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Whoever Wins the 2024 Election May Have a Difficult PresidencyDISCLAIMER: THIS IS A VERY LONG READ . Monday is Presidents Day. In America, this is a day we honor 46 individuals who have held that office both past and present. Ask anyone who keeps up with current news and events, and they will agree, America is a politically divided nation. The vitriol, one political party has for the other, seems like it’s never been this bad; ( and ) the language used today seems more abusive. Nowadays, It’s common to be out and to see bumper stickers, t-shirts and roadside bill boards that use the most vulgar phrases to describe the opposition. America appears to have descended to a place in civilized society where it is perfectly acceptable to label someone with opposing political views, a traitor. History tells us, partisan polarization has always been a cultural feature of America. We forget the 1828 Presidential elections termed the phrase “ Mudslinging ”, and saw the collapse of The Federalist Party, which ushered in Jacksonian Democracy. That was the first election cycle where in campaign insults and salacious innuendo was personalized among the candidates. I’m sure American society in the early 19th century uttered a collective “ oh my! ”, just like we’re all uttering today. Back then slogans and platforms mention that election was “… for the very Soul of our Country ”. Sound familiar? I’ve traded energy futures for the past 30 years. Except for world war, I’ve seen it all. I was active in the markets on the day when crude oil futures went -$31 dollars (That’s negative $31 dollars). I’ve been an active trader during every geo-political disagreement, conflict, economic crisis (Greece, 2008 Great Financial Crisis), political assassinations, etc., of the last 30 years…and although I never thought possible, a global pandemic to properly bookend my career. So, when I see a bumper sticker that says “ High Gas Prices? Thanks Biden! ” I chuckle. The average citizen doesn’t understand that the US President has very little to do with the price of gas at the pump. Now before the hateful comments come, sure, the policies of any administration can affect prices over short periods of time and cause volatility, but the trends that govern energy prices over the intermediate and longer term, has more to do with supply and demand, and the economies of extraction and refining, than anything else a US President can do in the short term. Never accused of being lax, the more than capable energy lobby sees to that. “ Drill Baby Drill ” is mantra to insinuate that to bring prices down, we must drill more, and somehow a Presidential administration is dropping the "Lower Prices" ball. However, leases to acquire energy natural resources on Federal lands are plentiful, and most would be surprised, that a lot of active leases are actually dormant . Capitalism moderates this, Presidents ...very little. We already “Drill Baby Drill” and have done so for the past 20 years. We have the current infrastructure and capacity to extract and refine more oil and gas than any nation on earth. It’s largely the economics of extracting and refining is what dictates production, which in turn, dictates price. Currently, the price of natural gas is approaching historic all-time lows. Nonetheless, (and I do not want to interjet politics) but I have yet to see a bumper sticker that says "LOW GAS PRICES? THANKS BIDEN" . I suspect gas rigs will be coming OFF line in droves as the weeks and months progress, despite what the US President wants , unless the administration decides to increase exports to allied nations. However, even that would only nominally affect short term prices, because the companies extracting the gas have to have the adequate number of rigs online. It truly is a complicated balance as to what constitutes the prices we pay, and to a lesser extent, who is the President. So, as a seasoned trader I regard the election, and current political divisions as, important as a citizen , but as a trader, not so much . To me it’s back ground chatter in the overall larger cyclical conversation we should be having...but are not. However, this article is not about politics, or ideological differences in the US. It’s not about US policy, nor which party is worst for the… “ Soul of our Country ”. It’s about economic cycles, and how THOSE cycles could place the next US President is a very challenging position. I’ll start with visual on the main chart above. These men we honor on President’s Day have largely been along for the cyclical ride. Each of them presiding over different outcomes. Each of them being judged, rightly or wrongly , solely based on good or bad cyclical timing. Cycles are a normal occurrence in all economies. Regardless of the country, they reflect societies consumption and contraction and they are affected by first and foremost quality and duration of life. Societies with the highest quality of life will consume more. While in contrast, those that have low qualities of life will contract and consume less. Next is increased efficiencies through technology, advances in communication, medicine, and construction. Quality and duration of life are more so related to the political and governing structure of the country. When those are comparatively rigid with power residing at the top as compared to other countries, advances in communication and socialization, medicine, and construction lag and can have outsized affects on the business and economic cycles causing large variances and outsized swings. In America, we freak out about inflation as it has recently vacillated between 9% down to 3%...and rightfully so. Now imagine being a citizen of Turkey and having to endure 61% inflation in 2023 . However, the US, being a mature and stable government, these economic cycles are on a more digestible and palatable timeline and the ensuing variances between the extremes are manageable as compared to those of emerging economies, and fledgling governing authorities. Therefore, if the intermediate and shorter terms cycles that govern economic expansion and contraction, are to converge with the longer-term cycles that have more to do with society and are governed more so by political governance and quality of life, how does that play out in real terms? Does a construct exist for determining if a negative long and short cycle will converge? I practice a form of technical analysis called Elliott