$4.00 Spam Marks the Market Top

Yes, Spam, the compressed pork product from Hormel that the Hawaii has turned into some great delicacies, like the Spam McMuffin.

The classics never go out of style.

Normally on Sunday nights I contribute to the MacroEdge team with my works, but due to my mother’s sudden hospitalization I was delayed. Thanks to everyone who expressed concern but she’s going to be okay and released this weekend.

What I had intended to write about was the horrid breadth in the markets and terrible indicators lurking under the surface. Fast forward to this evening and the following postings might provide another hint that as Q2 is coming to a close and while new all time highs are possible in equity fantasy land, somebody knows something.

First up, the $NVDA CEO:

Jensen Huang just sold another $31 million of $NVDA.

That brings his total sales this week to over $90 milli.

It’s his largest cluster of sales in 19 years. pic.twitter.com/D5oyFNIxZo

— Jason Goepfert (@jasongoepfert) June 22, 2024

He sold $90 million in stocks in one week? Maybe the AI voices in his head told him to do it. But it’s not just Mr. Huang:

Nvidia $NVDA executives, including CEO Jensen Huang, have sold shares worth more than $700 million so far in 2024.

This marks the most significant insider selling spree since early 2023.

Simple profit taking, or do they know something we don't? 🤔 pic.twitter.com/5oISNvsEAV

— Jesse Cohen (@JesseCohenInv) June 20, 2024

Next up, the CEO of $AMAT:

The CEO of the 2nd largest semiconductor manufacturing equipment maker in the world, Applied Materials, has their CEO selling 25% of his stake in the firm.
Nearly half their revenue comes from China.
I've been telling Commerce Dept about restriction loopholes for a while. $AMAT

— Dylan Patel (@dylan522p) June 22, 2024

I can not see blaming China for this. If demand in the US and EU is that strong, then there would be no reason to bail out now, in fact, buying more stock would indicate faith in the “strong” American economic theme.

However, insider sales are not the theme to watch. That’s just a peripheral indicator of trouble on the horizon as they usually know when the party is up long before the bagholders, aka, retail.

It is the sad state of videos like this one below, which tells you how the real people feel and why the markets and economy are at a tipping point.

This is most of America. The Middle Class.

I feel your pain brother. pic.twitter.com/o2IOkKL6zz

— QE Infinity (@StealthQE4) June 19, 2024

Now just what the hell does this have to do with a can of Spam?

Everything.

From the Hormel home page:

What is SPAM?

SPAM is a canned lunch meat product that first hit shelves in 1937. It was created in Austin, Minnesota by the manufacturers Hormel Foods. Toward the end of the Great Depression, SPAM helped fill a huge need for inexpensive meat products. And its popularity only grew. “It cemented its place in the culinary world during World War II, due to its ability to be stored for long periods of time,” explains James Schend, food editor at Taste of Home. “It could be easily shipped around the world.” And it was, both then and now; today SPAM products are available in 44 different countries, according to their brand site.

(emphasis mine)

The idea of a canned meat product that families could afford was attractive, popular, and a boom as the Great Depression, despite what your history books tell you, was still ongoing in full force in 1937 when the secondary wave of inflationary wage pressures collided with government regulatory overreach and deflationary surges in the United States.

Thus when I visited a local Walmart, normally the cheapest place to buy groceries outside of the Dollar Tree (now $1.25 and rising), I was shocked to see this:

That’s correct boys and girls, right at $4.00 for a can of Spam. A product just a decade ago was available for about $1.99.

Everything in an long duration inflationary period reaches a breaking point. When meat products like Spam become unaffordable, individuals like the man in the video above appear everywhere. When risks appear in markets near a top, insiders liquidate their holdings as much as legally possible, take their profits and run.

The American breaking point is here and now. It is evident in the housing markets, insurance, hell, the companies are now cancelling pet insurance for Pete’s sake.

Nationwide dropping 100,000 pet policies. Could more companies follow?

This will leave the same broken, frustrated, middle class pet owners who can barely afford food for their families, insurance for their cars and homes, and medical care for their pets with another unforeseen problem.

For my readers who tire of my rants, just remember that in technical analysis and market history, the same irregularities in markets usually indicate a shift in direction, sometimes violently. This is most true after a central bank or government compounds the mistakes with poor policy decisions.

Heading into the end of June, remember this fact:

Breaking points mark tops.

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