Open borders and the lack of worker pricing power; a set up for more dovish US Fed policy?

Economists are paid to misdirect

Notice how mainstream economists use logic fallacies such as red herrings and the Chewbacca Defense to wow and misdirect their audiences from the sober reality about what is causing wages to lag the economy. While it may be obvious to us that these economists are promoted by the globalists and their think tanks, most do not comprehend this and are taken by the research of these experts.

Open borders enlarges the labor pool; At the same time employers offer lower pay

I came across this article from Business Insider titled, There’s one simple explanation for the wage stagnation ‘puzzle’ confounding top Fed officials, which attempts to explain why there is anemic wage growth in the United States as well as the other rich nations in Europe. Notice how these economists use a ton of obscure and esoteric terms and research to avoid the real reason wage growth continues to lag expectations for decades.

Is the US Fed really puzzled?

Federal Reserve Chairman Jerome Powell has often expressed surprise at the lack of wage growth for US workers despite a historically low jobless rate below 4%.

“I certainly would have expected wages to react more to the very significant reduction in unemployment that we’ve had,” Powell told reporters during his last press conference, held after the Federal Open Market Committee raised interest rates again in June. “So it’s a bit of a puzzle.”

Business Insider – There’s one simple explanation for the wage stagnation ‘puzzle’ confounding top Fed officials (August 30th)

I believe that the researchers in the article are correct with their theory; there is much more wage slack in the economy than the official statistics infer. While the unemployment rate may be near historically low levels the lack of wage growth demonstrates that there seems to be no inflationary pressures caused by the low unemployment rate.

Can the unemployment rate really drop to 2.5% before inflation picks up?

The Fed chairman should take a look at a new paper from David Bell of Stirling University in Scotland and David Blanchflower, former Bank of England member and Dartmouth College professor. There, Powell will find a simple and convincing answer to his puzzle: the job market is really not as hot as the headline unemployment figure makes it look, leaving workers without the requisite bargaining power to ask for raises.

Unlike Fed officials, who believe the US economy is at or beyond “full employment,” Blanchflower estimates the jobless rate could drop to as low as 2.5% before any substantive wage gains materialize.

Business Insider – There’s one simple explanation for the wage stagnation ‘puzzle’ confounding top Fed officials (August 30th)

How can this be? How can the research provided by the US Fed be so far off the mark? How come the Fed Chair, Jerome Powell, is puzzled with the lack of wage pressures?

The answer; I really doubt Mr. Powell is puzzled. In fact, I am certain all the senior Fed members know the truth. Moreover, I submit most well-known economists know the facts driving this phenomenon, but cannot objectively discuss the answers to the topic as they are verboten. Economists working for the new world order and supporting its agenda cannot mention the real cause.

The elephant in the room that no mainstream outlet can ever discuss – Open borders

We have talked at length over the past couple years why working for a wage is a losing proposition. The wage base continues to deteriorate every year, because of the open borders policy. The current immigrants entering the US and rich European nations are not like the ones who migrated to the the US over the prior 100 years. As a result they have been instrumental in driving down the wage base and suppressing wage growth. This wage growth lag when compared to the true rate of inflation and asset price growth (e.g. houses, cars, businesses, higher education) is structural and permanent.

In the new world order labor supply is unlimited – The beneficiaries of cheap labor promote open borders

…but with open borders, the new entrants into the labor pool come mostly from poor and developing nations and thus, demand less than those who are already in the labor pool.

Chris Pirnak

I could show charts that illustrate how increases in the labor supply will drive down wages and motivate employers to offer lower pay, but with open borders, the new entrants into the labor pool come mostly from developing nations and thus, demand less than those who are already in the labor pool. Many economic sectors have been permanently altered by the influx of cheap labor. Before the free trade agreements were promulgated, jobs in the manufacturing, basic services, and housing construction and remodeling sectors provided enough income to support the financial needs of many families. This is no longer the case.

The worst part is that employers enjoy this low cost of labor and offer lower wages and benefits as a result. We often hear how employers cannot find talented people to fill open positions. The problem is that they refuse to offer higher pay to attract the people they desire.

Don’t blame the weakness of the unions

Notice how Blanchflower discussed how union weakness is partly to blame. He blames this weakness on government policy, but I blame it on open borders. Why? Immigrants have been driving down the wage base domestically for decades. This has effectively rendered the concept of the labor union obsolete. The new immigrants took away any leverage the worker used to have with his employer. If the union employee demands too much the employer can hire a non-union worker for a fraction of the cost.

