This article can be taken as a continuation to what was written early in October as well as others early this fall.Stock Market Update 10/02/23.
From that article,”I can tell you this. Anytime the averages are sitting on a long term trendline that everyone is focused on, watch out for the short squeeze. Watch out for the news announcement. The time will come when all of this stops working. All I can say today is; expect a stunt or a series of them ….because it will happen.” Impending Stock Market Stunt, Aug 28, 2023
The period of traditional fall weakness is now over. The stunt of a WWIII – generating event is ongoing. This is the kind of thing that is used to create a dip – followed by a surge of resilience which causes a huge short squeeze. This is not working. The biggest cause of serious crash will occur when this no longer works. It is not working now. The biggest crashes in history have come from oversold situations. It is never safe to forecast a crash. Make no mistake, the ingredients are there.
Our betters face unanticipated headwinds. Billionaires are starting to disagree and argue among themselves. The early 2000s may, in the future be cited, as the golden age of billionaires. In this era, corporations honed in on the technique of overriding their free market limitations by commandeering government as a means of growing their businesses. Democracy means little when moneyed – interest can manipulate public opinion. It means even less when the public doesn’t mind. But, now the public is beginning to suffer. There is nothing like suffering to activate the thinking process.
Years ago, Americans stopped deciding, on their own, what they buy. Government spending makes up 25% of GDP. There are countless private entities that exist by virtue of carrying out government dictates. Figure over all, the country is spending 25% of income on government services. Then there is healthcare at about 18% of expenditures. That alone makes up 47% of a person’s expenditures. Then , we have ethanol in gas that adds to its cost. Laws limit choices. It is hard to buy anything from an air conditioner to an airplane and your choices not be limited by what government deems o.k. for you to own. The point comes when people start noticing the money they spend, brings no satisfaction to them. These things don’t show up in published statistics. People are beginning to feel like horses which have been ridden hard and put away wet. This situation is not likely to launch a recovery.
Make no mistake. There is a plan for the stock market. Our betters may not believe in the country, God or anything else. However they do believe in themselves and their own superior intellect. They have been successfully manipulating the public so long, they now overestimate themselves, even as adept as they are.
The market is ready to break down right now. The question is, can a selloff be prevented and for how long? So far, we have seen attempts to launch a rally into the Santa Clause season.
Some Monthly Charts
The bluechips have gone absolutely nowhere since February 2021. What does that mean? It means we are at the stage where folks will start reasoning…. “Why not sell off a little stock? The market isn’t going anywhere anyway.” This is while yields are rising.
Before the market collapses, money seeks perceived safety by concentrating itself in big cap stocks. That is happening. The Russell 2000, small cap index, has broken to the downside out of a multi-year consolidation pattern. This is a seriously bad omen for the overall market.Look at the beautiful head and shoulders pattern in the Nasdaq Biotech Index. Our betters in the biotech sector are in great need of a new fangled virus and a super pandemic. We must all wish them luck, right?
It is buyback season again. I wonder how enthusiastic corporate boards will be with respect to buying back falling knives.
Also, never forget, we are entering a depression, a permanent one. There will be no recovery. Central planning cannot launch an economic recovery. Our betters can plan a recovery. This will work about as well as their plan to create a perpetual bull market is turning out.