A market Bounce

 6/8/2026

A market bounce after the big drop Friday was ex[ected. I doubt it is over given the strength of the bull market  to date.  Look back five days.

'

 Notice the big move up June 4.  Then mood dramatically changed, those same tech stocks that were loved the 4th wer thrown overboard the 5th. otday the 8th, teh market bounced and then returned to below the Friday low. 

A different short term picture emerges with SOX, semi conductors 

 SOX gapped down Thursday in a prequel to the Friday gap down. All of a sudden no one wanted to own semis. A gap up occurred this morning with little follow thru the rest of the day. 

I read one analyst today who suggested 'investors' I would call gamblers at this point, would sell Mag 7 stocks and buy Space X this Friday. Let's go back 10 days.  The Mag 7 selling began May 18 for Google Alphabet. You can see I had labeled the five waves up even then, no not today.

 Best guess is a messay sideways affair going into the end of the week. 

Silver was unchanged after its sell- off Friday but I expect it to begin falling once more.  

 

 

 

June 7, 2026 Weekly Report

 6/7/2026

 

Let's start with silver as I want ot make a point

 This is  weekly chart for the last  1.5 years.  Silver rose 4x from $3 in early 2025. I reached parabolic proportions at $120. In a matter of weeks it lost half its value to trade at $60. After a rise to $95, it is back to $67. My guess is $50 for support, which looking back to 2025 does not seem unreasonable. A 38% of 120 is about $48. Those sort of numbers do not seem to alarm anyone, but it one bought on the way up at $70 or more, one is way under water. My point is what if this happens to the stock market?

Micron Tech MU

 38%, a fionacci number, of $1,000 is about $400, the red arrow. That looks reasonable on the chart, too bad for the late comers.,

INDU

 38% of 50,000 is about 19,000 which. surprise, is about the COVID panic low. Considering 209 started from 7,500, 19,000 dos not seem unreasonable. But understand this will wipe out over half the savings of baby boomers and those following generations. UNreasonable, look at MACD bottom panel now, maxed out.  Look at 2009, ,wiped out. 

At such times Richard Russell used to say, there's a hard rain comin'

I return to my 1973 scenario

an unpopular President, Nixon then, Trump now

an unpopular war, Viet Nam then, Iran now

Inflation

High gasoline and meat prices

 A stock market at all time highs, then 1,050 now 50,000

Sound familiar?

Two Year Yield

 Since March ,that is a 22% rise form 3.4 to 4.1%. The market sets this rate not the FED. Note Friday's 2.42% spike on the sell off in stocks, Bonds, metals, oil. The trend in rates is up, period. the world is awash in debt. Lenders want more income as assurance against default.

Social Mood

 Senators want to tie SS to stocks and bonds  That was last summer, July 2025, do the ystill feel that way?

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Charles did not do this at INDU 7,500, this is what happens at insane new market highs

 

 Not to be outdone by Kaine and Cassidy, Trump gets on board with the stock market

Trump accounts the government offers free money to enter the stock market

Trump Accounts were created under a 2025 federal tax law as a new type of tax‑advantaged savings account, as USA TODAY's Daniel de Visé previously reported. While the pilot program provides a government contribution for certain newborns, all eligible families can participate on their own if their children meet the requirements. 

These would have been great ideas at the dot.com low of 2002, th sub prime low of   2009, but social mood would never have allowed them then, the mood towards investing was too negative, only amid a positive mania do such things happen.

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Friday was a 90% down daywith 90% of stocks trading lower on the day. Now look for a short term recovery as well as the Space X IPO later Thursday Friday, let's watch from the sidelines. 

 

 

The Market Seen Thru Indicators

 6/6/2026

 The NYSE advance decline  is hte single most reliable indicator of the markets. The rally since late March shows it has actually been  a mostly sideways market for ALL the stocks not just the tech stocks.

A close below the moving averages will confirm a top.

VIX the fear index, VIX stands for volatility index, as the market advanced in April May volatility calmed, it came alive Friday

 

The Conventional View

 6/6/26

From the Weekend WSJ 

Kevin Marsh Job Just Got More Complicated

Kevin Warsh has been Federal Reserve chairman for two weeks. The bond market and the White House have already picked his first fight for him.

Friday’s strong jobs report pushed traders to raise bets on a rate increase by year-end, drew a public warning from a Fed voter that higher rates could be warranted this summer, and prompted one Wall Street bank to forecast a series of hikes beginning in December.

Meanwhile, President Trump reiterated his longstanding frustration that investors treat strong economic data as unwelcome news because they expect the Fed to respond by raising rates. “With a great Jobs Report, like just announced, stocks should go up, not down,” he posted on social media Friday. “Growth does not mean inflation!”

