If you want to understand how volume profile and Fibonacci patterns ala H.M. Gartley, then you came to the right place. If you have questions about the video, ask away in the comments.
As you have (hopefully) seen from the video, we may have hit a pivot at the end of a summer rally, and we may or may not resume the selloff. I realize that all I am doing is looking at the micro Nasdaq 100 September 2022 futures contract. Even then, I am only basically looking at a cap-weighted index futures contract primarily composed of the FAANG stocks (or what I now call MANGA stocks, since Facebook has gone goggle-eyed as Meta). Even though it is not the $SPX or the $INDU, these stocks do represent a lot of the economy in terms of communication, data, and entertainment (if you consider Netflix entertainment, no judgment is implied there, though the service is bleeding subscribers).
Institutions, hedge fund managers, traders, politicians, average people, rednecks, and everyone else in America are wondering if we are in a recession. We have all seen the inflation in food, energy, transportation, and even services. When a politician tells us that last month’s inflation is zero, that statement using the word “zero” is a reflection of that politician’s or politicians’ grasp of reality on the street.
We know these things:
Credit card debt is the highest ever in American history. That is NOT a good sign.
Retailers like Target, are seeing their earnings hammered by consumers who have simply stopped spending to pay for food, energy, and housing. Wealthier Americans are ditching Whole Foods for retailers like Walmart and Home Depot.
What is still the heart of American employment growth is also in a bit of deep doo-doo. A recent survey shows that 1/3 of American small businesses cannot pay their rents because of inflation. ( I reserve the right to use obtuse language because people understand it more completely, and it somewhat truly reflects reality).
For those of you too lazy to read the articles (I know, I can be one of them), here is an even more scary quote from that story: “Even more alarming, 63% of transportation SMBs couldn’t afford June rent, up 41% from May,” Alignable said. “It's no shock to learn that 76% of this group said gas prices have had a ‘very significant negative effect on their businesses.” That means that if your plumbing goes bad or you need a special delivery, the cost of those services, assuming the businesses survive, could skyrocket.
In terms of housing issues for American families, more than 6 in 10 Americans are worried that they cannot pay the rent.
Think that’s bad, and it is, Americans are getting behind on mortgage payments ala 2007-2008.
“An estimated 13.4 million Americans — or 6.2% of all U.S. adults — are not current on their rent or mortgage payment, according to the U.S. Census Bureau's latest Household Pulse Survey.
Among those in nonpayment are individuals who have slight or no confidence in making their next payment on time, and a third (32.9%) report that eviction or foreclosure in the next two months is likely. And to make matters worse, 12.3% of all U.S. adults expect someone in their household to experience a loss in employment income sometime in the next month, the survey found.”
I could continue on with this stuff, but that does not appear to be, as our President calls it, “the strongest economy in the world”. With the Uniparty’s latest boondoggle called the “Inflation Protection Act”, the U.S. Treasury could print up to another trillion U.S. dollars worth of valueless currency to subsidize green projects and to shut down, coal, hydrocarbon, and nuclear energy-based electrical power. That would ultimately cripple what is left of our manufacturing base, as we cannot baseload energy with windmills and solar panels.
If you think you can, look at what is happening in Germany. Look at the cost of their energy in terms of electricity futures. If the Biden administration has its way, that is what our electricity prices will be like in a very few years. If this administration gets its way, and all hydrocarbon exploration, production, and refining are complete, transportation costs will escalate beyond all norms of sanity, and all food and material prices will skyrocket or become scarce at starvation levels at some point. Net zero for carbon is probably (and don’t laugh at this) could literally be net zero population growth ( save for the overrun of our southern U.S. border by illegal migrants). The Uniparty has no plan for a smooth transition. None whatsoever, period.
Things certainly aren’t poised for anything near a soft landing if the foreclosures, energy and food prices, and the manufacturing base begins to recede. This situation has to adjust, or there will be some form of panic that will ensue.
Even so, I am going to leave you with three videos:
An even-handed explanation of what might happen in what is a coming mortgage crisis.
A refreshing and stern warning to the global elites from Jordon Peterson.
I was going to discuss potential hotspots for world conflict that will also have an effect on the American and world economy, but I have crammed enough into this post.
Those of you who need to protect assets for retirement, if you have not done so already, you really should do it now. I have no idea what will happen. We could see one more “Hail Mary” pass with zero rates again before this insanity ends, and things could charge higher. I do suspect there will be some tough times ahead for all forms of assets. We will simply have to watch the clown parade as it passes (and it could be a very scary clown parade, but I hope not).
Thank you for lasting to the end of this post. I greatly appreciate your support of this blog.
More soon.
