Gamblers Double Down

Back in early October I posted: Gamblers Anonymous Trade for Q4 2021. I added more during the 50 percent off sale earlier this week.

All Hallows' Eve

No Recession: Atlanta Fed Predicts 6.6pc GDP Growth in Q4

So much for the slowdown, at least in the initial data.

The 1970s: Coffee and Sugar

I expect a pullback given my overall bearish interpretation of near-term macroeconomic forces. Longer-term, coffee has a nice base that will beget a double or tripling of its price. Sugar is not nearly as bullish as coffee here, but starting from a lower price, it would be a quadrupling or sextupling if it followed (or led) coffeee in a bullish/inflationary scenario.

The Meta Bear Market

Diverr

These guys can't make money charging 25 percent fees.

Crude

Something like this should play out, otherwise the decline is pushed out.

Another Red Flag for Oil

The yield curve is inverting again. Now, not every cycle is the same. What works in one need not work in another. Commodities made a major top around 2011 and oil started plunging along with the 10s2s ratio shown below. This time there is a large divergence.

Also worth noting: the last time the 10s2s ratio collapsed it was coincident with a U.S. bull market.

44 Lives Down

Five9

Teledoc

TDOC spikes following earnings again. July's spike was erased over the next three weeks of trading.

Pegasus

8 Lives Lost

This CAT beat earnings but hasn't escaped the downtrend.

Shopifried

IB: Shopify Stock Falls As Q3 Earnings, Revenue Miss Estimates

Not Counting Chickens Yet on Oil

If I'm right (I have been early on timing so far, which is terrible for a trade), oil should blow right through that support line in the next day or two.

XLE broke through its long-term support/resistance line today (green), but for the scenario I've been laying out, it should blast right through the violet line.

Short Baizuo Cities

DC, New York, San Francisco. The time has come to short the Baizuo.

Also New York, San Francisco. Urban real estate isn't so hot without police.

Student Housing?

Chart looks strong, but student enrollment has collapsed around the country. Nothing bearish at the moment, but I wonder.

Volatility Surges

The VIX index ripped higher this afternoon on no news. It was notable because I went through charts and could find a plunge in any major S&P 500 components or sector ETFs. Instead, it looks like the market got nervous after Tesla and Google stopped propping it up. VIX started rising rapidly and then accelerated in the last hour of trading. I have been bearish for a reason and the rapid dip in shares this afternoon is a sign of how quickly an air pocket can be hit. The question now is whether VIX can break resistance and move back into an ascending pattern. Futures have bounced after hours so no follow through overnight yet.

Peak Inflation Hysteria?

Flesh-Easting STDs Arrive in the UK

FoxNews: ‘Flesh-Eating’ STD that causes ‘Beefy Red’ sores is spreading in UK

Cases of donovanosis — which causes thick sores that damage genital tissue — have been steadily growing in the region since 2016, and cases are expected to rise, according to data and experts cited by Birmingham Live.

I have predicted STDs and new disease outbreaks would unfold as social mood goes lower and lower. The stock market is masking how low mood has gone and if the market interventions fail, mood will fall to levels unseen since the 1930s.

BTC to $50,000

If BTC stays below the horizontal, a move to $50k is in the cards.

Newmont to 200

Aztec had some nice drill hits. What I want to point out is that there are more than a few charts like this because the overall sector has a similar look. The stochastics (lower indicator) are in the oversold zone. Stocks can stay overbought/oversold for a long, long time on the montly time frame. By itself this isn't bullish. There is also falling volume. By itself, not bullish. However, the price has refused to drop. That says this is a firm base from which a new bullish advance can begin. A break of this price level would be very bearish given this backdrop.

Here's a short-term price chart.

A panic washout in gold mining remains possible. Investors think inflation will ignite the sector and there isn't really bearishness sentiment. It could be that the sector investors are right to be bullish and the mainstream are idiots for not buying dirt cheap stocks at historically depressed valuations. There is doubt though, and that could give way to panic selling if the broader stock market turns south and takes everything with it. There will be a generational buying opportunity if that happens.

