I'll give data on macro housing construction trends.

All Green right now. Massive YoY growth in August. Massive. Should be reported soon. I'd say third quarter guidance will be low compared to actuals for many builders since the end of 2Q was quite bearish.

Any thoughts on what the Fed does/says today? It sounds like most don't expect a rate hike.

This is only how technicals can be watched for keys to trend continuation or topping action continuing. We saw the result all the back to August 2015 alert precipitating a 2500 point drop. The first head and shoulders pattern never broke through. Macro indicators were still pointing red. That along with that bearish pattern meant extreme caution was the best option. However, once the right shoulder broker higher the posts changed to a firm 17k mark being the target and that was continued with a 17500 level mark for trading.

17500 being a solid probability meant a thousand point move to enjoy. The macros were skewed until brexit created a strong complete bull signal that led to the posting that 18k break would result in a new bull leg.

Now we hit clear resistance that resulted in the most recent caution. The "buy the dips" posts changed at the caution call and yet another crystal clear signal post was made that 18k was the target for re-entry.

So that brings us to current technicals, while waiting for data to give a macro signal. Do we have a potential head and shoulders developing? It's not looking likely because the right shoulder is actually above the left shoulder. The more likely move is to at least retest highs. Pre-caution gaps have been filled and smart money has cashed out on that easy $ move.

That's about it for now. Happy trading!

So if we are looking at the current head and shoulders indicator, what date periods indicates the 2 shoulders and the head?

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So if we are looking at the current head and shoulders indicator, what date periods indicates the 2 shoulders and the head?

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There is none at this point.
April 20th to July 7th is a potential left shoulder with the potential head forming from July 8th to Sept 15th. Right now the right shoulder (2nd shoulder) is out of play with the markets trading above the end of this past week. It would take a market move down under 2118 S&P to really start talking about that pattern.

As stated, the current market breakout on the recent resistance shows a higher probability to retest of highs.

We are looking at a potential retest of the 18k support. It would take a break down of that to move us into a right shoulder level 17650-17900 levels. To be clear, prior to starting this thread, there appeared to be confusion between all of the trader talk and macro analysis. The current status on macro actions are still the same. We are in condition yellow from the caution posted on the trader thread. 401k's should be 50%-100% sidelined during this time, depending on individuals factors.

This macro thread was formed in the wake of an Ag asking if now is the time to be putting new capital or 401k's back in (for those who sold on the caution). The response hasn't changed, which was a resounding "Heck no!"

Thanks Oldarmy!

Thank you sir.

For those contributing to things like a ROTH which has a time limit on when contributions can be made, is the best option to apply monthly contributions to something like a money market account and then shift those funds at a later date depending on market signals?

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For those contributing to things like a ROTH which has a time limit on when contributions can be made, is the best option to apply monthly contributions to something like a money market account and then shift those funds at a later date depending on market signals?

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Absolutely. Don't miss tax savings, maxing out 401k contributions, etc. More powder is never a bad thing.

I suspect there will be a macro change coming with the impending failure of Dutsche Bank being the canary in the coal mine. Politicians did nothing to structurally fix anything after the 2007-2008 crisis and actually made things worse with more spending and twice the debt. I imagine central banks will crank QE into hyper drive to stave off the coming disaster of low/no growth but historically printing money results in a need for an ever increasing acceleration in printing rates until collapse a la the Weimar Republic (pre WW II Germany).

I suspect the best places to weather the coming low growth, welfare state, debt bomb explosion will be gold and silver miners, tangible assets in basic needs industries like gas pipelines and producing wells but I would appreciate oldarmy and the boards constructive thoughts and serious recommendations.

If you actually believe in hyper inflation, you need to invest in real assets and you need to be stockpiling beans, rice, and canned goods.

REAL Estate
Physical Gold bars
Silver
50 lb bags of rice
Canned food

Only one of these has the ability to cash flow. Also, hyper inflation won't happen.

You should also probably buy lots of guns and bullets to protect the assets listed above.

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Gold and silver have proven to be terrible hedges. Even during the depression, they didn't work. Also, the stuff you list is for absolute disaster - when civilization totally fails. There are many, many more disaster scenarios where your list wouldn't add much value. Again, your list would have been of some, but limited value, during the depression.