Two final thoughts
-The findings offer another excuse for the Fed to keep a dovish policy

The result of the research paper has definite merit and I think the US Fed is analyzing its contents. As a result, these findings may offer  more excuses to keep interest rates lower than planned. The US Fed is continuing its dovish policy and I believe it will for the intermediate future. If this is the case then income-generating assets like stocks, businesses, and real estate will continue to offer superior returns. We need to understand that it’s the income-generating aspect that is key.

– working for someone else is a losing proposition

The monetary and economic systems in the new world order are rigged against the average worker. It doesn’t matter whether we are doctors or day laborers. As long as we work for other people and rely primarily on a paycheck for our financial survival we will never be able to keep up.

In the new world order the nation-state is an anachronism. Thus, in theory, labor supply will have no restrictions on movement. We see these trends accelerate over the decades as the open-borders policies enacted worldwide have worked to drive the wage base through the floor in the developed nations. When women entered the labor force they competed against those already in the pool (primarily men) and kept a lid on wage growth. It then became necessary for most households to have two wage earners to support the expenses. Now, with open borders, two wage earners can no longer provide the same standard of living. We see how the deck is stacked against us. Moreover, the globalist-controlled educational system indoctrinates us into the wage-slave system; it tells us to seek gainful employment as our primary goal. This could not be further form the truth.

Recall that deficit spending causes asset prices to rise over the long haul. Thus, in order for us to prosper and get ahead we need to acquire income generating assets. Specifically, we should look for assets that generate income with long-term income and asset price growth potential, while providing superior income tax benefits as well as leveragability – the ability to use as collateral.  This is what the financially successful people strive for.

Working for someone is not a bad concept if we can build a retirement portfolio or if we acquire assets over the years. We can then use the tax code to our benefit as well. Our ultimate goal, however, is to acquire enough assets and businesses to provide us enough income to live. Indeed, there is nothing better than not having a boss, but we can see that non w-2 or 1099 income is usually treated much more kindly for income tax purposes. In addition, our balance sheets will continue to grow over the years as the government deficits climb.

Alex Jones spotted with transgender pornography on his phone

If anyone is still relying on Alex Jones and the other controlled shills in the alt-media as being the tip of spear for the truth movement I feel bad for him or her.

The latest news about Alex Jones’s personal issues helps to explain the inherent inconsistencies between his publicly promoted persona and the facts about his private life that have trickled out over the past few years. If he prefers to look at this stuff, he should just say so and get on with it. But it is clear that his behavior is typical of someone who is suffering from a cognitive dissonance disorder. This makes him the perfect person to compromise. He is a very charismatic and intelligent speaker and has the power to influence millions. Thus the globalists find people like Alex Jones the type of person they seek to promote.

The fact that he looks at trannie porn helps to explain why he acts the way he does, why he was good friends with Charlie Sheen, and why he is close to closeted “truther,” Roger Stone.

Just add this evidence to the trash heap of news that comes out about him. There was ample testimony from his child custody case to turn away any discerning truther, but the fact that his listener base continues to grow is testament to the power of the globalists to promote him as well as the enormous slide in the intellectual capacity of what’s left of the patriot movement.

We need to reassess where we get our news from, especially with respect to alt-financial media. If anyone is getting his or her news from the likes of Alex Jones, Max Keiser, RT, or the copywriters and gold shills on the Daily Reckoning (e.g. Jim Rickards, Nomi Prins) I suggest you seek other avenues before you lose all your money.

I know many find it difficult to believe, but I am certain these people are Masons and are placed into their positions of influence to confuse, bewilder, scare, and impoverish the unwitting followers. It’s  done by design, and with the express, written consent of the Synagogue of Satan.

We need to think for ourselves.

August 30, 2018 – The choice has been made; The US Treasury and Fed are working to keep the US Government in business

I have uploaded a Markets update podcast for August 30, 2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click to download the podcast here.