Speaking of cheap miners, Nemont yields 3.80 percent. If gold prices rise to $2500 and $3000 the yield on today's price will rise above 5 and near 7 percent. The chart is interesting at this juncture with the inflation/disinflation arugment still going on at least in my head. If the economy is trapped in the post-2008 slowdown caused by the debt bubble, then Newmont might be stuck in the same 40-year channel.

Might, because I think the gold miners will do best in a deflationary environment, followed by stagflation. If a deflation or stagflation triggers a powerful new bull wave in gold miners, then Newmont looks like a gigantic basing pattern with the stock finding support at a former resistance area. The 2011 breakout was a false breakout and this one will be the real one. The measured move would take Nemont up about 50 percent to the $90 area, but really the move would probably be the first phase of what will eventually be a 350-percent rise to $200 per share, with dividends pushing the total return above 400 percent. If one of the large-caps in the gold sector rises 400 percent, finding 10-baggers among the juniors should be like shooting fish in a barrel——provided investors employ a modicum of research and avoid the hype and poorly run firms...no small task in this space.

Chart Buy: Santana

I accidentally typed this symbol at some point, and thought the chart looked blah, but for some reason I kept it. It's starting to look good now. I took a position today.

Vaccination of Children Will Be a Disaster

eugyppius:More on Original Antigenic Sin and the Folly of Our Universal Vaccination Campaign

It is a near certainty that this immunity will attenuate antibody responses to the spike protein of current and future variants, forever. Mutant spike proteins will increasingly escape vaccine-conferred immunity, and breakthrough infections will elicit only partial response to the new epitopes. Insofar as the data also suggest that our vaccines will attenuate immunity to other virus proteins beyond spike, mass vaccination will lead to ever more volatile waves of infection – in exchange for limited and fading protection against severe outcomes.

The most dangerous thing to do, at this point, would be to vaccinate children. The virus is not a threat to them, and if they are infected by the new forms of SARS-2 that are sure to emerge every winter, we will begin to establish – through them and the as yet unvaccinated – the layered immunity that is the only way of coming to terms with SARS-2 in the longer term. As long as the vaccinators are permitted to continue their radical and increasingly insane campaign, though, nothing will improve. Indeed, their policies threaten to bring about a semi-permanent pandemic state for generations to come.

Mass Deportation is a Winning Issue

By the time the next recession gets going, voters will be clamoring for mass deportation. Below is Australian data, but I know from reading older polling that the U.S. is in a similar place politically:

Macrobusiness: Even The Guardian wants Labor to reset Australian immigration

My only disagreement with Lewis’ salvo is the claim that “historic hostility to increasing immigration levels is at an all-time low”. This is the opposite of the findings of The Australian Population Research Institute’s (TAPRI) latest survey, which found that 70% of Australians want lower levels of immigration (of which 48% want significantly lower or zero immigration) after the pandemic than what existed pre-pandemic:

“There has been a distinct hardening of attitudes towards immigration. Before the pandemic there was a rough balance between the share of voters wanting the current numbers to remain the same or to increase and those wanting them to decrease. But as of July 2021, only a small minority want Big Australia levels restored. The majority do not”.

In many ways the pandemic accelrated existing trends: online destruction of physical retail, localization of supply chains and pro-worker/anti-immigration sentiment. The winning position for many countries will be calling for mass deportationos, followed by doing it. Immigration will not be reopened for decades once the door is closed. Diversity annd mulitculturalism will be replaced by assmiliation programs. As obnoxious as people are about topics such as transgenderism and racism today, so they will be towards foreigners and people who are seen as overly xenophilic in the future. Cancel culture won't go away. It will find new targets.

A brutal political battle is coming, one that makes the polarization of the past 6 years look like fun and games. It will be extreme because it will be a winner-take-all. Either the current trend towards authoritarian government and tech censorship wins or it will be run out of power. Mass deportation of illegal aliens is about as openly "racist" as one can get with a policy these days and thus, if the nationalists and populists win, they will win a total rhetorical victory against the entire Western media, entertainment, political and academic class. In other words, you will rarely here someone say "that's racist" in the future because they will be targeted for cancellation. It is possible that in the U.S., something like birthright citizenship could be retroactively reversed by a Congressional act or court decision (a plain reading of the law makes it clear that children of illegal aliens are not Americans because children of diplomats are not American citizens by birth. One must be "under the laws" of the U.S., i.e. here legally, to obtain birtright citizenship.) The War for the West is about to kickoff in earnest.

