Stalled Markets, Baby Boomers, and Accelerating Information

BABY BOOMERS & THE INFORMATION AGE

The Merriam-Webster dictionary defines a Baby Boomer as a member of the generation born between 1946 and 1964. If the average age of Baby Boomers is 65 years, then 1953 would be an important year for them. A lot of stuff happened that year, including the end of the Korean War.

Read more at ThePeopleHistory.com

At the age of 65, a person is also considered a senior citizen. With that "badge of honour" comes a whole host of pros and cons. Baby Boomers' young adult lives were much more simple without distraction of home computers, cell phones and social media platforms. This kind of simple life meant that one could live in a more "linear-thinking" kind of mode, where people could more easily define their goals and create strategies and tactics on how they could be achieved at an early age, then work towards those as they aged.

The rapid onset of technology, nano-technology, nuclearization, globalization, pandemics, medical advances and cures, fluctuating climates, and mass human migration that we've seen emerge since the Sixties has brought with it a lot of rising challenges related to the adaption of social, economic, cultural, religious, racial and political differences and discord...as well as an oversaturation of information that's been thrown at us on an ever-accelerating pace.

I'm not sure that the average human brain has kept pace with, and has a full grasp of, all that has occurred during those years and what it will mean for younger generations going forward.

No doubt, Baby Boomers have been and are in the process of retiring and downsizing their homes and possessions. Priorities have changed from work-related and family-raising activities, to ones more focused on health, pensions, friends, and comfort, as well as drawing down their investments for such purposes.

Younger generations are debt-ridden and information-overloaded. They will be saddled with the problems of yesterday, today and tomorrow at an ever-increasing pace and are required to think in a more "lateral" fashion...not an easy task, as they'll need to keep an open mind and a keen eye open. Their disposable income may not be sufficient to plough into the stock markets.

We're now living in that hand-off period between Baby Boomers and these younger people as they begin to step into those roles. What that transition period means for the markets is unknown at the moment...at least I don't have a handle on that aspect (no crystal ball, darn it).

We may see a period of instability or chaos occur on a world-wide basis at some point where indecision becomes the norm for awhile, until new order and direction can evolve...one where markets stall and whipsaw for some time.

WHAT THAT MEANS FOR CURRENT EQUITY MARKETS

In the meantime, the technical indicators on the following monthly chart of the S&P 500 Index (SPX) can be monitored to gauge the strength or weakness of equities.

While the parabolic stop & reverse (SAR), momentum (MOM) and relative vigor index (RVGI) indicators are displayed with their default input values, I've shown the average true range (ATR) input value as 1 month.

In this regard, my observations are:

• The SAR has flipped from a buy to a sell signal.
• The RVGI has formed a bearish crossover and is accelerating to the downside.
• The MOM has broken its recent uptrend from the beginning of 2016 and is accelerating to the downside.
• The ATR registered its second-highest reading in history during February of this year...second only to the one made in October 2008 during the financial crisis.

These tell me that markets have reached a level of saturation and indecision...something I've written about in more detail all year in a variety of articles on a variety of markets. And, these technical indicators are additional tools to the ones I've mentioned that can be used to monitor equity strength/weakness/volatility going forward.

Whether this pause reflects, or is the beginning of, what I posited above regarding the generational hand-off is anybody's guess...but it may be...keep an open mind, eyes open and think laterally. 

As a Baby Boomer, myself, I intend to do just that, to the best of my abilities.

Can The South Korea ETF Hold Onto Its Record Breakout?

* See UPDATES below...

The monthly chart below of the South Korea ETF (EWY) shows January's breakout to new all-time highs, followed by a brief pullback and rally back to close above its prior record high of 75.05 in March (now near-term support). Price is cautiously extending these gains, so far this month, while experiencing quite a bit of whipsaw movement on a daily basis.

It's also sitting just above the bottom of a long-term uptrending Andrew's Pitchfork channel around the 70.00 level (major support). Its next major support level is around 60.00 on this timeframe.

