What causes inflation?

 Very good video by professor Keen outlining how government debt doesn’t cause inflation, the private sector does.   The two components that can cause inflation is energy (oil) and income increases (wages or government checks to people).

With this understanding, we can clearly see government issuing free money from covid sending to people to spend caused prices to rise.   Issuing new bonds did not.

Between energy demands with AI and potential for Trump sending money to people, inflation is in the cards.

Well worth the watch.

https://youtu.be/CwCjgKmE0nE?si=RuDwsinzrXz2N90j

Who benefits from a depression?

 https://youtu.be/lDvYj6nlwI8?si=icMknV3YonaQjbw_

World is contracting because America selfish turn and AI future advantage

America is increasingly acting in its own interest, changing rules to favor itself while the rest of the world suffers. Russia and China bear the brunt of this impact, with China's troubles largely stemming from the free world withdrawing manufacturing operations and a decline in American consumer purchases.

Combined with the current US administration's efforts to cut government spending, we are on the brink of experiencing significant deflation—the likes of which haven't been seen since 1913—driven by an unprecedentedly strong dollar ahead. After reaching this peak, the dollar is expected to gradually lose value over time, as the world moves away from using it as a standard currency due to the hardships caused by overreliance.

In this environment, global wealth may be left grappling with how best to deploy capital for survival in the changing landscape. Meanwhile, as global challenges to traditional currencies mount, gold continues to reach new highs. In my view, the only assured area of value is the future of AI and robotics, as they represent a sector of guaranteed growth. Gold and Bitcoin, however, depend on a future influx of cash to drive asset values higher. Bitcoin, in particular, stands the best chance of retaining value, as autonomous AI-driven money-making systems built on Bitcoin could operate independently of global government constraints, preserving its status as a valuable asset for trade.

China debt is now hitting 1 trillion a month, see below

https://youtu.be/efRgjYcELko?si=PS2HeZTNOSlHMYsW

Going Short the Market

President Trump is aggressively challenging the status quo on multiple fronts. Whether it's bypassing the constitutional law that only Congress can appropriate funds, sidestepping security clearance protocols by granting access to figures like Musk without proper congressional approval, or making controversial claims about displacing entire ethnic groups in regions like Gaza, his actions are undeniably radical.

Having worked in IT for decades, I know that transformative change often brings immediate challenges—even when it promises long-term benefits. So, even if you support Trump's unconventional approach and favor consolidating power in the executive branch (much like authoritarian leaders such as Putin or Xi Jinping), expect that the road to prosperity will not be smooth.

I'm positioning myself accordingly by loading up on shorts, particularly in sectors I expect to suffer the most from increased tariffs and market instability. My focus is on industries like automobile manufacturing, small businesses, and banking, which I believe will be hit hardest without a safety net from Trump.

On the other hand, if a substantial downturn occurs in the AI market, I’ll be quick to go long on AI stocks. I’ve already invested in Palantir, as they are strategically positioned to serve the U.S. military's AI needs. I'm also bullish on Bitcoin, anticipating  Trump is planning to buy Bitcoin’s through policies involving taxpayer dollars. This will cause Bitcoin to surge, and his insiders (and his companies) will be cashing out—an early sign of crony capitalism in action. With that in mind, I plan to research Trump’s preferred allies and invest in their stocks as the trend unfolds.

Good luck!

 

How Democracy Dies

The current presidential use of executive orders to impose tariffs isn’t simply a matter of economic policy or even breaking trade agreements—it’s a stark reminder of the difference between democracies and dictatorships.

In a true democracy, trust is built on the bedrock of honoring agreements. Congress and government bodies craft laws through debate, compromise, and checks and balances. These agreements are not arbitrary; they are the lifeblood of a system that empowers citizens and distributes power so that no one individual or group can dominate. When a unilaterally overriding these agreements, it isn’t just adjusting policy—it’s eroding the mutual trust that makes democratic governance possible.

In contrast, dictatorships thrive on the concentration of power. In such regimes, a single ruler—or a small cabal—imposes decisions without consultation or accountability. In these systems, dissent is crushed and citizens are forced to echo the leader’s words, stifling open debate and independent thought.

What made America great was precisely its commitment to democratic ideals: the freedom to discuss, disagree, and shape laws collectively. To “make America great again” means refining our democratic process, not undermining it by bypassing Congress and centralizing power in one individual’s hands.

When executive orders replace laws made by our elected representatives, we aren’t just changing tariff rates—we’re setting a dangerous precedent that erodes democratic process and paves the way toward authoritarianism.  The strength of a nation lies in its ability to allow robust debate among its democratic representatives, respect established agreements, and share power. That is the essence of democracy

Is Bitcoin future store of value for the world?

