Fat Lady Singing? – Stocks

I sort of waved flags about this a few posts back. Market looked toppy. Wedging into a pennant, likely to drop but not actually called out as “it’s dead Jim”. Well, what the charts say right now looks like the Fat Lady Singeth.

Here’s the 1 year chart of the DIA Dow Jones Industrial Average:

Dow Industrials 27 March 2018 year

Dow Industrials 27 March 2018 year

By now you all ought to be able to read that without me hand-holding.

Here’s my read on it though, for any newcomers.

Starting at the top. The price bars are big. We are past the low volatility topping phase (back at mid to end January). Volatility is minimal at tops, highest at bottoms, and increases when moving from a top to a bottom.

At this point, buying options is very expensive as you are buying a lot of volatility premium. This is when selling options pays better. So instead of buying a put (what is best done at low volatility tops) the better approach is to sell a call (preferably a covered call) against your holdings. You collect more volatility premium and it’s unlikely your stock would be called away.

Notice that the price action has “lower highs and lower lows”. Both top and bottoms are stepping lower.

The SMA (Simple Moving Average) stack is fully inverted. Price on the bottom, longest duration on the top, everybody sorted slowest on top to fastest on the bottom. Prices tend to bounce off the SMA stack to the downside from here on out (until a clear bottom reversal forms). Traders will be shorting when price touches the SMA stack and covering on the big plunges away from the stack.

Now look at volume. It’s a bit odd in that usually volume drops at tops and is max at lows. We see some of that, in that volume was getting weak back in October / November. But then it increased into the peak in January. Come February we get the expected volume peak on price plunge. Not sure how to interpret rising volume into a top. Blow off top? Who knows… But clearly now we’ve got a big volume spike on the drop, and little spikes on other drops. Volume is to the downside. Now this is an ETF, and actual best volume to use is the NYSE numbers, but those are hard to get on BigCharts. So this might be an artifact of who buys the ETF instead of the real stock shares.

MACD is quite clear. Red on top. Below the zero line. “Mouth down” at the end. He’s saying out for now (out since end of Jan start of Feb really).

DMI has red on top too. Early “out” call was the inflection of the black line (ADX ) at the end of January. Now, since early February we’ve had “red on top”. Force of the move is weakening what with ADX at just 25.

Now look at the other lines on the chart. SPY & RUT are about the same place (the two redish lines just under the price line) while gold (bottom line) has some blips up (more fear showing in the market). At the top of the graph, the blue QQQQ line shows even the Nasdaq 100 weak. It had a “higher high”, but same shape. Even tech stocks are losing some magic luster.

Here’s the 1 year chart for the S&P 500:

S&P 500 27 March 2018

S&P 500 27 March 2018

A bit more ambiguous.

While DMI & MACD tell the same story, and Volume is a bit cleaner (spike at the end on the down dip is nice and clean) it still has some of the volume up into the tops action. A little unusual, so worth watching.

It’s the price bars vs SMA that’s the really ambiguous bit. SMA stack not clearly rolled over. Merged almost to a point. This usually just precedes what I call a “topping weave”. Where the SMA lines weave together for a week or so before clearly separating to the downside (or more rarely, upside). Price action has slightly higher highs end Feb to mid March. (But also like what the chart guys would call a double top sometimes). Lows similarly slightly higher recently. Odd that. Like there’s still some battle ground action and the big plunge in Feb didn’t rattle the Bulls enough.

Looking at qqqq we can see it has even more “slightly higher” tilt to the peaks (common for the techs vs others). While RUT the Russel 2000 has a bit of pennant “wedge” still going on.

Now what worries me about that whole thing is that the Old Money industrials are weakest of the lot. The “hot money” Nasdaq and RUT are showing more strength. That’s still a topping behaviour. Folks still taking risk in the hot groups. So either it’s slow to sink in that it’s time to shift to Risk Off, or the guys in the staid old Industrials are making a mistake and being too cautious.

So this one still is not being as clear a rollover top as prior cases, even as the DIAmonds are starting to sing on stage.


For a good while now, FANG has been popular as a top of the tech heap moving markets selection. There’s a bit of variation in what it stands for F Facebook, A Apple or Amazon, N Netflix, and G Google (now “Alphabet” and such a stupid name change). I’ve even heard one guy put in Nvidia for N. So here’s a chart with Amazon for A, but with Tesla as the main ticker. Both Tesla and Facebook have had face-plants lately, so we’re going to have a “Tesla vs FANG vs QQQQ” chart.

Tesla vs FANG & QQQQ 27 Mar 2018 yearly

Tesla vs FANG & QQQQ 27 Mar 2018 yearly

Well the first thing that jumps out at you is just how much of FANG is AN… Amazon and Netflix are doing all the heavy lifting. Google and Facebook are just wandering about the same as QQQQ the whole Nasdaq 100.

