Odds and Ends: September 2022

Market Outlook

The market displayed real fear for the first time since the depths of the pandemic. The VIX broke above 30 last Friday.  This is what we, at Evolution call the crucial point in the fear index. The price did not hold. We stated in our last piece that the Bulls will seek to bounce the market. There was the expected pause as the Fed had its meeting and results. We predict that the three-quarter hike will be the last three-quarter hike. The next meeting the Federal Reserve will lay the groundwork for smaller hikes and then, pause with no hike. This will be their blink. However, we are getting a head of ourselves. 

Near-term

The shills will remind you that the market has some of its biggest rallies in November. They will "sell" their new favorite, MATANA (Microsoft, Apple, Tesla, Alphabet, Nvidia and Amazon). We feel that there will be a bounce just like the one in the first week of September. We called that one. In fact, we gave you the target at Dow, 32,500. Since the Dow fell below the June low, we feel that the bulls will only be able to reach 31,000. Then, a more likely consolidation period before forming a new low at 27,000. We see the transports break 10,000 and the S&P reach 3,300. Volume will determine a new target at that time. We say this because the bulls do not want to surrender their control of the market. They have the deeper pockets to cannibalize retail. If you look at last Friday's price action, the bulls rallied the market 30 S&P points or 300 in the Dow before the close. This aspect in price correction showed itself on Monday. The bears could not get enough sellers to breach Friday's low. If the bears manage to sell lower than Friday's low, this changes everything. Whatever the way the price action moves, volume will be the convincing tone. Whether I'm right or wrong, remember: the market is not rational.

Inflation

It is not going away any time soon. It rose 8.3% yoy in August. At the moment, the strong dollar, which touched a new high at 113, is causing havoc to the rest of the world. We may have seen low gas prices, but do not expect that to last for long. The way the dollar is trending, it appears that it will attack its all-time high at 120. This may give US consumers some inflation relief, but we still import everything. Inflation moves around. You will see it appear in your utility bill and banks will seek more fees. Speaking of the shills selling the November rally, turkey will be the most expensive ever. We mentioned global inflation due to the strength of the dollar, consider Argentina? Their interest rate spiked to 75% with inflation running at 100%. That, Dear Reader is hardship. 

Danger Zones

The SPACs will be one cause for the market to form new lows. These special purchase acquisition companies are buying firms with no revenue and they are losing money. Don't fall for the meme.

Gold is also in the danger zone as long as it remains near its lows. Remember the market is not rational and the fiat people hate the precious metals. 

Don't forgt China and Asian nations. Their housing problems needed government intervention to avoid a collapse. 

Food insecurity is rising as more and more nations restrict food exports. Again, US consumers may not feel the pain, but the global community does.

The next item is the saddest of all. A report reveals that US retirement living standards continues to fall. It is sad enough that basic US standard of living keeps falling, but now, the elderly will suffer. According to the report, the US living standard for retirement had dropped to 18th on the world level. We see trouble everywhere. The scientists who gave us the "Doomsday Clock" also have a new report. It spells trouble with a capital "T" for Europe. When you look at the decline in the euro, you realize things are not good.

How about a leak in the underwater Nord Stream pipeline? Water geyers are happening and we already know water burns from the Cayuga River. It seems like more and more idiots are making decisions that hurt the world and pushing warlike actions.

Then, this from NASA. Shoot a rocket at a meteor to see if we can move its rotation path. At least someone was thinking if we destroy it, we get raining meteors like a buckshot. But, we ask, If moving the rotation path, are you not making it possible to collide it with another meteor? Of course, we are not scientists.

It is hard to write such scary stuff, but live in peace and love. This will make Him happy.  Peace.

  

Idiocy of Globalization

First off, let me say that I am not against global trading. However, the US, my country is the worst international trader in the world. One should always strive to be self-efficient. However, that is not always possible. Then, you trade. They might need what you got? Let's begin with the main benefactors of our outsourcing to which has destroyed our middle-class and standard of living.

South Korea

Our politicians were duped by the military into using our nation as a dumping ground for S. Korean exports. Many of their larger firms are really government subsideized enterprises. A basic American stand alone firm cannot compete fairly against a government corporation. We should never allow any government subsidized firm do business in America. This is socialism. It allows that form of economy to have the upper hand versus capitalism. Truth be told, we let South Korea send junk into our nation to keep them strong versus the Communists. Now, they have a powerful economy and the irony is unions are centerfold to their prosperity. Question? Do you think that they will fight the North Koreans if they had too? Do you think that they appreciate the suffering workers in our nation that allows them to live a better standard of living than we do? We do not need their cars, phones, TVs. Life will be Good when all our appliances are made in America. We need to return to protecting our economy and workers. This story can be repeated by almost every nation in the world.

