Boring Charts... Except This One.

Most charts put me to sleep… but this one makes me lose sleep. [The Rude Awakening] October 16, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Boring Charts… Except This One. - I’ve gotten bored staring down charts lately. - They don’t speak to me like they used to. - But this one makes me lose sleep. [[A.I. Supplier]: $100 Billion Sales Surge Coming?…]( And I want you to [hear about this – from me]( – otherwise this new policy could blindside you. This has gone into effect immeditaly, so I want you to understand exactly what it will mean for you. [So please, watch this video for my full announcement.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Good morning from autumnal Asti. On August 31st, I wrote “[Why We Don’t Feel Fed Hike Pain Yet]( Societe Generale (a French bank with a Wall Street and City of London presence) had found something fishy. Albert Edwards, SocGen’s famous permabear, wrote that corporate interest payments kept falling as the Fed was hiking rates. That’s odd, to say the least. His team concluded that the “S&P 150,” or the largest 150 companies in America by market capitalization (stock price x number of outstanding shares), could refinance their debt at lower rates. That is, they did the same thing savvy homeowners did during the pandemic: they traded their existing higher interest rate debt for new lower interest rate debt. The gist is that not all companies can do this, especially small businesses. (If the other 350 large-cap stocks in the S&P 500 couldn’t refinance, the smaller 2,000 companies that make up the Russell 2000 surely couldn’t.) Before we go on, here’s a handy table for you: [SJN] Edwards' research concluded we should watch the IWM (or Russell 2000 ETF) for signs of weakness. Before I show you the charts, let’s make sure you understand the Russell 2000: The Russell 2000 The Russell 2000 is a financial index that doesn't steal the limelight like its celebrity cousins, the S&P 500 or the Dow Jones Industrial Average. However, in terms of getting a natural feel for the market, especially the small-cap universe, this index is gold dust for traders and investors. Let's begin with the basics: The Russell 2000 index tracks the performance of about 2,000 small-cap companies in the United States. These firms have a market capitalization range between $300 million and $2 billion. Created by Frank Russell Company in 1984, this index serves as a benchmark for small-cap stocks in the United States, akin to how the S&P 500 represents large-cap stocks. Here's the kicker: While most people tune their financial antennas exclusively to the ups and downs of blue-chip giants like Apple, Microsoft, or Google, focusing on the Russell 2000 provides an alternative and more nuanced picture of market conditions. You see, small-cap companies are typically more susceptible to economic shifts, both good and bad because they don't have the financial buffers or diversified revenue streams that large-cap companies do. When the economy's revving up, these small players can experience explosive growth, which is reflected in a booming Russell 2000. Conversely, economic downturns often hit them first and hardest, making the Russell 2000 a canary in the coal mine for market troubles ahead. Now, let's talk about numbers. Unlike the Dow, which is price-weighted, the Russell 2000 is market-capitalization-weighted, like the S&P 500. This means that companies with a higher market cap influence the index's value more. Still, given that we're dealing with small-cap stocks, the largest company in the Russell 2000 is a minnow compared to the blue whales in the S&P 500. The Russell 2000 also has diversified sectors. While the S&P 500 leans heavily on technology stocks, the Russell 2000 offers a smorgasbord of industries from healthcare to financials, from industrials to consumer discretionary. This diversity makes it an excellent vehicle for investors seeking exposure to the broad U.S. small-cap market without picking individual stocks. Many do this through ETFs like the iShares Russell 2000 ETF (IWM). We’ll talk about the ETF in a moment. This index epitomizes the dynamism and entrepreneurial spirit of the American economy. It highlights businesses that aren’t entrenched behemoths but agile and innovative enterprises, often responsive to local or specialized markets. [PREDICTION: The Next Trillion-Dollar Stock]( In 2007, he predicted Facebook would become a $100 billion company. In 2010, he predicted Apple would reach a three-trillion-dollar