Now over at the right edge of the chart (where murky future tries to hide) we’ve got serious downturns for Tesla, Facebook, and Google. Even Netflix and Amazon have had a ‘go flat’ for a month. You can’t hide out there. The market aphorism is that “When the paddy wagon comes it takes the good girls out with the bad”.

PSAR the little red dots, is saying don’t even buy Telsa on a trade right now. Volume is showing lots of exits on drops. MACD and DMI both in “red on top” be out configurations.

IMHO, what this is saying is that first off FANG needs to be extracted. It’s not working as a group any more. Second, Tesla has serious stock action issues. It has gone precisely nowhere for a year and is in a down spike now. Google almost the same and Face Plant Facebook about the same.

It looks to me like the bloom is off the virtue signalling and reputational rose and folks are starting to look at actual profit potential again. Amazon and Netflix have some. Facebook and Tesla not so much.

In Conclusion

This market is being more flighty and hard to call than most. I suspect it’s the cognitive dissonance between The Fed taking the punch bowl away with normalizing interest rates (so stocks ought to fall) along with 24 x 7 “Trump Bashing” trying to create panic and negativity; while at the same time the actual economy is doing well (and is likely to be better in the future).

Essentially the prospects for future profits is good, but the emotional clock is being set closer to worry and panic. We’re looking at earnings ratio compression. PE shrinking despite higher E due to dropping P. (So if a company had a 12:1 PE and earnings doubled, it would become a 12:2 or 6:1 while similarly it could become a 6:1 if earnings held steady and price cut in half. What I think we’re setting up for is a 10% more earnings but a 10% price reduction too…)

That’s a guess. Higher interest rates will mean steeper discount rate used for present value of future earnings (so P paid ought to drop). A growing future E hope can only overcome so much real reduction of net present value.

When I look at those charts, I see a “local top” perhaps setting up for a “secular top”. But not there yet.

Still, the Fat Lady DIA Dow Industrials is on stage and starting to belt out some notes. On the 10 year weekly chart (not in the posting) the MACD and DMI are both saying “Be Out” on that secular trend basis. Price is nearing the bottom of the SMA stack (that is still in normal order, being very slow at that time scale) while volume all of last year is very thin and “toppy”. With the recent down months significantly increasing volume.

So for now, it’s protection strategies and hold cash for “buy the dips” at most. I’m just not seeing the upside at the moment. More like the yawning chasm of a blow-off top. If buying anything, it will be a “value” buy (low PE, high earnings, low debt, etc. etc. That whole Ben Graham thing) with a dividend. Stock picking, not hot ideas like FANG as a group. This is “do your homework and check it twice” territory.

But that’s just my opinion of what I’m doing for me. What’s right for you is something for you to decide. I’m not a money advisor nor a stock broker and I don’t even play one on the internet or on TV. I just like explaining how I use charts and how I read them. For educational or amusement value only.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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33 Responses to Fat Lady Singing? – Stocks

  1. jim2 says:

    What with the yuge swing to the upside, it’s not too surprising that just about any hint of what can be perceived as bad news upsets the market. But moderate term, the economy does look good and as I mentioned before, stocks can and do go up as interest rates do likewise. At this point, I’ll go with sideways or up.

  2. E.M.Smith says:

    It usually takes a while for rising interest rates to invert a rising trend. It is one of the things The Fed tries to do: find just that interest rate that is the perfect balance of stimulus and calming. In reality, they often overshoot. There is also an inertia issue. Rate changes today have effect 6 months to a year from now. Central banks must decide what to do now based on conditions a year in the future…

    What we do know is that we have moved from near zero rates (ZIRP) toward more “normal”. This raises the cost to borrow both for physical projects and for market speculation, and raises the hurdle rate for activities intended to make a profit (even trading). That tends to slow economies. The question is: Are they applying just the right slowing pressure for the state of the economy next year? The balance of “Yes” vs “No” belief right now determines sentiment and market actions today.

    I can’t know any of that, but I can see the votes of the players as they “vote with their dollars” in the market. What it says at the moment is a bit muddied (many players with different views) but tending toward worry and reduced confidence. Enough? To much? Will it be a cyclical “buy the dip” moment’ or a secular reversal? Right now, DIA is saying bear market coming while SPY is just at “dip” and QQQQ at volatility while rising. So different players with different votes. Yet FANG is falling apart… The big savior of the markets is having issues. I’m not liking the implications.

  3. llanfar says:

    You neglect the political angle: what if the Fed is raising rates in order to purposely stall the economy?

  4. RickA says:

    I have been waiting since 2015 for a 10% drop in the market to put more money in, which I did recently. I again dumped more money in during last weeks 1100 point drop on the dow. So of course the market could drop! The market always seems to move opposite to my thinking. So I have been buying the dips. Here is hoping the market doesn’t plunge from here. I guess I am betting it won’t. The 14% drop in tax rates is playing a big part in my decisions, as I think we will see some major tax savings helping the markets out during the rest of this year, and especially in 2019, when people and business do their taxes.

