Wolf Moon Monday: Markets Tremble, Raising Sons

You ready, Lupus?

No, not the disease. We’re talking the Latin word for “wolf” because according to the Clan of the Cave George Tribe’s neolithic Tree Hedge out back, tonight is the Wolf Moon. (First full Moon of the year.)

As always, we are guided by the two-bit A.I. as to how Wolves, bulls, and bears might “mix it up:”

“Wolves are more likely to attack cattle than bears, but the outcome of interactions between the two species depends on a number of factors:
Prey
Wolves are opportunistic hunters that prefer natural prey like deer and elk, but they may also prey on domestic animals like cattle. Young or newborn calves are especially vulnerable.
Number of animals
The number of wolves and bears involved in an interaction can affect the outcome.
Age, sex, and size
The age, sex, and size of the animals in each species can affect the outcome.

That’s not an especially insightful view (for the market today) except to mention the bulls and bears will be operating under the astrological influence of Moon. And Full Moons do make people crazy.

A Science Direct article (2006) citing work of Yuan, Zheng, and Zhu says that yes, indeed:

“Stock returns are, on average, 4 bps lower daily (about 5% annually) for the 15 days around the full moon than for the 15 days around the new moon. Using a 7-day window, stock returns are, on average 6 bps lower daily (about 4% annually) on the full moon days than on the new moon days.”

And so with the Full Moon, high volatility may be anticipated. Or not. (Remember, we don’t do advice. More like a market gadfly infestation.

From the Smote Dept.

On our Peoplenomics.com subscriber site, we crank out well over a dozen charts, twice a week, that look at markets from our (slightly teched) perspective. Which are based on several economic notions not widely appreciated, yet we hold as dramatically impacting market outcomes. To wit:

Aggregated Markets: Which is based on the notion that there is “only so much money in the World” as any given time.
Computational disintermediation: E.G. computer-based trading transforming traditional patterns due to the reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.
Ebbinghaus effects. Which we will explain in more detail in our report a week from Wednesday.

There is, of course, also our 85-DMA (day moving average) which the market closed under on Friday. And today, we are set to continue down until (perhaps) Retail Sales (Wednesday’s data coming up) may help staunch. And, ideally, fuel a rally from “lower than here” to back over the 85-DMA (Aggregate) from here. Following?

If you don’t have the “chart translation plug-in” installed in your cerebral cortex (of the occipital lobe, if you’re looking) the outlook based on early Futures pricing looks like the Wolf will begin with a big bite of Bull the open:

If you look closely, notice the 85-day trend line (red – there on the far right). Historically, long-term major market directional changes tend to “gel” around this point which is adjacent (overhead) to the 50-DMA and (below) by the 200-DMA.

It tends toward being a Bounce or Bust axis.

Not only does “market fear” kick in (generally) in this vicinity (which can spur additional selling) but we are confronted today with two (more subtle Ebbinghaus-related) “breaking of Index whole/round numbers.”

Thus, expect dynamic tension to grow as the S&P breaks below the “even” 5,800 level, and the techs bust under 19,000. Fear (and loathing in Los Angeles) is likely to drive lower. Why, even A.I. is hip to this:

“”Fear and Loathing in Los Angeles” is a phrase often used to describe a chaotic and extreme experience within the city of Los Angeles, drawing inspiration from the title of Hunter S. Thompson’s famous book “Fear and Loathing in Las Vegas,” depicting a drug-fueled, wild journey through Las Vegas; essentially implying a similar sense of excess and disorientation happening in Los Angeles.”

Pre-fires, of course. But now on Jet A.

Different manners of “seeing Future” are, of course, in play beyond some of these simple psychologically-anchored concepts. There’s an Andy view, a G.A. Stewart view, a Clif view, and a Farsight approach.

Regardless, the weekend here was spent in contemplation of “What next?” As a colleague raised a dandy question: “Has enough material burned in the L.A. fires to life enough weight off the San Andreas to get ground moving?”

