Good video on Dollar end game

The dollar strengthening is actually a sign of dollar end game.

This works until all treasuries are sold by foreign banks.

Santa rally?

 I think we are in a bear market now.  What that means is while the market trends down, we will have insane rallies and resume the downtrend.  If we break all time highs, then this thesis is wrong.   Otherwise I think I’ll be covering the remainder of my shorts this week.

My goal is to slowly over the year to add to india (INDA) for long term stability, and income. The remainder I’ll trade in and out, mostly going short st toppish rallies but also going long in extreme pullbacks   I may even cover some shorts, put on some longs, and sell the one that goes against me.

The down trend will go into 2024

Back on failure line

 Looks like I had it right last week, load up short.  The action Monday and Tuesday was to shake people like me off the shorts.  The market is on the line for a material market downturn.  I am still short, but the last two days I did take some off the table.

Good luck

That was quick!

There was no follow through BEFORE the market open.

I put sells in to sell about half my shorts on the open, and stop losses on the rest.

Good luck!

I am short the market

I have been ultra quiet on the market, as I do think America is decently positioned for deglobalization.  But the shift from globalization to deglobalization should bring the world major pain, and China is getting hit insanely hard already.  America does have financial stresses itself. Friday the stock market is on the edge of breaking the up trend line from 2020.

This past week I am now over 50% short the market between short term bonds and shorting.  My current 401k is in fixed 5% rate.   Next week is key to confirm a bear market.  

If we get a close next week BELOW Friday's low, we are in a technical bear market.  In my opinion cash is king, which can take in the form of 1 year treasury.

This doesn't mean the market crashes, it just means we are in a multi-year downtrend.

The KEY numbers are breaking the low Friday, this will break the uptrend from April 2020.  The next key is breaking the uptrend from 2008. The next key is the up trend line from 1982,  The worst possible trend line is the uptrend from 1942.  The unthinkable, impossible uptrend line is from the bottom of the great depression, starting from 1932. 

It is impossible to know which line is the bottom, but one of them should be.  I am actually optimistic for America in a world of turmoil, as our economy is positioned well for the future.  Given that optimism,  my disposition is rock bottom is the uptrend from 2008 (next year) or 1982 around second half of 2025. (My target) 

Investing in this environment is really tough.  Buying 1 year treasuries offers a decent return, almost no risk (unless republicans cause a default!), and ability to pivot if we hit rapidly a 2008 bottom.  Bitcoin could come into it's own, but it could fail miserably.  With Bitcoin ETF being approved in the next 6 months, we could see a pop up.  I no longer like gold, but in the short run it could be a surprise upside.  Countries like India that I have posted optimistically is also poised to lose millions of jobs as lower-class office jobs are replaced with AI.  With USA being reserve currency and leader in AI, this could be a winner take all moment.

My gamble is TZA, triple inverse small US companies, that unfortunately I think will get crushed in this wave down.   Click here for a really bullish youtuber who on Friday has become concerned.  Good luck!

2008 and now

The global economic forces of change culminated in 2008, and rather than allow the free market economy to find new footing, the global financial system decided to try to keep things 'normal'.

Fast forward to 2023, the rich vs the poor has never been greater in our democracy, the middle class can barely pay their mortgages, and consumers have over 1 Trillion dollars in credit card debt with interest rates of over 30%.

I'll be posting soon, the stock market will eventually reflect the future earnings.  For now, money has to go somewhere, and the world looks at America as the best of the bunch, keeping money in our stocks and bonds.

To see how the world has changed economically, a good, but rather long winded video

China and Russia Failing, Economic Global impact

Since end of WW2 the world has been continuously moving to open global trading.   The supply chain issues during COVID highlighted this.  History books will mark the start of COVID as the end of peak global trading.  The truth is global trading was strained and retracting from China started before then.

The result is we are headed to a multi-polar world, with different countries aligning as trading partners.  

Russia

With the invasion into Ukraine, the free world (minus India) has moved away from trading with Russia.  International companies withdrew from Russia practically overnight.  Russia removing itself from global open trade, combined with destruction of it's military arsenal, global banking freeze on US assets, and economic turmoil will continue to take a toll.

The ruble is falling as Russia spends its reserves to maintain Ruble value.  This isn't sustainable as Russia is no longer net importer of US dollars.

China

China raised its rhetoric of invading Taiwan before COVID, and started to take steps by removing westerners from its country.  The hostility of the environment rose, and post COVID accelerated.  Western countries have exited China en-mass for being the manufacturing hub of the world.

Even Chinese companies are exiting China to setup manufacturing outside of China simply to remain relevant.   If these companies didn't take this step, they would have collapsed.

