Ugly Into New Year

The major indexes are looking mighty bearish. [The Rude Awakening] October 23, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Ugly Into New Year - The IWM is leading the SPX and QQQ down. - Let’s see where we are right now. - Commodities tell a different story. --------------------------------------------------------------- [Sean Ring] SEAN RING Good morning from overcast Asti. I hope you had a restful weekend. I’ll start you off lightly this week with a chart-laden edition of the Rude. I know the Monthly Asset Class Report is only eight days away, but there were some crucial developments as of Friday. Small Caps Break Support First, let’s review our current thesis. We said that the small caps would dictate where the overall market goes. If that’s the case, the overall market will start to head down soon. First, the weekly microcap stocks ETF (IWC) has broken support. [Rude] Going back over the past two years, it’s clear the IWC has already gone below the original support of about 100.35. That was about a month ago. Next, let’s look at the IWM, which is the small-cap index. [Rude] This is the daily chart going back to the Covid breakdown. The longer blue horizontal line is the previous high of 162 before the Covid crash, which turned into a support level after the enormous rally. That’s a huge figure to watch. Interestingly, the shorter blue horizontal line represents the one-year support level of 168.30. The IWM has already fallen through that. So, a breakdown to 162 looks likely. Below 162, and the 145/150 area looks likely. Let’s move to the tech stocks. Are Tech Stocks Rolling Over? This is a daily chart of the QQQ (Nasdaq ETF) year-to-date. [Rude] Friday’s candle came within a gnat’s chuff of breaking support that’s held since June. That doesn’t mean it will break support. But with IWC and IWM heading south, it’s likely. Today’s price action will be interesting. If we do definitively break down, I will look to 336ish first, as that’s the current 200-say moving average, and then 320 after that. Let’s now look at some big tech stock charts to confirm (or deny). [Rude] META’s chart isn’t terrible. But it’s going up at a diminishing rate. Perhaps it won’t roll over, but it’s been flat for a while. [Rude] AAPL looks far worse. Since August, we’ve been in a clear downtrend. The 50-day MA is flat currently but was down for months. The 200-day MA is still slightly positive trend-wise. [Rude] AMZN’s chart is like AAPL’s. But it peaked in September. Again, it hasn’t fallen out of bed yet. And yet, this chart isn’t the healthiest. [Rude] NFLX popped after its recent earnings reveal—the free cash flow stunned investors, so the stock popped $50 last Thursday. Let’s see what it does from here. [Rude] My friend and colleague Dan Amoss has been waiting for NVDA to roll over for ages, but it kept rocketing. He may finally get his wish soon. The top horizontal line is recent support at 407.50. If we break below there, we’re heading to 370 (the middle blue line). And then, there’s that gargantuan gap that needs to be filled. So, a drop below 370, and we head to 317 (the lowest blue line). [pub] GOOG’s chart looks the healthiest of them all. However, it’s started to roll over a bit in the last week or two. All in all, tech stocks aren’t looking all that rosy. But that doesn’t mean they’ll crash. But we may be in for some rough times heading into year-end. [Your Credit Card: Declined?]( [James Altucher]( Take a moment and picture this scenario: The line at the gas pump is getting longer as you insert your credit card for the second time. You decide to head in and ask the cashier what’s going on. There’s a long line inside. The woman in front of you looks frustrated. Everyone does. “There’s nothing I can do. You’re declined,” the cashier says to the man at the front of the line. It’s not just you. Everyone is declined. Something doesn’t seem right. A sinking feeling sets in as you realize something has gone terribly wrong. [Click here now for an urgent new prediction from a former advisor to the CIA and Pentagon.]( [Click Here To Learn More]( SPX Looking Weak This is a chart of the SPY ETF (S&P 500) year-to-date. [Rude] Clearly, we’ve been in a downtrend for over two months. We can see the pressure the small caps and tech stocks have had on the overall index. (The big tech stocks account for a quarter of the index now.) For this ETF, the downside target is 392, which is quite far from here. But it’s not all bad. Let’s look at commodities next. Commodities Look Bullish Oil was about to fall off a cliff until Hamas invaded southern Israel. [Rude] But now, oil is looking unabashedly bullish. If the war escalates considerably, we’ll see triple digits. The current price objective is 103. If it calms down, which I think is unlikely, we could break back down to the 60s. My call is to the upside, however. [Rude] This is the daily gold future chart. I’m still a bull and think we’ll hit an all-time high again soon. Depending on the money printing and the warmongering, we may hit $2,300 by the middle of next year. [Rude] And though uranium cooled off in recent weeks, I’m still a big fan. Even the loony left is figuring out that nuclear energy must be a part of any sensible green energy plan. Wrap Up The bad news is that stocks will limp into the year-end. The good news is that some commodities may be poised for massive breakouts. Be nimble and be safe with your capital. This isn’t the 90s. All the best… [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Happy Friday! Lebanon, a small but intricate Middle Eastern nation, lies perched on the Mediterranean coast and packed with many religious, ethnic, and political complexities. Understanding Lebanon’s religious demographics offers more than a slice of historical pie; it’s a full-course meal with economics, geopolitics, and culture layered in. The Background First, some background. Lebanon is a sectarian-based society. Religious identities are deeply interwoven into the country's political fabric, dating long before the modern Lebanese state emerged. Historically, the Maronite Christians had considerable influence and majority status in Lebanon, especially in the Mount Lebanon area. This influence was fortified during the era of the Ottoman Empire when Lebanon was part of the greater Syrian region. Under the Ottoman millet system, which was a framework for allowing religious communities to govern themselves according to their laws, the Maronites enjoyed a reasonable amount of autonomy and safety in the mountainous regions they inhabited. The Sykes-Picot Agreement Fast forward to the 20th century, when the French took control of Lebanon after World War