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Ok. What's on your list? I tried to give some possible investment ideas rather than just list the problems. I would love to hear your ideas. As far as gold and silver not performing well during the depression, of course they didn't. The scarcity during the Great Depression was dollars. It appears to me our Fed and other central banks are flooding the system this time with paper money. So I believe what will be in short supply for the next collapse would be things that hold their value plus basic need items like natural gas, oil, food, shelter etc.

But I would love to hear your investment ideas.

PS: How much longer can the stock market grow at 7-8% annually when the American economy has been growing at less than 2% per year for the last 8 years? Pension funds have assumed a 7% annual investment growth rate to remain solvent. That seems very unrealistic to me without real growth returning.

Andy Beal?

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Again, your list would have been of some, but limited value, during the depression.

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We didn't have hyper inflation during the depression. We did however have thousands that starved to death.

There is absolutely zero chance that we have anything close to "sky is falling / wheelbarrow full of cash to buy a loaf of bread / Robert Mugabe's face on a 100 Trillion note" hyperinflation. If we do, you had better have lots of bullets and some combination of a moat and a really tall reinforced wall surrounding your homestead. Getting 7-10% real return will be the last of our worries.

Thanks Jj. It's a damn hard problem to invest and prepare for.

Yellow Caution still in effect. Basically the DOW has been working a fairly narrow channel and after a few days mid-line and above we hit a wall and are now pressing the lower end, although a ways to go. The S&P is at it's mid-line so there is room to move down or up without signaling a dang thing. You can see the S&P ranges have tightened which usually means something larger is on the horizon but it could happen quick or range out to the election even.

S&P Monthly chart is one of my favorite trend checkers you should keep on tap. You can see the devastating bear market, which lasted over a year, wiping out a decade of 401k growth. Then after the post "V" bottom correction we had a bull run for the ages. Q/E, free money for businesses, low interest rates for consumers, etc.

So how long can it last? Looking at the monthly chart we clearly see the sideways markets since October of 2014. We've broken above that the last 3 months but all of the gain occurred in the first month. Since that breakout month to all time highs we've consolidated at or below those highs, so the jury is out on longer term trend. It would be troublesome to see us lose the breakout month gains because it would give a fairly easy right shoulder pattern with the left shoulder established between October '14 to June this year. The head would then become these last 3 months.

Or do we break this 3 month resistance signaling yet another bull run for the ages? If there is trouble would there be Q/E available again? Free money for business is not a sustainable economic model so interest rates must head higher at some point.

So now we are at condition yellow. And why wouldn't we be? The sideways market has given an opportunity to actually move into a nice comfy position above the fray. The max "missed out" is a couple hundred points if the markets break out. If we break down then we literally plucked the golden apple off the top of the tree. Who can't love that?

jake2011 said:

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My personal take is far too many people don't appreciate risk these days and they are far more concerned with reward than risk. It is very possible to have an extended secular bear market that lasts several years and not be in a Mad Max type world. Look at Japan for an example. Their markets have never fully recovered from the 80s yet people aren't foraging for food however I guarantee you people that were over exposed in equities and real estate got crushed. Diversification is key with large cash cushions and bond allocation to take advantage of opportunities in another stock and real estate downturn.

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Very well said. But I am staying far far away from bonds with any meaningful duration. The 30 plus year bond bull market may not be over with yet but I'm just not courageous enough to own them.

Macro, along with price discovery, is dead. All hail our central banking overlords.

Trump says whatever will resonate with the fist shakers.

http://www.wsj.com/articles/u-s-cities-see-apartment-rents-fall-for-first-time-in-years-1475614808

jake2011 said:

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My personal take is far too many people don't appreciate risk these days and they are far more concerned with reward than risk.

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I find that sort of funny because:

1. What you're describing is the opposite of human nature, and
2. These threads are usually dominated by people expecting a bear market at the next sneeze.

TriAg2010 said:

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jake2011 said:

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My personal take is far too many people don't appreciate risk these days and they are far more concerned with reward than risk.

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I find that sort of funny because:

1. What you're describing is the opposite of human nature, and
2. These threads are usually dominated by people expecting a bear market at the next sneeze.

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I agree with Jake here. What's happened is with interest rates being kept artificially low, traditional savers can't earn anything in their CD's, T Bills and saving accounts. So risk averse savers are being forced to buy stocks with yields, longer term bonds that have great risk today, insurance products, etc. And if interest rates go negative here as they have in the EU and Japan then people will be forced to buy securities instead of paying a damn bank to take and hold your money. That's insane and it's already happening in certain parts of the world in a misguided attempt to stimulate growth.