"I write to find out what I’m talking about." - Edward Albee
"I’m try’na think, but nothin’ happens.” - Jerome Lester Horwitz (Curly Howard)
Those quotes represent the second part of this Substack post. Let’s get to the analysis part first, shall we?
Monthly Analysis of MNQZ24
I will eventually get back to video analysis, but let’s stay with words for now.
Monthly MNQZ24 Bullish Projection
You can click on that image to get a larger view, but in fact, we did blow out the target I established for last month. We still are technically short of last month’s projected high but given that we hit 21,220.25 ( a 1.618 extension of a previous swing high), we now have a new high projection based on a potential “three drives to a top” pattern of 23708.75.
At another time, I will go deeper into whether we are near historic valuation ratios ( as the $SPX is currently), but for relative comparisons:
The Nasdaq 100 Index’s valuation over time:
1999 (tech bubble): P/E ratio ~73x, free cash flow yield ~0.76%
2000-2002 (post-tech bubble): P/E ratio ~40-50x
2010-2013 (post-financial crisis): P/E ratio ~20-25x
Nasdaq PE ratio as of November 29, 2024 is 29.85. Free cash flow yield is 0.78%
The NASDAQ 100 is not exactly expensive on a historical basis, but it ain’t exactly cheap either. What is of much greater concern is:
What this guy talked about:
“Today, every inhabitant of this planet must contemplate the day when this planet may no longer be habitable. Every man, woman, and child lives under a nuclear sword of Damocles, hanging by the slenderest of threads, capable of being cut at any moment by accident or miscalculation or by madness.”That is what John Fitzgerald Kennedy said about the prospects of nuclear war in September of 1961. We are sitting on the razors edge of that now at an even more dire way than during the Cuban Missile Crisis.This:
What is important to understand here is that “green energy policy” has literally destroyed the German economy, which is about 70% of the EU’s economy. Clearly, unless the EU breaks up and the fascist governments (by and large) in the EU do not restore free markets and free-speech (something they seem hell-bent on destroying through a digital Euro and the creation of a Chinese-style social credit system,
this comparison will remain as extended as it is or become even WORSE compared to the USA’s valuations in USD terms.What that says is that, as extended as US stocks are (and as the magnificent 7 stocks are),the USA is still the best stock market in a bad investment neighborhoodcompared perhaps, if the debt situation stabilizes in China, as perhaps Southeast Asia.On the home front, when looking at the same chart, the folks at Xtrends on X (Twitter) had this to say:
“Trump's new Treasury Secretary Scott Bessent: "We are going to decide whether we are going to grow our way out of this debt burden, and I think we can, through deregulation, energy independence & dominance in the US, and a growth mindset. I feel very strongly that this is the last chance to grow ourselves out of this." Sounds great for future America but not for risk assets overall... Say bye bye to deficit and gov spending that created this decades long enormous bubble. There will be a transition period which may take year(s) and risk assets will suffer greatly. Undoing decades long policy mistakes will have a price. And remember outliers revert with velocity. Did market know what was coming ? I absolutely think so. Otherwise why growth stocks would suffer since Trump's lead in polls. You see, Bessent talks about bringing growth back but ironically growth stocks are underperforming. Why? Because the market knows that without deficit spending, bubble will burst. And as always hot money / smart money is now leaving high beta growth names before major market turn. They always lead. While I have doubts that Trump administration and new Treasury Secretary do as they say, if they do, it will be great for the future America but during the transition period, the bubble will burst with velocity.”
This is just my opinion, but anyone who does not think the QE is the biggest driver of price action in the past 15 years is probably non compos mentis. Yes, earnings growth has improved for technology stocks, particularly Apple, which sat on death’s door at the beginning of the decade. Yet, through incredibly reckless spending, our Federal government through the U.S. Treasury is printing about 500 billion USD (yes, Virginia, that is one-half trillion USD) PER MONTH to cover bills it cannot pay. That amount is DOUBLE what it collects in income tax receipts from tax payers, corporate and individual in 2023. That is unsustainable under ANY scenario, and is being spent at the Covid-19 pandemic (what I refer to as the “Covidiocy”) rates.