The video below does a great job explaining the history of money and where Bitcoin might be headed. However, it misses a key point: Bitcoin isn’t money and probably never will be. Instead, it’s the premier digital store of value that’s gaining global traction. Honestly, no other pure digital asset matches Bitcoin’s universal appeal for storing value.

Why is digital storage so important? It allows for fully distributed financial systems. In finance, transactions often need collateral to proceed. Think of collateral as a safety net—if things go south, the loss is covered by transferring the equivalent in Bitcoin. This setup lets people take risks with limited downside.

Imagine a fully digital world: what digital asset would you trust as collateral? DOGE coin? 🤔

Looking ahead to 2025, I’m predicting a Bitcoin mega bubble. Why? Let’s just say Trump’s economic ideas aren’t exactly sparking growth. Raising import taxes, slashing government jobs, and removing affordable labor from the U.S. are more emotional moves than solid financial strategies, hurting small businesses in the process.

Remember 2020? Bitcoin was just hanging out at $5K. Trump unleashed a $2 trillion bond issuance—the biggest money giveaway ever. Then Biden kept the free money flowing, and boom—hello inflation. 

With potential of Trump free money and Trump pushing Bitcoin as a short-term “USA success story,” I’m optimistic about Bitcoin’s prospects in 2025-2026.

Don’t get me wrong, I plan to sell a coin when Bitcoin’s hype peaks. Since it’s not a magic ticket but more of a digital collectible, I’m eyeing an exit around $400K.  Moving to $1M isn't out of the question. 

This time, I’m recommend FBTC over GBTC. Back in 2020, GBTC was the only option and it did great, jumping $10 to $55 back then and recently from $8 in 2023 to $80—a tenfold increase!
Do your homework on GBTC, though. Personally, I prefer FBTC since it’s directly tied to Bitcoin.

The ONLY question is can bitcoin hold value in a world with US Stock market falling.
Hence, please buy only what you can hold through a downturn of bitcoin.

Trump is good for bitcoin

 

Trump tends to reach for the easy button to make people happy or make money.   I am rethinking my stance if bitcoin at 145k as my target.   Instead, I am revising to 400k-500k as a 2025 target.   Specifically I am thinking bitcoin will hit upper bound of this chart.

https://websurfinmurf.blogspot.com/2024/11/bitcoins-end-game.html

Bitcoin may become an asset banks will allow loans taken against it as collateral.  Whenever this does happen, that should indicate a top will be approaching.  I suspect bank loans will be on the next wave, but it’s difficult to see how bitcoin as an asset changes under Trump.

I cancelled my bitcoin sell order at 145k.  If bitcoin approaches the upper bound of the chart above, please consider selling if the money will make a positive impact to your life.

Can Trump fix world finance?

President-elect Trump during his first presidency,  oversaw over 50 major departures from his administration. We witnessed significant turnover for various reasons: some officials received "too much attention," diverting focus away from Trump, or simply sought to perform their duties with some degree of independence.

In the years ahead, America will face economic challenges unlike those seen since 1929, and we need strong leadership to navigate the storm. The misuse of the U.S. financial system, both domestically and globally, is severe. When we need the world's support most, we risk burning bridges with our allies, while our adversaries may rejoice at our downfall.

If Trump consolidates power by directing all actions or surrounding himself with blind loyalists, he will stifle the distribution of power within the U.S. government. The outcome—whether wildly successful or a failure—will hinge on Trump and the Americans who supported his promises to dismantle the system. If dismantling the democratic system is pursued, America in 2028 will look nothing like it does in 2024, as division and internal conflict escalate.

Let’s hope I am wrong, and that Trump will unite Americans, empower democratic institutions, reinvigorate the populace, inspire individuals to strive, and change the rules of the game to make the American dream more attainable.  If the dream dies, I can't see anyone caring about the stock market anymore, except the 0.1%.

Future employment with AI

 

AI's Revolutionary Progress and Its Implications for the Future of Companies

AI is advancing at an extraordinary pace, and most people remain unaware of its true capabilities. I operate under the assumption that no matter how much I read and learn about AI daily, I am still behind the curve of what’s possible. What I’m about to discuss has already been achieved in various forms (wherever possible, I’ve included links), and the extrapolation is simply that these developments will become even better and truly viable in the near future. None of this requires true AGI, we simply need to make AI "a tiny bit better" than an average person.

