The Market Perspective

Wave One Down is Complete

Weekend Friday 3/14/2025

Markets move in five waves, In a bear market wave one is down and it just completed Thursday. Markets had vigorous rallies to the upside starting wave two up.

The next charts will show the topping action of the major indexes, we can now be fairly confident THE TOP  is in place.

Wells Wilder did pioneering technical work in the 1970s. One of his warnings was always invest WITH the major trend of the market. If you are wrong  on timing it will eventually bail you out.

I let the February top get away from me but it is clear that te MAs all crossed down just prior to Feb 24 and it was all to the downside after that.

Still we are early in what will be a ferocious bear market. Now we can buy bear funds with more confidence. Wave two can be shallow or strongly up but still we can begind scaling in positions as market gets short term over done and bear funds sell off.

Here are double tops in SPX, INDU,  NDX setting up the same pattern as March 2000 and Fall 2007.

Here is SH the S & P short ETF, and it is just starting to correct.  The sell off of wave one took about a month. This down  wave two should take  a week or two.

I will post more this weekend.

Bonds

I placed orders under the market for TBF the bear bond ETF.  I got positions  at favorable prices as the bond market advanced as the stocks sold off, sellers ducking into bonds of various maturities.Still TBF is advancing and TLT is falling.

The media claims that interest rates are the highest for quite some time, ignoring the sky high rates of the late 1970s and finally the high of 1981 around 14% for mortgages and higher still for Treasuries.Today the amount of Treasury debt dwarfs 1981 so expect rates to eventually soar way higher than the 4.3% of ten year T notes today.

the political polarization today matches that of 1973-74. First the  press hated Nixon just as they hate Trump today.  Second the market topped  in January 1973, pretty much the same with averages topping from Nov 2024 thru Feb 2025.  Mood is already negative, expect it to become far worse, check out this image from a recent protest.

Looks a Lot like 1973

2/9/2025

 

Donald Trump has a lot in common with Richard Nixon.

Nixon had  been Eisenhower's VP for two terms. He lost to jack Kennedy in  1960. He then lost the CA Governor's race n  1962 TO Pat Brown.

Disgusted at the results he told the press, well you won't have Nixon to kick around any more.

Sensing a weak Hubert Humphrey after LBJ dropped out of the race, Nixon defeated Harold Stassen, Ron Reagan, Nelson Rockefeller. 

Reagan would also lost to Gerald Ford in 1976. In both instances he was lucky. The negative mood of the1970s defeated all incumbents. Mood improved by 1980 when he easily beat Jimmy Carter.

The Democrats assumed Trump was out for good after losing in 2020. their Law fare campaign and the Press continual criticism as well as cable tv excoriations are similar to the way the Press treated Nixon.

By the way, as social grew more and more negative, Nixon finallyresigned rather tha face impeachment. The markets would collapse from 1,040 in early 73 to 577  by December 1974.

Nixon beat McGovern who only carred 17 electoral votes in 1972.

Now the Democrats control CA OR WA IL NY MA for a total of 123 electoral votes. If Kamla had not had that advantage her final tally would not have been so strong. But here are the similarities

Both men came back from losses.

Both men despised by the mainstream press.

Both men were n their second terms, usually far less successful than first terms.

It is 52 years from  1973 to  2025, three years short of a perfect Fiboacci 55.  But Nixon did not resign until August 9, 1974, that makes 53 years. Trump is just getting started so two more years to 55 might make a god target for a break down.

The US was bogged down in Viet Nam, now the US not in a war per se but Mid East and Ukraine drag on.

53 The stock market has re visited its all time high in  1972-3 above 1,000. Today the DJIA stands at another new high.

Popular culture was high for both men as they assumed office the second time.

For Nixon the Watergate burglary cover up doomed his second term resulting in his resignation.

With more executive orders and diplomatic chaos in Panama and Greenland, tariff threat at our biggest trading partners, Democrats screaming outside the Dept of Education Building, what could go wrong?

Page A2 of the Weekend WSJ states the Trump Bump in Consumer Confidence is already over. Prelim results show confidence level sliding 5%.

Trump has announced a new Golden Age, all this resonates with January 1973.

Then as now, interest rates were on the rise. Given the  $36 T national debt and a 39 year low in rates March 2020, I think Trump's promise of lower inflation and interest rates are a pipe dream. Indeed rates have started up again as markets slid Friday.

Let's be on the look for a Nassim Taleeb Black Swan event. Such events seemingly come of of nowhere to the surprise of everyone.

The  DJIA would collapse from around 1,040 in early 1973 to  577 by December  1974. May brokerages had to merge. Merrill bought White Weld awhich put them in the real investment banking business.

 

Explaining socionomics

Monday 1/13/2025

 

Here is a typical  market news headline

Dow creeps higher as rate-cut fears drag on Nasdaq

The Nasdaq is leading the retreat as bond yields climb and market faith in rate cuts this year fades.

_______________

 

Friday amid a great jobs repport, the dow fell over 600 points, the media struggled for an answer.

Last year the Mag Seven were all the rage, NVDA is down today, the Industrials fell first, then SPX, now NDX is joinging the group

What has interest rates to do with NASD?  It is the only explanation the writer could find.

The better explanation is that the market has concluded five waves up in various fractal times, certainly from  2009 low. And now the only way is down.

