Use Your Imagination

Draw your attention to the green line at $3.30 per pound on copper. This isn't a hard line, but notice how trips below this area have been violent.

Going back to 2017, there is heavy volume around the $3.25 area to the $2.50 area. This should be difficult for the market to slice through. Yet if there is a deflationary event, that's exactly what might happen.

My next target for QQQ is $260, that support line is right there in November 2022. A punch through to suck in the bears and trigger a squeeze might conclude the downside activity for 2022. That's only a 15 percent decline from here. I anticipate heavier selling in energy and commodities, for Apple to break down and for stocks such as Meta that are already near 52-week lows to suffer implosions. What I've mainly done is looked at the 52-week lows and then assumed it'll break by October or November, and purchased the most profitable puts for that scenario.

Expect a lot of chop. I will mostly accumulate short positions on rallies and may do limited trading.

The next phase for the bear is a transition from inflation to deflation, from worries about inflation to worries about recession. My sense is the market is being too cute with recession calls. I see investors who think the market won't go straight down. I think that's wrong. Markets front-run recessions.

There is risk of a major crash or prolonged bear market. It could be that everything going on is overblown, but there are indicators showing a recession as bad as 2008 and 2020 and 2000. My read is that the media has mesmerized the public. What is going on in Western societies is full blown insanity. I don't think people are mentally ill, but the crowd is functionally mentally ill. Transgenderism, green energy and war with Russia are all coming from the same mentally-damaged ideologies and narratives. It will eventually translate into financial markets. Like the severed genitals of a eunuch, Western economies have been "permanently" damaged. They are pretending at being wealthy the same way society pretends a eunuch is a woman. Getting Western economies back on track will require extremely high short-term costs in the form of higher wages, inflation, interest rates, welfare cuts and so on. Not getting back on track requires accepting a permanently lower standard of living. Factor in political risk when the public fully realizes the ruling class has purposefully impoverished the West. At some point, the West will realize what it has done and then good luck finding anyone to buy "stocks" at anywhere near current prices.

Many things can happen between now and the "moment of realization," yet the longer these policies are in force, the more likely this outcome will be. The GOPe is also in the process of blowing the midterm elections with a focus on already fading inflation, which will mean no shift in policy until 2025 at the earliest. Even if the GOP pulled off a Congressional sweep, the GOPe-dominated Senate is as insane as the Democrats on issues such as Taiwan and Ukraine. No one will stop the incineration of Western prosperity.