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The Virtual Company Revolution

Future companies will be founded by individuals or small groups who instantiate a virtual company. These companies will consist of fully virtualized employees, each with unique specialties and dispositions designed to maximize the chance of success. Every virtual employee will have individual memories and histories, allowing for iteration, continuous improvement, and the avoidance of repeated mistakes.

Human owners of these virtual companies will need access to seed capital. Knowledge work companies will find it cost prohibitive to staff highly skilled human employees as compared to the alternative, as a function of potential progress in a given year. Once operational, these virtual companies can function autonomously, with human founders acting as a decentralized autonomous organization (DAO) or a board of directors, conducting periodic reviews and offering strategic advice.

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Autonomous Operations and Financial Independence

Virtual companies will independently manage assets, including cash, to fund their AI capabilities, run experiments, and evolve their missions. For this to work seamlessly, companies will rely on decentralized financial systems. Bitcoin is a prime example of a capital system outside government control, making it an ideal candidate for these operations.

To succeed, the majority (95%+) of a company’s operations will be virtualized, including:

• AI provisioning: Dynamically allocating computational resources.
• Knowledge specialization: Hiring AI agents in specific domains of expertise.
• Execution: Meeting objectives through automated workflows and smart systems.
• Subcontracting: Automating or virtualizing third-party work.

For instance, a virtual company requiring research could hire a virtual researcher to design experiments and produce whitepapers. To maintain competitiveness, such processes must be automated as much as possible, ensuring objectives are met faster than the competition.

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Competitive Advantage and Wealth Creation

The last century has demonstrated that wealth accumulates where new capabilities are created. The wealthiest individuals or organizations often dominate markets by being the first to develop or commercialize transformative technologies. In this paradigm, the new top 0.1% will be those who can fund and deploy virtual resources effectively to create value in the marketplace.

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Implications for the Majority

For most of us, thriving in this new era will hinge on interpersonal skills, as most knowledge work becomes outsourced or automated.  The ability to foster positive relationships and collaboration will become paramount. Skills like Mindfulness and Emotional Intelligence will be invaluable. Developing and certifying these competencies could be a key strategy for staying relevant in a world increasingly dominated by virtualized expertise.

AI will create exponential advancements to human kind, but with it comes responsibility to adapt.

NOTE: I had AI take my thoughts and create this article.  Special thanks to Bob who commented I can't write a post well :)

Bitcoin to 145k or beyond?

I wrote on November 4th bitcoin to 145k in 2025, bitcoin was at 67k.  It is poised to break 100k in the days ahead.

Looking closer at the chart I called out Nov 4th, it looks like bitcoin is breaking out.

If this thing goes parabolic, I will likely not hold into 2025, 145k is still my target.

Democracy may end

 I am an independent voter, I support the US Constitution.  Democracy is based on power comes from the people, not a single individual.  With that said if we choose to end democracy, I will not stand in the way of the will of the people.

Dramatic? Ill check back in 2028.

If Trump wins, America will be torn to shreds  by 2028.

Buckle up.

https://youtube.com/watch?v=BP6_cI5UUZg&si=AVTVuVxG9VahED0v

Bitcoins end game

Using the history of Bitcoin as a guide, it will continue to go higher up towards $1 Million a coin.  

There are events that can change this trajectory, such as a "new better bitcoin".  One potential is the FED releasing USD blockchain.

How can you tell if the trend is dead?

There is a bitcoin "power law theory" that illustrates the price of bitcoin over the last 15 years:
https://giovannisantostasi.medium.com/the-bitcoin-power-law-theory-962dfaf99ee9

According to this graph between mid 2025 and end of 2025 we should see a near term peak of bitcoin of ~$150K, with a pullback to ~$95K.

If you see bitcoin break below the red line, I expect bitcoin to enter a freefall, simply because big money will be watching the bitcoin trend over the last 15 years and recognize something has changed.

https://charts.bitbo.io/long-term-power-law/

Based on this, it is reasonable to consider selling a coin in the blow off into 2025, maybe ~$145k.
Good luck!

The ride up, until its down

The market is at all time highs, and its anyone's guess if this continues into next year.  With the world printing cash, the cash must flow to assets.  And right now, USA is the best place for assets in a world having challenges.

This does not mean average Americans are being prosperous.  It means loose cash finds whatever the world thinks is a safe investment.   When the loose cash ends or people panic, no one can predict exact timing.  But it will end in 2025 (if not sooner).

When it does, fear will take over hard core, and US bond rates should plummet.  When this happens it will be the LAST time you see rates this low easily for a decade.  Ideally move out of bonds into energy, commodities, gold, bitcoin, even oil.   Can also invest in technology such as AI or biotech.

