Living for a decade (and some) on a sailboat, you develop a way of “seeing the Outer to understand the Inner.” As it is again, today. This particular insight has to do with charter fishing boats – which explains everything in Finance, if you have the patience to watch long enough.
Today’s saga began as I was watching the markets last week and thinking back on my sailing and fishing days. Younger by a decade (and more) it was fun to drop a line in Puget Sound, or up in the Straits west of Vancouver. Salmon were the goal and this time of year that would be King salmon.
Fish don’t bite (most of the time when I have a line in the water. And other than watching the odd bit of kelp float by, the next-most interesting thing to watch was the odd charter boat. They aren’t as popular, as once upon a time, but the behavior of the fishermen on such boats is our object of learning here.
When there haven’t been any “bites” all day, if the charter boat is drifting, the distribution of the fishermen can be pretty even. About half on one side of the boat with half on the other. Bow to stern there’s a similar distribution.
Once someone declares “Fish on!” it’s considered polite (though it depends on the boat and skipper how this is handled) the two or three closest fishermen to the lucky bastard with the fish, pull up lines in order not to get a God-awful tangle and lose the fish.
But then, as soon as the fish is landed, people change their side-to-side and the bow to stern distribution. Wherever the fish came from? That’s the hot spot on the boat. Everyone moves toward that same spot. In fact, sometimes you can see the charter boats take on a noticeable list to one side – the side where the fish was hooked.
Which has what to do with Markets, you’re wondering? Well…just everything, you ninny!
See if you have a whole bunch of charts of stock averages that you look at every day (and publish 18 of them twice weekly on the Peoplenomics.com side of the house) you can see in the Chart Action a similar behavior.
In financial terms, I noticed the market going into Labor Day was going through a lack of even small “bites.” The (financial) Boat was “due.” This is when fishermen are just telling each other stories and whatnot.
So, I went short over Labor Day. If you remember to last Tuesday? That’s when the fishermen heard the cry “I’ve hooked a whale of a Bear!” And the market dove. And it dove Wednesday, and Thursday…and as fishermen ran to the Bear side of the boat, sitting a way off, you could see the list of the boat beginning.
Tales of imminent collapse, “Doom the time for sure!” Not to mention
“So and so cuts their outlook.” (You can see this in charts if you put some effort into it and keep two sets of charts to integrate in your noggin.)
Looking last Friday, we could see one of our charts in particular (an oscillator) that was hinting “All the fishermen are over on one side of the boat now…expect a bite on the opposite side!”
Fishing School
Now, there are two kinds of charts, to our way of thinking. One is the traditional Prive Over Time variety. The other – and these are more fun to noodle on – are the Oscillators. In fact, looking at one oscillator in particular, we can see how the market could be (as we posited Saturday in Peoplenomics) Next Week to Turn? – Peoplenomics® ” Well, here’s how that Oscillator filled in overnight”
My, how useful, huh?
Now you need to understand that there are only so many charts that can run this way, or that. And only so-many oscillators. But when the charts begin to agree (it’s like fishermen scampering to the ‘hot side of the boat’ if you’re not fully awake yet) then you can await developments which will – eventually – show up as a change of trend.
The Most Useful View
Of a single chart is our Aggregate Index which you’ve seen plenty-often enough… But let’s inspect a bit, shall we?
And then let’s zoom-in a bit closer:
As you can see (from the all-time highs back in July) the market had a modest decline into August. But then Lazarus Averages climbed and put in a predictable (or I wouldn’t have won the Scotch bet) lower high going into Labor Day weekend.
Last week, we (*likely) started the Minor 3 down of a Larger 1 of Macro 3 down.
Now, since we know that under Elliott, if wave 1 down (yellow vertical arrow) is of length “x”, then the righthand arrow is likely to be in the range of “x & 1.5″ and commonly is x * 1.618”
However, all this is unknowable for now. The pending (in futures pricing) rally could peter out at the open. Or:
- The rally could be stopped at the just-overhead green trend line (which could act at resistance.
- OR we could stop at the red 85-day moving average trend line.
- OR we could advance 1.5 to 1.618 times X up toward the hot pink trend line, or we could just be Elon to Mars and go to infinity powered by Harris hyperinflation. No way of telling, yet.
