#Economy & #Stocks Review - The Propaganda Cycle & Stocks

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

The Propaganda Cycle & Stocks

What could easily be viewed as another round of bullish economic propaganda (before they threaten to bomb Iran to the Stone Age on Fridays) has sent stocks soaring. The real question is: when does the rally end? Probably when the majority least expects it.

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Our Timing A Correction/Crash Model displays an 80% bearish reading (see TAC Model below). It has been stuck on 80% for several trading days. This places increasing doubt towards the durability of the stock rally. Readings of 90%, 100%, or possibly 110% should all be seen "warnings" that increase odds of near term correction. The Evolution of the Trade (EOT) does not allow us to short a primary uptrend, so the play would be retreat to the sidelines, and let the gunslingers take over.

Future instability would likely come from additional decouplings in the composite trend. Subscribers and followers should focus on the Economy & Stocks Report updates in August.



TAC Model

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The Matrix provides market-driven trend, cycles, and intermarket analysis.