Stocks sold off, with the Nasdaq down more than 4%. In the current environment, good economic news pushes bond yields higher, and higher yields punish stock prices. Yields rose Friday because investors anticipated some combination of a Fed that raises rates, more persistent price pressures, or both.

Trump’s top economist—himself a finalist for the Fed job that went instead to Warsh—went on television to argue the report showed the Fed could be cutting rates before too long.

The whipsaw illustrates the high degree of difficulty facing Warsh as he heads into his debut meeting as chairman this month. He looked poised to inherit a much different economy when Trump tapped him in January.

 The Jobs Report

 U.S. employers added 172,000 jobs in May, and reports from the previous two months were revised up to show a gain of 93,000 more jobs than previously estimated, the Labor Department said Friday.

 From the Weekend WSJ

Fears of rising interest rates collided with worries about artificial-intelligence spending on Wall Street Friday, bringing an abrupt and painful end to weeks of gains and sending the Nasdaq composite to its worst day in more than a year. 

 Stocks, bonds, oil, gold and bitcoin all tumbled. The tech-heavy Nasdaq fell 4.2%—more than 1,100 points—in its worst decline since the tariff rout of April 2025. Micron Technology, Intel, Super Micro Computer and Sandisk lost more than 11%. Cisco and Nvidia both dropped more than 6%. Equipment maker Caterpillar, lately an AI play because of its power and energy business, fell 3.8%. 

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 The media constantly attempts to link some fundamental event with what happennd in the market on a particular day. You never read a comment like this, courtesy of your author

Bond prices fell as interest rates rose as a result of the continuing 39 year interest rate cycle. The Cycle bottom in March 2020, 39 years from its top in 1981. Cycles in markets are as inevitable as cycles in weather. No one questions the four seasons but let thr markets collapse in one day amid what was wide spread optimism, and all are searching for a fundamental reason.

For stocks, how about the idea that the Elliott Wave Pattern at multiple degrees of trend had finally topped in all major stock indexes (it did). And so the mood towards semi-conductors changed and stocks sold off.

__________________________

and here is the 39 year interest rate cycle to prove my point. note the arrow pointing up, this charts does not go back to 1942 but one can see its uptend from  1966. 

 Conclusion, charts at various degrees of trend show a concluding five waves up in sotcks.

Interest rates have resume a long term upward cycle.With world governments supporting trillions of dollars of debt, now estimated a $111 T,now wonder bond holders are nervous about repayment now demanding more return for holding the debt. 

 See the AI description of teh 55% 1973-74 decline, add widespread media dislike of the President and it sounds pretty familiar, eh?

 

To identify when stocks peaked in 1973, consider the following points:

• The stock market reached its peak on January 11, 1973.
• The Dow Jones Industrial Average hit 1,052.77 points on that date.
• This peak was part of a broader market trend leading to a significant downturn.
• The market decline continued throughout 1973 and into 1974.
• Economic factors included rising inflation and an oil crisis impacting investor confidence.

 

 

Stick a Fork in it, It's Done, the Market That Is

 6/5/2026

Every SOXcomponent was down today 

this will only apply to the 6/5 display so later 6/8 on this will not be true

 

Wall Street Panics 

 

A Turn of the Tidal Wave

 6/5.2026

TO MY READERS

 I am teaching a FIN 3338 financial analysis class. Yes I have talked about a market top for the last year.  today's violent reversal of all the major averages amidst the AI mania seemng out of nowhere is surely significant. I will be posting more frequently for the class and all regular readers.

Learn about Elliott Wave at this link 

Google short term

 Longer term from the 2023 Covid low. As mentioned below, Elliott Waves exist in fractals, larger, the graph below and smaller, the graph above, reflecting the mood on different scales of trend. 

The arrows highlight the top of hte third wave on RSI and PMO.

 

Elliot Wave and Socionomics are mass market thoeries, they do not necessarily work on smaller held securities. Hence I have chosen the SPX for a 17 year demonstration. Monthly charts move slowly so it will take some time for a notice able downturn. Such a turn is already showing up in WMT. 

SPX from the 2009 sub prime low, the PMO momentum indicator at bottom helps identify the wave pattern as well as the RSI at top

Wave One starts when no one expects it after two years of downturn

Wave Two is a sideways affair, waves reflect alternation, if 2 is flat, 4 is down, and that is the case here

Wave Three, the gang is all on board, usually the strongest of ht three, see PMO below

Wave Four teh COVID Surprise, there is always a fundamental event to validate the technical picture

Wave Five, is not as strong as 3, note the lower RSI at top compared to 3 evne though  it is near vertical. Maximum mood occurs at the  end of a move up or down. That certainly characterizes the AI mania that has pushed SPX, now 44% of which are tech stocks. 