Shortages? Why is Available Warehouse Space Shrinking?

WSJ: Tighter Warehouse Space Adds to the Supply-Chain Squeeze

The third-quarter demand for industrial real estate exceeded supply by 41 million square feet, pushing the vacancy rate to 3.6%, down from 4.3% in the same quarter of 2020 and the lowest level in data going back to 2002, according to new figures released by real-estate firm CBRE Group Inc.

CBRE found the vacancy rate for warehouses near the ports of Los Angeles and Long Beach, Calif., the gateway complex that is a major chokepoint adding to global supply-chain snarls, reached 1% in the quarter. The region’s vacancy rate was 2.3% in the same quarter of 2020.

The Boston, central New Jersey and Charleston, S.C., markets showed a 1.9% vacancy rate during the quarter, the lowest rates outside of the Los Angeles region, according to CBRE.

“Space in our markets is effectively sold out,” said Thomas Olinger, chief financial officer of logistics real-estate firm Prologis Inc., in an Oct. 15 earnings call. “In the last 90 days, supply-chain dislocations have become even more pronounced, with customers acting with a sense of urgency to secure the space they need.”

Here is retail inventory data indexed to February 2020.

jeff Snider discusses more in What *Seems* Inflation Now Is Something Else Entirely

If Inflation, What Correlations Break?

If there is a secular shift into inflation, many correlations that held over the prior decades and prior years will end. Some will simply become uncorrelated, some may reverse. Here's an interesting one: teh DXY rising with interest rates. What nation can afford to take interest rates highest? USA, EU, Japan or UK?

U.S. Dollar Cycle

Tax on Unrealized Gains to Include Video Game Loot?

Babylon Bee: Janet Yellen Proposes Tax On Coins You Acquire In Mario

"Every time your little Mario or Luigi character on the screen collects a coin, that's an unrealized gain," said Yellen. "Why are we allowing all those coins—not to mention all those power stars and power moons—to just sit in Mario's pocket untaxed?"

Experts estimate that over 32 billion coins are collected in Mario games every year, and all of those gains go completely untaxed, allowing gamers to reap the benefits of power-ups and extra lives without sending any money to the government.

The Nail in the Coffin on the mRNA Therapies

One question I asked around and never received a satisfactory answer to: does getting mRNA shots prevent natural immunity from an infection? If the answer is yes, then my desire for the shot goes to zero percent. Turns out that is the case.

URGENT: Covid vaccines will keep you from acquiring full immunity EVEN IF YOU ARE INFECTED AND RECOVER

This is from the data I posted over the weekend. Teh vast majority of people don't need the not-vaccine and should exercise/lose weight and eat healthy in lieu of a shot. Drugs like ivermectin, monoclonal antibodies and HCQ can provide adequate defense in healthy individuals.

Bauxite

A speculative bauxite stock that trades in Australia.

China Goes Nuclear

If this plan was actually implemented in the short-term, China's economy would immediately enter recession. That isn't going to happen. They've wisely pushed the date so far out that their buildout of nuclear power will hit their goals fro them.

iFeng: 中共中央、国务院：严控煤电、钢铁、电解铝、水泥等高碳项目投资

Business Standard: China targets more than 80% non-fossil energy use by 2060

China aims to have non-fossil energy consumption exceed 80% of its total mix by 2060, when the world’s second-biggest economy plans to be carbon neutral, according to guidelines published by the official Xinhua News Agency.

The measures are part of China’s larger plan for achieving peak carbon emissions and reaching net-zero by 2060, Xinhua said on Sunday. It reiterated the government’s climate goals for 2025 and 2030 and vowed to accelerate a decline in China’s coal use.

