I told you Bitcoin was a bubble. The biggest beneficiary is the precious metals and I had a hunch when I saw the calculations for the turn in the metals the cryptos were hijacking some of the shine normally bestowed to the metals.
Do you believe in Christmas in August? Better get used to it, we are upon the traditionally slowest volume week of the year other than Christmas. This year, a lot is going on which is simmering under the surface. We may just get a break from it this week.
Last week I told you risk for the markets was off the charts. Last week Google is down 1.5%, FB down marginally, Amazon down 2%, AAPL up marginally and NFLX down 5%. Biotech is down 2.9% as is housing. These are not big numbers, but when you look at some of these charts we are starting to see technical damage for the first time in a long time.
Here’s the good news, 8,000 jobs were attributed to mining and any jobs in that beaten down arena is welcome. But 37,000 jobs were attributed to health care. Why isn’t that good? Some of you will recall the only reason Obamacare exists is that Fannie Mae and Freddie Mac have been looted to the tune of billions. It is called “Net Worth Sweep.” It was first reported months ago by Jerome Corsi but confirmed several weeks ago by Mnuchin on the Maria Bartiromo show.
We had another of those small degree time windows—161 days up from the early November low, which came to be known as the Trump rally. With time windows, we have issues as one never knows if it will create a low or a high. Most of the time it’s a high, but upon occasion, it will top early and create a low.
Another week, more all-time highs. For the Dow, that meant the 21,169 high at 170 days after Brexit held for 65 days. Do you think 69 days from that March 1 high will be significant? It might and just as important this week is 144 days from the early November low just before the election. The freight train has more cycle excuses to take a pause or even a fall.
The initial outcome on Sunday night had the YM gapping up but dropping lower immediately for the classic gap and fade. The ship steadied by Monday morning but it remained off the high. Elsewhere, the EUR/USD was a golden spiral 263 days off its high as of Friday’s close and the open on Sunday night was negligibly lower and by the morning drifting lower.
Seriously, ever since Wednesday the S&P 500 has been drifting lower and the move to the recent high has a calculation to it. From the low on the 13th we can make a case for a first leg of 24 points and a bigger leg of 63 points. You don’t even need the calculator to see it’s a 2.62 ratio which means we either have a high or a 3rd wave high. It’s also back at the top of the channel lines. Since Wednesday they put in a bear belt on Friday.
The March jobs number was weak at 98,000, but mining added 4,000, construction 49,000 and manufacturing added 30,000. There is the good and the bad, but let’s be clear, anything under six figures is nothing to write home about. Is this President Donald Trump’s fault? I don’t think so, but if he is going to take a lot of the credit when the report is good at this early stage of the game, he is going to have to accept some of the blame when it’s not good. That’s how this game works.