China Yuan is in a freefall, with levels not seen since the start of COVID.  Real estate has declined 25-50%+, and unemployment skyrocketing to over 20%

The result is exodus out of China to leave en mass, with an estimate of 90 million people.

Inflation - here to stay.

The world has under-invested in resources, and resources like Oil will continue to see costs to produce rise.  Since WWII energy has continuously become cheaper.  For the first time in over 80 years we will see perpetual energy costs rise until alternate energy sources become more viable as a major source of energy.

The issue is the Federal Reserve is trying to fight inflation, when the real threat is increasing energy production.  The result will likely be a Fed that punishes companies from investing, including into energy due to higher borrowing costs.  This could become an economic death loop.

Affect on US and world

Money must reside in a place.  People living in these countries, and countries negatively affected by these failing states have the option to move money.   Moving money will also be affected by inflation concerns. Some will choose to purchase Bitcoin or other Crypto, European assets, US assets including stocks.  The net is a stronger dollar and a more robust US stock market.

The Risk

Assuming Russia or China does NOT start WWIII or other global dislocating event, as these countries destabilize, the result will be a less robust global economy.  How this plays out is difficult to predict.  The question out there is moving your assets to protect.

What to do?

INDA is a good bet, as it is a free country that also trades with Russia. It has benefited from the exodus from China to other countries.  India has 1.2 billion people and has low global debt. It does have weakness of depending on imports, and could get caught in a political issue between US and Russia.

Bitcoin historically falls and rises with the US Stock market.  Therefore as a hedge against US market it isn't that good.  Same for Gold, in times of downturn it takes a massive hit.  In times of massive printing or lowering rates it benefits.

The best investment is in yourself, including solar panels by reducing future living costs.  Divesting to countries like India is a good longer term hedge including a rising Rupee or India economy booms.

US stocks over the longer term does actually look better now, with emphasis on Bio-Tech (IBB), AI (BOTZ) , and other new tech sectors.  I believe normal companies will continue to suffer creating a wealth divide of larger money moving to tech. 

The US market could go higher from here due to the global instability, or take a nose dive with the world.  The nose dive I do believe is inevitable just not guarantied the next destination.

Good luck!

3d printing - Getting started

I typically use this blog about global economics and US stock market, today going in a different direction, 3d printing! My son was given a 3d printer from his maternal grandmother, and I have gotten hooked!

 What is a 3d printer? It is a device you can use to 'melt' materials to create an object, typically types of plastic. Click here to see a time lapse of it at work! 

There are metal 3d printers, but the price point is beyond anything I can afford right now! There is also laser cutters, CNC machines (video of wood. video of metal), and resin printers. 

Resin printers offer greater detail to create small objects but the cost of the printer and the material is at a premium. It also needs a little more post-processing steps.  To see how a resin printer works click here:

 

What printer to buy?

There is always new versions being released, with different optimized features. Some features include speed, printing detail, different materials you can print with, dual-use printers (like laser cutting), cost, and ease of use. My priority currently is different materials, ease of use, and dual use. As of Dec 2022, this is a good printer and adapter to consider.

Creality Ender -3 S1 Pro

Features I liked was automatic bed leveling (ease of use), max temp of the print head of 300c (different materials) and allows allows for wood etching (dual use).

Market bull or bull trap?

I am more convinced than August 2008 when I started this blog that a global recession is upon us. Back then there was only one result a market downturn unlike seen since the great depression. What about this time? 

 Its a bit more complicated. This time the market failure is global, NOT being led by the USA. One could argue China is leading this downturn, something I predicted would end the next bull run after 2009 bottom. The 2020 pandemic was a detour of our destination. Lets recap the evidence we are on the brink of an epic multi-year market failure. 

Russia economy 

Russia's demand and free trade with the world severely curtailed.  Russia's economic demand is no longer a world influence.  Their influence is restricted to possibility of refraining from selling natural resources and buying weapons.  Hardly a global leading position.

CHINA failing

China was closed for years due to COVID, they re-opened with expectation that China demand would fan global economy and inflation.  Instead they opened and their economy is in a freefall.  The real estate market has collapsed upwards of 50% in the last year and isn't letting up.  Unemployment soaring to over 20% for younger workers.   Their demographics are so bad, even China had to adjust their total population DOWN by a 100 million, a stunning development for a country that the world assumes lies on all fronts.  To compound matters, China ordering destruction of farms to replant with wheat with predictable bad outcomes ahead.  Finally capital flight out of China continues, forcing the yuan to fall to new lows with no bottom in sight.

Saudi Arabia & Oil

Saudis are slashing production stating oil prices will soar, only to continue to see oil prices fall.  Steel prices are falling, copper, and soon to be gold IMO.    There is no hiding in resources in this downturn of demand.