Both the momentum and rate-of-change indicators have been waning since last October, but remain above zero. A drop and hold below zero, as well as price drop below 70.00, could see price retest 60.00, or lower.

The daily chart below of EWY shows this whipsaw action (which began last October and which has formed a diamond pattern), and volumes have been high for the past couple of months.

Price is still above the 50-day MA and the RSI, MACD and PMO indicators have just formed a new "BUY" signal. However, this diamond pattern can be a bearish topping formation after a lengthy run up, so a certain amount of caution is warranted, especially with price near its recent all-time high.

Beware of a break with force on escalating volumes below the diamond bottom around 70.00 (which sits below the 200-day MA) as price could very well drop back to 60.00, or lower.

We'll see what happens following Friday's opening talks between the North and South Korean leaders to denuclearize the Korean peninsula and forge a peace agreement, and how further discussions may affect the EWY over the coming days/weeks, particularly in the lead-up to President Trump's proposed meeting with Kim Jong Un in the next couple of months.

* UPDATE April 30...

However, judging from NOKO's past violations of all previous nuclear agreements over the years, I wouldn't hold my breath that the words "Nobel Peace Prize" and "North Korea" will ever appear in the same sentence, despite what some are now excitedly hypothesizing.

Leopards (predators) don't change their spots...they only wish to make themselves relevant by pretending that they will...so, the onus is on Kim Jong Un to be the first to do so on that front and prove that as a verifiable and irreversible fact, while holding onto his power and control in NOKO...good luck with that.

Source: Reuters.com April 30/18

* UPDATE May 16...

Now that Kim Jong Un is revealing his true intentions (with his return to inflammatory rhetoric these past couple of days) that he will not actually disarm and denuclearize NOKO and that his recent (and past) words and promises to do so are empty, I really don't see any good reason for President Trump to meet with him in June. What's the point?

Once again, Chairman Kim is just show-boating and wasting everybody's time with his propaganda and insincerity...and still wearing his leopard skin...that's clear for all to see. He craves and loves attention and limelight and is a nobody without it.

Let him remain a nobody, Mr. President. Instead, use your time more wisely to further fulfill your election agenda to your citizens, including protecting their national security and economic well-being.

 

* UPDATE May 24...

President Trump cancels the June 12th summit with North Korea after North Korea failed to show up for scheduled pre-summit meetings in Singapore (while U.S. representatives waited there for 3 days) and didn't answer repeated phone calls for days on end, as well as made new threats of a nuclear orgy...

Twitter Link to video

And, once again, childish and anti-American/national security rhetoric come from Democrats (and, most of the media) in order to mock President Trump (it sounds like they're on North Korea's side and don't want the U.S. to succeed with peace-making efforts)...

Source: InsiderFoxNews.com

* UPDATE May 25...

Mr. President, I repeat...don't waste your breath on North Korea. 

Kim and his regime are clearly not serious and will never completely and irreversibly denuclearize and give up their weapons. Nor will they ever allow full and transparent inspections or allow their citizens to enjoy peaceful democratic freedom. They do not value western democratic principles, so do not expect them to embrace such a concept because it's simply beyond their capability.

* UPDATE June 1...

Final thoughts...I have to wonder why Kim Jong Un would actually trust that, if NOKO did completely and verifiably denuclearize NOKO, blow up all their test sites, and disarm and turn over their weapons to the US (rather than, say, to China), any deal that he might make with this current US President would be upheld and honoured by future Presidents to guarantee the safety and security of him and his regime, in perpetuity. We've already seen how two vastly different Presidents operate under Obama and Trump...and how one administration's policies and agreements can be scrapped with the stroke of a pen.

I just don't see the US and NOKO ever agreeing on what the west really wants.

If some kind of a deal is struck, I wonder just how transparent all the facts will be outlined in any agreement that gets released to the public.

Call me a skeptic...with eyes wide open...

Source: @FoxBusiness