    Thank you for your market blogging – I enjoy reading your analysis and looking at your charts.

  5. Larry Ledwick says:

    Here is a little chart of Tesla bonds recent behavior from zerohedge.

    A chart on hedgefunds and their top holdings

  6. Larry Ledwick says:

    Reuters take on the markets.


    My gut reaction is that the Market is a bit confused because the talking heads keep saying how President Trump’s actions will cause things to implode but in stead many signals of economic strength keep showing up such as unemployment numbers, GDP numbers, then to confound that is the worry that the recent run up in stocks just can’t continue for ever, and if I remember carefully is one of the longest on record.

    That is why I let the funds managers at my 401K account worry about it and don’t play the stocks myself, I just don’t need another issue to worry about. The market is what it is and will do what it does and I hope the folks at the fund have a clue.

  7. R.de Haan says:

    What goes up must come down especially what shouldn’t have been up in the first place like a flying Barn Door or Facebook or…Tesla. Social Media in the past were all marked by the Rise and Fall effect. Never thought it would be any different for Facebook but a corrupt and lying Zuck screwing over his “users” and “advertisers”, the road down hill will be rather steep.

    Tesla would have a had a small chance if they would have focused on the manufacturing side of the 3 series and would have addressed the fire issues of their battery packs. Instead Tesla jumped the shark by taking over the failing Solar City corps. All heavily depending on State Subsidies and State and Government loans to keep the business afloat and subsidies to sell their cars. If in this faze of the business entire markets disappear by the flick of a switch (like Norway, Tesla’s biggest market in Europe) simply because the Government no longer subsidizes electric cars, there is no market and without a market no future.

    What else is going on that IMO is posing even more but a drag on the economy short term…..
    Ah, the developing trade war with China and probably Europe. The introduction of import tariffs and trade sanctions never bode well long term. History says so.
    The expulsion of Russian diplomats and the increasing pressure on Russian “partners”, Iran and Syria and Trump’s appointment of what I call a Neo Con War Cabinet.
    Add up the accelerating demise of the oil dollar due to bat crazy Federal Reserve policies and bat crazy, totally irresponsible spending bills, the rise of a new power block introducing the Oil Yuan and all the ingredients are at the table for economic decline and more important war.

    And there is this.
    We had a very cold winter this year but also a very wet one especially in the corn belt.
    I have read reports about massive losses of winter crops and no way for to access their lands due to heavy rain and floods. Situation in Canada even worse. And this winter is not over yet.

    So rising consumer prices, not only for food but also for China goods and energy,

    Just watch it all happen.

    My 2 cents

  8. E.M.Smith says:

    @R. de Haan:

    I’d like to tell you your doom-in-out-time scenario is totally wrong.

    I’d really really like to… but I can’t quite figure out why, or how it is wrong…

    But it just must be wrong, because it means I’m going to be unhappy… and as we all know, a Progressive World View is entirely based on ignoring anything that makes me unhappy…

    1/2 /sarc; of course… ;-)

    In reality, so far it’s only threats of a trade war to get better terms and to root out the crap stuck in trade “deals” (like must endorse Paris and all things green clauses) that would be a major win to remove.

    For the crops, well, it’s still a bit early to see what the real impact will be. Corn, for example, has gone from 120 day plus to maturity types some years back down to 90 and in some cases 60 days to maturity. I’ve even got some seeds for 45 day sweet corn. A “2 week delay” or even “month” delay that would have been terminal for a corn crop 40 years ago is now nearly no impact. Where it does have impact is in places where the short varieties allowed marginal double cropping. There, it’s easy enough to know you won’t make the 2nd corn crop and plant a ‘catch crop’ instead, like very fast buckwheat that’s also more cold and wet tolerant.

    So predictions of imminent food crisis are a bit early. Maybe. There’s also the issue that we likely don’t have enough seed buckwheat to cover 1/4 of the 2nd crop in the mid-west… and then farmers who may not be ready for that the first crop year the problem hits (or even the second) so don’t have seeding and harvesting equipment that can be set up to harvest buckwheat… We just must wait and see how bad it really is (gets…).

    So you really could be wrong… (“Beautiful Dreamer” starts playing in the background…) and everything could be Just Fine (said The Cat In The Hat as he looked scornfully for the Grinch…) and China has said they really really want to be our friends (as long as we pay for dinner and hand over our manufacturing methods and facilities) so I’m sure it’s all going to work out Just Fine…

  9. R. de Haan says:

    Did I tell you I am a born optimist…

  10. R. de Haan says:

    Ice Age Farmer, see youtube, is mapping all the crop loss area’s and events.

  11. R. de Haan says:

  12. R. de Haan says:

  13. jim2 says:

    RDH. I viewed most of the global crop report. Interesting. Decreases blamed on solar minimum.