USA

US dollar is the global reserve currency, and it's bond market is in contango.   Near rates are higher than longer rates.  This indicates the future has lower rates due to a slower economy.  Further USA has been laying off, unemployment is rising, and prices are falling.  Some areas of the country are seeing material lower prices for homes.  Covid and technology are going to depress commercial space for a generation.  USA does have going for it a stronger economy than other developed nations.  Also onshoring (bringing work back to USA) and tech developments like AI.  Lastly in a deflationary world, many may bring their wealth to US assets.  This could mute any stock market decline and create a new USD bull run.

But all of this isn't a robust economy, its relative to other countries.

Timing

Market could make new highs or the market is going down shortly.   I think we will have our decline starting before or early July.  Given we had a bull run since 2020, and before that a bull run since 2009, timing by a month to squeeze out a little more profit is a fools game.

USD short term bonds (1-2 year) is best, pay off debts, and longer term holds in INDA or EWW.

Good luck!

Inching closer to deflationary event

We are inching closer to a more material market decline.

I am still mildly hopeful that its weeks or months away, but it could be days.

The reason for my optimism is across the world, as bad as we see it in US with layoffs and banking failures, other countries are dealing with their own issues.

As the global reserve currency, it gives us strength to deal with challenges.

I suspect for USA the catalyst will the government spending less due to debt ceiling.  This should accelerate liquidity issues.

China is in a free fall AFTER they opened their economy.  Companies across the world are exiting China as fast as they can.

It will be interesting to see how CCP will deal with their economy implosion.

Assuming they survive, it doesn't look good for them as their demographics is a disaster.

To learn about China's current debacle of an economy, here is one of many videos I have watched.

NOTE: the only safe place for money now is US "1 year" treasury bonds.  Even if USA defaults, I suspect all payments will be made whole.

I don't advise any bond over 2 year, as I do think we will have odd market action into a global decline.

Good luck!

Lightening up on gold

 My gold miners are up 40-50% since October, I am selling.   In a deflationary collapse gold does very poorly.  Taking profits

Strap on in! Bumpy ride ahead!

 Money is feeing banks in volumes never seen before in the US.  Bank give 1% or less on savings, while bonds, and now Apple give 4% or higher.   As banks lose deposits they must adjust their balance sheets. 

Bank stress isn't over until this imbalance changes.

Further, we are seeing insiders dump stocks in record numbers, as executives see business slow down.  They want to get out before there is a massive stock sale.

I have more shorts than at any time since January 2020 in preparation for the pandemic.  I think the market peak is in, and even if some turbo final blow off rally occurs, the top will be in then.

The downtrend should be 5 to 10 years before we see new market highs.

Safety is 1-3 US Federal Treasury bonds.   You can consider putting some into Gold miners like "royal gold", or ETF's like India.  But in a deflationary collapse everything should go down except us Federal Treasuries.

Strap on in, if you keep your stocks, catch you in 2030 before we come to these levels.

Good luck!

If you want to short, consider SPDN, its a 1x short.  My concern on 3x shorts is we have seen high multiplier ETF's fail like when Oil spiraled. I lost I think about 10K when those ETF's failed.

A leveraged short is SPXS or buy puts.  But I still don't think we will see a huge swoop down, more like a slow motion fail.

Good luck!

Oil is more cost inflation, pushing US recession hoping for Deflation.

 OPEC has announced cuts in oil to drive prices up with a target of 200 a barrel up from recent 60 a barrel.  

If the economy is going to slow massively before this announcement, then OPEC is really front running a massive cut in demand, trying to capture the story as 'they' not the fed brought the economy to slow down.

Alternately, if the US economy is actually strong as the FED and the US government states, then the Federal reserve attempts to command the world to lower prices by raising US government bond rates.  The idea being if the FED raises rates, cost of debt/credit goes up driving demand down.  The FEDs top goal is to ensure the USD faith in it across the world is maintained.  A hard, perpetual inflation would challenge this view.

So the FED wants inflation to go down, if OPEC is forcing oil higher, it will perpetuate inflation as energy is needed in every aspect of the economy.   This will FORCE the fed to maintain higher rates longer than they want in an attempt to bend the world to lower costs.  If this is the fight, then the recent agreements with China/Russia to the Saudi's and BRIC countries is really a first volley to tell the USA it won't be the one to dictate when demand slows.

China re-opened and IMO wants to drive global demand as the US puts the breaks on US dollar demand.

No matter how you slice this, OPEC cutting production will affect costs.  This is yet another attempt to push the US economy lower.

The market top may have just been hit or is close, as yet another break has been pulled.

A good video generally on OPEC oil and inflation, showing US manufacturing has entered a recession.