Wave. Before you think I’m going to tell you, the construct for predicting this cyclical phase is me, and my ability to be somehow be divinely ordained to make such a bold call based on my expertise in Elliott Wave… your wrong . No one can say with an accurate degree of certainty when or if this will ever come to pass. We have historical results on cycles that say such an event would be perfectly normal and on a cyclical time horizon, we're due for one. To me, is somewhat comparative to the geologists who forecast the Yellowstone caldera will erupt tomorrow, or in the next 10,000 years. In the same mindset, data sets suggest its totally reasonable to make the case that the period of the next US president (which is 4 to 8 years) could be such a period as detailed in the above chart. What I can say is Elliott Wave does provide a highly successful methodology based on rules and guidelines, that can offer some intriguing information that can make a more than reasonable case for a cyclical downturn, and forecast the magnitude of it… but not when . However, it's not my intention to educate you on Elliott Wave analysis. I do want to focus on one guideline in particular within this discipline. It's called the theory of alternation. Simply put, it states that if wave 2 (BLUE (II) ON ABOVE CHART) is shallow, or short in timeframe...then the wave 4 (BLUE (IV) ON THE ABOVE CHART) will be deep, and or long in duration, and thereby alternating. I have labeled the above chart taking alternation into account. However, my intention this morning is to call attention to the events that were present during wave (II) and if those events can tell us anything about wave (IV) as a cycle, the timing and magnitude, and more specifically, do the events alternate as well . Wave (II) consisted of the following events in chronological order. (1) Free Banking Era, (2) WW1, (3) Spanish Flu of 1918, which was moderated by sheltering in place and when those socialisation curbs were lifted, led to the expansion of the roaring 1920's which led to (4) 1929 stock market crash (5) Great depression (6) and culminated in The Glass Steagall act passing as a provision of The Banking Act of 1935 effectively ending the Free Banking Era and limiting what commercial and investment banks can do with respect to public money and taking risks. Today, we know that (1) Glass-Steagall was repealed in 1999, which ushered in a sort of new FREE banking era, which caused the financial crisis of 2008 because banks did exactly what that repealed legislation was designed to prevent (3) Society then endured another variant of the 1918 Spanish Flu in 2020 called COVID-19 which caused us to shelter in place, which affected the global supply chain and has led to a large economic expansion that most economist are baffled to this day by the length and degree in which it has endured. Making this current time period very reminiscent of the roaring 1920’s. It seems the comparative events are similar but the chronological occurrences seem to be alternating as well. Except one. NO STOCK MARKET CRASH. Is this just the last missing event in an alternation that has been decades in the making? I obviously can't say. What I can say, whoever wins the 2024 President Election may not have an easy go of it. Best to all, Chris
SP:SPX
by maikisch
4
FRED has lost control of the train. They are completely stuck.This is why the next 6-12 months in the markets are going to make zero sense. 2020 the FRED not only created money they injected so much unnecessary money that have they not enforced global lockdowns the "2022 mini bubble" would have looked like 2000. Markets will follow and always adjust to debasement meaning your earnings / your P/E ratios are useless in this environment. The FRED tried raising rates the fastest in history to front run the M2 Velocity (money changing hands / transacting) but there's still simply too much money created, markets are finding support and have not "corrected" enough to off set lowering rates. If the FRED does not lower rates look at the red line on chart 2 the Federal government will blow up due to to debt. There's only one solid choice here, Option 1 "Global bust" meaning governments will default inflation will go negative no GDP growth safety nets will fail. Option 2 "Global debasement" The FRED starts lowering rates cheap credit will flow into stock markets / gold / bitcoin Money Market Funds will pour back into the markets M2V will go parabolic reigniting a dangerous inflation cycle. Once that blue box on chart two is broken this means its over. Considering how much of the market is pricing / preparing for a "collapse" yes a collapse will happen but what happens if its the currency debasement and not markets that fall? Correct, you need to re enter all markets. Lets see how this plays out towards year end.
TVC:NDQLong
by FederalXBT
2024-01-18 - a daily price action after hour update - nasdaq Good evening and i hope you had a good trading day. Bulls took over in the globex session and we never looked back. Yesterday i said in my short term outlook that we go up and we did. nasdaq e-mini futures Most bullish indix of em all. Many of the same as dax for today. Nq just reached higher prices. We are trading 38 points below the december high and i think we will get there. Can we touch the big upper wedge? Probably. Bull case is the 400 point rally from the weekly low yesterday which could easily go to the wedge line around 17250. Bulls even bought the 160 point dip midday to close at the highs. Bear case is that this is a trading range from 16950 to 17120. The selloff from bar 43 to 50 was deep enough to dampen the euphoric rally. We are also at the highs of the wedge on the daily tf. They also argue that this is a trading range inside a bigger one between 16450 to 17130. So the question is, how much more room is there for the bulls despite the selling pressure? I think the most reasonable case is, that above 17100 there were many trapped bulls from the december high who will gladly use this rally to exit out of their longs and that’s another reason why i think the upside is limited. But i also thought NVIDIA at 400$ was high enough, so bulls might just continue to dance until the music stops. short term: sideways to down (weakly held and i will long on big bull bars) medium-long term: big down New swing short position opened for nasdaq. I think shorting above 17000 on higher timeframes is a no brainer.
CME_MINI:MNQ1!
by priceactiontds