However, the nature of Elliott waves has been changing a bit over time. Here (I suspect) the pink trend line will be instructive. You see, as Elliott has…no, I suppose that’s enough. A friend told me once “You really give away too much, George…” Maybe so.
Still, markets *(and damn near anything else) is made vastly simpler when you work with analogies where similar behaviors happen. Charter boats and casinos being two of our most favored.
Owning the Future – Part 2
I may have mentioned that I have this morning ritual I go through, and it’s all lined out in Brisqi.
Markets are the first part of General news and email. The second step is looking at News Budget Items. This is where you look at regular scheduled events that will move markets. Other than some bond action today, this is a yawner
The Big News tomorrow morning will be the National Federation of Independent Business’s Small Business Optimism report. Not likely to stop the fishermen from going to the Bull side of the boat.
The continuation of the rally (if it goes into a second day) then would likely infer that the Inflation news – due out Wednesday with CPI – is likely going to print (e.g. be actualized) as a buy the rumor, sell the news event. But that’s all we really care about – just a couple of days into the Future – for optimizing close-in Life plans.
If you want to go farther into Future? Well…75 percent of the CME Fed Watch is expecting No Change in Rates. The rally today (and maybe into tomorrow – if you’re following this long-ramble on short-term future contingency design) should it last into the close tomorrow, would then be jumping out of quantum foam as a “Buy the Rumor, Sell the News.” Implying that inflation will be hot enough to frighten markets.
I’m sure you can work out the further implicates for the following week. (Fed may lower) and that would scare everyone because then it would become apparent that we will be in Depression by the middle of ’25. And the international shock and awe will kick off as early as the weekend of the 21st – to the end of month – when we would not be surprised if China places an air and sea blockade around Taiwan. You can see that coming a mile away as China warns Germany against naval transit of Taiwan Strait,
The rest of the news flow should not interfere with the fishermen scampering to the high side of the boat.
On the other hand, warmongers in Europe continue to get more shrill saying No more restraint. It is time for NATO to back Ukraine’s offensive – Emerging Europe. Going the other way, Belarus is starting to pivot into play as Volfovich: Ukraine has deployed 14,000 military near border with Belarus.
And between the drooler and the fuelers, all it will take is an attack on a nuclear power plant that results in a meltdown blowing rads to Russia and Russia will go “nukes free” and that could also happen before the end of the month.
See why nothing looks much different – except where the fish are biting?
Useful and Informative
Like accounting nightmare” stories? Salary error at Taiwan post office leads to NT$380 million overpayment.
Summer is over – depending where you live: Heat puts strain on SoCal grid, knocks out power to thousands of homes. And there’s the fires up the 10 a way. Here in Texas, small office pools are forming on whether the wet spot in the Gulf of Mexico will turn into a hurricane. It’s likely to turn into a tropical storm today (6) and then slide up into Nawlins by the middle of the week. Batten down time in Looselyanna.
Sex-driven violence? Benny Johnson on X: “The Colorado Springs shooter identified as non binary. The Denver shooter identified as trans. The Aberdeen shooter identified as trans. The Nashville shooter identified as trans. Now we’ve learned the Georgia shooter was motivated by trans activism. One thing is VERY https://t.co/4hEbb7Zswl” / X
Politics: Seriously? No one cares today. Blah, blah, blah…
And useful to know that Police across US given new UFO handbook as they warn craft ‘pose significant safety risks’. It’s a cookbook, right?
Around the Ranch: Screw Monday
Trust you read about our deck-building adventures in ShopTalk Sunday?
Part 2 of the new mini deck was finished Sunday. Time spent working was about 3.7 hours, so far. Pondering railing options. But this is Screw Monday. There are eight 2-by-6s running crosswise. And 17 nicely-fitted strips of five-quarter decking.
Do the math. 17 times 8 is 136 screws. And with the midpoints and ends being double-screwed, right around 200 screws to put in. And I’d like to get that done so I can put on a coat of Penofin before the sun is fully on the deck.
So now you know why around here it’s “Screw Monday!”
Oh, and good luck to my pal “The Major’s” son (also a Major) who is defending his PhD dissertation in hypersonics today… (And you think you’ve got a tough Monday ahead?)
Write when you get rich,
Read the full article here
