OCTOBER 12, 2024 – The September report came in at 2.4%, in line with my estimated 2.4%-2.5%. The 3-month annualized inflation rate is 1.5%. The 6-month annualized inflation rate is 1.9%. These figures are slightly below the annualized rate (2.4%) and thus indicate the annual CPI should remain in this area or decline slightly. The data is predicting a reading of 2.6% next month. I think it will be there or higher.
As a side note, the monthly CPI has been at 0.20% or lower for 5 straight months.
The market has the Fed Funds Rate priced at 4.4%-4.6%. It was recently cut to 5.0%. The Fed has some catching up to do. Til next month.
Shalom,
The Mann
Tag Archives: The Mann
STOCK MARKET UPDATE
UPDATE AUGUST 12, 2024 – One of the reasons I have followed the Elliott Wave Theory for 44 years is it has predetermined points where you need to realize a market isn’t going where initially thought and you need to reverse course. Yesterday, the major market indices (except the Russell 2000) crossed lines that said the recent correction was actually part of the ongoing bull market and not the start of a new bear market. This suggests the economy will be strong thru the 1st Quarter of 2025 at a minimum. Right now, I am seeing +2.0%-2.9% estimated for 3rd Quarter GDP. I suspect the 4th Quarter will be equally strong. Too early to see where 1st Quarter 2025 will be. Albeit, I think the market says there will be a bit of a hiccup then.
Gold is at new all-time highs. Silver is struggling, but should go up into the $30’s per ounce. I did take positions in Copper and Natural Gas as they are at lows that over the past 20 years have signal major bottoms. Cryptos have acted well since the downturn 10 days ago. CPI came in at +2.9% today. I will post about that tomorrow. Hope everyone has had a good Summer. – The Mann
AUGUST 2, 2024 – Wow, what a week this was. As everyone should know, I love Bear Markets way more than Bull Markets. It killed me to be all out bullish for the past 2 years. But, I rode the upturn to its fullest I think and sold all my stocks a week ago on Friday July 26th when the Dow was up about 700 points. And this week as 10-Year Treasury Notes and further out went below 4%, I locked in a 4.8% annuity for 3 years. Easier to sleep this weekend and beyond. Albeit, I did leave some play money to play the downside:) Bear markets are quicker and harsher than bull markets. Easy money to be made if the bear market is truly underway. On to some numbers and forecasts. This is going to be VERY LONG as I am going to layout a lot of specific targets for numerous markets. AGAIN NONE OF THIS INVESTMENT ADVICE. Just my hobby of forecasting the future.
One thing that annoys me most about most analysts are they make forecasts and don’t provide a point (aka as a stop-loss) where they say their forecast is wrong and has to be reconsidered. That leaves their followers not knowing what to do when the person they are following has missed a call. I never care when the market crosses a stop-loss point. Yes, it means my analysis was wrong and, if I traded it, I took a loss. But, if you take trades where your expected profit/loss ratio is at least 3-4/1, then the small losses are nothing compared to the large profits.
DOW 30 INDUSTRIALS – The DOW broke below the 39,411 level today that I mentioned would indicate the peak on July 18th was the Bull Market top. The only problem was this was a closing target, not an intraday figure. The DOW closed at 39,737. Also, the wave theory I follow does not clearly show a change in trend. With all other stock indices clearly in a Bear Market, I am going to assume the DOW is, too. If it gets back to 40,061-40,353, I will probably go short with a stop-loss around 41,000. If it is in a Bear Market, it should not see 41,000 again.
