UPDATE 2024
How about starting the new year off with an Update? I get so few out lately, I feel I need to. if nothing else, then keep myself up to date. This will be full of predictions, opinions, charts and maybe some fun 😁 Let's GO.
Speaking of go. I had a simple thought. Why not use the same colors on my charts and color code them to make it easy on the reader🤷 it seems logical to me, so here is my simple color code. I worked as a civil engineer, so I'm going to make it easy.
● Bullish. Support
● Caution, slow down, take profits, wait ⚠️
● Bearish. Resistance
● General information
let's do a little 2023 recap, from my view. This year was going to be bullish. I honestly didn't think it would go all year, I thought Sept or October would end the bull market.
*When the "real" numbers come out and we look back on it. October will be the official start of the recession.
The market has run longer than I thought (time is the hardest to predict) but not higher. I think we can still go higher. THE MARKET IS NOT THE ECONOMY. The market is a money-making mechanism. if you're not making money, you're doing it wrong, but providing liquidity for the rest of us.... The market SHOULD have crashed in March, and it was about to until the FED. The FED introduced a bank bailout. The FED would buy (with your money, you're bailing the banks out) any of the banks bad treasuries and give the bank full face value for them.
Let's talk about treasury bonds, notes, and maybe even a little bills. These are debt instruments used by the US as means to pay for all the empty promises politicians make. Politicians promise something, and then the treasury department makes a debt instrument to pay for it. That gets sold to the banks who resell it to you or collaterize it in a debt instrument bundle (think housing bubble "tranches").
BOND - matures in anything greater than 10 years. usually 20 or 30 years. Also, it is a general term for any of the treasury offerings.
NOTE - matures between 2 and 10 years. usually 2 and 5 years.
BILL - matures from 4 weeks to 2 years.
Now that we are refreshed on what they are, let me explain why they are important. We are ending a 44-year bond bear market (rates going down) and entering a bond bull market (rates go up). This is DEVASTATING for everyone because of the transition. Those who have locked in long-term debt at low rates = good on you 👍Those who need debt = NO good 👎. Savers = well, you got screwed, wrong idea at the wrong time👎Spenders = you had better have that debt off your balance sheet 👎 Lenders = if you lent long term👎 lent short term 👍😃💃. So who wins? Those with no debt, high credit, and lots of collateral. The boomers mostly. Their work finally paid off.
I will focus on the 10 year bond. I will use this as a measuring stick for the other rates.
Why this matters.
See that oval? All the bonds bought during that time ~2007-2021 that have NOT matured are garbage. They are worth less than inflation and return less than any new bonds at auction. How many bonds were issued during this time? Oh, just off the top of my head, how about 98% of all bonds created! and how can I guess that?
the above is the money chart. That is money created in the world. Each of those lines is a country. Every time money is created, a treasury is sold. More money more treasuries. All the money from 9/11, the great financial crisis, the war on terror 🤣🤦, covid. All of that is trash now. The holders of the bonds are holding trash. So the FED has been buying them back to offer relief. because who are the largest holders of these? The American people are. But mostly passively through banks and... wait for it.... PENSIONS.
*The consolidation point, that is when the bonds went from bearish to bullish, 2017. (That was the turning point of the world😉 many other events led to that point)*
This is all the banks that report to the FDIC. This is the percent of bad loans and treasuries they hold as a total of their holdings! That's all of the banks that report to FDIC (insurance) are holding 40% garbage that at the earliest they could get off the books is 3 years (about 8% matures in 3-5 years). Now, what if money wanted to leave these banks? Now, the bank has to produce that money, and the banks balance sheet is 40% visible losses. So, are they cashing out gains? if so, that makes the % of bad debt much greater. So far, the banks are cashing out losses via the FED bank bailout. But that ends in March.
This is the banking/bond collapse scenario. This could happen anytime from now until 2029 when the 99-00' 30-year and 08-09' 20-year bonds mature. How much do you think a dollar will be worth in 2029? What is the purchasing power of that 100 billion dollars? that bought a whole lot in 2000 and 2008, but not so much now.
$Micro 10-Year Yield Futures(JAN4) (10Ymain.US)$
I expect it to bounce around a little. Maybe for a few weeks in order to turn the indicators on the weekly and create divergences on the daily. I expect it to retest 4 and as high as 4.2. This could also drop lower during this bounce phase. 3.52 is my lower end support.... When this is done bouncing, BACK UP! BOND BULL MARKET!
upper target is ~7.3, maybe as high as 14%. Yes, 14%! That is because of....
INFLATION
"But iam the TV said inflation is down."
The TV said it because the government said it, and governments lie. Always.
