We have made several predictions about the markets performance this fall, let’s see how those are working out.
STOCKS WOULD RALLY INTO MID-SEPTEMBER
The Dow 30 rallied right to its 200 day moving average in mid-August. It pulled back into the Labor Day Weekend and now is rallying for a final move up.
Expect this move to exceed the 34,000 prior high which will give the bulls confidence. That confidence will be misplaced.
The larger picture is that the first wave of the bear market lasted from January to June. Wave Two to the upside is now underway. It will likely conclude by the end of September. Then a far stronger wave to the downside will begin.
The economic slowdown is lagging the 50% drop in Facebook/Meta. Soaring electric bills call for energy caps in Great Britain. The German economy reels from Putin’s energy threats. Real estate failures and defaults continue in China. South America continues to fall into collectivist economic failure.
OIL PRICES WOULD PULL BACK TO THE LOW 80S
Though none of his efforts contributed to the fall, Biden will enjoy lower gasoline prices, while attempting to avoiding blame for the increase.
Crude prices have fallen from $125 to just over $80. It appears a low is forming. Expect a rally back to the last high in the mid 90s. Then a fall is likely to resume. This will reflect a slowing of the world economy.
SILVER AND GOLD BOTTOM AND RALLY
Gold has fallen from $1,900 to the $1,700 area. The fall has been steeper than expected. The resulting rally is weak. December silver was trading at $18.56 Friday morning. A weekly close over $18.50 suggests a rally into mid-month.
A report paid for by the Permian Strategic Partnership of some 17 companies operating here delivers some good news. The Permian Basin produces half of all the oil in the United States. It accounts for 72% of total Texas production. The State of Texas received some $118 billion from the Basin Area.
The report suggests Basin activity supports some 500,000 jobs in Texas. This includes productions, stimulation, transportation, and refining.
THE BOTTOM LINE
Stock prices are performing much the same as in 1973-74. A low in the summer, a bounce and then a lower low. I expect that next low to be severe.
By that I mean an eventual (2023-24) move to the 200 month moving average now at 18,000 DJIA. This of course is totally unexpected in the mainstream media not to mention the White House.
Mortgage rates are already over 5%. Home sales have fallen dramatically in areas that were white hot just months ago. Prepare now for this very real potential.