Japan

They complain about quotas to their exports. In reality, their government does anything and everything to help their corporations and economy. The only positive with trading with Japan is their committment to excellence. They build to last. Our corporations came up with the concept of planned obsolesence. It is sad that they allowed idiots to control their government that led to war. Now, the sad reality is those same type of idiots have too much influence in our government. With that said, you should only trade for what you need or realize the trading entity has something to offer. Japan has something to offer, but we still need quotas. Again, government sponsored enterprises have a built-in advantage. 

China

They are ungrateful, egotistical, greedy and they are run with a philosophy that is anti-capitalist and anti-American. How can you trade with someone who demands that you reveal everything about your company? They want your blueprints and they offer no protection. How can you listen to their BS about protectionism when everything in their nation is controlled in one way or another by the government? The stupid elites think that by bringing this peasant nation into the 21st. Century that they would change their opinion of the West? Not happening. Now, if we put barriers to their economy, we will worry about war. This is the height of idiocy with globalization.

I could go on and on. The only positives that have come from globalization in recent years is foreign firms are building their factories in the US. Truth be told. They only do this because they realize the backlash will come to them because they use our nation as a dumping ground to help their own economies. We, at Evolution are always for American workers and against our military who have bankrupted our nation, allow hackers open entry and use our citizens as pawns in a global military police force. We are not the world's police force. All the pentagon has achieved is wasted money, resources and lives.

Proof?

It is all around us. We have jobs that cannot sustain a living. We see people everywhere sleeping on the street, in cars and RVs. We get reports all the time about foreign diseases and intrusions into our environment, into our agriculture and economy. We have snakes destroying the Everglades. We have useless fish that are killing our eatable fish in the Great Lakes, rivers and streams. Get this!

Florida Oranges

A freaking Asian disease is killing Florida oranges. In 2007, Florida produced 250 million boxes of oranges. Last year, it dropped to 40 million due to the global intrusion. For those of you who understand the old math, that is a 83% drop. We are losing an important industry. Farms are dying. In 2007, there were over 8,000 growers. Today, it is falling to 2,500. We can thank the BS artists who push globalizations and open borders with no protections! COVID-19 showed us that we don't manufacture anything. We couldn't find a mask anywhere. With the mid-terms approaching, ask hard questions. What are they going to do to stop outsourcing? How about tariffs to protect what is left and close the deficit? We don't want to hear that the candidate is for jobs. We need life sustaining work, not subsistance level.  

Market Outlook

The near-term looks like the Bulls will try to force the market up even after the Fed announcement. The media will BS all the crap like "Buy the dip!" They are controlled by the people who the shills work for. Don't be fooled! Inflation isn't going away. Keep in mind that already 20 million households are behind on their utility bill and a report says those same companies will seek a 7% increase next year.     Peace.

King $Dollar = Trouble

Market Outlook

Before we fill your head with another worry, we take a glance at the market. We told you repeatedly in our last few articles that the Dow appears to have a dual consolidation range within it. There are two ranges. A range within a range, if that is clearer. The rise in the market last week only made it reach to the top of the lower range. The market needs to breach 33,000 to be safely within the other or the top range. The volume suggests that the market will run out of gas in this (bounce) rally. The phonies and schills will seek to persuade you to buy. We recommend caution. We called this market is in a consolidation range over one month ago. We have been correct. 

Now, we have a new fear concerning the market action and price. Whenever the market forms a consolidation period, it is building cause for its next move. The longer the time period, the greater the move. The Fed's meeting is on 21st of September. Timing is crucial. At the moment, the market could rise up until that meeting. It will react to the interest rate hike. If this bounce does not clear 33,000 in the Dow, and it did not, so look out below!

King Dollar Worry

Last week, the dollar hit a new high at 110.79. It fell to 108, but that price level was rejected. It closed Friday at 109. The market does not like a strong dollar although it is good for US consumers. Our greedy, small minded producers have outsourced everything. So, they lose profits on foreign made products when they come back to sell in the US. While this may worry Wall Street, it is a killer for the global market. Keep in mind, the war in Europe is causing hardship with inflation pertaining to oil, gas and their factories and citizens in the EU. Their small minded, no vision leaders had years to prepare for the present situation. They should have begun LNG for energy. Granted, Germany has made some moves to alternative energy as well as Holland. France sticks with its dangerous nuclear and the rest, will feel a cold winter. Maybe, they should thin their forests to stop wild fires and give the wood to its citizens to keep their homes warm?

Anyway, the euro has fallen to par with the dollar and it actually fell lower. This is the trend. This translates to rising inflation in the EU. However, they are not alone. The Japanese yen is only worth .70 cents? I don't know about you, but I still see a lot of Japanese cars on US roads. How about made in China? Everywhere you look and on almost eberything that you buy, you see that label. If that is true, how can the Chinese yuan be only worth .14 cents to the US dollar?

