More Market Context

Yes, the markets were up yesterday. But how big was the move? Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] More Market Context - The major US indexes were up between 2% and 2.5% yesterday. - Overnight, the same indexes are down between 1.5% and 2%. - If the indexes open where the futures currently trade, yesterday’s gains are gone. Recommended Link [These weird devices are about to appear all over America]( [Click here for more...]( According to America’s top tech futurist – dubbed the “Tech Prophet” by Forbes – millions of these strange little devices are about to appear in every corner of our country… including your home. What are they? And why did one tech insider with connections to Apple and Microsoft claim they’ll “rewrite the rules of what’s possible?” [Click Here To Learn More]( Sean Ring Editor, Rude Awakening Happy Hump Day from an overcast Asti! Right now, I contemplate a horrible truth. Over the last 15 years, you would’ve made far more money listening to the cheerleaders on CNBC than the doom merchants who constantly called for a market crash. I wince and shake my head as I write. Nevertheless, it’s true. CNBC would've cheered you to life-altering gains from the bottom in March 2009 to the top in November or December 2021. Too many of my industry colleagues were stupidly calling tops for that decade-and-a-half. I was lucky that I didn’t start writing for this newsletter until April 2021, or I would’ve fallen prey to the same permabearness. And therein lies the rub. Now that we’re nearing the end of six ugly down months, CNBC and the mainstream financial media are still smoking the hopium. The permabears are dancing on the graves of many a retirement account. Permabears are usually steeped in economics, which causes them to make calls far too early. And claiming to be correct after being wrong for 15 years is a bit rich. For instance, I fear for [Peter Schiff]( health. He’s dancing so hard on Bitcoiners’ graves that he may collapse. Doubtless, Peter feels he’s doing his duty to the public to expose “scams.” But if you bought BTC at under $100, you’re still up 200x. Not a bad return. Meanwhile, gold has moved for sure. Up and down. Up and down. Now that doesn’t mean you should’ve put everything into Bitcoin. [Michael Saylor]( is learning that the hard way as we speak. But this isn’t a crypto column. It’s another column about context. Because the media and others with vested interests see the world through their own eyes. And those eyes aren’t objective. Yesterday and Today If you opened the WSJ app last night, you would’ve seen this headline screaming at you: Credit: [The Wall Street Journal]( You may have been tempted to think, “Hey! The bear has been slain. Time to buy again.” That’s not your fault. That’s the Journal sensationalizing a commonplace move. I don’t want to pick on the Journal. I’ve been a subscriber for decades. But they, along with the rest of the mainstream financial media, overegg the pudding on up moves. Because if you look at the same front page as I write, you’ll see this: Credit: [The Wall Street Journal]( Again, for context: these journalists aren’t lying. The market moved exactly as described. What’s missing is the context. If the market moves up 2% one day and down 2% the next day, you’re pretty much where you started. And if you aren’t watching the overnight market, you’re missing half the picture. So before I go further, let me briefly describe stock futures to make sure we’re on the same page. What are Stock Futures? First, what are futures? A futures contract is an obligation to buy or sell a specified quantity of a standardized asset at a price agreed today, for delivery in the future. We’ll use the S&P 500 as the standardized asset in this case. So that makes it a stock index futures contract, as the underlying asset is a stock index. With futures contracts, producers and consumers can hedge their risk. Fund managers can replicate portfolios and positions. Arbitragers can make risk-free profits if the opportunity arises. And speculators can speculate. Bond, commodity, and some single stock futures are physically settled. That means you either pay or receive the underlying upon closing out the contract or the contract maturing. Stock index futures are cash-settled for ease. That means you get the difference between what you paid and what you sold it for in cash. One last important fact: on average, 97% of all futures contracts are closed out before delivery. For instance, if you bought a single Sep SPX futures contract at 3,700 and sold it at 3,750 before the contract matures, you’d have made 50 full points. As every point on the index future is $250, you’d have made $12,500 (50 x $250 x 1 contract). Since $250 per point is too rich for most investors, they trade the E-mini S&P 500 future instead, which is only $50 per full point. The futures markets trade for practically 24 hours, so hedge funds can freely speculate on them from their Tokyo, Hong Kong, Dubai, London, and New York desks almost without interruption. This is important because more information may come to light as the US sleeps. So paying attention to the SPX, Nasdaq, and Dow futures overnight trading matters. It also gives a good indication of where the market will open in New York. Recommended Link [AOC and Biden Plot to Replace US Dollar?]( [Click here for more...]( A former advisor to the CIA and Pentagon predicts President Biden plans to retire the US dollar we know – and replace it with a digital “spyware” currency. Your US dollars could be confiscated – or made worthless. It is underway now. On March 9, Biden signed Executive Order 14067, which could pave the way for the new US currency. AOC tweeted her support. Dems could use this to hold onto power indefinitely. [View This Warning Now]( Wait and See So let’s revisit yesterday’s move: The candlestick within that blue bubble was yesterday’s move. Even in and of itself, it’s not all that much. That doesn’t mean we won’t have a rally from here, but there’s much confirming to be done. Add to that last night’s futures movement: And we’re right back to where we left on Friday. I hate pissing on everyone’s parade. But it’s more important than ever to look at the market holistically and objectively. That’s incredibly difficult when you have the bull market cheering squad in your face all day. So charts help in this regard. The great Bill Parcells was fond of saying, “The eye in the sky never lies.” He was talking about cameras, but the same applies to charts. Wrap Up My good friend, former compliance officer, and Rude reader Ned is fond of English poetry. One of his favorites is Kipling’s If—. I think this poem is especially apropos for today’s environment. Headless chickens run amok. And unfortunately, they have their claws on the levers of power. It’s imperative you keep your head about you. Reading this may help. If— BY RUDYARD KIPLING If you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you, But make allowance for their doubting too; If you can wait and not be tired by waiting, Or being lied about, don’t deal in lies, Or being hated, don’t give way to hating, And yet don’t look too good, nor talk too wise: If you can dream—and not make dreams your master; If you can think—and not make thoughts your aim; If you can meet with Triumph and Disaster And treat those two impostors just the same; If you can bear to hear the truth you’ve spoken Twisted by knaves to make a trap for fools, Or watch the things you gave your life to, broken, And stoop and build ’em up with worn-out tools: If you can make one heap of all your winnings And risk it on one turn of pitch-and-toss, And lose, and start again at your beginnings And never breathe a word about your loss; If you can force your heart and nerve and sinew To serve your turn long after they are gone, And so hold on when there is nothing in you Except the Will which says to them: ‘Hold on!’ If you can talk with crowds and keep your virtue, Or walk with Kings—nor lose the common touch, If neither foes nor loving friends can hurt you, If all men count with you, but none too much; If you can fill the unforgiving minute With sixty seconds’ worth of distance run, Yours is the Earth and everything that’s in it, And—which is more—you’ll be a Man, my son! Have a wonderful day! All the best, Sean Ring Editor, Rude Awakening [Whitelist Us]( | [Archive]( | [Privacy Policy]( | [Unsubscribe]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [unsubscribe](. Please read our [Privacy Statement.]( If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting us.]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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