TK

Clownifornia Sinks the U.S. Economy

Below is a long thread about the global economy coming to a standstill. Globalization is definitely in trouble, but California's special brand of clown socialism is adding to the problem.

Yesterday I rented a boat and took the leader of one of Flexport's partners in Long Beach on a 3 hour of the port complex. Here's a thread about what I learned.

It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.

Right now if you have a chassis with no empty container on it, you can go pick up containers at any port terminal. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis.

If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container. And if nobody goes to pick up the next container, the port remains jammed.

WIth the yards so full, carriers / terminals are being highly restrictive in where and when they will accept empties.

...This is a trucking company with 6 yards that represents 153 owner operator drivers, so he has almost 3 containers sitting on chassis at his yard for every driver on the team.

He can’t take the containers off the chassis because he’s not allowed by the city of Long Beach zoning code to store empty containers more than 2 high in his truck yard. If he violates this code they’ll shut down his yard altogether.

...We must OVERWHELM THE BOTTLENECK and get these ports working again. I can't stress enough how bad it is for the world economy if the ports don't work. Every company selling physical goods bought or sold internationally will fail.

The circulatory system our globalized economy depends has collapsed. And thanks to the negative feedback loops involved, it's getting worse not better every day that goes by.

It All Comes Down to This

I have this chart of crude oil. The horiztonal I have on the chart is at $84.05, in the neighborhood of where there was a lot of trading activity from 2009 to 2012.

I have been looking for energy to turn lower and it should happen this week based on short-term technicals. It could be pushed out to the Fed's official taper announcement next week, but like I said, the technicals tell me traders are ready to front-run the news.

However. When the market doesn't behave as expected, that is often a good sign that the underlying trend is more powerful than anticipated. Depending on what I see on Monday, I may close out my short position because it is heavily weighted towards short-term options. Additionally, what happens if crude oil keeps rising? Crude is overbought on the daily and weekly timeframes, and almost on the monthly. Reversals are born in these conditions, but it's also true that the most explosive vertical moves come under these conditions. If crude keeps rising, $100 could come fast.

Speculators have increased their bets on rate hikes next year. The odds of a hike by June 2022 were effectively zero three weeks ago. Now they are at 70 percent.

If crude runs to $100, it will immediately add about 1.75 percent to the headline CPI. If CPI keeps rising, the headline CPI will be pushing north of 7 percent in November or December, the highest level since the very early 1980s when the 1970s inflation was winding down. President Biden's approval ratings are in free-fall and now the worst of any post-WWII president. If oil jumps to $100, the Baizuo regime will be cemented as Carter 2.0. Instability will rise because all but the most die hard will believe the government is incompetent. The Democrats could lose some of their core constituency as social media becomes impossible to police. Risk of geopolitical disaster will rise because enemies will take advantage of a paralyzed Washington, D.C. For the stock market, the inflation panic will trigger at least a short-term breakdown in long-term bond yields. The odds of a March rate hike will spike towards 70 percent and the Fed might be forced, like in December 2018, to reverse their policy statement days or weeks later. Perhaps they'll announce the taper will finish by March instead of July as Bullard proposed in his public statements last month.

The 10-year yield will spike, with potential run to 3.1 percent in the cards. The downtrend in the 10-year bond yield will be broken if it clears 2.80 percent by the end of 2022.

Leaving aside a long-term term rise in rates and inflation, a short-term pop in yields that takes TLT to a new low, would map to a roughly 10 percent correction in the Nasdaq for starters, plus whatever extra interest rates continue rising. Taking out the lows from this past month would also increase talk of a top in rates.

I don't own a crystal ball. What I can say for certain is that the VIX looks very cheap given the two most likely scenarios I see involve a sharp sell-off in the stock market. One also includes a sell-off in bonds plus political paralyzation of USG.

It Gets Worse for the Not-Vaccines

Excess mortality not caused by SARS2 is up in the United Kingdom, Germany and the United States. The U.S. has seen higher deahts for 2 years. It has more opioid addiction and may suffer more from lockdown-related illness, making for a less clear cause. In Europe is it different. The increase in mortality happened first in the U.K. and then in Germany. The timing was spaced out by months. The U.K. launched its mass vaccination campaign a couple of months before Germany. According to this clip, the deaths are cardiovascular-related and showing up in teh under-50 demographic cohorts.