Now, we realize that many commodities must be purchased in US dollars. This point is central to Putin's desire to have Russian oil sold in rubles as the Chinses want you to use the yuan. This is visual conflict.  There is also unseen conflict. There are derivatives on oil and gas. They are in a losing position due to the war and future outlook. This could cause financial contagion. My beloved country has leaders who have abused our reserve currency status. Our debt is becoming unpayable. This whole situation coud blow over or blow up? We feel that King Dollar is only worth .72 cents. Our forefathers had it right when they made gold our currency. After the Federal Reserve, the international exchange system is the second most corrupt aspect in the world. The unwarranted rise in the dollar spells rapid inflation to the global community. If the dollar is replaced, it spells possible civil unrest in the US. Let's pray that this will pass.     Peace.

Home on the Range

For all you cowboys out there, the title brings back memories, but I'm for the Forty-Niners!  The season starts tomorrow. Enjoy.

Anyway, I was referring to the stock market. A few weeks back, we, at Evolution mentioned that the market is showing a picture within a picture. By that, we mean that the charts on the Dow, Transports and S&P 500 are displaying two ranges within a large consolidation pattern. It continues.

If you are a Bull, you might worry, but I woud not, at least in the short-term. The market has declined to a point where it will run out of gas or sellers for that matter. The Dow is at the bottom of its first range and in the middle of its lower range. The Transports are also at the bottom of its first range and the top of its second. However, it has a bearish engulfing at the end of last Friday. This indicates more downward pressure. The S&P is 300 points away from its bottom. We feel the Bears will get tired. There will not be anymore sellers. The market should bounce. We need to see if this bounce is a lower bounce than the last confluential point. 

With that said, we also must look at the calendar. The Fed's meeting is coming up and September is generally a down month for the market. If I was a Bull, I would be very cautious. The signs of recession are not apparent as the market is not rational. How do you explain Micro Strategy (MSTR)? The market valued the firm at $525 a share in April and now, $218 and falling...hard. It is losing money like many other meme songs. Traditional things, things that you and I need every day, are in the dumps. We stated in last weeks piece, our continuing belief that we are already in a "stealth recession." We saw a suttle sign in the jobs report. How can you add 315,000 new jobs and then say, unemployment rose to 3.7%? We say because with higher interest rates, the zombie companies can no longer rollover their debt to keep being a going concern They are filing for bankruptcy. Here is our first short list. It shows what we see. The stealth recession is becoming more visual.

Revlon,    the space firm, Masten,   Endo Pharmaceutical,      Express Jet,   Bed, Bath and Beyond,

the imaging medical firm, Carestream Health,    Regal Cinema, part of Cineworld.

There are also sections of larger conglomerates like J&J, and 77 mortgage lending companies. So, it begins and soon, it will become apparent.         Peace. 

Odds and Ends: August 2022

 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

Indecision

 A few weeks past, we told you that there were no more sellers. We called the turn. Last week, we suggested that there were no more buyers. It appears that we were right on the calls.  Now, what do we "C"?

Sideways

The market is showing a convoluted chart. It is a consolidated pattern except there are two ranges. A range within a range if that is clearer. You can understand the price pattern if you observe two sectors, the chips and oil. Why, you ask?

Because chips led the market up and presently, oil is showing its value and impact. The SMH chart reveals the consolidation picture. The top is 250 and the bottom is 215. Oil's picture shows the strangeness in charting and in relationship to the market, a dichotomy. The daily chart says oil is in a downtrend. The weekly chart says oil is still in an uptrend. There you have it. 

Our Decision

We based it on two indicators. The first is volume. The market always has higher volume on down days than on up days. Last Friday was option expiration day and the volume was strong. The second is a basic rule. A weekly chart is a more powerful tool than a daily chart. When you combine these two aspects, the market is looking to touch its first bottom range within the two price ranges.  

Other Factors

The chief one at present is King Dollar. It reversed again. It could touch its high. A strong dollar causes inflation around the world. It acts like a rate increase to the global community. They need to purchase dollars to do transactions in commodities. The stronger dollar makes their currency buy less. Inflation is an unseen tax. It hurts consumers everywhere. There is one dangerous backlash with a strong dollar. It does give reprieve to American consumers, but jealosy and anger in foreign nations. The BRIC nations will use the opportunity to call for the end of the dollar as the world's reserve currency. With our unpayable debt, if this ever happened, the US would be a third world nation. The BRIC's are Brazil, Russia, India and China. Dear Reader, that is a lot of the world's population. At present, the market is overlooking this danger. The IMF is not. It already has a new world reserve currency ready to roll. When big money addresses all these and other concerns, you can easily see the market will be range bound until the next Fed meeting.   

