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Daily Stock Market Update. May 13th, 2014. InvestWithAlex.com

daily chart May 13 2014

A mixed day with the Dow Jones up 20 points (0.12%) and the Nasdaq down 14 points (-0.33%). 

Let me ask you a question. When you look at the chart above, what represents the X and Y axis? Duhhhh, price and time. Exactly. And with 99.9% of Wall Street analysis concentrating strictly on the “price” part of the equation, let me ask you……

WHAT IS TIME & HOW CAN IT BE USED TO PREDICT THE MARKET? 

I know it is a deep question. There are libraries full of philosophy and physics books that define time in a million different ways.

For our purpose, we have to ask a question. Is time linear or is it cyclical?

The stock market chart identifies time as linear (from past to present to future), yet if you begin to actually study what time is you will very soon come to a conclusion that time is anything but linear.  Nature is not linear. Everything in nature is cyclical. It might look linear to an untrained eye, but once you look under the hood, the situation is completely different.

For example, you are born, you grow up, you live, you grow old, you die. The cycle is now complete.

Same thing is with time. Time does not flow at a constant rate nor does it flow in one direction. Time vibrates and cycles at its own speed and rate of vibration.

Before I get in too deep let me restate it from a much simpler perspective as it applies to the stock market or individual stocks.

Because time is cyclical (not linear) and has its own rate of vibration as it applies to the stock market or individual stocks, that rate of vibration can be determined and as such be used to  identify precisely WHEN any given stock or the overall market will move in any given direction.

Yes, you have heard it right, my mathematical and timing work clearly indicates that the stock market can be predicted and timed to within daily resolution. Due to this, out sized returns can be achieved.

For instance, let’s take a look at today. This same mathematical and timing work clearly shows that the bear market of 2014-2017 is just around the corner. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. May 13th, 2014. InvestWithAlex.com 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

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Ron Paul Asks: What The Hell Does The US Government Want In Ukraine?

Ron-Paul-investwithalex

We have been asking the same question over the last few months……..

The real question is why the US government is involved in Ukraine in the first place. We are broke. We cannot even afford to fix our own economy. Yet we want to run Ukraine? Does it really matter who Ukrainians elect to represent them? Is it really a national security matter worth risking a nuclear war with Russia whether Ukraine votes for more regional autonomy and a weaker central government? Isn’t that how the United States was originally conceived? 
 
Has the arrogance of the US administration, thinking they should run the world, driven us to the brink of another major war in Europe? Let us hope they will stop this dangerous game and come to their senses. I say let’s have no war for Ukraine! READ THE REST HIS VIEW HERE. 

Unfortunately, the US is no longer run by the principals it was conceived on. It is being run by the Industrial Military Complex thirsty for war and profit. And war is exactly what they are going to get. The big one is coming. Nuclear World War 3 Is Coming Soon.When, How & Why

z32

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Shocking: Unprecedented Amount Of Risk In Our Financial System

The amount of risk in our financial system and within our financial markets today is truly unprecedented. It is equivalent to sitting on a barrel of TNT with a fuse lit. With the stock market sitting at an all time high, VIX scrapping the bottom of its trading range, FED tightening and non-existing credit spreads…….this mess is about to blow sky high.

These two charts should drive the point home.

VIX

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credit spread investwithalex

What these charts are suggesting is further confirmed by our mathematical and timing work. Again, our work shows a severe bear market between 2014-2017. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

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Jim Rogers Is Buying Russia And China. Should You?

Jim-Rogers-investwithalex

Typically, Jim Rogers has an extremely long time frame associated with his investments. For instance, according to him China will do very well over the next 100 years. As right as he might be, I don’t have that kind of a time frame.

While Jim is starting to buy China once again, he is worried about the Chinese Credit Bubble. Just as we are. Where Is China’s Hidden Debt Bomb

Personally, I think it’s a little early for China. In my view, the Chinese market will be dragged down even further by its massive shadow banking system and by the upcoming severe 2014-2017 recession and a bear market in the US.

In terms of Russia and as I suggested before, wait and see is the best approach here. There is no doubt that the Russian market looks attractive and that there is literal “blood in the streets”, but to make money timing becomes increasingly important. After all, the Russian market has been in a general downtrend for over 3.5 years and with no sign of a turnaround.

Further, while we do not have enough data, the Russian stock market tends to do poorly during the US Recessions or Bear Markets. Since we anticipate a severe one to happen shortly, it’s another red flag to take into consideration. Either way, I would would wait for a technical reversal prior to taking up a position in this “undervalued” market.

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Jim Rogers Is Buying Russia And China. Should You?  Google

Daily Ticker: Jim Rogers: Forget U.S. markets, I’m buying Chinese and Russian stocks

This week’s optimism about capital market reforms in China seemed to outweigh any investor concern stemming from the referendum on independence held in two regions of Ukraine.

Enthusiasm around China came after the State Council reiterated its desire to liberalize finance in areas such as IPOs and limits on foreign investment — even though some of these measures were originally announced months ago.

