Pieces Falling in Place…

Today we are seeing the whole market and economic picture that started in late July, kind of sort itself out.

1. Piece number one is the Trump decline, his ability through cohorts to influence the markets bullishly is in free fall. At the turn of the century, way back 26 years ago, who would have though a country like the United States of America, would abandon a small Democratic partner like Ukraine. Or who would partner with Israel and start a mid-east war.
2. Piece number two were the Bond Vigilantes who started saying enough is enough in terms of debt and interest rates. They started their play in mid-July and really piled on between July 27th and August 3rd.
3. Piece number three is the absurdity of the “super-intelligence AI talk”, it doesn’t exist and for reasons as simple as God is not being replaced by Silicon Valley, is not going to occur.
4. Piece number four is the coming mid-term election where we probably are going to see the start of major political and economic structural changes like we have not seen in 46 years, since the start of the Reagan “move money to the top” years. This won’t happen overnight but it will be an undercurrent into the 2028 election.
5. As to what that means for the market, putting on my long-term forecasting hat, I think we are seeing a warning shot and a few hits, maybe even see the S&P decline to the 5100 area soon, but down the road I would not be surprised to see another shot at new highs by mid 2028, when a real decline based on the economy running out of financing ability occurs.

Here are some short-term strategic items to monitor:

Of the sectors and ETF’s and sectors that I listed back on October 1,

1. the ones that have had an initial decline and now are in a bounce are DJI, DJU, RUT, XLY, DJT, XLF.
2. The ones that are having a sell signal igniting today are the techies:: IXIC, NDQ, XLK
3. The hard core “no one can touch us” markets that are trying to hold on: SPX, and MAGS, will be the ones to watch as a signal to when this overall decline is over, the 5110 SPX target is part of this. Probably will occur sometime after the election.