What could change my outlook? Average Americans having lower costs, gainfully employed, paying down debts, and growth in consumerism.  Without this mix, we will all struggle to keep things afloat.

I do think after this crash we may see inflation in the decade ahead balloon as the world prints its way out of debt, and its obligations to baby boomers. 

Buckle up!  Enjoy this stock market, for it won't be the same ever again.  Easy money days are almost over.

A Lesson of when you are right, but wrong

 My last post asserted SPX hitting 4900, it hit 5120.  This is a prime example when you are right, but yet still wrong.  This is what the market is excellent on doing.  We did get a market decline and rally into the election as I asserted. 

But what I did not get is a decline to the target I thought.  Lesson is always trade out of positions when you are right, and don't wait until perfectly right.

I did close out of short positions, in the case of shorting Stellantis, it all worked out well.  But for SPX, I let quite a bit go back.

Looking ahead, while the market should be topping, I am reserving this from a declaration.  The reason is China is printing printing printing.  With loose money it will flow to whatever it thinks is a good investment.  I expect gold, bitcoin, and potentially the US stock market to benefit.  The reasoning is China's economy is a disaster, I question if the CCP will be in control by 2030.

Worse yet, we will likely get inflation in the USA, and the world, because of the Chinese printing flowing into hard assets.  Also Russia is attacking Ukraine international grain ships that will result in less world wheat.  These two items will force the FED to not cut rates, ensuring our economy doesn't get the support it needs.  I suspect the FED will know this and will ease in "different ways", like its special operations.  The interest rate lever is used to pretend it is the master controller of inflation, and while a component, it is hardly the largest one.

If assets do rise, the US pundits will use this to confirm the US economy is doing great.  Far from it.  The housing market is turning bearish (click).    And I personally know multiple people unemployed, some over a year in IT.   There isn't a crazy amount of layoffs, companies are simply hiring at a minimal level.  This is the first step to having an employment problem as the unemployed accumulate.

Where does that leave us?  With China printing we may get another goose up.  If it does Bitcoin & Gold is a good play, and the market.  Stay into the market going up, but if you get concerned listen to your gut and capture gains.  There is nothing wrong with sitting on a portion of your cash in fixed and sit watching into Q2 next year IMO.

Short to spx 4900

 We didnt reach the low into the election, when things hit below spx 5000 i will cover most things.

So if you are long in the next week or two, be prepared for some pain.  Ill join you as a short term bull soon.

We just experienced a counter rally, going down or up is never in a straight line.

Whats next?

 When the FED started to raise rates in March 2022.  At that time the Fed said it takes time , over 12 months before the effect of raising rates can cool down the economy.  The Fed raised incrementally rates from March 2022 to July 2023.  The overnight rate went from 0.25 to 5.5%

Since July 2023 the stock market has reached new highs and bond rates have actually fallen.  

The stock market had issues at the same time Japan had issues last Friday into this past Monday.
Now the market is calling for the Fed to cut.  Does anyone doubt the fed will cut if unemployment rises or the stock market destabilizes?

While its possible they don't cut, even the Fed set expectations they will in September.  What is the rate we are talking about?  Its the rate the Fed will pay some financial institutions to deposit their cash with the fed at a set annual rate on a nightly basis. 

Notice, this is NOT the 1/2/3/5/7 year, 10 year, 20 year, or 30 year US bond rate.  It is not car loan, credit card, or mortgage rates.    So a rate cut of the fed rate doesn't automatically cut borrowing costs.

It took 2 years from March 2022 first cut to have material inflation decline about March 2024.  Why do people think reducing rates by 0.25 or .5 from 5.5 to 5.0 will positively impact the economy quickly?

It can't because what the Fed rate does is influence financial institutions to seek gains from different financial activity instead of parking cash at the Fed.  When banks and other institutions change their investment strategy it takes TIME.

Therefore it isn't possible for a fed rate cut to 'save the economy'.  There are potential other events that will give a really good boost for a bit even if unemployment continues to rise.  But barring dramatic events, the dice is cast, the market has peaked.

Could we see a new high in the next couple of months, of course.  But when the Fed does cut rates, its them saying "we see the economy has taken a turn for the worse", and their action will start to help the real economy, in a year or two.

Now for other potential bad events, last week the reason the US market tanked was Japan had material challenges in their economy, including their stock market falling over 10% in a day, and the Yen appreciating dramatically.  This hurt US financial institutions using Japan as a "safe place to borrow money cheaply and use it to invest in USA or world".  A shift of rate hikes, Yen appreciation, and Japan market decline basically forced financial institution borrowers  to liquidate assets to have enough cash to cover the shift.