-Discussing the US treasury market under traditional circumstances is meaningless when the US Treasury and US Fed are working to keep a lid on the 10-year yield.
-Mainstream media has it wrong; The talking head shills on CNBC cannot rationally discuss what is going on with US treasuries if they refuse to comprehend the conspiracy for the one-world financial dictatorship.
-The alt-financial media has it wrong; Larry Kudlow must be working with the US Treasury to keep a lid on yields. The compression of the 2-yr and 10-yr spread is manufactured and has lost its meaning in being an indicator of future economic weakness.
-The US Fed cannot raise rates higher while the US Treasury is taking the contra-side in the futures market. The Large spec short position continues to grow, while the large commercials (working for government) are going record long. If I owned a large portfolio of Treasuries I would be shorting the futures as well.
-Despite all the tariff talk, trade data still point to widening deficits (that’s because the US consumer keeps spending)
-Inflation is continuing to pick up and the domestic economic data looks fine, yet the US Fed continues its extremely dovish policy. However, the Treasury is keeping the Fed in a straitjacket.
-The asset bubbles and higher prices in stocks and real estate can continue as long as the US 10-year can stay at these depressed levels.
-Bitcoin’s price rise may only provide the needed potential energy to allow it to fall further. The alt-coins could not get above weekly channel resistance. Recall that bitcoin cash was a free coin handed out last year. The original owner cost basis is $0.

August 28, 2018 Update – Is Donald Trump being set up? How to spot a conflict of interest

I have uploaded a podcast for August 28, 2018. Click here to go to the show archives page to download the podcast, or you can listen on the link below.

-How to spot if someone is not who he says he is.
-Why is getting loans on collateralized income-generating investments much more difficult than borrowing for personal consumption? Why is it easier getting a credit card, student loans, and car loans than getting a line of credit for rental properties?
-Guess the type of person who gets the $500mm and $1 billion loans for large real estate and business purchases regardless of success?
-An analysis of Joel Skousen and his potential for conflict of interest.
-I don’t have to go to to read up on Alex Jones. I can read the dozens of fresh MSM articles that promote him. Recall that negative press is good, because it piques the interest of a sizable minority of the population.
-Many people would have gone to jail or been sued into personal bankruptcy for many of the frauds and misrepresentations (e.g. Trump University, bankrupting his casinos) Trump has pulled off over his career.
-The most effective way for the “deep state” to keep AJs ideas from spreading is to not mention him at all. He should be a persona non grata in the MSM. But the opposite has occurred; AJs poison is spread far and wide. Another symptom of controlled opposition.

August 26th Update – I agree with you, we are in an “everything bubble”

I have uploaded an Investment commentary podcast for August 26, 2018. Click here to go to the show archives page to download the podcast, or you can listen on the link below.

-An analysis of a Forbes Magazine article titled, U.S. Household Wealth Is Experiencing An Unsustainable Bubble
-Anecdotally speaking, when school psychologists and government workers are worth over a million we know that this asset inflation cannot last forever.

US Fed and Federal fiscal and tax policies are always to blame

-Complaining about these circumstances won’t help.
-The only measure that has become less relevant over time is the U.S. stock market capitalization-to-GDP ratio, as US-based corporations have expanded further into international markets.

Remember, the US Fed is just carrying out orders
Bubbles can last much longer than we can remain solvent

-I can do nothing to change this. However, we can deleverage our personal balance sheets and spend less than we earn. We have much more control over our circumstances than we think.
-Think long and hard about taking on debt to expand a business. Let’s not look at current economic data as the deciding factor. Capitalization rates on everything are lower. Even retail stores and franchise businesses have expanded mightily during this boom as their cost of capital was low.
-The time to take on debt is during the busts cycles. Assets are cheaper.
-Since it takes a lot of knowledge to be good real estate investor, I always suggest getting involved immediately. But, keep the above charts in mind when we make investment decisions. Do the math first.
-We have to take responsibility for our actions. During the last real estate boom/bust cycle, nobody held a gun to the foreclosed borrower’s head at the closing table when they signed the closing and mortgage docs, and took on a mortgage obligation they clearly couldn’t afford.
-We can be ready when the next bust comes. We can pare down debt when everyone is accumulating it.

Market and Investment Update – Perception is reality; The secret to long-term investing success

I have uploaded a Market and Investment podcast for August 25, 2018. Click here to go to the show archives page to get the links to the articles and media discussed and to download the podcast, or you can listen on the link below.
-We all have confirmation biases. How we deal with them is the difference between success and failure.