Countries are seeing unusually high all cause deaths that are not related to Covid pic.twitter.com/ekTcJUI3ZE

— Wittgenstein (@Kukicat7) October 21, 2021

The Biden administration and state governments will no doubt push mass vaccination down to 5 years of age next.

WaPo: Pfizer-BioNTech say children’s vaccine is 91 percent effective in documents ahead of FDA meeting

The authorization of a vaccine for school-aged children would open coronavirus vaccine eligibility to an estimated 28 million children in the United States and represent an important turning point in the nation’s effort to control the virus.

The vaccination campaign is anticipated to launch as early as the first week of November, after the Pfizer-BioNTech shot clears key steps. A decision by FDA regulators is expected in the days after Tuesday’s advisory committee meeting. Advisers to the Centers for Disease Control and Prevention, who recommend how vaccines should be used, are scheduled to meet Nov. 2 and 3.

The White House has drawn up a plan for distributing vaccine to pediatrician’s offices, pharmacies, hospitals and other sites. Federal health officials project that in the first week, 15 million doses of the two-shot regimen will be shipped.

This is a horror movie come to life.Make no mistake. Wholesale removal of the ruling class via political revolution is behind door number one, totalitarian government is behind door number two, and chaotic dissolution of the polity is behind door number three.

mRNA Not-Vaccines Epic Fail: "Vaccinated" Are Not Immune

Mass vaccination may permanently attenuate population-wide immunity to SARS-2

The universal vaccination campaign has coincided with a marked increase in the volatility of Corona and vast changes to regional and temporal patterns of infection. For the first time, SARS-2 has departed from the seasonality observed by other human coronaviruses. Official discourse has laid all of this at the feet of the Delta variant, but it is very doubtful even the scientists and bureaucrats responsible for this line really believe it. Mass vaccination has drastically altered the environment in which SARS-2 circulates. This was always expected to change the behaviour of the virus – just not in this precise way. In return for only limited protection against severe outcomes, the vaccines appear to encourage the spread of SARS-2, in multiple different ways. In continuing to insist on mass vaccination, our public health bureaucrats are doing the bidding of the virus. There is no other way to look at it.

The first chart divided two types of antibodies, one found in natural infection and the other produced by the "vaccine." It's showing that natural immunity produces a lot of antibodies that last a long time (and target the whole virus, not only the spike protein), while "vaccinated" people have low and consistently low antibodies. The second chart show a similar trend from blood donors. The younger cohorts who are less likely to be "vaccinated" show higher average levels of antibodies.

The not-vaccines achieved the opposite of herd immunity. They've made the "vaccinated" more susceptible to another infection. Add another complete 180-degrees-from-stated-goals failure by the American ruling class, this one

Google and BTC

Both are below their march 2020 support line. Not a prediction of direction, but to highlight that everything is the same asset these days.

Bonus chart: ARKK is coming to a conclusion soon.

Crash Protection: The Market and Fed are Clueless

MSN: Time for Fed to taper bond purchases but not to raise rates, Powell says

Powell said he doesn't see that as the current situation, but he does see a growing tension between the Fed's two mandates of full employment and stable prices. "The risks are clearly now to longer and more persistent bottlenecks and, thus, to higher inflation," he said. For now, the Fed needs to "look through" that high inflation, despite the pain it means for households having to pay more for gas and food, in order to give time for the economy to work out supply kinks.

There is no tension. Higher inflation will mean higher unemployment. The Fed will fail on both mandates and then be forced to hike rates, creating still higher unemployment. I do think Powell may be right about the supply chain disruptions giving way, but the problem is the Federal Reserve should have started tapering 12 months ago. They're late and spawned excessive, out of control speculation in the process.

Energy Puke Moved to Next Week

Still looking for a plunge, but barring a mini-crash in the last hour of trading, the puke is pushed to next week.