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Jim Rogers, famed commodities investor and author of Street Smarts: Adventures on the Road and in the Markets, lives in Singapore and is a prominent bull on China’s long-term prospects. He tells us in the accompanying video that for the first time since 2008 he is buying shares in China “in a small way again,” which includes putting a little more in financial companies given authorities desire to open the economy more, “especially finance.”

He says he’s not buying much in China because of the country’s “big debt problem” — (“it worries me a lot”) — and he’s concerned with China’s shadow banking system.

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When it comes to Russia, the country’s markets have been more than rattled by the crisis in Ukraine, with the main stock index falling 10% in March and the ruble losing 9% against the dollar in the first three months of the year.

Rogers says he bought more Russian stocks during the turmoil in Crimea and is interested in buying more.

Why?

You’re “supposed to buy when there is blood in the streets,” he tells us. “In Rusia, figuratively there is blood in the streets.”

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Daily Stock Market Update. May 12th, 2014. InvestWithAlex.com

daily chart May 12 2014

A substantial up day with the Dow Jones up 112 points (+0.68%) and the Nasdaq up 72 points (+1.77%)

How do you spell Short Squeeeezzzeeeee? In essence, that is exactly what we saw today. While most market pundits will argue that the bull market is back on, I do not share in their optimism. First, very few of the Dow stocks are participating in this rally. Second, there are so many different divergences in most markets that there is no clear sign of anything. Finally, even though the Nasdaq and the Russell 2000 had a massive two day rally, they remain in a clearly defined bearish trend.   As do most of the leading high spec stocks.

More importantly, all markets opened up a large gap up in the morning. As you know from my earlier updates markets tend to close all gaps before resuming their directional moves. Not always, but 95% of the time is a good measure. With a large gap up today and a number of gaps going all the way down to 15,400, it’s just a matter of time before the Dow reverses and heads lower.

That is further confirmed by our mathematical and timing work. It clearly shows that the bear market of 2014-2017 is just around the corner. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. May 12th, 2014. InvestWithAlex.com 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

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Market Climbing The Wall Of Worry….. Huge Rally Ahead?

As the Dow surged passed its all time high the divergence between the Nasdaq and the Dow continues to widen. More so with the Russell 2000. With a lot of market participants suggesting that the market might be climbing the proverbial “Wall of Worry”, how likely is it that the most speculative issues will snap back to catch up to the Dow and the S&P?

Not very likely. What we are witnessing today is more indicative of a short squeeze as opposed to a sustained rally. Particularly on the more speculative indices. When you take the rest of the divergences into consideration, one reality sticks out. Typically, small caps and highly speculative tech companies lead the market. With both the Nasdaq and the Russell remaining in a short-term downtrend, it is highly probable the rally is about to fizzle out. Our mathematical and timing work confirms the same.  

divergence investwithalex

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Breakout Writes: Market divergence: Dow hits new highs, but small caps still struggling

Everyone in the world is now focusing on the extreme equity market divergences. They cause a good bit of anxiety and appear striking to observers forever looking for patterns in the big scheme with which to make sense of the universe.

First, there’s the difference in performance between the large caps and the small caps. The large cap Dow Jones Industrial Average is making new all-time highs while the small cap Russell 2000 closed below its 200 day moving average last Friday.

Second, the number of NYSE stocks making new highs minus the number of NYSE stocks making new lows continues to look mediocre at best even as the Dow and S&P make all time highs.

Something has to give one way or the other. Either small cap under-performance and the relatively poor market internals drag down large caps or the small caps battle back and play catch up.

The million dollar questions go like this –

Is this a healthy washout where small cap stocks and 2013’s momentum darlings, which furiously sprinted higher for months on end, get knocked down a peg in a healthy corrective manner before the broader bull market resumes?

Or –

Is this an unhealthy hideout, where the market senses economic deterioration and money moves from growth to safer larger cap and dividend paying stocks as a last bastion of return before they too give way, get sold and move lower?

My own sense is based on a much simpler dynamic relating to seasonality. These divergences are occurring during the second and third quarters which are usually the weakest half year for stocks and so, if history is a guide, markets will remain choppy and ultimately frustrate most until middle to late September.

As such, I continue to think you sell the rips and look for bargains for the longer term during the most notable periods of fear and loathing.

Market Climbing The Wall Of Worry….. Huge Rally Ahead?

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Investment Grin Of The Day

Recently Updated Stock Market Terms

  • CEO — Chief Embezzlement Officer.
  • CFO– Corporate Fraud Officer.
  • BULL MARKET– A random market movement causing an investor to mistake himself for a financial genius.
  • BEAR MARKET — A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
  • VALUE INVESTING — The art of buying low and selling lower.
  • P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.
  • BROKER — What my broker has made me.
  • STANDARD & POOR — Your life in a nutshell.
  • STOCK ANALYST — Idiot who just downgraded your stock.
  • STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
  • MARKET CORRECTION — The day after you buy stocks.
  • CASH FLOW — The movement your money makes as it disappears down the toilet.
  • INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse.