-Much of the stuff we hear in the alt-media is disinfo conjured up by expert psychologists in DARPA and Arlington, VA. Much of the stuff we hear on MSM is developed by the same people.
-I don’t listen to the popular alt-media shills anymore. If I need to find anything out about Alex Jones, I can read the dozens of MSM articles and news segments that come out daily about him. He’s there to blow up, embarrass, and impoverish the patriot movement.
-A review of US Fed policy changes
-A review of the gold, silver, UST, stocks and other asset markets
-High end real estate continues to suffer. Working-class properties are still the best investments out there.
-Higher rates will cause distress around the globe and could lead to painful market adjustments. We can spot them if we stay objective
-Opportunity cost
-A small but noticeable numbers of homeowners who live in high-cost, high-tax states such as New York and California appear to be fleeing to lower-tax markets. Some communities in Florida, Nevada and Washington are seeing unusually large price jumps in sales of upper bracket homes. Buyers aren’t reticent about their reasons either: Congress’ $10,000 cap on deductions of state and local property and incomes taxes.

Links to articles and media discussed-

Durables Goods Orders Drop Most In Six Months As US Slowdown Accelerates
U.S. Business-Equipment Orders Climb by More Than Forecast
It’s Getting Harder to Pump Up Prices in Cryptocurrency Markets
Hedge Funds Kept Betting Against Gold Even as Prices Began Rally
Durable-goods orders fall for 3rd time in 4 months, but businesses boost investment
COT Gold, Silver and US Dollar Index Report – August 24, 2018
US dollar index chart
10-Year UST COT Chart
Gold COT Chart
gold/platinum ratio chart
10-Year UST Price and COT Chart
Gold Price and COT Chart
Sellers’ price-cutting trend could be good news for buyers

Great News! U.S. government to stop backing institutional single-family landlord loans

This certainly was a coincidence as  I just reported on this yesterday… This story came out this morning. This is great news for the small investor and prospective home buyer, as it raises the institutional investor’s cost of capital. We should be happy with any victory at this point. These types of changes will help to make housing more affordable in the areas of the U.S. that had large concentrations of institutional single-family landlord activity.

Institutional investors don’t need a taxpayer guarantee on top of rental revenues

Fannie Mae and Freddie Mac, the government-sponsored enterprises that help lubricate the U.S. mortgage market, will stop backing loans for single-family investment homes in a nod to the growing controversies surrounding that marketplace.

The Federal Housing Finance Agency (FHFA), regulator of Fannie Mae and Freddie Mac, announced yesterday that both companies would end the two-year pilot programs which were intended to “test and learn” best practices in a market that’s exploded in the aftermath of the financial crisis.

“What we learned as a result of the pilots is that the larger single-family rental investor market continues to perform successfully without the liquidity provided by the Enterprises,” FHFA Director Melvin Watt said in a statement. – Fannie, Freddie will stop backing single-family rentals (August 23, 2018)

Keep in mind that Mr. Watt has been serving in his capacity since 2014 and is a President Obama appointee. Although Mr. Watt’s input was instrumental in beginning this subsidy back in 2016, he was also the force behind concluding the program.

Only institutional landlords advocated this subsidy

“I was glad to see this decision, I think it was a responsible decision and I’m looking forward to continued engagement with (Fannie and Freddie) over ways in which they might modernize traditional investor financing,” said Julia Gordon, executive director of the National Community Stabilization Trust. – Fannie, Freddie will stop backing single-family rentals (August 23, 2018)

Gordon and other housing observers have criticized the enterprises’ decision to get involved in a market in which investors don’t seem to have much trouble raising funds from traditional capital markets sources. The first such step was in 2017, when Fannie guaranteed a $1 billion deal for Invitation Homes, which was then controlled by Blackstone, even as the giant asset manager was preparing an initial public offering.

The National Association of Realtors on Tuesday issued a statement commending the FHFA’s decision. “By financing the purchase of thousands of single-family homes for institutional investors to use as rentals, Fannie Mae and Freddie Mac compounded on inventory shortages and affordability concerns, which are holding back prospective home buyers across the country,” the industry group said. “NAR applauds today’s FHFA decision, and we look forward to continue working with Fannie Mae and Freddie Mac to help more Americans achieve home ownership going forward.”



