Some Relief For The Memorial Day Holiday Weekend

Things finally bounced. Stocks, bonds, precious metals brought a happy Friday start to the Memorial Day holiday weekend. If you're inclined to let your emotions and/or your spiritual life depend on the way the world treats you, you're golden. If you're of the saner variety that doesn't look to the world for comfort, respite, or spiritual enrichment, you would have been fine either way. But the snap-back won't hurt, right?

For those of us trapped in the increasing downward spiral of crime and economic deterioration that continues to haunt New York City, and apparently many other places in our country, this snappy stock market really doesn't make things much better. But, again, it won't hurt. And with the weather in our neck of the woods promising to be summer-like in contrast to last year's unusually dark, dreary, weather, well, that's two little shots of Adrenalin to get us to fire up the grill and get together with family and friends despite the gloomy backdrop of economic slump and crime-induced fear.

If nothing else, today's post should provide a little respite from our last. Not that anything said then was untrue, exaggerated or even intended to be a downer. It is what it is. And facing the facts, dealing with reality comes with the package of life on earth.

Nevertheless, it's not a crime to enjoy little treats when they're offered. And Friday was a little treat. Not only that, but don't be surprised if the treats continue for a bit. One of our trusted sources even pinpoints a date to bookend this (let's face it) bear market rally: June 16th. We'll see.

For now, Friday's treat leads a holiday weekend - an even bigger treat. With that in mind, we'll wrap up with one of our faves - something we dropped on last year's Memorial Day - that dreary weekend that came in the midst of a dreary C-Virus Mess.

But first, some highlights of notes taken from three of our trusted sources - our Brain Trust as we like to call them. We jotted these down this past week. For what it's worth, maybe you get something of value to keep your mind focused on reality even as you take a break and enjoy the holiday weekend. Here goes:

- In early stages of Bear Market

- Most well-known stocks could decline 50% or more and still be “overvalued.” – Most dangerous period for markets lies ahead.

- Bear Markets characterized by sharp, mostly short-term rallies.

(It's likely what we've got going on now.)

- Bear Market Rallies primarily a function of two items: 1) Manipulation: taking advantage of less experienced traders-investors who think every bounce is the start of the next bull market; 2) Emotions: attracts bargain hunters thinking the bull market is resuming – The rally gives pros a chance to re-short at higher prices.

- Bear Markets don’t stop at “fair valuations,” just as bull markets don’t. Both go to excesses in both directions.

- Margin Debt: Major stock market trends follow in both directions. Margin debt now declining.

- Diesel Fuel: Supply in US plunging. Unless something changes by end of May/June, expect rationing – If so, will sharply effect everything in economy: food, energy, construction, transportation, and more.

- Major Trends: 2 years ago, the world began what will be a 10-20 year global economic crisis, part of a long-term cycle that may end in a huge global war like WWII (although may not be a shooting war, but one waged with economic weapons).

(Something to look forward to?)

- Crises: Shortages will replace the “pandemic” as the worst crisis. So far food shortages and droughts have received little coverage. Northern regions will experience shortened growing seasons, especially Canada. World has started what could be an 11-30 year period of cooling called a Maunder Minimum.

(Hey, isn't it supposed to be global warming?)

- Mass shootings will increase significantly – will produce outcry for more gun control, even though cities with the tightest gun control have the highest murder rates.

(This was published before that horrendous shooting last week. The accelerating trend seems to be asserting itself.)

- Re Sentiment: Despite bearish sentiment, the speculative ARK funds got an inflow of $534.7 million. NB: Sentiment tells us how people feel, not necessarily what they do.

- Treasury Bonds/Yields: Yields spiked from 1.512% at beginning of year to 3.167%. Should be a period of consolidation before continued rise. That pause may coincide with a pause in inflation. But for both, this would be temporary. Even if they pause, levels will be broken over the longer-term, confirming theory that inflation will reach 105-year high.

(And yields have indeed started falling, goosing the price of bonds.)

- Cryptos: Forecast of eventually going to zero still operative. If so, could trigger a credit market event like Lehman Bros, etc.

Conclusion: Bear Market in early stages. Stagflation now happening; could last a decade or more. Creation of money and credit by Fed that began with COVID will continue or the economy will plunge into a depression.

Reality can be pretty cruel sometimes.

Here's the ear candy we posted last Memorial Day. Enjoy. But remember those who made the ultimate sacrifice so that we could enjoy whatever freedoms we have left these days.