This is NOT the last major event, it is the first.  Think January 2008 when US market dislocated on a Monday.  Its a warning shot.

What to do? Secure assets in financial institutions that explicitly state FDIC insured up to 100K, or buy TLT ETF.  

When the Fed cuts, beware of long duration bonds as I expect markets to have long term rates rise in anticipation this next round of Fed Rate cuts will be followed by even higher hikes to tame inflation again.

If you can remain financially well of, I do expect investments of a lifetime available in 2026-2030 that will be the rocket ride of a lifetime with AI bringing in profits.

Good luck!

The top is in, now what?

 Hello! Its been a while since I posted.   I sold all my crypto a few weeks ago except my core bitcoin.  I lightened up on longs (not that I had much!) a few weeks ago too.

Now the market is correcting.  I will be exiting my shorter term puts between here and S&P 500 between 4,800-5,000.
I really doubt we will see a 2008 crash.  I do think we will see insane swings in the market, with an overall trend down.  The market is opening up insanely down today, and we could get more.

But when the S&P500 is below 5,000 its getting a little over-sold on such a short term.

In the chart below is the SPY, and we will see the 50 day moving average hit at between 4,800-5000 depending on the day in the weeks ahead.

I do expect August as a month to be DOWN, so I am not talking a meaningful bottom here.
My goal will be to roll over puts dated 2025 to 2026 and hold.

Overall, safest is 1-5 year US bonds and/or investments in core companies you think are worth it for 10 years.  I do think the next 5 years will not be great for the stock market, but I do think eventually AI will be explosive.  Its just a little too soon just like 2000 with the internet.

Good luck.

Latest and Greatest

 Been a while!  Watching the index slowly drift higher has been a bit boring. :)

The stock market is holding, but there are so many cracks its hard to understand how it drifts higher.
We have bitcoin breaking down,  skyrocketing household debt, bankruptcies skyrocketing, car repos skyrocketing, new/used car market collapsing, US bond market rallying hardcore today,  CVS/Walgreens/Rite Aids closing ,  Banks failing,  Market Crash signals triggering, Housing prices collapsing in SOME areas of America,  some commodities (like lumber) falling so hard being sold at a loss, unemployment rising, and so much more!

If we see a stock market fall, there is so much leverage that all assets should lose value.  This includes crypto.  I recently sold all my crypto except bitcoin.  My safety position is in cash, shorts, and some outside USA investments (INDA, MSCI).

The only reason I can see America's market continue to levitate is out of all countries, it is still the best bet.  Canada, Europe, China, Russia, and other major economies are facing very strong negative economics.

China isn't dumping US bonds, it is failing as a nation being forced to sell US bonds to try to prop up its currency.  

Such a cheery post!  I been expecting this moment since 2009 to peak between 2020-2024, that I am tired of it and just want the next shoe to drop.

Pay down your debts, stay in a safe job, lower risk investments and buckle in!

I am not sure even the  Donald promising he can fix everything will turn this around.  If AI makes some insane breakthrough it may help the USA remain the best of a debt ridden, demographic disaster situation.

No Flash, Shorts covered

 I covered almost all my shorts Monday, as Friday or Monday did NOT get a meaningful low.
We are in an "A wave" down, following Elliot Wave Theory".  We will get  a B wave up, probably around SPY 5005-5050 range, and then we will get a major wave down bottoming in May.

So enjoy the ride up over the weekish again before the pain train returns.
I am looking for re-entering shorts in the range above.  Good luck!

Flash Crash Ahead

Leading up to April 9th I went heavy short.   With news of explosions of Iran combined with 5 days of market weakness, a flash crash maybe on the table.

If we get an extreme market down, I expect SPY 4900-4800 range to hold.  If correct, the counter rally will be very painful if short.

Its very hard to cover shorts when your finally in the green.   Lessons from the past, nothing goes in a straight line.  I may go long or simply wait to get reshort.

If we break on a closing basis SPY of 4800 its going to get very interesting, and being short would be huge.   But I cant take that chance with such a sudden drop.

Good luck

Is the top Finally in?

 If you look at the market leader NVDA, it has been moving sideways since first week in March.  This is either eating time off the clock for a new explosion up or there is material selling occurring since then.  If the latter once the late comers have exhausted their purchases, we can expect a 20-25% cut in price.

