area in the first few minutes of the market open Monday and stayed there into the close, I thought I would update you as to what I am looking for over the next few days. If I am correct in the wave count, we have one more final surge to the 9700 -10200 area, to complete Wave 4, or even higher, if my alternate count (Wave 2) is in effect once this correction is over. The attached chart shows the possible wave pattern to the ideal low for this Wave B at the 8950 area. If that level is broken and volume begins to increase on the downside then the odds begin to favor that THE TOP for this rally, off the March low, is over and new lows are directly ahead. I will address that if it occurs with another update.
Readers are picking up all kinds of tell-tales about. One, for example, has been looking at the Philadelphia Housing Index (HGX) which he notes was cut in half in 2007 and roughly a year later the S&P 500 was halved. Then in 2008, the housing index went nowhere…and then in mid-September of 2008 it was halved again. So is this just a coincidence or is it a one-year lead-time indicator of what’s to come? If it holds this year, then the Dow ought to be halved in the September-October period of this year, which would (from a peek-a-boo over 10,000) put us down around Landry’s Dow 4,400 expectation.
Wonder if Depends sales will go up in mid September?
But no worries yet – rally on today and since the market needs to rally a bit, then how about something rosy to hang the rally on? Something like, oh….
Producer Prices
No inflation in sight! Hallelujah, brother! Pimp them futures! New Producer Price index numbers are out this morning, and here’s how they pencil out…
“The Producer Price Index for Finished Goods declined 0.9 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed advances of 1.8 percent in June and 0.2 percent in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved down 0.2 percent in July after rising 1.9 percent in the prior month, and the crude goods index fell 4.5 percent following a 4.6-percent increase in June. (See table A.)
The downturn in finished goods prices was broad based. The index for energy goods fell 2.4 percent in July after climbing 6.6 percent a month earlier, prices for consumer foods decreased 1.5 percent following a 1.1-percent advance in the previous month, and the index for goods other than foods and energy edged down 0.1 percent compared with a 0.5-percent rise in June.
Not that the government numbers mean much, since there’s such a disconnect in statistical techniques. But that’s the ruling paradigm view for you… I’ll just sit back and see how many writers can screw up the rewrite of this very simple government press release.
There Goes Healthcare Reform
Usually, when there is a big hoopla about something in the (manufactured) news arena, I find myself asking “What was really going on during the past month or two that we weren’t supposed to notice?” Uh….sixth biggest bank failure ever being under our belt with no particular panic in the markets, maybe?
Somehow, Arnold Schwarzenegger’s famous line “I’ll be back…” wells up from my subconscious. As does the latest cartoon from our resident cartoonista, Rebecca Price of www.toon-republic.com:
Wonder if the doctor has swine flu vaccines in that case?
Schwein Time
Speaking of which, you saw where the actor from the Brit’s swine flu commercial got swine flu?
Florida Sinking
Word that the population of Florida is dropping for the first time since 1946 has me asking: Is it just the housing bubble collapsing, or is there some subliminal sense of wanting to leave the lowlands at work here?
WTF Foreign Affairs
Here’s a pisser: “Iraq may hold vote on U.S. Withdrawal.“ Hey! Shouldn’t we have had a vote on that at some point? I mean, change…remember that? Change? I never expected Iraq’s government would be more democratic than ours, did you? How come our congress can’t listen to us on things like bailouts and buying, oh, AIG, just for example….Jeez Louise….
Hack Attack
A super hacker has been busted by the Feds after reportedly getting 130-million credit card numbers.
The real question – not answered in coverage so far: Were any of them not max’ed out? So what was the point, eh?
Bill’s Due
Not that kinda bill….the kind that’s a hurricane about to pounce on Bermuda. There go my golf plans for the weekend…hate soggy greens (have to blame something, right?)
Comet Sense
Science is reporting that an amino acid that’s a common building block of life has been found in a comet. Grand. Now if we just had some building blocks of life on earth that were not owned and rented out to humans…