    However, the doomsayers dismissed fracking as a flash in the pan. It wasn’t, and the reason it isn’t is because people trying to make money invented new fracking techniques. The people who make money growing crops, along with companies like Monsanto, will do the same. There will be some bumps along the road, but I view the decrease in crop production as a stimulus of innovation, rather than the end of the world.

  14. pouncer says:

    As Arlo Guthrie says, “You can’t have a dark, without a light to stick it in.”

    The present dark is actually that grain supplies, worldwide, are in momentary surplus. One year’s weak harvest may strengthen prices enough to sustain some growers that might otherwise exit the markets, so in the long term a dark period brightens the prospects for the grain industry overall.

    Per corn specifically, if corn harvests weaken, the very large fraction of that market now federally mandated toward making ethanol fuel additives COULD be released from those mandates and traded into sectors where it might actually be of economic value. It is a bad thing that the government has this sort of control over what happens. But given that our government does have such control, the good COULD be it’s used to ease the historically-ever-present risk of famine.

    I would love to have a president come to the public, throw up his hands and admit, “They expect me to know everything about all parts of all this [x] … Shit, NO body really knows ANYTHING for sure about this whole fouled up [x] situation. I surely don’t. And I’m done. I’m firing the staff, decommissioning the [x] commission, and my White House and my cabinet, as of today, is out of this whole cockamamie [x] business. You all work it out for yourselves. I think you can. Good luck and May God Bless America.”

    Nearly the same tweet seven days in a row. Monday, [x] = food production. Tuesday, Health Insurance. Wednesday, Education policy. Thursday, Energy distribution. Friday, Labor markets. Saturday, Housing. Sunday, banking and “moneylending”

  15. R. de Haan says:

    @jim2, For me personally goes that I still have to see the evidence of solar minimum conditions in the weather cycles. In that respect I am on par with Joe Bastardi who thinks that none of the current weather events are extraordinary including snow on the ground in 42 US States as predicted for April 10th. The same goes for the cosmic ray record which is increasing but still in the “green” with no concrete evidence of increased cloud cover yet. The next 5 years however will show where we are heading. Fracking i.m.o has a great future although the Dutch gas field in Groningen in the Netherlands will be shut down within 12 years from now due to earth quakes causing real estate damages that run in the billions of euro. The quakes are real but the cause of the quakes is still under discussion. There are those who claim the extraction of the gas is causing the ground to sink which process would trigger the quakes. Others claim that the injection of waste water into the wells is triggering the quakes because it “lubricates” existing faults in the underlying crust. Unfortunately the Green Agenda has no serious opposition in the brain washed low lands which makes the discussion about what is causing the quakes obsolete.

    The Dutch will have to find out the hard way how the highly promoted renewable energy base of wind, solar, heat exchangers, earth warmth and bio digesters will serve them in the near future.
    The German “Energiewende” has turned out to be a total failure and the Dutch optimism about a similar energy strategy for me is absolutely flabbergasting.

    As for Montesanto, the company has been taken over by Bayer. What the do in practice is to adapt a crop plant to a herbicide. The result is the rise of mono cultures where diversity is needed. However, over the past years I have seen two interesting developments emerge.
    The first one is the application of Clo2 (Chlorine Dioxide) to fight plant diseases and fungae in crops (eliminating the need to modify crops through GM) and cheaper and better, crop enhancing mineral based alternatives for Urea based fertilizers. What remains however is the vulnerability of crops, any crops, for high rates of precipitation, unseasonal and early frosts and heavy hail storms.

    What I like about Oppenheimer Ranch Project and Adapt 2030 (among other resources) is the daily and world wide reporting of events you don’t read about in the main stream press.
    I am a skeptic and time will tell which idea’s will proof right.

    The biggest surprises however are in the future.

    Yesterday for example I read an article about Lockheed Martin receiving a patent for a fusion propelled fighter jet, The claim was made that they obviously have the capability to produce a container sized fusion reactor able to power a city of 80 to 100.000 inhabitants and that they have developed the tech to down size this fusion tech to a size and weight that enables the production of a fusion propelled jet.

    If that is the case, a fusion propelled car is just around the corner.

    The recent research performed by the people involved with the Safire Project show an alternative path of plasma manipulation and power generation (a scalable manipulation of a plasma without any magnetic confinement)

    Neither fracking or fusion technology will be able to stop the onset of a reduction in earth’s temperatures but it will tear apart the devastating Green Agenda and promote the return of Emperical based Sciences in regard to climate science and astronomy.

  16. E.M.Smith says:

    I’m not worried about crop losses leading to famine in the advanced economies. It’s places like China and India that are at risk.