NASDAQ – The Bull Market top occurred at 20,691 on July 10. As I predicted a few weeks ago, the DOW has been much stronger than the NASDAQ. There have been several days recently where the DOW was up a few hundred points and the NASDAQ was down a few hundred. First support is around 17,000-17,500. It is very early, but I am thinking the Bear Market might bottom between 10,500 and 13,500. A 35%-49% decline would be moderate for the NASDAQ. In the past, major declines have been over 80%. Right now, it will take a move to a new high to end the Bear Market case. That isn’t ideal. But, sometimes that is all you have. Right now is not an ideal entry point to short the NASDAQ 100 or S&P 500. Although, I think some more carnage lies ahead next week, a rally after that back to anywhere around 19,000 on the NASDAQ 100 would give me a great place to short. I just am not sure it will ever get back to that level. Today’s close was 18,441. A Bear Market doesn’t like to give short-sellers an easy time either:)
RUSSELL 2000 – The Bull Market top actually occurred back in November 2021 at 2,459. The Bear Market rally topped at 2,300 on July 31. Today’s close was 2,109. If I can get a move back to about 2,172 to close a gap on the chart that occurred today, I will go short with a 2,300 stop-loss. My analysis suggests the high end of the Bear Market bottom range is 1,475 with 965 being the bottom end. Two separate wave relationships point to 965. So, I give that most weight. Thus, a short trade initiated at 2,172 would have an expected profit of 697-1,207 points with a stop-loss being at 128 points. That is a 5.5-9.4/1 profit/loss ratio. Those are the kind of trades I like:)
TREASURY BONDS – The rally I have called for continues and accelerated today. The US 30-Year Treasury Bond price closed at just over 125. Around a 4.1% yield. The main target is around 131 or about a 3.5% yield. The high-end price target is about 144 or about a 3.0% yield. I guess if I had to pick a stop-loss point it would be about 120.5.
ECONOMY – I have reiterated many times that economists waste their time trying to forecast the economy when the stock market tells us what is happening 6 months into the future. The market has correctly forecast the strong economy for the past 2 years and already said it will be strong through the end of the year. However, if the market is in a Bear Market, then it is telling us that next January and February will show us an economy in trouble. As I mentioned almost a year ago, a way early indicator was pointing towards a 2025 recession. The market is now pointing that way, too. And the market doesn’t get this wrong. My expectation is that the economists and pundits that have been dead wrong for two years about a recession occurring will start to say no chance of a recession in 2025 because the Federal Reserve starts lowering interest rates in September and interest rates fall significantly as I have forecast. Also, Trueflation is now down below 1.4%. The pundits will be overwhelming you with how great things are as inflation is tamed and mortgage rates are down, blah blah blah. I do hope they will be bullish right as the recession gets underway. As a reminder, when the yield curve (10-year minus 2-year Bonds) gets to +100bp we will be in a recession. It is down to about -20bp. The lowest I have seen in a year or two. We have lots of lead time to get from -20bp to +100bp. Could that lead time be 6-9 months as the market has indicated? Coincidence? 🙂
UNEMPLOYMENT – On July 1st, I posted it will be 4.4%-4.5% by year end. It went up to 4.3% in today’s report. The whole world now knows about the Sahm Rule (I will let you look it up to see what it is.). Supposedly, it was triggered today. I thought it already had been. I think there is a similar rule with a different name measured in a slightly different way. Everyone talks about its 100% perfect record predicting recessions since 1970 or such. What everyone doesn’t know apparently is that the rule has only a 50% accuracy rate when unemployment rates get adjusted after the initial announcement. A flip of the coin is definitely more accurate than economists and weather forecasters! But, it doesn’t help me in my analysis.
GOLD & SILVER – I am getting tired. If you are still reading, I am sure you are, too:) The gold target is still $2500-$2600. Silver looks extremely good with a move to the $34-$40 range likely. I will probably hop on this trade Monday morning.
