This is the chart from August 24th:
I made a new one but, since it's monthly, you can't see any difference so let's just use the one I put up the last time I called it "Toppy Tuesday (Again) – S&P 500 Tests 4,500 (Again)." Yes, we were higher a month ago – closing just over 4,350 yesterday and we're clearly hitting strong resistance at that 4,500 line that, so far, has not proven to be futile.
Last month, I warned:
An endless series of low-volume rallies is not enough to get you over a major level on the S&P 500 so, once again, we are being rejected at the 4,500 level. EVEN IF there were no stimulus and this were an honest 28% increase in earnings – we are still 20% too high at 4,500. This is not sustainable – especially if the Government isn't going to throw in another few Trillion Dollars to keep things humming next year.
As you can see, it took the S&P 4 years to get from 2,000 to 3,000 (up 50%) and that 1,000 point rally had two 500-point pullbacks along the way. This is our first attempt at 4,500, less than 2 years after crossing 3,000 and that's a 1,500-point rally and the pullback we'll be looking for is 3,750 at some point, which is only down 16.66% – so not too big a deal if it happens (and we hold it).
Meanwhile, we are still ignorning the virus, aren't we? How many Americans were infected in the past 28 days? Think of a big number…. How about 4.25M? 45,822 Americans died of Covid in the month we marked the 20th anniversary of the day 2,996 Americans died of terrorism. We declared war on Terrorism – we're "learning to live" with Covid…
There is something very, very wrong with us that we're not even TRYING to stop Covid in the US. Perhaps it's a symptom of the virus that does something to your brain and gets you to give up or perhaps it is something "THEY" have been putting in the water for a very long time that makes us so complacent to all the greed and corruption that runs rampant in this country? When did we stop caring? When did we stop trying?
Of course there is some token resistance, like having SOME people get shots and enforcing a few rules for social distancing and wearing protective masks – but only if you feel like it because, after all, this is AMERICA (F-Yeah!) and we are free to get (or spread) any disease we want to – read the constitution mother f-er…
Yesterday's sell-off wasn't about Covid, of course, it was about China but that is about Covid as China is very concerned as 1 (one) person died of Covid in the past 28 days and 1,226 people were infected so the country is putting back restrictions and budgeting (what's that?) in case there's another major outbreak. That means, economically, China can't continue to support failing companies – especially ones which are mismanaged messes like Evergrande.
Speaking of mismanaged messes. The catastrophic logjam of almost 40 container ships backed up at the port of Los Angeles last month hit 73 ships on Sunday and is still growing. This is causing supply disruptions for all sorts of goods in the US and a container shortage in China – as they aren't getting any empties back to supply the next round of ships.
The Organization for Economic Cooperation and Development said on Tuesday that a global economic recovery from the pandemic was taking hold, but it inched back its forecast for worldwide economic growth and warned that the rebound was benefiting wealthier countries more than the developing world as vaccine distribution occurs at an uneven pace raising a host of related economic problems that are affecting global supply chains and pose a risk for the future.
“A failure to vaccinate globally puts all of us at risk,” the report said. The warnings came as the O.E.C.D. released its semiannual economic forecast, in which it lowered its outlook for global growth, the U.S. economy and emerging markets. The global growth outlook for 2021 was revised down slightly to 5.7%, from 5.8%, but that's coming off a terrible 2020 – so not at all impressive rates.
We're keeping an eye out for which companies are warning or guding down into Q4, which seems bound to be disappointing given the Covid-19 numbers we're still seeing at the end of 2021.
"Cold and misty morning, I heard a warning borne in the air
About an age of power where no one had an hour to spare
Where the seeds have withered, silent children shivered in the cold
Now their faces captured in the lenses of the jackals for gold"Suffering in silence, they've all been betrayed
They hurt them and they beat them, in a terrible way
Praying for survival at the end of the day
There is no compassion for those who stay
I'll be there!
I'll be there!
I will be there!
"There must be someone who can set them free:
To take their sorrow from this odyssey
To help the helpless and the refugee
To protect what's left of humanity
Can't you see?
Can't you see?
Can't you see?" – ELP
