We begin the market's dreded month tomorrow. The media has page-after-page of big name market movers giving their outlook. Can you trust people who have hidden agenda's? Anyway, JP Morgan says, "The market will reverse. The S&P 500 will hit 4800 by the end of the year."
Then, we read Ray Dalio saying, "The market could drop another 20% to 25% before the year ends."
(Only you have heard of us) We say...
what we said last week. The market is range bound. In addition, it is so convoluted that there appears to be two ranges in the consolidation pattern. A range within a range if that is clearer. As for Morgan's call on the S&P, there will be no upward rally unless the SPX closes above 4305, to which is the lower range of the two ranges in chart pricing. By the way, 4800 is the market top. Morgan is basically saying the SPX will test its market high. We say the market moves to the least point of resistance. As for Ray's call, the market would have to breach 29,700 on the Dow and 3200 on the SPX. Then, again, we would need to look at the volume on each test (prediction) to give our determination. On aspect that strongly suggests another downward leg is the island reversal pattern that appeared in the SPX.
Speaking of the Devil...
The ex-head of gold trading for JP Morgan was found guilty of spoofing gold trades. This is the second time that JP Morgan has been found guilty of manipulation the precious metals. We, and others have been saying this for years. Trading firms should face the similar penalties as crinimals. Three Strikes and you're out! What we mean is repeated guilty firms shoud be banned from trading what they are found seeking to manipulate. JP Morgan controls 40% of all gold trades. It is easy yo see how they can manipulate the price. In this case, by keeping it low, they gain favor with the Fed.
Stealth Recession
This is what we feel that is occurring in our economy. We have many signs, but nothing in the publc domain that is so conclusive to point to yes or no on the question of recession. We know that we have had two consecutive quarters of negative growth. However, that historical reference is under attack for political purposes. We look at the life of ordinary people and connect the dots to producers for the overall picture. It is pointing down. We are in a stealth recession. You can't see it until it is on you. It like the frog boiling in water. At first, it does not worry, but when it realizes it has a worry, it is too late.
Mortgage Industry...
is seeing its first wave of going out of business. In a report by the US Mortgage Industry, First Guaranty is leading the parade. It did $10.6 billion in 2021 and it no longer offers a guarantee. They are also facing lawsuits from unpaid employees to home loans that are now in default. This is how a contagion develops. The same thing could be said about our dollar in relationship to GDP.
$Debt to GDP
It is now 123% for the year. We owe more than our whole economy produces. When you consider all the debt that we already accurred, our dollar is in do-do. Don't be fooled by its current rise in value. The dollar's rise has helped keep the gas price in check, but there are many other bills our citizens face. The next one shows real trouble to our economy. It is like the old unemployment office. The media could not hide the truth of the economy with the long lines at the office. It is hidden again by the internet.
20 Million Behind...
in paying their utility bill. We know the moratorium on rents and mortgages is over. We know rents are up through the roof as well as home prices. We see homelessness everywhere. This says it will get worse. Will the government provide another bailout like the corrupt student loans? Trouble ahead.
$37 to $2000...
overnight. A company with no revenues like the old "NINJA" loans rose. AMTD has nothing coming in, and now, it is valued at $425 billion. These things happen at market tops along with fraud cases that come to fruition.
Synthetic Media...
is another worry. You can dub a voice-over to present fake news. This is bad for society. And why do we allow terrible, corrupt platforms with no consequences? Tik Tok pushes a "Choke" challenge. Facebook has multiple fake, corrupt, misleading sites and their own guilty biases. Twitter just BSs. All these and probably all of them have three strikes every day! They need to comlete checkout and shutdown before a restart.
Then, we read...
about art and the crazy prices that occur. Case in point: An artist, and I use the word in sarcasm, displayed a piece of tape on the wall with banana coloring and look. He asks for an ungodly figure for his "work?" Suddenly, a lawsuit emerges. Another artist claims this artist stole his idea that he did. The judge says, "It is a metaphysical question." We ask this question? As the banana decays with brown spots, is this a form of monkey pox? Then, we hear from a friend in Nome, Alaska.
Hyper-Inflation
You think prices are out of control? Could what is happening to our most northen state come into our lives? Up there, food surged 27% in Nome. A small watermelon runs $55 bucks. Gas costs $5.29 a gallon. There are dangerous projections that gas could rise to $9 - per gallon. Utility hikes hit 12%. All this leads to the BS by Jerome Powell and the Fed. It is easy to sound tough when there is no danger of getting punched in the face. We will see what we will see in their next meeting in Sept. The market will stay range bound until that moment arrives. Peace