    For Europe and N. America, our problems are over production and obesity. That’s AFTER feeding about 1/4 of our grain to our cars, and sending most of the rest through animals at 3:1 best or 10:1 worst conversion of dry grain to wet meat animals. Taken together, this means we could lose about 1/2 to 3/4 of our grain production and nobody need starve. Just stop sending grain into gas tanks and eat the animals then eat the grain we would have sent to the animals.


    Has corn production in the USA at 13,016 Million bushels where a bushel is 56 lbs for corn:


    So that’s 728,896 Million lbs of maize. Or roughly 728 Billion pounds of corn / year. It takes “one dry pound” of grains / legumes / etc. to feed a person for a day. Or 365 lbs / year. Dividing the corn by that many pounds per person-year gives 1996.98 Million person-years of food per year. JUST for maize / corn. That’s roughly 1/4 the world population. JUST from corn JUST from the USA.

    Looked at another way, given the USA has about 400 Million folks (allowing some for Canada and such in a real disaster) we could lose about 80% of the corn crop and still have enough rough grain to stay alive. (Though one hell of a lot of cows, pigs, chickens, fish, ducks, etc. etc. would not be so lucky… 7890 Million bushels go to ethanol / cars and animal feeds combined, or about 7890/13016 = 60% of the corn… with 4345 Million of that being animal feeds or about 1/3 of corn production…

    Now realize that’s with totally ignoring the production of rice, barley, wheat, rye, triticale, oats, beans, soybeans, etc. etc. etc.

    The simple fact is that we’re so drowning in total production of gross dry goods products that massive GLUT is the problem.

    Now some place like India where they mostly eat the grains themselves and don’t have a lot of animals for meat production and have over a Billion people and, well, you get the picture. Where they are already eating most of their production directly, an 80%, or even just a 30%, reduction in gross production would have dire impacts. The unknowns are how much of that kind of production loss could be made up from places like the USA and Brazil, and just where production losses would be greatest.

    Oh, BTW, Germany has massive excess production of Rye. They have the problem of how to get it consumed somewhere, some how. (My suggestion is promoting Rye Whiskey ;-) IIRC they have an active program to promote it for cattle feed…

    So when the Glacial returns, it will be Canadian and Northern European (and possibly Russian) production that will be hardest hit first (guessing from prior ice maps). IMHO that means India is unlikely to have an issue. China gets drought, but they have come through those before. It will be a loss, but not a 100% loss. IMHO there will be ample grain available from the middle to southern USA into Mexico to support much of the Northern Hemisphere. South America ought to produce enough to support Asia. Sub-saharan Africa ought to have no real net change so I’m ignoring it.

    IF that is correct, the real big Aw Shits will arise over:

    1) Convincing the people with money to eat grains and not meat so that the animal feed grains can keep folks alive on the other side of the planet.

    2) Figuring out “who pays” when those in need are suffering agricultural and economic collapse under snow.

    3) Arranging distribution since the 18 wheel truck that hauls corn from Iowa to a feed lot in Texas is not suited to hauling it to Norway.

    4) Convincing people that they ought to be happy and peaceful eating corn tortillas and mushed beans, soy bean tofu, and corn bread and not much else, with a vitamin pill… In the LIA, the French Revolution happened largely because The French refused to give up wheat bread and eat potatoes instead (wheat was beaten down by “unseasonal rain” while potatoes grew fine…)

    Those will be quite enough problems to lead to various kinds of global warfare and collapse of governments. THAT will cause chaos and famine; not the inability to produce enough gross gains to keep the population alive…

  17. Larry Ledwick says:

    On the energy front a new oil field in the middle east.


  18. E.M.Smith says:

    Per Lockheed compact fusion:

    Read the link and a few more. It’s a development concept. I.e. not real. They HOPE for results in 5 years, product in 10. The reality, IF it can even be done, will be more like results in 10 years, product in 20.

    I’ll believe it when they demonstrate a self powered reactor complex… Just like I’ll believe Rossi when his facilities have a zero electric bill… audited…

  19. R. de Haan says:


    As for your much appreciated comment on famine, I really don’t agree.
    We have experienced several huge bottle necks in human civilizations in the past and we now know that almost without exception these “bottle necks” were triggered my one or more huge volcanic eruptions that darkened the skies for really long periods of time triggering a severe cool down of the climate, multi year crop failures on a row, mass migration, conflict and epidemics like the Justinian and black plague that decimated the populations of Europe. No use of counting bushels under those circumstances.


    Even if we would suffer crop losses only due to a colder weather regime,
    I personally don’t see any reason to give up on meat consumption. On the contrary. If we look at the development of agriculture in Europe during the Little Ice Age our farmers got really successful in feeding our populations when they moved from dominantly agricultural farming to mixed farming where the farm animals provided meat, milk, butter, cheese and eggs, severely enriching the daily food menu. Besides that the farm animals also provided the manure that not only increased the crop yields but allowed farmers to use the same piece of land year after year.

    The other big development during the LIA was in shipping and the building of ware houses and storage facilities for grain allowing for trade with the Baltic States and Southern Europe.