Since NVDA market cap dwarfs all other stocks in the S&P 500, this would be a material top until a new 'growth story' like AI with NVDA can drive the market higher.  

Consider stops to keep profits and be ready with some cash.  I expect this bear market be a up, down, up, down, repeat through the election. 

The BEST guy to watch for daily targets is: https://www.youtube.com/msforecasting/videos

The end of the middle class

This blog started in 2008 with the pending global financial crisis was about to begin.
Since then, I have been concerned as the global financial system and the future of Americans financial future.

Back in 2009, I called out the demographic challenges, the future decade of inflation, and the decade of increasing interest rates.   Since then in January 2020 I raised the pending pandemic.

Since then I dramatically reduced my post-rants and typically post only when I see more extreme situations.

I been following YouTubers that are very good, they have more time and ability to share information than I do.  We are on the precipice of a financial crisis that will be felt for a decade.    AI will produce immense wealth, for the few.  If you have money you can increase your gains providing you can own part of these companies.  If you don't, things will get harder.  

I urge you to learn more on what the world is facing, and get ideas on what you can do.

Eurodollar System - The driver of the world economy

Zeihan covering the changing Global order.

News on the second largest Economy, China, Uncensored.

A Fun stock market guy, mostly for entertainment, he does call out key news.

You want to get rich day trading? You will IF you do exactly what he says

And finally The Real Estate Ninja started on real estate, and his scope is now beyond to the American middle class.

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/

China Demographics matter

 I have posted many times how demographics matter for robust country economies.   China is a country that is about to implode this decade.  China grew what took England 7 generations in 1 generation.  That is why China was such a growth story.  But the bulk of their growth is now in the past.   This video does a good job covering the demographic story.

https://youtu.be/c1tA1WnzU9s

Why the Fed must fail

The Fed is comprised of 7 board members determining their actions into the economy.   While the FED does NOT control the economy, it does influence and affects the emotion of the financial markets. To learn more how the FED is not in control of the financial markets (but does inject emotional influence, click here.

But it is an entity, it does have about 9 trillion dollar in assets. And what the FED tries to do is to remove the variations in the market, 'stabilizing' all assets in one direction, up.   Doing this will have the long term affect of making the financial markets more fragile.  By having 9T in assets is is now a liability of the US Government, in addition to government debt.  This is how we have arrived at today.

The problem with the FED is it introduces human emotion into human financial system that thrives best with an open market.  The open market gives the feedback to companies by investment attractiveness, causing investors to buy or sell based on clear, open, evaluation of their financial health.   The open flow of objective information is essential to help analysts and investors 'judge' a company.   Since 2008, we have abolished mark to market asset valuation, removing visibility into the health of the banking system.  The Fed continues to force interest rates to a place they 'feel' is the right level.  They will not, and cannot allow the market to determine the rate, due to their emotional pressure they must act.  Since Allen Greenspan this has been the FED has taken.  Decades of intervention has brought us to today, a fragile ecosystem.

Below is a you tuber summary of Nassim Taleb book "AntiFragile". If you rather listen to the author summary, a great one is here:

Uptrend is back, what is the target?

Oct 13th was "Reversal Day", as I posted on my blog.  The best time to get in long was Friday EOD (or exact bottom Thursday!).

So what now, all clear?  I expect the market to float higher, with the bear market resuming in earnest in 2023.   I expect between Feb and May the market to start to break down, with an epic plunge between June and September.  Think Circa 2008, a market trying to fight to survive and finally throwing in the towel.

Between now and then, everyone, including me, will say the worst is behind us.  But what we started in 2019 under Trump, releasing 2 trillion in free money, will continue to ripple through the world economy.   First deflation (before 2T given away) then inflation, and now the FED is tightening rates and will trigger an earnings collapse.

The up trend should hit ~440 range as a high.  A close above 502 violates everything I am writing.
Please remember, The FED is announcing a MATERIAL change to its operations around June 2023, a private blockchain called Central Bank Digital Currency (CBDC).  This is the first step to overhaul all money in the world based on Dollars to centralize control to the FED.  NEW tech takes time to be effective, it isn't flipping a switch, so I think the market will follow the pattern I outlined.

I added a purple line that I expect the market may return to, but not pierce on a closing basis.  Even if the market does pierce, it doesn't violate the thesis.   What will indicate a market decline is breaking the lower dashed horizontal green line.  Once that happens, US equity indexes is the last place your saving should be in.  The Market will decline to the up sloping green line, then  bounce again, then on a turn around could go down a full 80% on SPY from the top made in Dec 2021.  I'll do another post on what my plan is for safety.

