Stocks Act Fearless as Oil Price Soars

If you can keep a cool head while everyone around you is panicking, perhaps you don’t understand the situation. That’s what they say, anyway. It is exactly what we saw last week when stocks barely shrugged even as the shooting war in the Middle East took another baby step toward nuclear conflagration. The oil markets certainly recognized the danger, spiking sharply after our titular president warned that Israeli warplanes might soon start targeting Iran’s refineries. Energy quotes scored their biggest weekly gain in years while stocks, although relatively subdued, appeared to consolidate for yet another psychotic upthrust. What seemed to matter most on Wall Street was not the threat of cities going up in flames, but a few meaningless, cooked job stats implying that droplets of juice from America’s financial bacchanal have begun to trickle into the parched gullets of gig workers, nurses and cocktail waitresses (if not yet retail clerks).

Longshoremen could join them shortly with a 62% raise to $69 an hour, including the union’s legendary no-shows.  It’s a little late in the Kondratief cycle for them to become rentiers, but the prospect of owning a few shares of Nvidia seems realistic enough. Although keeping up with the Joneses has gotten easier because the Joneses’ inflation-adjusted net worth has been stagnant for 50 years, chasing inflation has only grown harder. And that’s measured against phony data that understate inflation by half.  Take heart, all you working stiffs: beating inflation is going to be a cakewalk when the next recession brings it down to, like, minus five percent.

What About Microsoft?

Speaking of recession, this IBM chart, even to the unschooled eye, suggests the Beamer may be about to reverse in a big way. Although I have never tracked the company’s shares closely, there may be a few old-timers who still remember when Fortune and Forbes featured Big Blue on their covers regularly. Now, the computer services company is so little thought of, at least by traders, that IBM puts and calls barely register a pulse. Spreads are too wide to use options for shorting the stock even though it looks likely to make an important top at or near 226.34. I’ve been drum-rolling that Hidden Pivot resistance as a prospective bull-market top since last January, and now it’s finally time to flip long positions.  Does that mean MSFT, our #1 bellwether and currently trading for 416, will not test the all-time high at 464? Time  will tell.  Although its ABCD pattern is too obvious to work precisely, it is also too compelling for the ‘D’ target to give way easily. In any event, it’s hard to imagine IBM usurping MSFT as the stock to follow, but the relentlessly steep pitch of Big Blue’s bull market would surely qualify it as a full-fledged member of the lunatic sector (aka the idiotically misnamed ‘Magnificent Seven’).

  • RICHARD CHARLES October 8, 2024, 3:56 pm

    It was our honor to host your intrepid ABCD Picker on part of his summer trip out west to escape Florida humidity if not heat and hurricanes.
    He surmounted 5 PM San Francisco fog on little cat’s feet (Carl Sandburg) for Mark Twain’s Nevada Roughing It via Amtrak and flew in a small plane skirting a seasonal forest fire.
    We tried to match Italian San Francisco culinary quality with a local casino restaurant still in business, unlike Alioto’s, Michelin ALs, Jack’s and Trader Vic’s at 20 Cosmo Place, inventing Tiki Drinks like the Eastern Sour, El Diablo, Fogcutter, Scorpion Bowl and proprietary Mai Tai, often imitated but never duplicated.
    Liar’s Dice days at Harringtons and the Exchange in the Financial District are also long gone, like many famous San Francisco gustatory landmarks as part of the Third World Invasion of USA.
    Ti Amo in Capitol City Carson brings back fond memories of Little Joe’s on Broadway and Westlake Joe’s.

    We just chanced on an Interfax note that Russia, now fourth largest Global Gold reserves, is diversifying with Gemstones, Palladium, Platinum and Silver, but not fine art, which stays at the Hermitage in St-Petersburg with one Rothschild Faberge’ Egg worth millions. The rest of the 46 known surviving Eggs found their way around the world to Malcolm Forbes and even on Seven Seas Grandeur Regent Cruise luxury liner. 10 of the F Eggs display in the Kremlin Armory, making sense that the best of the world’s largest natural resources stay at home.

    Lots of Lab Synthesized stones, but not too many 1719 Emperor Peter I Crown Jewels at the Kremlin Armory, enhanced by Prussian born Russian Empress Catherine the Great who reigned 38 years and loved baubles and sex with bulls more than her husband it seems. Thanks to monopoly power the Russian Federation enjoys the best and biggest bangles, with a 260.37 carat Sapphire, 342.57 carat diamond, 398.6 carat Red Spinel (False Ruby) in the Great Imperial Crown, and a 36.2 kilogram gold nugget. At least half the entire collection was sold or stolen with regime changes, executions and sentences to Siberian labor camps. Nontheless it is worth in excess of $50 billion and even partially backs the Ruble. Today Russia is the world’s largest diamond producer and second largest crude oil producer. International Paper harvests vast Russian timberlands.

    The Interfax prompted another flight of retrospective fancy into silver. We took profits on SLVP early in hindsight as economically sensitive while the current occupants of DC appear to have anathema to widespread prosperity.
    (We never went broke taking premature profits, but did not build real wealth that way.)

    So we checked the current Point and Figure target for SILVER at + 42 % from 31.655 to 45, Normal Risk 27.86.

    We will begin accumulating SLVP again toward Normal Risk levels on bad news.

    SLVP Target + 48 % 13.03 to 19.32 + .67 % Dvd, Normal Risk 11.21

    Cheers RA