Chatter About to Pick Up

Get ready for the chatter to pick up now. Two likely themes: a Santa Claus rally; a new bull market in stocks.

The Santa Claus rally is understandable. It's something that happens as we enter December most years. But not all. So whether we get it this year is more or less a coin toss. Of course, the stock market explosion the week before last injected a good dose of Adrenalin that some believe will carry forward into year end. Then again, last week saw stocks down. Maybe this does of Adrenalin takes time to do its magic.

As for a new bull market, well, no reason to be surprised there. After all, inflation has peaked. We're over the hump. It's all downhill from here...right? At least that's what some sources chattered about this week. After both CPI and PPI came in under expectation, what else could you expect. The fact that a lower reading actually says inflation has increased is beside the point. It's not increasing as much as it was.

Think about this: If inflation kept increasing at a higher and higher rate, a logical development would put us in the neighborhood of hyperinflation, right. Higher, higher, higher, higher...BOOM!

So because we're not seeing constant increase in the rate of increase, inflation is over. Make sense. Go figure.

So that's where we're at in these days before Thanksgiving. Yes, Thanksgiving is right around the corner. And for us sane folks, consider putting a lid on all the chatterboxes out there. Get your priorities straight. Being thankful for your blessings can - no, should - take center stage now.

Meanwhile, if you can't help chewing on market and economic commentary, even as you prepare to chew on your turkey and fixings, here are our latest notes from two of our Brain Trust crew. At least we've found these folks reasonable, if not always perfectly accurate in their forecasts.

Source #1

-   Big rally in stocks well organized – NB: Cheaper to intervene and manipulate markets than to bail out failing financial firms – Designed to prevent crisis precipitated by collapse of over 2,000 crypto firms.

-   Could be the start of year-end rally

-   Despite the lighter than anticipated CPI #, chart shows clearly shows inflation still rising. Have to see negative CPI over several months to see inflation falling.

-   Will look for signs that the intervention is no longer effective – These never last that long – Firms with negative cash-flow could provide first indications

-   Long-Term Bearish – Short-Term be cautious with rally, trade light

-   Re Crypto Crisis: The craze was mass hysteria like the Tulip bubble

-   Still thinks this could pave the way for a government digital currency

-   More Ponzi schemes like FTX and Alameda will come to light

-   This crisis is more than a “canary in the coal mine”: It’s a “buzzard”

-   Bond rally: TLT could be a good short-term trade but use a tight stop.

-   Pes should be about half of what they are in light of rise in yields. Unless yields drop down below 1% again, expect more stock losses.

 

 Source #2

-   A new era: But last 40 years weren’t normal – Growth fueled by ongoing massive debt and money creation – Now time to pay the piper

-   Cites Ray Dalio: Entering era of crises, conflicts both internal and external – So be alert!

-   Bear Market will likely resume when current rebound ends

-   Next test could be 2009 uptrend at 3300

-   Market expensive: Buffet inidicator (market cap to GDP) at 145% Was 140% during Dot Com bust.

-   Stocks thrive on falling interest rates – Interest rate mega-trend turned up in September – This is the start of an era for stocks and bonds that most investors have never experienced

-   All Indicators bearish except PTI which is neutral to bearish

-   Both general stock market and bond markets say stay on sidelines

-   Re USD/Currencies: Everything outside US is “on sale.”

-   Gold/PMs: Looks like D decline over

-   Review of the Gold cycles that began when Gold price was left to the free market: Low could be December 2022 or early 2023, with 11- year Bull cycle that began in 2015 the picking up steam.

-   A rises and B declines typical consolidation phases

-   HUI > 245 should indicate resumed miner Bull Market

-   Of PMs, Silver strongest followed by Gold.

-   Bitcoin has fallen 80% this year – could fall below 10,000

- For PMs: Stay focused on major uptrend for coming years.