Stocks and Precious Metals Charts - The Babson Break

 

"In 1929 Wall Street was dominated by trading pools run by groups of insiders managed by an 'operator'. One of the most common tactics was to manipulate the price of a particular stock, a stock like Radio Corporation of America.  Wealthy investors would pool their money in a secret agreement to buy a stock, inflate its price and then sell it to an unsuspecting public. 

Most major stocks in the 1920s were regularly manipulated by insiders.  They were a little like musical chairs. When the music stopped, somebody owned the stocks and those were the ones who suffered the loss.  One of the most successful pools was run by Michael Meehan in Radio Corporation of America.   They were able to take the price from $85 in 1925 to $549 in 1929.

If small investors suffered, they would soon be back for more. They knew the game was rigged, but maybe next time, they could beat the system. Wall Street in the 1920s had its critics, among them economist Roger Babson.  He questioned the boom and was accused of lack of patriotism, of 'selling America short.'  He had repeatedly warned of the speculation.  And people jumped on Babson from all around for saying such a thing, so that people who were cautious about their personal reputation, who did not want to call down on themselves a lot of calumny, kept quiet.

Babson was an MIT trained engineer who became a famous stock market analyst and financial theorist.  I have acknowledged in the past that my own particular style of charting was in part inspired by his approach to force and resistance.  He never really publicly codified his techniques, so they are not all that well understood. But in reading his works and considering his education background it is possible to deduce some of them. 

On September 5th, 1929 Babson gave a speech to a group of businessmen. 'Sooner or later, a crash is coming and it may be terrific.'  He'd been saying the same thing for two years, but now, for some reason, investors were listening. 

The market took a severe dip.  They called it the Babson Break. The next day, prices stabilized, but several days later, they began to drift lower. Though investors had no way of knowing it, the collapse had already begun.

Roger Babson had ten simple commandments he followed in investing and encouraged his readers to do the same.   The shadier aspects of markets are most always cloaked in convoluted jargon and complexity.

• 1. Keep speculation and investments separate. 
• 2. Don't be fooled by a name. 
• 3. Be wary of new promotions.
• 4. Give due consideration to your market ability.
• 5. Don't buy without proper facts. 
• 6. Safeguard purchases through diversification. 
• 7. Don't try to diversify by buying different securities of the same company.
• 8. Small companies should be carefully scrutinized. 
• 9. Buy adequate security, not super abundance.
• 10. Choose your dealer and buy outright (i.e., don't buy on margin.) 

 

The US midterm elections are being conducted today.

I have white cheddar popcorn AND a Costco pepperoni pizza on hand.

The next couple of weeks may be pivotal.

Have a pleasant evening.

Stocks and Precious Metals Charts - The World and Its Desires Are Passing Away

 

"But wisdom is justified by all her children.”

Luke 7:35

"The souls of the virtuous are in the hands of God, no torment shall ever touch them. In the eyes of the unbelieving they appeared to die, their going looked like a tragedy, their leaving us, like a desolation; but they are at peace. God has put them to the test and proven them worthy to be with him; he has tested them like gold in a furnace, and accepted them as a sacred offering. They who trust in him will understand the truth, those who are faithful will live with him forever in love; for grace and mercy await his holy ones."

Wisdom 3:1-6, 9

"For the preaching of the cross is foolishness to those who are perishing, but to those who are saved it is the power of God. It is written: 'I will destroy the wisdom of the wise, and will cast away the understanding of the learned.'

Where is the wise man? Where is the learned of the law? Where is the philosopher of this world? Has not God made the wisdom of this world look like foolishness? When the world through wisdom could not know God, in His wisdom it pleased God to save those who came to believe through the foolishness of our preaching."

1 Corinthians 1:18-21

"And the world is passing away along with its desires, but whoever does the will of God abides forever."

1 John 2:17

They attempted to rally stocks in the usual Sunday night - Monday game.

But stocks slipped, badly.

What was that again?   

Bad Friday, Blue Monday, Black Tuesday.

Tomorrow is the midterm election in the US, so we might have to wait until later in the week.

Gold and silver bounced.

Bitcoin is struggling.

Oil and the energy sector were hammered, mindlessly it would appear.

Maybe after he gets smothered in the midterms Trump will surrender to Iran.

No?

Well, grab some popcorn because the next couple of weeks may be interesting.

However it goes, Donnie and his cult seem likely to have a short half life.

The world and its vanities and desires are passing away. 

And fools and their delusions are soon fallen. 

Have a pleasant evening.

Stocks and Precious Metals Charts - A Look Behind the Curtain

 

"This elite-generated social control maintains the status quo because the status quo benefits and validates those who created and sit atop it. 

People rise to prominence when they parrot the orthodoxy rather than critically analyze it. Intellectual regurgitation is prized over independent thought. Voices of the dispossessed, different, and un(formally)educated are neglected regardless of their morality, import, and validity. 