I as part of the infamous Sykes-Picot Agreement. It’s a deal as notorious in the Middle East as subprime mortgages are in the world of finance. The Sykes-Picot Agreement was a clandestine deal that redrew the map of the Middle East and laid the groundwork for a century of turmoil, geopolitical chess, and economic opportunism. Remember it well, as it’s one of the reasons David Fromkin named his bestselling book The Peace to End All Peace. For a start, the Ottomans had ruled much of the Middle East for centuries. Their empire was a sprawling mass that incorporated a variety of ethnic, religious, and cultural groups. The one thing that united them? They were subjects of the Sultan in Istanbul. Sykes and Picot, however, saw the Middle East through the lens of strategic interests, access to vital resources (you guessed it - oil), and good old colonial exploitation. They weren't concerned about the Shia or Sunni, the Kurds or the Arabs; they were looking at the geopolitical chessboard and wanted to place their pieces wisely. [Rude] Credit: [( So, the agreement went like this: Britain would get control over what are now Iraq, Kuwait, and parts of Jordan. France would get modern-day Syria and Lebanon. Palestine would be under international administration because of its significance to Christians, Jews, and Muslims. Maps were drawn, and lines—oh, those notorious straight lines—were etched onto the canvas of the Middle East with the nonchalance of a graffiti artist tagging a subway train. The problem? People live in those etchings. People with histories, cultures, and traditions that didn't fit neatly within those straight lines. The Kurds were split among Turkey, Iraq, and Syria. The Sunnis and Shias found themselves sharing future battlegrounds. Christians in Lebanon found themselves in a Francophile state, distanced from their Arab hinterland. Sykes-Picot didn't just allocate territory; it sowed the seeds for conflicts that would rage for generations. [[A.I. Supplier]: $100 Billion Sales Surge Coming?…]( Nvidia’s little-known supplier is set for a [$100 BILLLION sales explosion]( …and it’s thanks in part to this mysterious device you see here: [Click here to learn more]( According to our research… This $100 billion sales boom could even turn this little-known supplier… …into the [the next trillion-dollar stock](. To see how to take advantage of this little-known supplier – before it’s $100 billion sales surge —— [go here now.]( [Click Here To Learn More]( Lebanon, Specifically Under the French Mandate in Lebanon, the French colonial powers favored the Maronite Christians. Their majority status was institutionalized when creating the modern Lebanese state in 1943. This new state, larger than the historic Mount Lebanon, was a cocktail of religious groups, including Sunni Muslims, Shia Muslims, Druze, and, of course, Maronite Christians. The 1943 National Pact, a gentlemen’s agreement, if you will, was Lebanon’s attempt at power-sharing. The unwritten accord specified that the president would be a Maronite Christian, the prime minister a Sunni Muslim, and the speaker of the parliament a Shia Muslim. This quid pro quo aimed to acknowledge the Christian majority while accommodating the Muslim populace. However, there was one critical flaw: this power-sharing model was established based on a 1932 census, which was never updated. Why? Because the religious demographics were changing, doing a new census was tantamount to opening Pandora’s box. Now, let’s get into the demographic shift itself. Several factors contributed to the change from a Christian majority to a Muslim majority in Lebanon. First, different Muslim and Christian communities had varying birth rates, with Muslims outpacing Christians. (Sound familiar?) Secondly, urbanization and modernization had an impact. The booming city of Beirut attracted a large Sunni Muslim population, altering the religious balance. But the game-changer was the Palestinian influx. Those Palestinians, Again… The arrival of Sunni Palestinian refugees after the 1948 Arab-Israeli war and subsequent conflicts led to a further increase in the Muslim population. The Palestinians added numbers and a volatile political ingredient to Lebanon’s complex religious recipe. The tension reached its zenith during the Lebanese Civil War (1975-1990), a destructive conflict that shattered the country and left it deeply scarred physically and spiritually. When right-wing pundits ask why Muslim countries aren’t taking in Palestinian refugees, this is part of the answer. The war brought further demographic changes. Many Christians emigrated, leading to a decline in their population percentage. This diaspora has continued, with many Lebanese Christians residing abroad, from Sydney to São Paulo. Fast forward to the 21st century, and the Muslim majority is an open secret, yet the political system still operates as if it’s 1943. Add in the Syrian crisis, which has led to an influx of Muslim refugees into Lebanon, and the demographic kaleidoscope turns once again. Wrap Up From an economic and geopolitical angle, this shift is seismic. Lebanon is a case study of how changing religious demographics reflect and affect socio-economic stability and political alliances. America needs to take note. Europe, at least the Western part, is already lost. With the rise of Iran-backed Hezbollah, a Shia group, as a dominant political and military force, the U.S. and the West must re-calibrate their strategies in the region. For instance, the petrodollar recycling mechanism, a cornerstone of U.S. dollar hegemony, becomes shaky when geopolitical allies become complicated frenemies. In sum, Lebanon’s shift from a Christian to a Muslim majority is filled with historical contingencies, colonial legacies, and geopolitical intricacies. And it’s far from over. We see the unintended consequences of colonialism, the pitfalls of power-sharing based on religious identity, and the undeniable influence of demographic changes on economics and geopolitics. Understanding Lebanon isn’t just an academic exercise. It’s essential for anyone looking to navigate the complexities of Middle Eastern geopolitics, global finance, or even the labyrinthine networks of power and influence that shape our world today. After all, in our interconnected global village, a tremor in a small Middle Eastern country can send shockwaves across capitals, markets, and war rooms. We’re in the middle of one of those shockwaves right now. Have a great 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. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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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