Reversal day

Quick post, we opened lower from previous reversal, but closed much much higher, this was THE reversal that I was expecting, it was a long bottoming process.   It could be a reversal that lasts for a year before hitting our much lower destination.   If you like going long, buying Friday SPY, with a stop of yesterday’s low of 349 as a stop loss.  Good luck!

Mondays Decision, no Market breakdown!

 Friday ended below the line I called out as the 20% lower line, but not by much.

Monday was decision day, and the market is now back into bear rally mode.  However, until the January high is broken, we are in a BEAR market!  So I do expect much, much lower market, but it could be out to fall of 2023 now.

I added a purple line now, and if the SPY closes BELOW 357 on a CLOSING basis, its is finally, game over and a material run lower will happen.  Until then, playing the bull is fine, and I may on occasion go long items.  This rally is a gift to exit long positions, pick your level between 385 to  400ish range.

If you are very optimistic, then a break above the red downtrend line is the first step to BREAK this bear market.  Until that happens, its pure hope, no chart or price support for that point of view.  I'll put some short on if/when we get near 400 for the next material down swing.  Good luck!

Decision day is now THIS Monday?

 It has been 5 DAYS and the market can't break lower!   The S&P 500 has pierced the June low 3 times, but NOT on a closing basis!

Other indexes, not the S&P 500, have made NEW LOWS on a closing basis.  But the SPY is the primary hold out.    The news has been trumpeting new lows, which in charting is really bad at this stage, to scare investors to sell. 

But if its such a terrible market, why is the S&P 500 levitating for FIVE DAYS above the June low, barely, on a closing basis?  This is why I use the SPY as a gauge, it has a broader representation on the core 500 companies in the USA.

The market is either trying to build energy for an epic fail, which would likely be Monday morning, or a 'come back'.  .

This weekend is shaping up to be the decision.  I wrote a week ago we would know Monday, but here we are!  Who could have guessed multiple market indexes would fail, but not the SPY 5 days later?

Don't get me wrong the US and world markets will be sliced 20% lower in the next 6-9 months, and I think 70% lower from here is in the cards.  But for now I am looking to get short on a rally, I may buy some short instruments today incase Monday is the epic fail, but without leverage.  The leveraged ETF's should get hammered on a relief rally due to the various indexes failing this week, and running 'time off the clock' 5 days later.

Charting wise an SPY closing below 362 its bad, indicating going lower 20% in quick order.   But dancing on this June low for 5 days makes a 'new low' squishy now, this line doesn't have the same meaning as it did on Monday.  There is now wiggle room!

A perfect close will be 359.50-361.90 range, making it a coin toss for Monday, nobody will go all in in either direction unless you like to put your life savings on lottery tickets hoping to pay off.

A break below 359.50 on a closing basis is as good as any bet you could make that there WILL be in quick order a 20% haircut! 

Good luck!

Target is 30% lower from the high

I have been posting about the critical points in the market decline, and is has been triggered.

The market has broken the trend line in place since the low in March 2020, I expect fall of 20% lower from here is in the cards.  If you are more optimistic, a VERY strong confirmation is breaking the SPY low of 363 in June 2022 on a CLOSING basis, we are headed to ~300.  IF we break the up trend in place since 2009, on a CLOSING basis, we can see an 80% stock market collapse.

I don't think we will break the up trend since 2009 for a bit, maybe in a year (if ever).

Click on the chart at bottom for greater detail.

So if you want to catch a falling knife, a good place to go from cash to the market is on the up trend from 2009.  The question is what to buy? Why the future of course!

My current list:

India
Mexico
Artificial intelligence & Robotics
Crypto financial companies - SERVING the existing banking system,
Gold / Bitcoin / US Bonds  mix.

Monday is Decision day!

 EOD of Friday the market was 'saved' and it recovered above the line I have been posting about.

Over the weekend the Fed asserted the next raise maybe 1%.  I believe this was done specifically to try to get the market to tank at this critical level.  Why? Because the Fed DOESN'T want to keep hiking rates, but believes it does if we are seeing markets ignore their efforts and inflation comes in higher.

They want to craft a story that when the Fed raises rates, markets and inflation falls.

Today we will get our answer.  Can the market close above the line yet again? If it does the bull is resuming!  If we are below the line today, I wouldn't go all in short just yet.  We need some follow through.   Cash is best right now, good luck!

Breaking support - 20% decline ahead?

 Today is quadruple witching, and this morning we are breaking the trend line I posted about.
If we are going to reverse it will be by EOD today or Monday with an "event" announced over the weekend for a 'save' breaking the trendline.