 

There are plenty of theories on how markets pattern, here are a few

Random Walk the book essentially saying no method works was ironically published in  1973 at the start of th e50% drop in the DOW from 1055 to  577 in two years

Discounted Cash Flow this is the idea that future cash flows are discounted using the appropriate rate to determine a Present Value of a stock or income stream, great but what about those sky high valuations for firms with no earnings?

Efficient Market Hypothesis another it can't be done but Louis Navalier swears by it

The idea that financial market returns are difficult to predict goes back to Bachelier,^[6] Mandelbrot,^[7] and Samuelson,^[8] but is closely associated with Eugene Fama, in part due to his influential 1970 review of the theoretical and empirical research.^[4] The EMH provides the basic logic for modern risk-based theories of asset prices, and frameworks such as consumption-based asset pricing and intermediary asset pricing can be thought of as the combination of a model of risk with the EMH.^[9]

^{Benjamin Graham / Graham and Dodd these two books are referred to as the Bibe of Fundamental Investing, think Apple for a great example}

^{But today I am introducing you to The Elliott Wave Theory  Ralph Nelson Elliott an accomplished accountant by profession, by the way I am a PA and an accounting professor) created his theory in the 1930s. It is, as shown above a five step three one direction with two counter waves. The idea is that this profiles the social mood of large numbers. E;lliott's work was re-introduced by my friend Robert Prechter. His theory of socionomics finds that social mood is patterned in an Elliott Wave format. In the words of Elliott Wave International.}

Robert R. Prechter’s name is familiar to market observers the world over. Since founding EWI in 1979, Prechter has focused on applying and enhancing the Wave Principle, R.N. Elliott’s fractal model of financial pricing. Prechter shares his market insights in The Elliott Wave Theorist, one of the longest-running financial publications in existence today. Prechter has developed a theory of social causality called socionomics, whose main hypothesis is endogenously regulated waves of social mood prompt social actions. In other words, events don’t shape moods; moods shape events. Prechter has authored and edited several academic papers. He has written 18 books on finance and socionomics, including a New York Times bestseller. 

 

What Could go Wrong?

 6/5/2026

 

What Could Wrong?

 

Elevated global oil inventories at the start of the year have caused a  muted response to the Hormuz stoppage. Those world inventories are staring to draw down rapidly.

Trafigura, Singapore commodity trading firm

Exxon Mobil and Chevron have joined that opinion.  The two major firms warn inventories of oil and refined products will reach a critical point  in the next few weeks.

Iran has been, to the surprise of Secretary of State Rubio, surprisingly resilient in the face of US and Israel air strikes. Just this week, Iran struck the Kuwait Airport, doing damage to the terminal. This takes the war home to the oil rich country Kuwait, the size of New Jersey.

Yes, as Secretary Rubio has said, inflation is rampant in Iran and the currency has collapsed. Today it takes 1,375,000 Iranian rials to buy one US dollar. But the Iranian mullahs don’t care.

Kill the Supreme Leader and his henchmen.  iI just means the survivors want revenge. Iran realizes the US President faces a November election of the entire Congress and one-third of the Senate.  Their ace in the hole is keeping world crude prices high. And if indeed, world supply particularly in refined products like jet fuel and gasoline pass the tipping point, so much the better.  Even if the Strait opened tomorrow,

·      mines would have to be removed

·      ships in que would need to pass, would you be anxious to do so if you owned a ship?

·      Reserves would need to be restored and refined products produced

·      All that takes time

Trump’s strategy of talking the crude price down and the stock market up,  is running out of gas, so to speak. The DOW dropped over 600 points Tuesday. On that day the House voted 215-208 to end the war with Iran. Four Republicans voted for the measure.  With Senators Cornyn and Cassidy out of their multi-decade jobs thanks to Trump’s intervention in the races, there is a growing chance they would join other Republicans Rand, Murkowski, and Collins to pass this in the Senate. Trump would no doubt veto the measure, but that is not going to help his standing in those mid-term elections.

All the data analytic AI excitement has driven markets to new highs. It finally appears that party may be at least pausing. The tech heavy NDX is down 3% today.  The equally important SOX semi-conductor index is also down 6.74%.  All the Magnificent Seven stocks are down today. The AIQ global AI index has dropped 6% just today. Someone call Elon Musk, surely this cannot be happening.

Speaking of which, SpaceX SPCX now owns Musk AI business. One gets a ticket  to outer space and the booming AI market. The SEC filing seeks a whopping $1.75 trillion valuation with proceeds of $775 billion. Pricing is expected June 11 with trading first day on June 12.

As Buddy Holly would say, that’ll be the day.