Real change in politics or society cannot occur under the orthodoxy because if it did, it would threaten the legitimacy of the professional class and all of the systems that helped them achieve their status."

Kristine Mattis, The Cult of the Professional Class, April 4, 2016

“If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will blow up everything in its way.”

Émile Zola, as quoted in Dreyfus: His Life and Letters, 1937


Stocks sold off rather hard, triggered by disappointments in the tech giants earnings reports, and increased chatter about a renewal of the kinetic conflict in the Mideast. 

This *might* just be a major wobble, or the start of something more significant.

One pattern I always like to keep in mind is 'Bad Friday-Blue Monday-Black Tuesday.'

After the bell:

PIMCO — the world’s biggest bond fund — dumped 50% of its AI debt two days ago. That dump is what lit the fuse on this week’s tech bloodbath right before the midterms. Bubble was already on its last legs.

Gold and silver were hammered.

Bitcoin slipped on hacking concerns. 

The US midterm elections are coming up next week.

Several political figures of international importance are growing increasingly desperate. 

Bring popcorn.  Pivotal events unfolding.

Have a pleasant weekend. 

Stocks and Precious Metals Charts - A Failure of National Conscience

 

"According to Traudl Junge the Goebbels’ children sang for Hitler, who was very pleased to hear their song.  This innocent choir of young voices was soon murdered by its very mother, in the bunker, just before the mother herself committed suicide.  There is no academic phrasing suitable enough to describe the incomprehensibility of how mankind can achieve this nonsense, especially at this high level of leadership."

Panayiotis Demopoulos, Götterdämmerung: Suicide Music and the National Self

"The sign of Christian courage is the struggle for truth.  The virtue of courage is overcoming human weakness, especially worry and fear.  For in life we should fear only the betrayal of Christ for a few pieces of silver in exchange for empty peace.

It is not enough for a Christian merely to condemn evil, lies, cowardice, enslavement, hatred, and violence.  A Christian must be a true witness, spokesman, and defender of justice, goodness, truth, freedom, and love.  He must courageously demand these values for himself and for others.

To a large extent, we ourselves are guilty of our own enslavement when, out of fear or convenience, we accept evil and even vote for the mechanisms that sustain it.  If out of convenience or fear we support the mechanism of evil, we then have no right to condemn that evil, because we ourselves become its creators and help to legalize it."

To preserve dignity means to live in accordance with conscience.  It means awakening and forming a right conscience within oneself.  It means caring for the national conscience.  For we know that when the national conscience failed, great misfortunes befell our history.  But when the national conscience began to awaken and come alive with a sense of responsibility for the homeland, then the nation was reborn."

Jerzy Popiełuszko, Sermon, Kościół św. Stanisława Kostki, Warsaw, May 27, 1984

"It is very easy to get drunk with hate. Hate is like the glass of whisky which is given to the soldiers before a bayonet charge. Whisky stimulates but does not nourish. Hate is not creative, only love is creative. These sufferings will not cause us to crumble but will help us, more and more, to become stronger. The most deadly poison of our times is indifference. The Cross is the school of love.

The real conflict is the inner conflict. Beyond armies of occupation and the catacombs of extermination camps, there are two irreconcilable enemies in the depth of every soul: good and evil, sin and love.  And what use are the victories on the battlefield if we are ourselves are defeated in our innermost personal selves?”

Maximilian Kolbe, Executed at Auschwitz,  14 August 1941 

"Kolbe looked directly and intently into the eyes of those entering his starvation cell.  Those eyes of his were always strangely penetrating.  The SS men couldn’t stand his glance, and used to yell at him, Schau auf die erde, nicht auf uns!  Kolbe was a psychic trauma, a shock for the SS men who had to bear his look, a look that hungered not for bread, but to liberate them from evil."

Bruno Borgowiec, fellow prisoner at Auschwitz


Given the choice between choosing the truth over error and admitting they were wrong, or doing nothing, most people will do nothing and continue on, and often become even more vehement and stubborn in their error.  Pride goeth before destruction, and a haughty spirit before a fall.

This news item came out late in the day. 

"Speaking at the Middle East Institute, Connecticut Democratic Senator Chris Murphy revealed details from briefings on a Trump administration plan for strikes on Iranian energy infrastructure, nuclear sites, and military targets after the November 3 midterms.  He argued it would fail its goals, prolong conflict, and harm U.S. rule-of-law commitments amid reports of repositioned forces and restocked munitions."

Stocks slumped a bit led by tech after the Alphabet miss on its earnings report.

Gold and silver were monkey hammered because they can.

The Dollar is just chopping sideways.

Oil shook off an early bear raid and rallied back up a bit.

Notice that it has formed a symmetrical triangle that *may* be a bullish continuation pattern.

These markets are being highly manipulated in the short term as most experienced tape watchers have well noted. 

I'll be out of pocket at the cornea specialist tomorrow afternoon so the charts may be late. 

Have a pleasant evening.