But that would be complicated to explain in a headline.

the market ois sensing trouble, and there is plenty around, natural disasters in Carolina and Los Angeles, weakness in the EU and China, the realization that wind and solar need natural gas and coal fired generator back up, hey crude oil up another two bucks today!

the bear funds I have recommended continue to do well

 

PSQ, SH, HDGE, BEARX

 

A Wave 2 Ends

Monday 1/6/2025

 

The INDU had a 4100 point intra day range and closed down. No this rally doe snot have legs.

 

Here are the charts of the major indexes showing today's new high and then reversal. This was the top of a Wave  2, Wave 3 should begin tomorrow, note the NDX which did better than INDU or SPX due to the abundance of tech issues. One advisory I follow today said does this rally have legs, they say yeah maybe, I say no, More tomorrow

Every Investment FIrm is Bullish

Weekend 1/4/2025

Here is a handy summation of how Wall St firms see 2025

But he admits if it were not for the Mag 7 tech stocks, the last two years would have been ho hum low single digit performers

At the end of a bull market 'investors'  pile in to a few stocks, the Nifty Fifty in the  1960s, the dot.coms in 2000, home builders in  2007

now it is seven tech stocks.

$500 Meals for Four

Thursday 1/2/2025

Is a $500 meal for four a sign of a market top, I think so!

Plans for San Antonio

 

Graham Weston plans downtown expansion, UTSA as well, this high end steak house doing the same, As my friend Bob Prechter says,it is not 1921 it is  1929.

All the News

Tuesday 12/31/2024

From CNN today

“Inflation is waning, interest-rate cuts are in motion and earnings are trending higher, all which bolster sentiment and provide valuation support,” said Terry Sandven, chief equity strategist at US Bank Wealth Management.

It’s an extraordinary event for the modern-day version of the index. (Precursors also racked up that kind of performance three other times, in 1927 and 1928, 1935 and 1936 and in 1954 and 1955, according to a Bank of America analysis.)

_________________________

The 1927-28 and 1935-36 dates make the point, the year following those gains the market peaked and then collapsed the following year.

Surprise, No Santa Claus Rally

Friday 12/27/2024

TECH SLUMP SLAYS SANTA RALLY
WALL STREET MOMENTUM FADES

Nosferatu Is Your Holdiay Ticket to Fear and Trembling

Friday 12/27/2024

Nosferatu is a re make of a 1922 German silent horror film concerning vampires.

Think Dracula.

The link is to an interview with the male and female talent in the film.  Interestingly the male describes this as a holiday film, really a vampire movie?

Indeed it opened in theaters Christmas Day, what next Santa  as a vampire?"

By the way the vampire hunter is Wlliam Dafoe one of my favorites I have not seen in some time.

Socionomic theory holds that negative mood identifies with horror and gangster films. This has its roots in the original Frankenstein and Dracula films of the  1930s.

Public Enemy was a popular gangster film of that era. Horror returns in 11973 with the Exorcist. Gangster films with  Godfather I and II at the same time.

the 1970s were so generally awful it saw the creation of the disaster movie like Poseidon Adventure, the Towering Inferno, and Earthquake.

I have been calling for a market top and considerable sell off, if so Nosferatu is coming in right no time.

 

2025 Expectations

Dennis Elam

Thursday 12/26/2024

Word Count 453

Will the Promise of 2025 Hold?

A landslide was Ronald Reagan winning 525 Electoral College votes in 1984. Or Nixon winning 520 votes in 1972, or Franklin Roosevelt getting 523 in 1936, or even Lyndon Johnson winning 486 votes in 1964. They were all landslides. 312 Electoral College votes is pretty average.

RTE News

Much has been said and written about Trump;s comeback victory. Still his popular vote was only ahead by 1.5%.  He has the Senate by less than six votes and the House barely at all. Harris took over 200 electors given the Democrat advantage in six states.

Already things are looking less rosy.  A minority of Republicans in some sort of caucus seem to vote against everything. This required Republican Speaker Johnson to obtain Democrat votes to pass whatever. Then Trump and his new buddy Musk object. This is Congress guys, not the Hogwarts School of Magic.  It will be quite the anniversary if certifying his election is held up over who is actually Speaker. Any chance of farming this out to Nancy Pelosi who seems to know a thing or two about the job?

Ovee the top statements suggest Trump wants the Panama Canal back as they charge too much money.  That’s rich. Trump International Hotel is NYC runs $622 a night. The initiation fee for a Mar a Lago Membership is $200,00 plus annual dues of $14,000 and a $2,000 minimum food charge.   Gee Donald, is that excessive?

All of a sudden the near frozen island of Greenland is vital to US security. But Denmark is not selling.  Anyone want to appraise that purchase?

Trump’s choice of Matt Gatz was classic Trump ‘loyalty first’ but Gatz ethics investigation make ones wonder what he was thinking. Other candidates are under question like Tulsi Gabbard and RFK Jr.

My point is Trump looks a lot closer to Nixon 1973 than he realizes.

Stocks took a big dive last Wednesday losing over 1,000 points. As of today that loss has not been totally but mostly erased.  Momentum indicators allow for considerably more rally before  topping out again. Should the recent highs be taken out we will have to re-assess a bearish stance. My point here is that, as from the highs in early 1973, cd not discount the government’s ability to throw a wrench in all of this.

And as noted, Britain, France, Germany, Ukraine, China, and Middle East all have problems. Interest rates are not falling even after the  FED cut. Crude oil remains in low volatility around $70. Energy service sector limps at best.

I suspect we will need to be well into January to get a better feel for  2025.