The Case for Dow 770
That the present period is starting to have the 'feel' of the Great Depression will likely build a bit more for the balance of this week as the market seems set up for further index declines - a topic which we'll get to in a moment. But a few words about the 'feel' and how what was 'old' is going around to become 'new' again.
Take for example, this publication called "The golden Days" which landed in my mailbox this week. Published by Chester Lapp and some folks up in Pennsylvania (Golden Days, 420 Weaver Road, Millersburg, PA, 17061-9509), this tabloid running 36 pages (including cover) plans to publish 10 complete books a year. The ones in my sample issue included "Fame & Fortune" by Horatio Alger, Jr., "The Bell-Ringer at Brinsley" by Wilton Burton, and "Jack Peter's Adventures in Africa" by Walter A. Morris".
OK, so what's so special about "Golden Days"? For one thing, I didn't see any web site for the publication. Goog'ed it, of course, but nothing. Even more interesting: Not so much as an email address on it. Even the advertising doesn't have web addresses!
Now why would I bring this to your attention? Because I've been waiting for the modern-day equivalent to the "Everyman's Library Series" to re-emerge as the country spirals deeper into an economic decline. Lapp's fine publication seems to fill a niche: thoughtful content, very limited advertising, and something that even a person who's living in a car might be able to squeak into the budget because once you're living in a car and the hypnosis of modern media fades away, there's not nearly so much to buy once you've got the basics like food and a few toiletries covered.
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Not common I make ad hominem comments, but am I the only one to catch the striking resemblance between Daddy Warbucks in the Annie comics (or the musical) back when to Treasury Secretary Hank Paulson?
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A third and more pertinent point that makes me wonder how close the Second Depression is came as a phone call to a long-time reader Tuesday...
"George,
You may or may not remember me from the Colorado Longwaves site, where you, I, Robin Landry, and MANY other people came together to discuss market and economic situations.
I come to your website daily and have read about the predictive linguistics’ forecast for a stunning event. I think the word EPIC was used. And I think in one of your recent daily updates you said people would be stunned or in shock for several months.
So far the market decline has been brutal, but NOT a crash. The reason I say that is that I believe, from my own Elliott Wave interpretation, that the current decline is of Supercycle or maybe even Grand Supercycle wave degree. If Supercycle, then the correction that is underway will correct the rally from 1932 all the way to the ATH last year. That projects to a Dow low at the previous 4th wave which was either the 1974 or 1982 low depending on how its labeled, at a minimum Dow 770, SPX 100
The following is a post that I made to a small forum group that I participate in, about a dozen traders. I also attached a chart from one of them showing the time geometry coming up this week.
(chart posted with permission of Kevin W. Murphy, kwmurphy@bellsouth.net )
Thanks for the wonderful site that you maintain, and for your efforts to help people prepare for the catastrophe that is coming.
Most people are looking for SPX in the 600’s this coming week for the low. I have posted 602 for weeks. A very few have lower (much lower) price possibilities:
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October 22nd is 377 days from the Oct 11th, 2007 ATH in SPX, 377 is a Fibonacci number
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SPX 377 on October 22nd is a perfect square of price and time, and it happened in 2002, where the high on Sept 1, 2000 (many call the “orthodox high”) to the low on Oct 10, 2002 @768 was 768 days
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October 22nd is 55 days from the closing high on August 28th
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There is a cardinal panic moon on October 24th
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The number 5 is a key number for Fibonacci and Biblical sequences, and is a key universe number (5 senses, 5 body extensions, 5 fingers, 5 toes, etc)
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Square root of 5 is 2.236, a key number in geometry of the markets
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.236 is another key geometry number from the Fibonacci ratios
So,
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ATCH = 1576, 1576 x .236 = 372
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2.236 x 100 = 223.6 x 3 (another Fib and Bible number) = 670
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Tuesday’s rally high @ 1044 was either wave 2 or wave 4. if wave 2, this exercise is more plausible. 1044 – 670 = 374
A range of 372 to 377 for a crash low would be an EPIC crash which leaves people walking around stunned and in shock for many months.
Sincerely,
C.S. Atlanta
I'm not expecting the Dow to get to 777 right away. More to my liking (and yours, I expect) would be the decline to the 5,800 Dow range by the end of February and then a good strong 6-months rally. But that's not necessarily in the linguistics or the fractals, so we shall just have to wait and see.
Whatever your expectation, we can set most all of them aside once the market opens today because in the end, all the charting and hypothecating in the world doesn't matter as long at the markets are open, the PPT is intervening, and funds caught out short are trying to raise cash to cover counterparty obligations due in a couple of days.
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By the Way, C.S. living in the North Atlanta area reports one of his kids works for a real estate outfit that in the heyday of the real estate bubble was doing 200+ closes a month. She's reporting that last week, or so, there were only 5 closings schedule for October and none were schedule for November yet.
With any luck, that's changed, but you got the picture: Remember that with many of the statistics about mortgage applications (just to pick one metric) it's hard to sort the wheat from the chaff as lots of couples are putting in 5 to 10 applications because money is so tight right now. It may look like applications are up, but more'n likely it has to do with the reduced flow of money.
Velocity of Money is a concept you need to be at least somewhat familiar with because it's having such a huge impact on our lives right now although not many in the mainstream is talking about it. An exception is the Forbes article "Velocity and the V-shaped Recovery" which at least addresses the issue in part, although it seems possible to me to have high velocity in what I'd call "useless money" (derivatives) and still have a dearth of loan money for regular biped humans trying to keep their homes. Stuff better left in the academic discussions, perhaps.
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On my latest trip over to the house for coffee, and to help the cats who were having problems with one of the HDMI plugs on their big screen, I noticed the futures had continued to deteriorate and the Dow looks like it would drop about 200 at the open. I scolded the cats for watching financial porn when they should be out mousing, but they simply meowed me away; the feline equivalent of 'shut up we're doing some FOREX trading here.' "The buy your own damn cat food and cough up your share of the satellite bill, huh?"
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If the Bulls (and cats) get really lucky the fractal outlook will be dead wrong. I wouldn't put money you couldn't afford to lose on it, however. Don't quit your day job, and if you're a cat, remember your core value is mousing of the field, not ETrade kind.
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Speaking of mousing.....you did hear that Yahoo is laying off 1,500 workers as their profits are falling?
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Against the backdrop of recollapsing markets (is that a word? My bad for making it up, but it fits...) John Crudele of the NY Post has a posed a dandy challenge this week: "Let's see if we can have a stimulating stimulus plan..." Before we're all dead or bankrupt would be nice, fer sure...
http://urbansurvival.com/week.htm
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