valuation. In 2013, he called Bitcoin -- before it rose 50,000% and ultimately reached a trillion-dollar market cap. And now, this A.I. Genius is stepping into the spotlight to predict the next-trillion stock. [To see his shocking new reveal, go here now](. [Click here to learn more]( [Click Here To Learn More]( The Charts That Keep Me Awake The IWM Chart First, the IWM (Russell 2000 ETF) chart: [Rude] That blue line, at the $161 level, indicates a resistance level (until late 2020) that turned into a support level afterward. Technical analysts call this a “change of polarity.” We bounced off that level twice in 2022. We’ve not tested it, as yet, in 2023. On the contrary, those higher highs are cause for optimism. However, if we break down hard and go below $161, that spells big trouble for small caps and the underlying economy. Some charts are already looking at $149 as the first target. Again, we’re not there yet. The IWC Chart What’s scarier is what’s happening in the microcaps. The IWC, the iShares Microcap ETF, has definitively broken down. [Rude] Those two blue lines, at 103.75 and 97.75, represent the top and second peak, respectively, before Covid. They created more of a “zone” than a definitive “line” of resistance/support. From here, the next target is $77. However, this represents something much more important: it may be the first domino to fall. Since the IWC has broken down, the IWM may be next. Then the Nasdaq, and finally, the S&P 500. What To Do The Rude is a free daily; its mission is not to give you stock picks. However, there are things to look at. If you’re aggressive, you can look at puts on the IWC that’s already broken down and still has considerable downside. Unfortunately, I could see no open interest (liquidity) in that option. You could look at IWM puts as well. Or, if you’re feeling brave, you can buy the RWM (inverse IWM ETF). But I must warn you that you mustn’t hold this for long. Inverse ETFs are meant for short-term plays. The longer you keep it, the less your return will look like it should. The safe thing to do is to use these ETFs to monitor the NDX and SPX, so you know when to sell if it comes to that. I’ve been bullish lately, so these charts leaped out at me. But the dominos have stopped falling if the IWM doesn’t fall through its support level. Wrap Up Let’s keep our heads about us. If we continue to monitor the things that matter, we’ll know when to bail out of positions. Right now, it’s time to take a deep breath, watch with keen eyes, and act when it’s time to act. [Rude] Have a wonderful week! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Auntie Semite Happy Friday! It’s gloves-off time. No intro. No bullet points. Let’s get straight into it. Hello Sean, [Your 9-Oct-2023 column]( now confirms to me something that I have suspected for a while now. You are a crazy Libertarian. Your column was borderline anti-Semitic. An old friend of mine is also a crazy Libertarian, but he had the common sense to do 2 of 3 things that I suggested to him: (1) Relocate to Panama to take advantage of their pensionista visa system. (2) Renounce your US citizenship after gaining a second citizenship somewhere. (3) Make full use of the wonderful healthcare system that can be found in Panama. I "un-friended" my old friend after he refused to take step 3. As I have said before, your business & economics insights are wonderful; my old friend was a very smart electrical engineer whose technical opinions I trusted. Like my old friend, you have this horrible tendency to steer your column off-road into the weeds of subjects you do not understand, and that makes some of your columns unpalatable to read. Why should I bother with your lunatic rantings? Should I take the good with the bad? No - because there are many other business & economics columnists out there that are just as good as you without showing us their Paul Krugman-like lunatic controversial sides. Jeff R. One former colleague of mine, when seeing my Mensa card in my wallet, said, “Gee, Seanie, you hide that well.” I replied, “Nah, it just takes one to know one.” Jeff, I suspect we’re going to have a similar conversation. The Flimsy Charge of “Borderline Antisemitism” Oh, Jeff, the column’s title gave away my position. “Palestine Attacks!” it reads. Not “Palestine Attacks Because Israel Deserves It” or “Israel Gets Caught with Pants Down.” Just “Palestine Attacks!” The entire piece demonstrates how stupid Hamas were to attack civilians in such a barbaric fashion. I did not attempt to justify