LASTLY – One last thing came to mind. Over a year ago when the SVB debacle occurred, I posted about buying when no one else wanted to. Everyone predicted 400+ banks to close up and the housing market to crash. Here is what those experts cost you if you didn’t invest in those sectors. Granted no one would be able to buy at the exact low and high. But, the bull moves were as follows – The S&P Regional Index (KRE) bottomed at 34.52 and the recent top was 59.59. A 72% move. Even if you just caught the middle part of the move for a 50% profit remember all of those pundits that told you banks were in trouble. The S&P Homebuilders ETF (XHB) was around 64 at the time of the SVB event. But, the bull move had started a year earlier at 51. The recent top was an ALL-TIME HIGH at 121.23. Over the past 15 months it went up a measly 89%. If you threw in the towel today, you would have made over 70%. Remember to thank all of those people that have been predicting a housing market crash. And seriously folks, look up on YouTube or wherever the videos from around the SVB event forward and find those analysts that were forecasting armageddon – and NEVER EVER listen to them again!!!
I might be back here sooner than later. I live for bear markets. I get very active when they are occurring. This bear doesn’t hibernate:)
Shalom,
The Mann
FINAL RULE ON AVM QUALITY CONTROL STANDARDS
JULY 25, 2024 – The Federal Agencies have issued the Final Rule on Real Estate Valuations: Quality Control Standards for Automated Valuation Models. Hopefully, you can cut and paste the URL below. If not, go to an Agency website and type in the above words in Search and it should come up.
https://www.fdic.gov/news/financial-institution-letters/2024/final-rule-real-estate-valuations-quality-control-standards?source=govdelivery&utm_medium=email&utm_source=govdelivery
This guidance was desperately needed because we all know computer models actively seek out the skin color and/or gender of borrowers. Once they find this information and the borrower(s) is not of a specific hated class, then the AVM will apply a -20% adjustment to whatever initial value it generates. If the borrower is of a specific hated class, then obviously no downward adjustment is applied. Who knows, maybe even an upward adjustment is applied heh heh
Yes, sarcasm intended. What a freakin’ joke! Gotta watch out for them darn racist and sexist computer models;)
Shalom,
The Mann
https://www.fdic.gov/news/financial-institution-letters/2024/final-rule-real-estate-valuations-quality-control-standards?source=govdelivery&utm_medium=email&utm_source=govdelivery
This guidance was desperately needed because we all know computer models actively seek out the skin color and/or gender of borrowers. Once they find this information and the borrower(s) is not of a specific hated class, then the AVM will apply a -20% adjustment to whatever initial value it generates. If the borrower is of a specific hated class, then obviously no downward adjustment is applied. Who knows, maybe even an upward adjustment is applied heh heh
Yes, sarcasm intended. What a freakin’ joke! Gotta watch out for them darn racist and sexist computer models;)
Shalom,
The Mann
ECONOMY UPDATE
JULY 29, 2024 – A quick note that the 2-year vs. 10-year Treasury spread is down to a -16bp. Probably the lowest it has been in a few years. If you have read my prior posts, I mentioned that a coincident indicator will be when this spread hits +100bp — at that point we will be in the middle of a recession. The good part is first it has to get back to par and then it has a long way to get to +100bp. So, we have ample time to know a recession is the light we see at the end of the tunnel. Just another item that is starting to increase the odds of a recession occurring in 2025. Probably the best indicator we will have is when we see the headline – ‘Economists do not see a recession occurring in 2025.’ 🙂
JULY 26, 2024 – Just to be transparent, I cashed in most of my holdings today. When the Dow is up 700 points it is a good day to sell:) We continue to see the Dow perform way better than the NASDAQ. My expectation of one more new high move by the Dow not being confirmed by the NASDAQ looks better and better.
JULY 25, 2024 – 2nd Quarter GDP came out above expectations at +2.8%. We have now completed 2 full years of strong economic growth. Something that 99% of the economists and pundits said would not occur.
I do some of my best thinking in my dreams. I have long thought of them as an alternate reality and am amazed at some of the things they come up with. As I dreamed about the economy, an analogy came to mind. A traffic stoplight.
For the past 2 years, the economy has been on solid Green. Economists and pundits kept calling for Yellow or full Red. We never had a chance of such and never came close.