Housing market being permanently restructured; Institutional money still pouring into single-family housing

Private equity money still pouring into single-family housing

A few days ago, Cerberus Capital announced they were seeking to raise more than $500 million for rental homes. Cerberus, which manages its single-family properties through FirstKey Homes, owned 11,000 homes at the end 2017, making it the fifth-largest owner of rental houses. FirstKey Chief Executive Officer Martin Esteverena has previously described plans to build a portfolio of more than 40,000 homes.

Today, Bloomberg ran a story, which outlined plans for Amherst Holdings LLC to raise more than $1 billion to buy single-family rental homes.

Despite all of the ostensible gloom that has been creeping into the residential housing market, institutional investors are still actively acquiring single family houses. Instead of looking for instant equity gains these private equity firms and single family REITs are staying in it for the long-term as rents continue to escalate.

Large investors started acquiring single-family rental
homes following the U.S. housing crisis, when institutions
including Blackstone Group LP and Tom Barrack’s Colony Capital, Inc. assembled portfolios through foreclosure sales. Wall Street’s acquisitiveness cooled as the supply of distressed
properties ran out. Institutional demand is picking up again as
aging millennials trade apartments for rental abodes to house
their young families.

Bloomberg – Amherst Seeks More Than $1 Billion for Rental Houses (August 22nd)

While patriot radio was warning of catastrophe, the single-family housing market was being permanently restructured

In the wake of the 2008 real estate collapse, while the average person on the street lost their appetite for acquiring single-family residential housing, large institutional money began buying tens of thousands of foreclosed single-family houses. The auspicious opportunity existed for the first time as price plummeted.

Recall all the disinformation that was being spread on the alternative-media. As recently as 2015, people like Dave Kreiger and Lindsey Williams were frequent guests on the Power Hour and Alex Jones Show and were scaring the listeners and keeping them away from buying real estate. They claimed the Mortgage Electronic Registration System (MERS) provided no proof that a holder of a mortgage-backed security held title to a foreclosed home. Thus, these charlatans admonished the listeners that if a mortgage was originated after 2002 and went into foreclosure there would be a good probability that there was a cloud on the future title.

A similar refrain was portrayed on and was picked up all over the alt-financial media and even by the attorneys who wanted to make an industry of it. Even Martin Armstrong got into the act at the time.

The whole irony is that title insurance is specifically designed to cover these potential defects. Unfortunately, the fear selling worked very well and many prospective homeowners were effectively shut out from owning a home at a decent price. Instead of purchasing their future home to live in, they procrastinated as institutional money began to drive prices higher.

Opportunities still exist, but be careful

In many areas of the country this institutional money is slowly taking over the supply/demand dynamic and a permanent rent-slave class is beginning to emerge and grow. Of course, this is being done by design. Despite the Obama regime’s rhetoric of looking out for the common man, President Obama signed legislation just before he left office that allowed the debt of these private equity firms to be backed by Fannie Mae and the other federal housing agencies.

This effectively allowed firms like the Blackstone Group to borrow at much more competitive rates; similar to what a homeowner could borrow with a 30-year mortgage. Thus, Obama’s legislation drastically lowered the cost of capital for much of the institutional money directed toward single family housing. By lowering their cost of capital, this expanded opportunities available to the institutional money as they could now scoop up tens of thousands more houses than they could have previously.

It has been my contention that this process will continue and is being done by design. Thus, it would be in someone’s best interest to continue to build a residential real estate portfolio like the smart money is doing.

Market Update – Price and market action tell everything; Stay objective and free of cognitive bias; More thoughts on real estate

I have uploaded a Markets podcast for August 20, 2018. Click here to go to the show archives page to download the podcast, or you can listen on the link below.

The stories of woe and the market action in the crypto market are identical to the situation with the Nasdaq in late 2000, the gold and silver markets in late 2013, and real estate in 2010. Hope and desperation do not make the markets rise. The crypto shills are at least disingenuous and are full of conflicts of interest. Ronnie Moas has an expensive crypto service, but he lies to his subscribers and says we cannot determine the markets by looking at charts and market action. He is shilling to the bitter end while his subscribers cry the blues.