    This practice virtually eliminated famin’s from happening at all during the last century of the LIA.

    This is all in huge contrast with the Agenda 21/30 propaganda of the UN who claim that all our foods consumed must be produced locally and we should quit our bio industry in favor of insects for proteine consumption since the Bio Industry is producing too much climate devastating methane.

    As for the Chinese, judging efforts to set up food and resource production ventures all over the world, from Australia to Africa, they obviously have learned from their historic records and so do we.
    We should increase our strategic food stocks considerably and we can do so (if you have a nice place to store the stuff) without leaning on our Governments to take care of that.

    I think I not only speak for myself if I make the claim that we’re just a bunch of lucky bastards so far and we should live the hell out of every day that is given to us.

    Oh yes, and screw the Green fear mongers and the idiots like the late Prof. Stephen Hawking and Elon Musk who believe Mars is a better place to live than our Earth.

    Not that I am against Space Exploration, on the contrary. I am in favor of exploration in any shape or form since that is what humans do and what brings us forward.

    As for your comment on Lockheed Martin (Skunk Works) I can’t tell you how far they are in reality.
    I am as skeptical as you are but, they do have this incredible reputation though and the site I linked is already up for a number of years. I also underline their view on rapid prototyping and the scalability of plasma/fusion tech in general. Their reputation and their patent application for the fighter Jet, filed 4 years ago and now awarded triggered my interest.

    Anyhow the moment they come up with a fusion propelled jet, I’ll buy one.

    For now Gasoline and Jet A1 will have to do.

  20. E.M.Smith says:

    Per Lockheed and Skunkworks:

    If anyone can do it, they can. Yes, IF this has been a black project for 20 years already, they could be in the position they stated (but I’ll still believe it when they ship it.)

    I’ve done a LOT of rapid prototyping. It’s the way to go. You get very early defect removal and very early abandonment of bad ideas. It is not a miracle though. If your goal is impossible, it stays impossible even if you rapidly explore a million ways in which it is impossible… The question is: Is small scale plasma fusion with large energy production economically a tech which is possible? Nobody knows. Many people hope.

    Realize I am NOT saying that they can’t do it. I’m saying that the history of attempts is not good and it’s opaque to projection, so I’ll believe it when the opacity is gone. I’m firmly standing on the immutable high ground of being wishy washy ;-)

    Per Famine:

    I was specifically restricting my comments to “Famine from cold and cold caused rain causing crop failures”. I’m willing to explore other causes of famine, but that’s a huge area and would want its own thread. Yes volcanos and especially really big ones, have done a number on the planet a few times, and will do so again. If Katla lets loose all of Europe will be in dire straits but that has little to do with a cold turn. Similarly if Krakatoa lets loose, or Vesuvius, or…

    However, while folks in a few hundred to thousand kilometer radius are basically toast, the cold / rain issues for folks a continent away would still have the same “bushel counting” benefits. It’s all down to percent of current production lost, and can you divert what is less to more efficient calorie delivery to people. Running grain through animals is very inefficient. Through cars even less. Diverting that to human food works (at anywhere from a 3 x to a 10 x more calorie delivery per kilo of grain fed).

    But do realize this dos NOT mean “giving up on meat”! It means temporarily giving up on grain fed meat. Ruminants like cows can digest foods we can not digest. It is important to include them in agronomy systems even in times of famine. We would eat the kernels of corn, they would eat the cobs and leaves, pasture grasses and “range” too.

    There is a long history of traditional farmers doing just that. When “bad times” come, you cut back feeding excess grains to animals BUT keep those that are eating browse, grazing, and like pigs ‘recycling’ waste products. You just cut back their grain ration as that’s stuff people can eat.

    What is more, if you DO NOT have a meat based diet during good times (i.e. the Agenda 21 / 30 crap and eating bugs) then you DO NOT have the grain production in place feeding those animals so that you can divert it to people when needed. That’s the big flaw in the “go vegetarian now” argument. It means when the Aw Shit happens you are already consuming 100% of the grains. The grains presently fed to animals mean we re already over producing a vegetarian diet level by a fair amount, so can “take a hit” by diverting some to people.

    If folks stopped eating meat now, that production of grains would stop. We would be unable to divert it to human needs in an emergency, and it would take a few years to build up that production. years you don’t have during a famine / crop failure.

    BTW, this diversion method is NOT a hypothetical. Its been used for thousands of years.

    While manure is a good fertilizer, we no longer need it. It’s easier, better, and cheaper to use manufactured fertilizers. At least as long as an industrial society survives.

    Per logistics capacity and food storage:

    Absolutely! It is a high crime that we’ve moved to global transport and just in time shipping instead of having food storage silos. That means zero buffer in case of huge global Aw Shit instead of a regional one. That’s why preppers have taking a DIY approach. But even there, where we used to have a year of grain in storage, I’ve got maybe 3 months max. Still a fail, if a lesser one.