However, for the first time in over 2 years, I am switching my signal from solid Green to that hard to see split second when Green starts to turn to Yellow. As I have mentioned many times, the stock market (Dow 30 for my analysis) is forecasting the economy 6 months into the future. Right now, that is the end of February 2025. Basically, next Spring.
The NASDAQ 100 has a good chance of having topped on July 10th. Thus, it would be in the first stages of a Bear Market. My analysis is calling for the Dow to make one more move to new highs peaking as low as 42,000. 43,000 still remains possible. The NASDAQ 100 would also rally. But, not to new highs. If the Dow does put in a final top over the next month, then it would be saying the economy will peak by the 1st Quarter of 2025 and start a downturn after that. I forget how long ago it was that I mentioned a long lead time indicator was suggesting a recession in 2025. Also, the first year of a Presidential cycle often sees a recession.
In summary, it looks like the economy’s Green light is just starting to change to Yellow. Using another analogy, the stock market appears to be the first car on a rollercoaster that has passed the top and started downward.
I will say that my 50+ years of experience says that stock market tops are tough to call as they stretch out over a period of time. Stock market bottoms are usually easy to see as they take a ‘V-formation.’ Interestingly, commodities do just the opposite.
Lastly, ALL sentiment indicators say almost all stock markets (NASDAQ, S&P 500, Dow, Russell, etc) are around a top.
We shall see how the next month or so plays out. There is a small chance the Dow has already topped, too. I will be watching closely.
Shalom,
The Mann
HOUSING MATH DOESN’T ADD UP
UPDATE JULY 17, 2024 – So far, no objections to what I wrote below. I wanted to add some data. According to Zillow, inventory is higher than last year in 48 out of the 50 Major Metropolitan areas. It rose last month in 45 of the 50 markets. If we are so short on housing, why aren’t all of the houses for sale bought instantly? How can the inventory possibly increase? And, no, it is not because of high (not really high, around where they should be) mortgage rates. Simply put, the forever housing shortage rant is a hoax. False information. Propaganda.
JULY 1, 2024 – Here is your chance to email me why NAR and the NAHB may be even remotely right about our housing shortage and why I am wrong. I researched the intraweb, as my step-daughter jokingly refers to it, and found that NAR has said we have a shortage of 4.5 to 5.5 million housing units. Their logic is the annual number of houses built since the Year 2000 has been below what was needed. To paraphrase Henry Ford, that is bunk.
Let’s look at some facts and some math. First, the demand for houses by 18-55 years olds today is about 25% (!) of what it was when Baby Boomers were the same age. Second, annual population growth has declined significantly from around 2% at the start of this century to 0.53% last year. I have seen as high as 0.7% in the past few years.
Yes, total population has obviously increased over time. But, it is not double or triple what it was 20 or 40 years ago. Demand for housing is about 1/3 to 1/4th of what it used to be. So, you cannot continue to forecast based on 1980s or 1990s rates. As I note in other posts, annual GDP of +3% or +4% has been replaced with a good-excellent range of +1% to +2%. Everything is slowing down and will continue to slow down for decades ahead.
To the math….As of today, the intraweb says we have 341,814,420 people. Let’s say last year’s growth rate was low and the 0.7% rates before that were high. We will use 0.6%. (I note that CoStar uses +0.5% annually for the next 5 years.)
That means this year’s population growth is about 2,050,000 people. Average household size was 2.53 people in 2020. It too has been declining for decades. Let’s assume it is down to 2.40 today. The math says we need about 850,000 new housing units for the upcoming years.
Laughingly, NAR says we need 1.8 million new housing units and since only 1.4 million are being built we will add to our shortage. In fact, based on real math, we will have an oversupply of 550,000 housing units brought onto the market this year alone!!!! Every report I see shows apartment vacancy rates are way up from 3 years ago (about doubled in past 3 years nationwide!) and new homebuilders have a crisis of oversupply. NO ONE but NAR suggests we are not building enough housing units.