That has to stop and stop NOW. If there were any fairness in government for citizens (and of course, there is not), as this spending is eviscerated, hopefully, by the new Trump administration, I should think a one-to-three year Federal tax holiday be declared to return the money stolen from the American taxpayer to fund the insane war in Ukraine and the potential nuclear annihilation we are threatened with currently . That spending also includes the Federal government’s destruction of the American economy through fascistic lockdowns and vaccine mandates that cost Americans their jobs for not taking dangerous and ineffective mRNA “vaccines”.
For now until the nukes fall or until the New Year, whichever comes first, I would assume that euphoria and FOMO will continue given what has happened over the last few weeks to relieve the pressure of a fascist capture of our Federal government by the Uniparty.
Are we near a top? We might well be, but I think the real change of events will begin after January 20, 2025 assuming the President-elect can remain alive amidst all the death threats that surround him, J.D. Vance, and the rest of his team. I am not totally optimistic that a group equivalent to 1980s-style moderate Democrats can really fix things in the way they should be, but the proof will be in the pudding. I am impressed with most of the picks, but highly skeptical of others.
Now To The Plea For Help
I have gone over the history of my writing in the past.
I ran what was probably the first AI driven stock analysis in the USA on StockTwits and for a short time on the old tradehard.com bulletin boards (which became tradingmarkets.com) and then on the completely defunct mrswing.com. There are now hundreds of services that provide AI analysis, though not to the degree that I might have. That analysis continued on the thebuffalotrader.com until mid-2013, when a series of events by data vendors destroyed my ability to continue without a major reprogramming effort. Many of my models were 80 year models own Dow Jones Industrial stocks and they showed remarkable resilience over time.
I swing traded stocks exclusively from 1986 through 2009, when I became disgusted with Fed policy and shifted the bulk of my investing to real estate, choosing to trade futures and forex at the margin. I was also an institutional broker for a boutique entrepreneurial institutional brokerage firm in Atlanta GA from 1994-1995 for international clients. I left there when things were getting tricky from the compliance side and I chose to disassociate myself from it. I have experience on both sides of a trade desk.
I also did market analysis for BizRadio Network from 2005 until the middle of 2010, when the partners of that network sued each other into oblivion over revenue sharing issues. The show “Ahead Of The Curve” finish #2 on the old iTunes podcast format for 2009. There would be no comparisons by the end of 2010.If there had been, I think we could have ranked #1 in finance.
The point is this. Every one and their brothers, sisters, mothers and fathers run stock trade signal services. I could probably provide in depth analysis on new tech companies, but again, what would be the demand for that in reality?
I could write about fundamental economic issues that seem unresolved in this country and others. I am a STUDENT, as opposed to an expert, in Austrian economics. I constantly read articles and stories related to it, and an a subscriber to The Misesian, printed by mises.org and I listen to tons of economics-related podcasts.
I know I can be topical, but for purposes of keeping time profitable, I want to run a paid service that actually benefits readers. I could write on a number of topics, particularly related to taxation. I am really enjoying “re-reading” The FairTax Book by Neil Boortz and John Linder via Audible. The first two chapters of that book are mandatory reading for anyone who wants to understand the history of Federal taxation in this country. Hearing it in Neil Boortz’s sarcastic tones sends me back to Atlanta when I used to listen to him on WRNG (now WCNN). I still cannot believe he mean-reverted from a Founders-era libertarian into a neo-con simp in the mid-2000s. I think he was jealous of his competitor in Atlanta, Sean Hannity, and bent over to get exposure on Fox News.
I do have a string of dedicated readers here who might want to hear discussions on economics, finance, and investments that you might not ordinarily read on Substack. Leave any ideas you have in the comments. I would like to write profitably as I would take the time to pull the research and write about it. If I write for profit, it must return a profit for the people who read it.
Thanks for reading and supporting The Buffalo Trader’s Writing Desk!