    The only benefits of “Living on Mars” (other than the feel good aspects) are proof of concept for “farming” anywhere on Earth, even frozen wastelands, inside manufactured structures; and that there’s some of humanity off planet who could re-start the place if something like an asteroid destroyed humanity on Earth (once Mars Colony is big enough to be self supporting for a few years AND can get back here on their own…)

    But that’s enough to make it worth doing, if expensive.

    But better than here? Nope. Not by a long shot. And yes, we are extraordinarily blessed to live in a time of comparative warmth and high CO2 / crop levels!

  21. Larry Ledwick says:

    On the prepper food storage angle, best guess is that there are about 3-5 million active preppers in the US alone. If each has food storage for 1 year, that tallys to about 1.09 – 1.83 billion person food days of food pantries in private hands.

  22. R. de Haan says:

    @E.M, Your points are clear. I know feeding corn but also other feed stocks not usable for human consumption is common among the industry but the natural feed stock for cows is simply grass of dried grass, hay for winter stock. That’s why they have two stomachs and why they re-chew their meal. Corn is not a natural cow feed stock. So I really don’t see any reason to cut down on meat under any circumstances. Besides that. In all of our history I have never found an army of vegetarians that a won a battle and I never saw a veggie boxer win a world title. I simply love my steaks and I will not bow to any mumbo jumbo that tells us that meat production is bad for the climate and I certainly won’t shift my diet to roasted krickets or other insects. and I don’t eat no frogs either. Leave that up to the French.

  23. R. de Haan says:

    @E.M. As for Fusion Tech…
    I’ve had a second and third look at the Safire project.
    They have managed to create a stable plasma with a double layer that obviously is something like the holy grail of their research. The double layer not only contains an area with great pressure but also extremely high temperatures. This year they will focus on methods how to extract that heat.
    It has been my understanding that the creation of a stable plasma for an undetermined period and containing that plasma has been the big topic researchers world wide have been working on.
    Well, the Safire people have managed just to do that and all without electro magnetic force fields to contain the process.

    The interesting part is that they approached their project based on the sense that the entire process was based on electric forces. It looks as if they are right because during their entire research to date no nuclear radiation has been measured.

    Because they mastered their stable multi layer plasma with relative low amounts of electrical input and they measured temperatures of 81.000 degrees Celsius or more there is a chance that they will come up with a positive saldo in terms of power generation.

    I really think these people are on the right track.

  24. E.M.Smith says:

    @R. de Haan:

    I fear you have taken the Vegan’s points for mine.

    I am specifically NOT asking you to “give up your steak” or “eat crickets” outside of famine times.

    I am NOT saying corn is the right and proper food for cattle.

    What I AM saying is that, at present, we feed lots and lots of corn to cows, pigs, and chicken. That’s just a fact. SHOULD (or IF or WERE) we have a dramatic and horrid return of glacial conditions that result in a dramatic CROP FAILURE such that there is A DRAMATIC LOSS OF GRAIN PRODUCTION on the order of 50% to 80%, then, and ONLY THEN, a very good COPING STRATEGY is to eat those animals that ARE BEING FED GRAIN NOW and then eat the grain that is produced ourselves.

    Now there are also a lot of grass and range fed cattle. Those animals are continued on pasture as present and harvest and propagated as at present. They form the breeding stock for the future recovery of larger herds once total production can be increased again. They are essential to maximum productivity from an agronomy system and any “vegetarian” shift in the total diet of humanity means a less efficient agronomy system with worse production. I am NOT advocating a move to a vegan world…


    Because there are lands unsuited to growing grains that do a dandy job of growing grass or browse. We can’t use that land to increase grain production so the way to use it for people is to eat steaks and chickens (who ate the bugs on it). Similarly, if we were to STOP eating beef today not only would we lose the productivity of that range land, but we would NOT be growing all the grains we do today. Then, when the Aw Shit happens the 80% reduction would not be from the present dramatically high production, but from “Just Enough” to keep people alive. That would of necessity mean a similar reduction of 80% of the people alive… So it is ESSENTIAL to keep eating your beef steak TODAY so that in the case of a Glacial Onset, we don’t die.

    BTW, Cows have a 4 stomach partitioning, not two.


    Yes, grass is their natural feed. Yet they love grains too and are quite happy on a diet including them (usually with soy mixed in). It isn’t bad or evil to feed them a variety of such feeds and entire industries are devoted to making that mix just perfect for the cow’s health and happiness. I attended an agricultural school and came from a farm town. We raised a few cattle for our own freezer each year. At school, we had “cows with portholes” – basically glass doors sewn into their sides so the students could sample the contents and observe the digestion process without bothering the cow. I know a bit about cows. They are also quite tasty and despite having increased arthritic problems when I eat too much beef, I have it every now and again because there’s nothing like a good Rib steak or T-bone (though my favorite is the Porterhouse).