Down the Road - Winter-time

The biggest problem will be in Europe. They should have realized their dependence on Russian oil years ago. It is water under the bridge. They should have begun infrastucture for LNG years ago. It too, is water under bridge. Russia wants payment for their commodity in rubles. They should placate the commies, but they should begin to address the oil/energy question. This winter that quesstion will lead to an answer. The real answer is to begin to use their Western allies and create a new energy flow to keep people warm and factories humming. In the meantime, they should throw out this thought to the idiot warmongers in Moscow. When your country has a food famine problem, and you know that you will get one, don't look to us when your nation is starving. I can see a day when the Red Chinese Communist betray Russia just like Nazi Germany. When that time comes and they want to be our friend again, let them stew before we throw them a life-perservor.       Peace.

Inflation: Just in Its Second Phase

When the government revealed its inflationary report for July, it set a lot of things in motion. The market bulls took courage. Presdent Biden stroked his declining approval numbers. He had many reasons to smile. He got good legislation with the Chips Act. He bullshitted the Inflation Reduction Act by declaring it lowers our national debt. How can you reduce debt when you spend in the trillions and reduce in the billions? The Federal Reserve pointed to their policy with a self-pat on the back. Biden added that gasoline declined from over $5 per gallon to less then $4. Oh yeah, after the inflation report, the government said the unemployment rate dropped to 3.5%. Like George Harrison sung, "Give me peace..."

The Way We See It

The market rally is already running out of steam. Up volume is declining rapidly. Just like there were no more sellers in the decline, now, there are no more buyers. Since the market mirrors our economy on many levels, investors are getting second thoughts as data slowly paints a picture of a declining economy. The unemployment claims rose another 14,000 to 262K. Keep in mind that hundreds of jobs like a waitress, realtor, any self-employed and people working off the books are never counted. This runs into the millions!

Previously, we indicated the market could touch 34,000 in the Dow. It did. However, the turn is developing. The government controls the media and it is spooning positive developments in the economy. I think everyone heard the gas news? This is allowing the Federal Reserve to change its tune on inflation. It should read "toon" because the Fed is a cartoon joke except we are the "punch"-line.

We already told you that we believe the Fed will blink. The first sign appeared last week. Fed members were saying, inflation will drop to 4% by the end of the year. There is no need for another three-quarter rate hike. At best, maybe one-half and possibly only one-quarter? Dear Reader, when inflation emerges, it comes in cycles. Generally, there are three or four.

Why, you ask? Because the price increase has to effect your business. If labor rises like it did after COVID, your costs go up. If you are dependent on short-term loans and rates rise, your costs just went up. In some cases, you might end up closing your doors. Last week, our piece informed you of the many firms cutting back or closing locations. These events get very little to no national coverage. The next inflation cycle has already made its presence. You may think that when gasoline declines, it is good for everyone. Not true due to the many other uses that oil is transformed.

Deisel

I never want to follow a deisel vehicle on the road. The pollution is unbearable. However, until society can develop technology that has the strength to carry large loads, run big machinery and do it economically, we are stuck with deisel. With that said, deisel is the quiet locomotive in our economy. Long and short haul drivers depend on it. Almost every piece of farm equipment runs on it. Many factories still use it. Shippers still use it. Quess what? There is not enough deisel fuel to go around. All of the above are paying $5.13 per gallon. Granted, the price was even higher, but that is just a little relief. All of the above are paying $1.62 a gallon more this year than last. This should tell you that inflation isn't going anywhere soon. The war in Europe and its dangers are not helping the situation. 

Velocity of money? How About the Velocity of Inflation? Effects?

Everything eventually ends up on a truck. The price increase for fuel will be contagious to all businesses. Last week, many companies announced lower forecasts due to costs like chip leader, Nvidia to the retail king, Walmart. Amazon reported lower income, but the market has yet to punish its share-price. The media does from time-to-time offer tidbits in regards to inflation. A little blurb said the average new car costs rose to $62,000. We already mentioned the new Ford F-150 will run you a mortgage at $97,000! Ouch! No! Double ouch!! When harvest time comes, farmers will feel the whammy again. They got a taste when they planted. The real problem for consumers is the middle-man. He will raise prices to which the supermarket will follow. The Fed calls for 4% inflation by the end of the year is just another proof that they do not know anything. Blowing up a bridge does not make you an engineer. And yet, guys who never had to work for a living, think that they can engineer an economy. It is like their previous call on inflation. It is just "transitory". Idiots! Get Real! Inflation will touch 10%. This is another example why we should End the Fed!      Peace.