-We should appreciate the Ronnie Moas shilling as trading is a zero-sum game (minus-sum after trading costs). So, if we make 100k in cryptos his subscribers lose 100k.
-Stop using the social media platforms to get news and trading ideas. They are only echo chambers that reaffirm preexisting confirmation biases.
-80% of futures traders lose money. Only 10% of traders make money. Only trade when we can locate opportune instances. The COT reports can help us, especially when they reveal overstretched markets.
-Private Equity firms are still getting involved in real estate. Cerburus Capital is raising $500mm to purchase single-family rental homes.
-Be flexible with real estate investment. If a person is interested in real estate and he or she lives in a high-priced market (e.g. Toronto, San Francisco) look outside the area. I know of one Los Angeles investor who buys in Barstow and Apple Valley. I know of another LA resident who concentrates in Albuquerque.
-If you decide to invest outside your area, just develop a relationship with a Realtor in the target area who knows exactly what you are looking for. They can manage your real estate portfolio, too.
-I would rather own 4-5 cash cow single-family properties than own a 7-11 franchise. Imagine dealing with all those customers and the hours are endless.
-The FOMC minutes come out Wednesday. Jerome Powell speaks Friday morning at Jackson Hole. With Trump and his demagoguery of criticizing the Fed, we may get some dovish hints. The US Treasury is already cornering the 10-year UST futures market. And the Large Commercials work with the Fed.
-Trading is a mental game. Develop a style that works with you. Trading services are usually a waste of money. There are thousands of way to trade successfully. Our flaws and cognitive biases are our worst enemies.

Market Update – The gold bugs should be very excited. If there is any whiff of Fed dovishness these markets could explode

I have uploaded a Markets podcast for August 18, 2018. Click here to go to the show archives page to get the links to the articles and media discussed and to listen, or you can listen on the link below.

Soft Commodities Hit Record Low With More Losses Seen for Sugar. The stronger USD is killing the prices of the softs and trops with most at decade lows. The economies of the emerging markets are disintegrating as the US Fed has continued to tighten. If the Fed was only concerned about the domestic economy, it should be even tighter.
-The battle rages in the 10-year UST futures market. According to the latest COT report, it is the most oversold in history. The large specs added 100k new shorts to their already massively oversized net short position. The Large commercials are taking the other side and I have to assume it is official intervention.
Fed May End Taper This Year Amid Regime Rethink. If the USFed even hints at a taper pause or provides any dovish tone, the overstretched markets may explode. According to the latest COT reports, the 10-year UST and gold are the most oversold in history.
-If the US Treasury is demanding the 10-year yield remain low, the USFed may have to rethink its fed fund rate increase strategy. Only 24 bps separate the 2-year and 10-year USTs
-For the first time I can remember the Large Commercials have actually net long gold exposure. The Large Specs are outright short for the first time that I know of, and when futures options are included the large specs. net short position is sizable and the Large Commercials are net long.
-I believe we could be setting ourselves up for a massive short squeeze in the gold, platinum, silver, and the 10-year UST markets. If the markets think the Fed could rethink its strategy in any way (even small), gold could easily pop $100 off the most recent low in a few days.
-As the dollar strengthens, USD-denominated assets will be well-bid. I think US real estate is cheap compared to the rest of the world’s developed and developing markets, particularly Asia. I base this primarily on cash flow numbers and price to household income levels.
-If the 10-year UST yield can remain below 3% or so, the only place to go in the US will be stocks and real estate.

Australia and Canada may have debt ratio problems, but the US looks very reaosonable

-Australian and Canadian household debt/GDP and personal income are at historic extremes. I guess that is because foreign money has bid up their real estate.

With low interest rates, the debt service ratios remain subdued. Currently, the US has the lowest rate this of century. More room to add debt.

-The current US household debt service ratio is the lowest it’s been this century. The US delevered a lot after 2008 as much of the debt was worked through and/or written off.
Jim Cramer with somber news for bitcoin. Both we and Cramer were correct in estimating that the bitcoin futures market would cause prices to fall. He is out this week saying equilibrium could be as low as $800-1,000. As usual, the crypto shills are whistling past the graveyard by attacking Cramer for his opinion. I personally think it’s going lower, but Cramer’s estimate is a bit harsh.
-Bitcoin keeps putting in bearish wedge after bearish wedge and I think 6,000 will give way soon to a price eventually as low as $4,700. Notice the trading volume is still high; thus I don’t see it it turning higher any time soon. But, I wouldn’t short a market that already has suffered. Never fight a wounded animal as it may surprise us in the short-term.