what they did for any reason. I won’t accuse you of cowardice for not outright calling me an “antisemite.” Because I know there’s no word in US English to describe someone who thinks Jews deserve to live in peace with dignity while simultaneously condemning The State and Government of Israel for its rash actions. That’s why you had to include the weak adjective “borderline.” Because deep down, you knew your accusation was bullshit. Scientists have proven cognitive dissonance is akin to physical pain. And why do I think so differently than the average American? Because I left the United States on October 3, 1999, and never returned to live there. That means I’ve been out of the CBS-NBC-ABC-CNN “news” cycle for almost a quarter century. It’s a long time to escape brainwashing. And since I left London in January 2009, I haven’t watched a single segment of BBC News. That’s nearly a decade and a half. Have you ever met another American who’s lived in Europe for as long as I have that’s not a socialist? I subscribe to The Wall Street Journal, The Times of London, and Le Monde (English edition). But that’s about it. The rest of my news comes from people I trust on the ground. And why is that? Not only have I lived in seven countries (US, UK, Singapore, Spain [for only two months], Hong Kong, Philippines, and Italy), I’ve traveled to 53 more countries. I’m the guy at the end of the bar buying rounds in places like Marrakesh, Tunis, Sharm El-Sheikh, Istanbul, Bodrum, Dubai, and Abu Dhabi. I get to know people. I ask questions. And I’ve been doing so for a quarter century. So, your charge of writing about “subjects I don’t understand” doesn’t hold up. No one’s knowledge is perfect, but I will assert mine has far fewer holes than the average American. And that’s what makes this a “Rude Awakening” and not a “Kiss Your Forehead and Caress Your Face Awakening.” As for being a “crazy libertarian….” Crazy Libertarian “Libertarianism” is a tainted term. But as it so happens, yesterday I interviewed Jeff Deist, author and former President of the Mises Institute. One of my questions to him was, “What’s the difference between libertarianism and conservatism?” Jeff, as eloquently as ever, explained how while he hoped there were many differences between the two, the one that stands out is that libertarianism is anti-war. I’m unabashedly anti-war. But if you want an actual, crazy libertarian, I suggest you read [Walter Block’s piece in]( Wall Street Journal]( yesterday. Here are his final two paragraphs: In other words, it needs to support a complete, total, and decisive Israeli victory. If this implies an overwhelming, unprecedented use of military force, so be it. Hamas is and will be responsible for any civilian casualties. Cause and effect. They created their own destruction and its consequences. Mere victory isn’t enough. Israel has won every war it has ever fought. This time, the triumph must be so thorough and conclusive that there will never be any other war for this country. Israel has a moral right to finish the job, and the West has a moral duty to support it. Let Israel do what it must to finish this war in the fastest way possible, with the minimum civilian and military casualties on its side. The consequences of this lie on the group that initiated the causal sequence—the one that must be completely destroyed, Hamas. I don’t have their permission to name them, as I didn’t ask for it, but here is what some quite famous libertarians think of Walter’s piece: “Unhinged.” “Walter Block went completely overboard. This is a reaction out of pure anger, frustration, and desperation and will in no way serve the interest of people living in Israel, whilst degrading people living in Gaza to less than disposables.” “Walter continues to disgrace himself and expose himself as a tribalist first and foremost.” “Sounds like Bush right after 9/11 and before the Iraq War.” “‘The state should destroy a different group of people!’ I think I have a different understanding of the Ancap definition and philosophy.” Those “crazy” libertarians are trying their darnedest to ensure peace on Earth. That brings me to… “Get The F*ck Out of the Country!” Jeff, I’m sure you thought you were being terribly clever when you advised me on your three-step plan for your “crazy” libertarian buddy. But as most Rude readers know - because I’ve been utterly truthful about it - I renounced my US citizenship in 2011. (You can check in the [Federal Register for April 30, 2012](. It takes a while to get named and shamed.) On that page, you’ll also find Denise Eisenberg (formerly Denise Rich, the songwriter), Eduardo Severin of Facebook fame, Matt Ridley (scientist and writer), and Derek Sivers (founder of CDBaby.com). I’ll admit it felt good to be associated with such luminaries. Rude readers also know I generally loathe socialized medicine, as it provides an inferior service to well-paid doctors and nurses. I’m sure you’re thrilled to hear it when people like me leave the country. And you have no worries about who will replace me. Those kids at [Harvard]( and [UCLA]( seem the best and the brightest, right? But… [America no longer a superpower because of Biden]( [Ever heard of America’s “Doomsday Deal”?]( It’s a deal so vital to our country’s wealth and security… Every President for 50 years has defended it at all costs. Until Calamity Joe Biden. [Biden broke the deal](. And I now predict… The America we love is doomed. And the biggest wealth transfer in US history is now underway. [>>See the truth about Biden’s terrible mistake HERE<<]( [Click Here To Learn More]( Shortly Outnumbered Let’s get some hard data for you now, Jeff. Jewish-Americans number about 6 million people. There are 3.5 million Muslim-Americans in the US. How long will it take for the Muslims to outnumber the Jews in the US? “Don’t be a racist! What does it matter?” you ask. Here’s how: [Rude] Let’s play: “I came to Israel as a Muslim and a foreign minister.” What’s going to happen then? [Are the Muslims in the US supposed to cheer for Israel instead of their own suddenly? Not happening, pal.]( Another question: if people like me, who are about to be proven right on Ukraine and Russia, were “Putler’s Paid Agents,” what’s Ben Shapiro? [Rude] [Watch the entire video @RomanGoddess72.]( Ben tells the audience he can do much more for Israel inside the U.S. than outside the U.S. I believe him. [Rude] Here’s a picture of a plane load of Israeli reservists flying from the United States: [Rude] Credit: [@Kevin88_H]( My questions are these: - Why aren’t these guys in the US Army? - If they’re not in the US Army, they’re a part of a foreign army. Why are they in the US? - How do they just get off work to fight a war and get let back into the US? What about this? I unreservedly accept that Israel has the right to exist. Can you tell me what countries don’t have the right to exist? - Scotland? Because they voted to stay in the UK? - North Korea because we don’t like their Dear Leader? - Kurdistan, because it doesn’t exist already? Am I being ridiculous for merely posing the question? I don’t think so. And will these reservists still be allowed to leave and fight for Israel when “The Squad” expands as the US’s Muslim population expands? Remember, the US allows Congressmen, Senators, and Executives to hold dual citizenship. Many have Israeli citizenship. Dual citizenship is prohibited in the Knesset. Interesting, don’t you think? Again, will that change with America’s growing Muslim population? What I’m Really Sorry About I wrote in Monday’s [Rude]( But there are truths and facts. The truth is the Holy Land matters to a great deal of people. The fact is that part of the Middle East is a worthless piece of dirt utterly devoid of resources. It’s utterly unforgivable. There are loads of natural gas offshore Gaza that I forgot about. [Rude] [Rude] Both maps are credited to [Global Research](. Joke Biden sending two aircraft carriers should’ve given the game away, to be honest. It’s an amazing coincidence that Europe needs that gas because they listened to the US and stupidly cut off Russia… And Europe would pay the Palestinians for that gas, enriching Gaza far beyond Israel… And by mowing the Palestinians into the Med, Gaza becomes part of Israel… And then Europe would send its money to Israel instead of the Palestinians. I should’ve just followed the money like I usually do. Same as it ever was. But what happens when Ukraine goes to the bargaining table cap-in-hand before the winter because the US has stopped financing the war for “as long as it takes?” [Listen to John Kirby spell it out here.]( Then, not only will Europe ask Russia to turn on the taps, but Ukraine will be partitioned. Then, both offensives were for nothing at all. What a waste of life. That’s how I understand the subject, Jeff. But you’ve probably already disengaged. So, I wish you a pleasant onward journey. Buono Appetito! [Rude] And thank you for staying. Have a wonderful weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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