Does inflation really feel like it's coming down? Sure, I can get cheap electronics. But what about a house? transportation, medicine, medical care, food? Those are not coming down. And then there is this;
That's the Baltic container rate. That's the price to ship goods.
Why is it going up?
This has far larger implications as the US is responsible for the safety of commerce in international waters. That's why countries buy our debt. It's protection payment (yes, we are essentially the mafia. Buy our debt, and use our dollar or we won't protect your ships)... But that's neither here nor there. Just another example of why we are nearing the end of Western dominance. Also shipping is a portion of my portfolio. I own;
Ok, back to markets. I went over rates and rambled about the coming collapse, briefly touched on inflation. Let's touch on the markets because I expect chop for a few weeks to months. 🤷
Maybe a larger drop or sell-off.
The markets are at a reflection point. They have run too high too fast and now must digest the move. This could be a drop or chop. There is news released this week and next, along with another federal budget due this month. I think we drop. But a technical drop. just to relieve a tired market. HOWEVER, if data starts showing job losses pick up and/or the economy slowing (data will show that, but when is the trick), then there is more downside. The market is pricing in a soft landing (a perfect scenario. What are the odds of that happening? 👌)
I don't want to OWN anything here (meaning i'm not buying, i'm holding and hedging). I want to hedge my positions
HEDGE = protect against dowturns in the markets.
How do I hedge?
A: SELL Calls, BUY puts, Long VIX, BUY leveraged protection ( $ProShares UltraPro Short QQQ ETF(SQQQ.US$ , $ProShares UltraShort QQQ(QID.US$ , $ProShares Ultra VIX Short-Term Futures ETF(UVXY.US$ , $iPath Series B S&P 500 VIX Short-Term Futures ETN(VXX.US$ , $MicroSectors FANG+ Index -3X Inverse Leveraged ETN(FNGD.US$ , etc....)
Let's take a look at COMMODITIES
I want to own commodities during this cycle. They are taking off, so like the markets, I don't want to buy them yet. I want to watch and wait for the recession to hit the markets dropping price into my target zone (which is low, I expect a large drop, gold to under 1700 as low as 1500 for example)
The weekly chart reminds me of C3-PO in the opening of A New Hope, "The damage doesn't look so bad, from out here" 😆
I don't trust Bitcoin. I think the ETF is a buy the rumor sell the news event. 🤔 it has been running strong, and MARA flew, but 9 weeks going straight up 300% is not sustainable. it's fun, but not real price discovery. Eventually, reality smacks everyone across the face.
My Favorite commodity, URANIUM
i own so much of so many, but here is a short list. 😁 i will chart the 3 important things; spot, CCJ, URNJ
The biggest player outside of Kazatomprom. they even own a portion of Kazatomprom.
The junior miner ETF. Jr miners are simply small and mid cap miners. iam all about this at lower prices. although I buy the miners outright over the ETF.
my short list 😁
$Energy Fuels(UUUU.US$ , $Denison Mines(DNN.US$ , $Uranium Energy(UEC.US$ , $Centrus Energy(LEU.US$ , $Encore Energy(EU.US$ , $Lightbridge(LTBR.US$ , $NexGen Energy(NXE.US$ , $Ur-Energy(URG.US$ , $Uranium Royalty(UROY.US$ , $GLOBAL ATOMIC CORPORATION(GLATF.US$ , $FISSION URANIUM CO(FCUUF.US$ , $APPIA RARE EARTHS & URANIUM CORP(APAAF.US$
I expect the markets to chop or drop. I don't think we are in crash mode yet. Just drop. unless the market starts pricing in a recession, then it should get thrown off a cliff.
Well, this post was shorter than I thought. but at the end of this week and definitely next week, i will have a better view of the future.
Be Safe, Be Careful, Be Wise
and as always
Good Luck ![]()
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Engineer, Commodity Buyer, Alert Bettor,
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TinkerB3ll : Thank you for sharing and happy new year my friend :)
74126981 : Happy new year
Violets : you should seriously sell your posts for educational purposes....so we'll written and educational
Violets Violets: well
Wei13 : I would like to ask, is there any January effect?
iamiamOP : i don't think so this year. normally, january effect is from tax loss selling in december, but we didn't have tax loss selling we had buying. i think we get another bull run, i'm just not sure when.
Wei13 iamiamOP: Thank you for the answers
Revelation 6 : So good to hear from you again. Don’t make it so long next time, please.
bay78bay : Peace and blessings to you. Congratulations on your mooer of 2023 badge. Wow, you rock. Thank you for sharing such detailed information and insight, wow. Keep up the great work, truly a blessings. Thank you so much. Good education.
JonnyBets : very good job here
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