    So realize I’m NOT saying to “cut down on your steaks”, in fact I’m saying “Eat MORE of them in good times!” so that when a glacial onset happens we have more grain lands already in production and more standing stock of cows to eat while we adapt to the Aw Shit.

    IMHO a move to a vegan world NOW would be horribly catastrophic when the glacial onset begins.

    Hopefully that’s clarifying that I’m not pushing the vegan agenda. I’m talking about what to do as a temporary coping behaviour when everything from Nebraska north is under 2 feet of snow in August.

    Sidebar on Frogs:

    You really ought to give them a try. Unfortunately, they must be very fresh. The ones in the grocery store here are flat tasting and insipid. As a kid, we’d go “Frog Gigging”. Walking at night along canal banks with a bright light and poking a small trident into the glint of a frog’s eyes along the bank. Then at home, you’d empty the gunny sac and prep the meat. Skinned, the legs are tossed in a pot of salted water (where they twitch away) and then floured and fried rather like fish or chicken. Done that way, they are quite tasty!

    Rather like something 1/2 way between fish and chicken. The meat is translucent like fish, and with a vaguely aquatic but not fishy flavor, but more like chicken in being more “chewy’ than fish, rather like a bit of drumstick, and with a bit of the more savory flavor of fried bird, but not a bird flavor exactly. Just delicious.

    Unfortunately I once saw some in the local grocer and snapped it up, only to find that the flavor was gone and it was bland. it would seem that they must be wild caught and rapidly cooked to be right. Oh well…

  25. E.M.Smith says:

    Per the plasma stuff:

    Got a link to the stable plasma details?

    To the extent they got that done, they are on schedule to do what they said. The stuff I saw looked like promises, not reports of accomplishments. A link to “We got these bits working” would be a big confirmation of their path.

  26. Larry Ledwick says:

    Comment by zerohedge on the economy who is to blame or credit and what to expect as the chickens come home to roost.


  27. E.M.Smith says:


    As usual, Zerohedge is way too pessimistic in their presentation of the state of things.

    That said, I found little in that article that is seriously wrong, just over hyped.

    I think things will take far longer than they predict, and not be as abruptly catastrophic when it hits. There’s a lot of room left still for “can kicking”, Trump is busy positioning for a reduction of need for can kicking, and The Fed is an adaptive agency so when raising rates starts to actually hurt, will back off and potentially even lower them again.

    The big problem is a demographic shape problem, and those move at the rate of generations. It’s a retirement / pension problem, and those can suffer from “repudiation”. We’ve already seen some of that as major industries dropped defined benefit pensions for defined contribution; and as bankruptcies shed pensions to the Pension Guarantee Corp branch of the government (who neatly prunes overly large ones to underly large…).

    So it isn’t like one Friday the Fed raises rates to 5% and the economy collapses on Monday… More like a rolling stagflation will start in the worst States and spread over a decade toward the only medium-bad ones… Along the way a load of Cities will declare bankruptcy (if needed, after getting their State Legislatures to pass enabling legislation) and then several States will follow suit (as the US Govt. if needed passes enabling legislation…) then finally the US Govt. will just crank up the inflation money printing and make that $Trillion deficit into a petty cash voucher. Rather like it has done since the 1970s… (Anyone remember when a $Millionaire owned 10,000 sq. ft. Estate mansions on 100 acres in the woods, as opposed to a 60 year old 1000 sq. ft. stucco house in the suburbs of Silicon Valley?) The $Million of 30 year bonds issued then similarly evaporated…

    So yeah, it s horrible mess. Yeah, it’s going to have horrible consequences. No, it’s not going to precipitate on a weekend, or in a month, or even all in the same year.

  28. Larry Ledwick says:

    I always see Zerohedge as a worst case presentation. They seem to have valid points but as you say tend to avoid any of the mitigating issues. That said it is good to have a prophet of doom around to raise issues others are trying to paper over. The most likely path is somewhere in between those extremes but you can’t define the range of possibilities unless you examine bounding cases.

    Like you I am entering that could have retired if a few things had been different age band. As such I am mostly concerned about getting it mostly right and avoiding being catastrophically wrong for about the next 20 years or so. That article came from David Stockman who has a long history of doom and gloom prediction but the fundamentals of his arguments are usually very sound on a technical basis. It is that he forgets the world is an adaptive system and what is now, will not be when all these issues come to a head. The bad news is sometimes the “what is” turns into “what is much worse” if bozos are making the decisions. In that case you want to recognize that the titanic just turned toward the iceberg and started to speed up.

  29. Larry Ledwick says:

    “bozos are making the decisions.” = Jerry Brown and similar.

  30. chiff says:

    Looks like I’m an owner of PG at 75. Sold puts for $1.04. Market ready to make new highs

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