So, here’s the riddle to me. If we are short millions of housing units, wouldn’t vacancy rates for SFRs and apartment properties decline each year? If we aren’t building enough units, wouldn’t vacancy go down? Wouldn’t we see people lined up to get into the next apartment or SFR unit that becomes available?
According to CoStar, the USA had 927,018 vacant apartment units in 2021. As of today, we have 1,544,497 vacant apartment units. Over 600,000 apartment units have become vacant in a period where NAR screams that every year we are increasing our shortage by hundreds of thousands of units. Where is the logic? This doesn’t even include our 10 million vacant SFRs! (BTW, this count does NOT include second/vacation homes.)
I have contended for years that if we didn’t build a single housing unit nationwide for 5-10 years we still would not absorb all of our vacant units.
I look forward to your thoughts. The one I will say that doesn’t work for me is the vacant units are not where the people want to be. Some may be. But, most of the new supply for decades has been in the Sun Belt where the greatest demand has been. And people can live anywhere and move anywhere (especially since 2020). A few units might be old and badly located. But, old product is removed from the stockpile annually.
I will leave this one at that. Depending on feedback, I might follow up with another post on the subject.
Shalom,
The Mann
GeorgeRMann@Aol.com
MID-YEAR UPDATE
JULY 3, 2024 – I forgot two items in post below. The next wave up should take gold to $2500-$2600 ounce and the next wave up should take Bitcoin well above $100,000. And most importantly, Happy 248th Birthday to the USA!
JULY 1, 2024 – As you get older, the years fly by quicker and quicker:) Here’s an update on a few items.
STOCK MARKET – The Dow has now put in two lows in the 37,500-39,000 that I had forecast for being a bottom. I think it will put in a third low around 38,500 before the Summer is over. Then we should see a strong rally to the final Bull Market top of 43,000+.
BONDS – Treasury Bonds are at a critical junction. I don’t like those because what it says is we may go up or we may go down. Anyone can say that lol. I am sticking with the bullish case and expect a turn up at any moment literally with interest rates declining for several months. Even if the weakness occurs, it just delays the up move in prices and thus downturn in interest rates.
UNEMPLOYMENT RATE – Simply put, I expect it to be 4.4%-4.5% by yearend.
RECESSION – Today is the 2nd anniversary of a very strong economic expansion. As I noted all along, it was missed by the vast majority of economists and pundits. Also remember, until the 2030’s when we see +100% annual GDP, we will not see annual rates of 3%+ anymore. Annual growth over 1% is good and over 2% is exceptional and cannot be sustained for long. As with interest rates, people need to adjust to the new normal. Is a recession finally the horizon. Yes, finally! I mentioned last year that a longer-term indicator was suggesting a recession might occur in 2025. First years of a presidential cycle are usually the weakest. Also, if the stock market does top out this Fall and turns down significantly, then it will be signally for a recession at the end of Spring into the Summer of 2025. As I mentioned awhile back, when the economists and pundits give up on a recession, then we know one is right around the corner:) Numerous articles like the following have come out this year:
https://www.reuters.com/markets/us/yield-curve-disinversion-is-recession-signal-watch-2024-06-04/
Although some argue this indicator has not been wrong since World War II, it was wrong in 1966. What is significant about that? That was the year the Dow first broke 1,000 and was at all-time highs. Similar to today.
In the above article and others, people start grasping at straws and say well maybe it isn’t wrong, yet. In the past recessions have started 13-22 months or whatever after the inversion occurs (fyi it was July 2022 when it occurred this time around). We are now passing 24 months and with a near zero chance of a recession occurring this year, we will be at 30+ months. Time to just admit this, and another dozen indicators I have mentioned in past blogs, indicator is simply wrong. Come on, admit it:)
Enjoy your Summer and an interesting Fall. Only 126 days til the 2024 Presidential Election. But, sadly, only 1,587 days til the 2028 Presidential Election and we know the campaigning begins after the 2024 election is settled (which no longer is the day or night of the election itself).
