The Perfect Storm
One thing everyone knows about markets they go up, they go down and they will drive you crazy if you let them. You have likely heard of the markets referred to as a rubber band. when it gets stretched to far up then it will go to the extreme down ie Dot Com bubble in 2000 or the Financial Crisis in 2008/2009.and now the COVID Effect (I believe is still to come). Here is why I think this time is different.
- Markets have been on an unusually long Bull Run On the Weekly 5 yr of the Turnbull ETFs the 79 SMA has really pulled away from the 200 SMA and Price is in the stratosphere thus overdue for a pullback/ correction. Almost everything I look at is exactly the same (I’ll explain later)
- Inflation is out of control making the cost of living insanely high with no end in sight
- Now the clincher. Stupidity is also at an all-time high
- Markets I have included 3 looks at the USA Bob Turnbull ETFs on a Watchlist Average Graph. On a short term daily graph not that scary but on a 5-year Weekly graph we see how Price is extremely extended (Stretched to the limit) and the 79 SMA has really pulled away from the 200 SMA On the 3rd Graph I show the Fib Retracements. My Eyes aren’t that good anymore, but it looks like the 79 SMA is at the 38.2 Retracement level and the 200 SMA is just below the 61.8 Retracement level. (this is the level I hope holds) Either way, at some point there will be a “Mean Reversion” and we want to be out prior to and be ready to buy near the bottom for potentially huge gains.
- Inflation Gas, Nat Gas, Food. Everything costs a lot more with no end in sight. I took my own advice and got our house looked after, so what’s going on has little to no effect for me. Even gas for the van, we have several Native areas that last weekend gas was $1.22 and I’ll be shutting the business down for the year in 4 weeks so really no effect. However, those not prepared or working in low-income jobs this will be the worst period ever for them. They say Food Bank usage is soaring and of course debt loads are out of control with even Mark McEwan (Famous chef) filed for Creditor protection saying he’s $10 million in debt.
- Insane levels of Stupid. Ask anybody if this virus has brought out the stupid in people and you will have lengthy conversations. Let’s not worry about the everyday level but let’s look to those who are supposed to set the example: Prime Minister set aside a National holiday in regards to Residential Schools. Instead of setting the example and attending one of hundreds of remembrances he lied several times and was on vacation in a $14 million mansion on the beach. Quebec is likely to pass Bill 96. This bill would affirm Quebec as a nation with French as its ONLY Official language. This Bill would potentially restrict access to English Health and Social Services for 500,000 English Quebecers.
As if that wasn’t enough, try getting anybody to do anything. Try buying an appliance. My sister got a fridge because the store just finally got a shipment and it only worked for 2 days. After a bunch of medical tests, she found out she has to wait 12- 18 months for necessary surgery. I have a friend who is seriously ill. She said that after waiting 9 hours plus in ER she heard a commotion outside her room. She opened the door and saw a lot of police. The lady across from her had died waiting.
I went to the mall yesterday. Still 60% of stores are vacant. Downtown is not as bad but in both cases, a lot of the For Lease signs are gone with no sign of them ever being occupied. Many stores including Wal Mart have installed Steel entry gates not only to get into the store but you also have to go through another set to leave the self-checkout area. Numerous stores have removed checkouts and have installed self-checkout areas.
I see a lot of changes happening and none make me feel encouraged. That’s likely why stress and anxiety levels are at record highs all around the world. Even I’ve had enough. I’m encouraging all my NICE Clients to book me before Xmas for next year. Next year I’m only booking 4 days a week. I will not work weekends or holidays and anyone not giving me 3months notice I won’t even return the calls. I can’t handle disrespect anymore.
As I said at the top this seems like the Perfect Storm for a Severe Correction/ Pullback. I hope I’m wrong but whatever the future holds thanks to Vector Vest, Stan Heller, Bob Turnbull, and my many friends not only am I thankful this weekend but I look forward to a nice retirement.
As always nothing more than my 2 cents and I hope it’s of value and interest.
Now for the Markets
Summary in a Nutshell almost everything I looked at held support but failed at the 79 SMA. (Someday I hope the 79 SMA becomes an accepted SMA)
USA C/DN MTI 85 BSR 69
DOW JONES: Similar to the PTSE Held support 3EMA above 8 EMA above the 20 SMA but failed at the 79 SMA Needs to break above the 79 for the run to continue
NASDAQ: Held support but still weak Also failed at the 79 SMA
S&P 500: Again Held support but failed at the 79 SMA
MKT TIMING: Like all the rest. Bounced off support but failed at the 79 SMA
READ Views and Strategy
CANADA C/DN MTI 81 BSR 35
PTSE: Held support 3 EMA crossed above 8 EMA crossed above the 20 SMA Needs to break above the 40 SMA for run to continue
VENTURE: Still in a downtrend Rally the last 2 days but a long way to go before I get too excited
MKT TIMING: Indicators rose this week Price stalled at the 79 SMA (That’s a surprise) Needs to break above the 79 & 65 for Bull to continue
READ Views and Strategy
AUSTRALIA C/DN MTI 87 BSR 54 Read Views and Strategy
BRITAIN: C/DN MTI 84 BSR 71 Read Views and Strategy
EUROPE: C/DN MTI 92 BSR 95 Read Views and Strategy