I reminded him of the insufficiency of data on this point, instead pointing him at SoCal precip levels which are (albiet loosely) associated with earth movements (ne quakes). I sent him this short ChatGPT summary:

“While heavy rainfall in Southern California can influence seismic activity, it is typically a secondary factor. The primary driver of earthquakes in the region remains the movement of the Pacific and North American tectonic plates. However, under specific conditions, rainfall-induced changes in crustal stress and pore pressure can act as a trigger, particularly for small-scale seismic events or in areas with faults already near failure. The extent and significance of this relationship depend on factors such as fault system characteristics, local geology, and the intensity and duration of rainfall.”

But, the “how much weight removal question” is still open and of interest. Because the mesial vectors of force likely exert asymmetrical impacts due to gravity bias, but we’re sure you remember that from your post-doc in seismology, right?

Fire Forces

…and additional vectors, then:

We will know more as the wind models for the next few days are reported.

Headline Scroll: Expectation Setting

Biden and Netanyahu are talking again about a Gaza ceasefire. Even as JD Vance predicts hostage deal before Trump’s return to White House. Good for global moods, perhaps, but likely of little impact on markets.

An “army of True Believers” is how this sounds to us: North Korean POWs in Ukraine decline South Korea asylum. Which matters because in warfare, the mindset of soldiers can triumph over war materiel; hence we question if NATO forces are as “mentally tough.”

Canada’s dick-tator is talking about Trumperian real estate negotiations: Canada says ‘everything is on the table’ to Trump’s tariff threat. Our money is on Trump – if Biden doesn’t spend the last few cents before leaving office. (Will there be an artifact audit?)

And one last “look at the sky” in Mars and the 2025 Wolf Moon meet in the sky. Though we’re more interested in how the Bulls, Bears, and Wolves will get on in markets shortly.

Around the Ranch: Grown Up Kid’s Books

My buddy the Major and I have been trading “book notes.” Along the way, citing recommendations to pass on to our sons.

His son, by the way, is now an official Lt. Col following the pinning ceremony weekend before this. While talking about this, he made an interesting observation that we never have fully understood. “Why is it that the 2nd. Lt. collar bars are gold, while the 1st Lt. bars (a higher grade) are silver?” Yep – sounds back-asswards to us, but isn’t that the .mill way?

Yeah – we knew it, but just never tasked neurons to “solve for why” on that one. Now, though, we’re in “active wondering” mode.

With the pinning, The Major’s family now features an inverted command structure. Mrs. Major was a Capt. in the medical corps. So, she salutes The Major. (Well, in his dreams, anyway.) And the Major salutes his Lt. Col. son now… (I can’t get Elaine to salute me, even though she was a Spec. 5 and I was a civilian equivalent O4…”Get over it!” I think were her words…

There’s a biblical teaching (Proverbs 27:17) that says “As iron sharpens iron, so one person sharpens another”. Masons are keen on this one.

Hence, we’re starting to compare notes on what we are working to “teach” and “pass on” to our sons. Turns out he sent me an excellence (four page) refresher summary of David Goggins’ book “Can’t Hurt Me.” (Amazon, alone, has sold more than 100,000 copies of this. It’s a great book.)

My suggested read for “the col.” was Cal Newport’s Deep Work because it can be used so effectively by super-busy (or ADHD) people (like me and son G2) to both focus and get all the other (monkey-motion) aspects of Life handled.

One of my colleagues recently did a review of my “The Millenials Missing Manual” a while back and it got a favorable review. That was written to pass on a lot of father-son life lesson framing ideas. So that may be worth a read.

The Major recommended I read the book “Jesus, Buddha, Krishna, and Lao Tzu: The Parallel Sayings.” Sounds like it’s worth time and study, so it’s on the list now. Hardcover is on sale and the Kindle version is just $7 bucks, which I think I can handle…

Monday bottom line? I wanted to throw out for community comments “What are the best books for fathers to pass on to Sons, once they are on their own in life?” Ought to ferret out some worthwhile study materials.

Best-laid plans?

A month or so back, I told you about planting perenial clover in front of our “180-room.” This is the room we head to daily at 4 PM to sip wine and watch the wildlife around here.

Well, the deer apparently are SAG/AFTRA holders. They are not showing up on time for perfomances without better comp plans. The surveillance system caught ’em in the act after we were done with the wine, dinner, and off watching YouTube videos…