Shalom,
The Mann
BULLISH ON WHEAT
MAY 15, 2024 – I haven’t been paying attention to my March 22nd forecast for a Bull Market in Wheat. On that date the December 2024 futures was about $6 after bottoming a few weeks earlier at $5.65. The futures closed today at $7.11 after peaking at $7.29 a few days ago. If I were trading the futures, I would be ecstatic and would probably grab some profit.
But, just forecasting here and the forecast was for a significant increase in price over the next 12 months….now 10 months.
I expect Wheat prices to increase significantly over the next 12 months. I will revisit this at yearend to see how things turn out.
As an aside, no need to rush out and store up on bread:)
Shalom,
The Mann
But, just forecasting here and the forecast was for a significant increase in price over the next 12 months….now 10 months.
I expect Wheat prices to increase significantly over the next 12 months. I will revisit this at yearend to see how things turn out.
As an aside, no need to rush out and store up on bread:)
Shalom,
The Mann
STOCK MARKET AND INTEREST RATES
MAY 15, 2024 – It has only been ten days since I posted an update about stocks and bonds. But, when things change, you need to note it. It looks like the recent correction ended in my target range and the final leg of this Bull Market is underway. We are dealing with TARGET 1 from my January 8th post which stated the following:
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction was a short 5 weeks (ended April 17th) and bottomed in the 37,000 to 38,500 range at precisely 37,612.
As noted in the January 8th forecast above, the final target range is in the 43,000 to 45,500 range. It is crazy to be precise (albeit the past 5 months have been spot on), but I really am liking 44,000 to 44,300 for a final top. As this final leg plays out, a more precise target can be made.
Remember, a Bull Market climbs a wall of worries. And for 18+ months it has fed on the world predicting a recession. Regardless of where we go from here, ALL of those economists and pundits have been 100% wrong. The case is closed on them.
INTEREST RATES – As noted ten days ago, it appears the bond decline ended on April 25th. Bonds have rallied strongly since then. Albeit, the first wave of the 5-wave move has probably ended and a small decline should start immediately. A much larger rally lies ahead – which means interest rates will resume their decline at that time.
I will post updates as the stock and bond rallies unfold.
Shalom,
The Mann
P.S. If I told you that sometime in the 2030’s we may have +100% annual GDP growth, what would you say?
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction was a short 5 weeks (ended April 17th) and bottomed in the 37,000 to 38,500 range at precisely 37,612.
As noted in the January 8th forecast above, the final target range is in the 43,000 to 45,500 range. It is crazy to be precise (albeit the past 5 months have been spot on), but I really am liking 44,000 to 44,300 for a final top. As this final leg plays out, a more precise target can be made.
Remember, a Bull Market climbs a wall of worries. And for 18+ months it has fed on the world predicting a recession. Regardless of where we go from here, ALL of those economists and pundits have been 100% wrong. The case is closed on them.
INTEREST RATES – As noted ten days ago, it appears the bond decline ended on April 25th. Bonds have rallied strongly since then. Albeit, the first wave of the 5-wave move has probably ended and a small decline should start immediately. A much larger rally lies ahead – which means interest rates will resume their decline at that time.
I will post updates as the stock and bond rallies unfold.
Shalom,
The Mann
P.S. If I told you that sometime in the 2030’s we may have +100% annual GDP growth, what would you say?
STOCK MARKET AND INTEREST RATES
MAY 5, 2024 – It’s been awhile since I posted about stocks and bonds. It takes time for the waves to play out. Back on January 8th I posted the following:
There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction has been underway for 5 weeks and we are right in the 37,000 to 38,500 range.
As I have noted in the past, as the waves unfold I can update the targets. I would say the low end of the range needs to be lowered to 36,000. I do not think the low for this correction is in place, yet.
INTEREST RATES – There is a good chance the bond decline finally ended on April 25th. This was a 4-month decline. From here bonds should rally at least through the Summer and interest rates should decline at least 100bp.