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Bonds & Stocks Continue To Rally. Who Is Right And Who Will Break Down First.

If you haven’t noticed, both the bond market and the stock market have been rallying as of late. An unusual situation. The real question is……which market has got it right and/or which of these markets will break first?

Will the bond yields begin to rise in tandem with the stock market as the US Economy accelerates growth -OR- will the stock market break down, pulling both the US Economy and the bond market down?

Typically, the bond market is considered to be the “more intelligent” market and I would have to agree with that classification in this particular case. With the US stock market being severely overvalued (in bubble territory) and with the FED tightening in full force, it is just a matter of time before the bond market comes out on top.

This is further confirmed by our mathematical and timing work. Again, our work shows a severe bear market between 2014-2017. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

10 Year Yield

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Google

Talking Numbers: How long can stocks and bonds rally together?

Call it the ultimate game of chicken.

The Dow Jones Industrial Average closed at record highs on Friday. The S&P 500 index is just a few points shy of its all-time highs. And yet, year-to-date, as the S&P 500 continues to defy gravity, investors have been furiously buying up bonds as well.

So, which will break first: stocks or bonds?

Portfolio manager Chad Morganlander of Stifel Nicolaus’ Washington Crossing Advisors thinks bonds will crack first.

“I think interest rates are going to start going higher as the economy starts to improve and accelerate into the second quarter,” Morganlander said. “I think the [10-year Note] could go around 2.85 to 2.90 [percent].” Bond prices and rates move inversely to each other.

According to Morganlander, evidence of an accelerating economy will include nonfarm payrolls growing at a rate higher than 300,000 per month (it was 288,000 in April), higher household credit creation, and housing starts at an annual rate of 1.2 million (it was 946,000 in March).

But, while he sees the 10-year yield getting closer to 3 percent, he is optimistic on stocks as well. “We are quite bullish on the market,” Morganlander said. “We think that the equity markets are going to go higher by about 7 to 8 percent for the year.”

Mark Newton, chief technical analyst at Greywolf Execution Partners, doesn’t think rates will necessarily move up just yet.

“It’s still difficult to argue that the 10-year yield has to move straight up from here,” Newton said. “I know in the long run, that’s likely correct but in the short run, we’ve been very range-bound over the last few months.”

That range in the US Treasury 10-year yield is roughly between 2.56 and 2.82 percent, according to Newton. There is “very little sign, at least technically, that rates should move up right away. The chart overall is still quite bearish.”

Newton sees rates and stocks moving together, but this time to the downside.

“I think we’re going to see a move to 2.45 first,” said Newton about the 10-year yield. “That likely coincides with an equity correction probably between the months of July and September. That’s seasonal time when stocks usually pull back and we see that flight to safety in the Treasurys.

On the longer-term charts, Newton sees the 10-year yield moving down a well-defined trend channel since the mid-1980s. The upper end of that trend channel is currently around 3.75 percent.

“We almost need to get up above 3.75 to argue that a bigger move higher in rates is going to happen,” Newton said. “Rates over the long term are likely going to rise and it’s probably a poor risk/reward for investors. But, I think from a trading perspective, money should flow into Treasuries if the market starts to pull back more for safety reasons.”

“Over the next few months,” adds Newton, “I can still see rates pulling back here, getting back under 2.56 and down to 2.45.”

To see the full discussion on the US 10-Year Note, with Morganlander on the fundamentals and Newton on the technicals, watch the above video.

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The Stage Is Set. Why What Happens In Ukraine Next Will Have A Severe Impact On The US Financial Markets.

Ukraine/Russia/USA/EU/NATO continue to be one of the most important issues. In fact, I continue to believe that things will escalate significantly over the next few weeks.  

It appears that Mr. Putin’s game plan is clearing up. As anticipated, a large % of the Pro-Russian population turned out for the “independence” vote on May 11th. Here is the latest…

What happens next? 

These regions will now ask, in one form or another, to join Russia in order to be protected from the Ukrainian forces. Mr. Putin will happily oblige. Essentially, it’s the same game plan as what had happened in Crimea.  No shots fired, no invasion and Russia regains complete control of East Ukraine.  A great strategy.

The fun starts when Ukraine’s interim government (under the direction of the US, the EU and NATO) refuses to let East Ukraine go (which they will). This should give Russia the pre-text needed to enter Ukraine in order to “defend” its new territory and its people.

As you can imagine this situation will spark a number of economic sanctions (from both sides), political storm, war rhetoric and a million other unforeseen consequences.  It is highly probable that this would be incredibly unsettling for financial markets.  I can tell you one thing, the markets do not have this priced in. The upcoming week is critical.

People stand in a line to receive ballots from members of a local election commission during the referendum on the status of Donetsk region in the eastern Ukrainian city of Mariupol

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The Stage Is Set. Why What Happens In Ukraine Next Will Have A Severe Impact On The US Financial Markets. Google