By EOD Monday we will have a definitive direction of the market, 20% lower ahead or a rally for a bit, perhaps into the midterm elections?

Take bets, get rewarded big (long or short) or wait for the directional choice.

Good luck.

Closer look at support levels

 If you haven't read my previous post Meaningful Support levels, please do so before reading on.

I wanted to pull in for a closer look at the support level, if broken, on a market CLOSE (not a open below and closes above, etc) we can expect a meaningful stock decline. Depending on when, the close must close below the green rising line, range of S&P 500 385 (tomorrow) -395 (oct 24th).  A break above the line is a bullish indicator.

This trend line up has been in tact since March 2020.  A close below we should expect the market to decline by a full 20% over the month(s) following.

On a positive note, the world is worse off, much much worse off than USA.  For this reason, we may see INFLOWS of capital into USA and we may resume the bull for up to 9 months ahead.  I am not convinced the market will fall 20% in the near term.  This is a watch and wait to understand the direction.

Meaningful Market Support Levels

The chart below is the S & P 500 support lines.  Red lines are resistance, if the market breaks above it on a weekly closing basis, we have a bull case for the market.  A break below green support lines, the bear will roar.  

Below this summary I have the details.  Given above we are about 2% striking distance downward to first support, but if broken, another down of 20% from current levels on the index.  That level if ever broken is entering the realm of panic.  On the upside if sold today, you would 'miss out' on 10%  gain before the all clear to buy.  

Details

As I write this, S & P is at 390, the first major support line is at 383ish.   A break below will have a next support at 300-315 range (depending on time).  That is material support and should have a multi year recovery.  Breaking below that is dismally lower at 120 ish. ( depending on time).

On a positive note a break ABOVE 429 is very bullish, and on a closing basis a good risk to buy.  Obviously anything above the all time high is pure bull run at  481.  

Action

Take note of the levels above, they are critical for the health of your 401K.

NOTE: I Purchased RGLD today at 90, since the Dollar is strong, euro weak, gold is weak.  For risk v reward we need stronger dollar, weaker euro, weaker gold price.   All have moved to extremes already, I am trying to catch a falling knife. :)

Market top is in!

Friday was brutal, I expect a generational paradigm shift has arrived in our global economics.  The world Baby boomer generation is now more retired than not, and we are seeing shrinking populations for the rest of our lifetimes. (excluding India and a few other countries).

China has a material demographic issue both with aging population and retreating population totals.  China officially expects to hit 800 Million people in 2082 from current 1.4 billion.  Unofficial numbers advance this materially to as soon as 2050.

With the world population peaking sometime in the next 40 years after major population growth the past 100 years, our economic system isn't built for it.  This will result in global currency wars (already in progress) and a world searching for something to invest for growth.

Right now the market topped, and I am now selling all my long assets tomorrow, with a few exceptions.  Goldman Sachs agrees as it sells over 140 billion in the month ahead.  If/when the SPY closes weekly ABOVE 410 in the 'next few months', I'll reverse my opinion. I expect since everyone is invested in index funds, and automatic trading may kick in to conserve assets.
I'll also become a buyer if/when the market makes a substantial low, to play the long side for a time.  I expect an intermediate low around the elections.   
Over the year ahead I do expect a real low to be 50% lower than here, if not 80%.   But nothing runs in a straight line!

This is what I have been obsessing over since August 2006, the fourth turning that is upon us.  I don't have any easy investments answers except 'risk off' is the motto.

Good luck.

Economic repression since 2007

Since 2007 western countries have experienced economic suppression.  I can't say exactly what it is, but I think generally the global economy has been resting on the baby boomer generation for growth.  And in 2007 the first baby boomers hit 61.  This means the start of baby boomers retiring was well underway.  Remember many baby boomers got pensions from private and public sectors and can retire as early as 55.   In 2022 the oldest baby boomers are hitting 58, meaning, we are experiencing the last of the boomers retiring.   The majority of boomers are retired as of 2022.

These people are retiring at the peak of their earnings, lowering tax collections while simultaneously requiring more public services.

Below is a great video talking about analysis of England's productivity.  The personal financial growth from 1992 through 2007 if it continued through 2022, people working today would be  33% economically better off.  People who entered the workforce from 1945 through 1992 are materially better off.

If you are after generation X, you are at a material disadvantage than rest of society.  So when we look at the stock market, this is all a reflection of an economically sick society.

I recommend this video to get a sense of the economic disadvantage and how democracy is being undermined by the diminished economic opportunity.