I will post a stock update when I believe this correction has ended.
Shalom,
The Mann
There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction has been underway for 5 weeks and we are right in the 37,000 to 38,500 range.
As I have noted in the past, as the waves unfold I can update the targets. I would say the low end of the range needs to be lowered to 36,000. I do not think the low for this correction is in place, yet.
INTEREST RATES – There is a good chance the bond decline finally ended on April 25th. This was a 4-month decline. From here bonds should rally at least through the Summer and interest rates should decline at least 100bp.
I will post a stock update when I believe this correction has ended.
Shalom,
The Mann
TO REITERATE – MORTGAGE RATES ARE NOT AN ISSUE
MARCH 22, 2024 – The following is from an article by Gabriella Cruz-Martinez of Yahoo Finance on March 21st:
“Sales of previously occupied US homes gained momentum in February as buyers accepted the new normal of higher mortgage rates.
Existing home sales surged 9.5% in February from the month before to an annualized rate of 4.38 million, the National Association of Realtors (NAR) reported Thursday. That was almost 6% higher than a year earlier and marked the largest monthly increase in a year.
Sales picked up last month, even as mortgage rates flirted with 7%.”
My June 15, 2023 post titled “CAN PEOPLE AFFORD 7% MORTGAGE RATES?” appears to have been accurate and played out as I predicted. I will simply show a few quotes here. You can revisit the post if you want to read it in its entirety.
A side note, the S&P HomeBuilders Index is at all-time highs. It is up almost 75% since the October low. Even with the supply of new homes soaring, the market has no worries of a housing bust occurring this year.
Shalom,
The Mann
Excerpts from my June 15, 2023 post:
JUNE 15, 2023 – YES! The simple answer is, of course!
I saw a survey this week where people said they needed mortgage rates to drop to about 4% for them to afford a new house. As my friend The Red-Shoe Economist, KC Conway, would say ‘I call BBQ-Sauce!’
People can afford a 7% mortgage rate. They can afford a 10% mortgage rate! Us old-timers remember when a rate below 10% was a bargain.
By this time next year when the world realizes the day of artificially low interest rates is history and will not return, they will simply adjust to living with 7%-8%+ mortgage rates and supply and demand analyses will work the same as they did before. People adjust. They always have. It’s just easier to complain before facing reality and adjusting the way they do things. Human nature.
“Sales of previously occupied US homes gained momentum in February as buyers accepted the new normal of higher mortgage rates.
Existing home sales surged 9.5% in February from the month before to an annualized rate of 4.38 million, the National Association of Realtors (NAR) reported Thursday. That was almost 6% higher than a year earlier and marked the largest monthly increase in a year.
Sales picked up last month, even as mortgage rates flirted with 7%.”
My June 15, 2023 post titled “CAN PEOPLE AFFORD 7% MORTGAGE RATES?” appears to have been accurate and played out as I predicted. I will simply show a few quotes here. You can revisit the post if you want to read it in its entirety.
A side note, the S&P HomeBuilders Index is at all-time highs. It is up almost 75% since the October low. Even with the supply of new homes soaring, the market has no worries of a housing bust occurring this year.
Shalom,
The Mann
Excerpts from my June 15, 2023 post:
JUNE 15, 2023 – YES! The simple answer is, of course!
I saw a survey this week where people said they needed mortgage rates to drop to about 4% for them to afford a new house. As my friend The Red-Shoe Economist, KC Conway, would say ‘I call BBQ-Sauce!’
People can afford a 7% mortgage rate. They can afford a 10% mortgage rate! Us old-timers remember when a rate below 10% was a bargain.
By this time next year when the world realizes the day of artificially low interest rates is history and will not return, they will simply adjust to living with 7%-8%+ mortgage rates and supply and demand analyses will work the same as they did before. People adjust. They always have. It’s just easier to complain before facing reality and adjusting the way they do things. Human nature.