Interim Update Oct 27, 2022

[Triplethought]

Another potential contributing factor to the Dow leading the Nasdaq up currently is foreign flight of capital to safety.

This sort of thing often occurs during somewhat unstable geopolitical environments, like the one we are in currently.

During times like now, capital flight to safety goes first into the USD (global reserve currency), then into USDenominated blue chip stocks (i.e. Dow) and U.S. bonds (should happen soon). Then the capital spreads out a bit.

As yields come down, long duration assets should start to do well (e.g. software/e-commerce/cloud/SaaS, Russell, etc.).

As Mark mentioned, junk bonds (e.g. HYG) may also be used as a "risk on" indicator of sorts. It looks to be basing - will likely take off at some point.

USD looks to be breaking below an important support zone in the 109-110 region ... if it can confirm below, could slowly make its way to 104-106, which would likely coincide with equity rally.

Copper looks to be basing in a coiled spring/snake pattern, ready to explode up, which would also support the case for an equity rally.

Only fly in the ointment (for me), is my lumber:gold ratio, after confirming above 0.30 last weekly close, fell below 0.30 this week.

We'll see ...

You're still winning our bet. But I still think there is a good chance the down leg to occur before the end of the year. We'll see if the markets panic on Dec 14th when the Fed makes their announcement. Clearly they don't like the China news this morning. I sure hope I don't have to write that silly article that defends the position that astrology can be used to predict the markets.

[MarkD]

If Trump wins based on the emotion of perception, expect the markets to roar. However, I am not sure they will allow him to win.

My base case is that there is a 99.9% chance that Trump will not win in 2024.

He's lost that mojo he had for a period of time.

I agree that Trump's chances are not good. However if you're doing real risk assessment I feel giving him only .1% is unrealistic given he's far and away the front runner right now on the republican side. To me it's more like 85% chance he won't win.

Trump will tank the party if he doesn't win. He has at least 15% of the peeps on board, perhaps 25%, so will be a factor in the death or rebirth of the right. Tulsi might go Independent, another negative but for the left. It's going to be a great show in 24.

[SOL]

My base case is that there is a 99.9% chance that Trump will not win in 2024.

He's lost that mojo he had for a period of time.

I agree that Trump's chances are not good. However if you're doing real risk assessment I feel giving him only .1% is unrealistic given he's far and away the front runner right now on the republican side. To me it's more like 85% chance he won't win.

AnTrump will tank the party if he doesn't win. He has at least 15% of the peeps on board, perhaps 25%, so will be a factor in the death or rebirth of the right. Tulsi might go Independent, another negative but for the left. It's going to be a great show in 24.

And the most important observation is absolutely nothing will change no matter who wins. The money supply will continue to rise and as it rises, things by default worsen. This has been our stance since our inception but it took on more urgency after 2009, and then things went ballistic after COVID.