I re-iterate US stock market 30% lower from here, with maximum of 60% lower.

https://www.youtube.com/watch?v=AnUd4_h52TM

Market Games

 One of the mistakes investors make is expecting problems in the economy, to immediately be reflected in the stock market.

The stock market is value is determined by buying and selling pressure, not actually tied to the economy directly.  The market is more directly affected by change in liquidity of the public investing and firms.

In the very short term, we may actually have a final 'pop up' in the market as money leaves banks or other conservative investments providing MORE liquidity into the market.   Also, people tend to place leveraged 'investments/bets' on the market to capture profits in the direction they think the market will go.  This provides an incentive for big money to force the market the other direction to capture those 'investments/bets'.

In short, we may see one final short squeeze, a market pop up.  If that happens, I will place some short 'investments/bets' for the first time since 2020.

Overall market target is still much lower, 30% is my minimum target.

Good luck!

Potential Market Failure

 Back on Oct 14th I posted it was  reversal day, with a rally into March.   It’s March!

To be clear, I think its LESS likely of a fail from here, more likely a recovery.

Bank index did absolutely terrible Thursday, and if this doesn't recover ASAP, the market failure is imminent.  Target is 50% lower at a minimum until we find a bottom.

We could continue higher, if we do I believe the market will eventually fail with the largest single day drop in history.   But the market could break down soon with a more orderly wiggle trend downish.

Fridays job report could trigger the biggest day down (Monday?) I don’t think the report alone can do it.  If Russia or China state something really nasty turbo charging the jobs number reaction , if the market can move far enough to start a market maker squeeze.   

Robin Hood 20 year old's have taken their gambling addiction to zero day options.   The risk volume is in the trillions.  Yes trillions, while the S&P 500 30 day options is very low.

That leverage in a single day could create the market maker panic if the risk becomes too great to cover 'the bets'.   I think we have more time (~1-3 months), but if we get a market move up continuing in the month ahead, the setup will be in place.  Ironically in Oct 14th post I said that *I* would be convinced the market will go higher in March, and here I am writing it. Listen to me on Oct 14th or today, your choice.

What everyone is waiting for is a break through the trend lines.  (click on image) If we CLOSE on a FRIDAY below these lines, its not going to be pretty, expect immediate market decline of 10%. 

If we break below , first stop is the 200 day moving average, about S&P 500 3740-ish, then next stop is 3500, then 3267.  Past that, final stop is ~2600-2700 range.  The market high was S&P 500 4082, now at ~3945.

That would be a very big drop.  If we hit a critical mass low (2700?) , I will be buying INDA, EWW, and EWZ for a decade hold. I purchased Royal gold at the USD top, and will retain that as a hedge, along with some crypto holding.

Good luck!

Market Direction

Back on Oct 14th, I posted "Reversal day", and it was.  Until we break below that day,  that could have been the bottom.   At a minimum I think the market rallies into March as I posted that day.  This is because I knew the Republicans would refuse to raise the debt ceiling, and the government would be forced to spend savings.

Normally the Government sells bonds to raise funds and spend into the economy.  This has the effect of pulling some money out of the economy creating savings / bank assets.   The government then re-distributes this money from the savers to whatever the government wants.

Without debt issuance, and new cash entering the world markets without needing to pull money from savers. 

A break above the red down line on a CLOSING basis will spark a continue uptrend, in my prediction, into March.

A break below the green dashed line indicates the party is over.

Good luck!

3d printing

 I am publishing this on 1/8/23, but will be updating it later today.

For those who own 3d printers, I wanted to share some of the resources I use.
Many of these will link to my personal collections

Best commercial site to buy accessories for your printer is Matterhackers.  This link also educates on the different filament types: https://www.matterhackers.com/3d-printer-filament-compare

To create your own objects, I recommend: 

https://www.tinkercad.com/users/5lrItlGzfLg-websurfinmurf

To find objects, the 'google' of 3d printing is: https://thangs.com/

The largest repository for 3d objects is: https://www.thingiverse.com/websurfinmurf/collections

Higher quality Objects, some objects are for pay: https://www.printables.com/social/317093-mike-murphy/collections

Miniatures for D&D, and other board games for purchase: https://www.myminifactory.com/

Another 3d print object repository: https://cults3d.com/

Another 3d printer object repository: https://pinshape.com/

Keep your Filament dry! When not using, put in a ZIP lock bag.  Filament that absorbs water will not print well.  For more info on how to dry: https://www.youtube.com/watch?v=fTLBPUJfTJg

Best free 3d slicer is PRUSA: https://www.prusa3d.com/page/prusaslicer_424/

A good pay one is: https://www.simplify3d.com/