6/16/2016 – A positive day with the Dow Jones up 93 points (+0.53%) and the Nasdaq up 10 points (+0.21%).

What was unheard of in January and February is once again back on the table. Various bullish commentators are once again out in force calling for new all time highs. For instance….

• What Fed? Stocks will post double-digit returns this year, Tom Lee says

“We’ve got inflation picking up; which is good, we’ve got commodities bottoming. The dollar isn’t gaining anymore. High yield probably is the most important thing to focus on; it’s telling us that the stock market should have double-digit gains this year,” the founder of Fundstrat Global Advisors told CNBC’s “Squawk Box.”

• Strategist Jim Paulsen makes case for why stocks are about to hit record highs

Economic growth, not only in the U.S. but around the world, is picking up in a “synchronized” fashion, and deflationary concerns are fading, the chief investment strategist at Wells Capital Management told CNBC’s ” Squawk Box .”

Fair enough. Since the market is close to new all time highs it is fairly easy or convenient to make the prediction above. In essence, it is a 50/50 shot at being right.

But don’t be too eager to load up on stocks here.

• New all-time highs in stocks could be the ultimate trap this summer

U.S. stocks are making yet another run at all-time highs—at least for the S&P 500 (^GSPC) and Dow Industrials (^DJI). But even if that were to happen, that’s no reason to get uber-bullish on risk markets, as there are three significant headwinds facing the markets right now.

Here is the bottom line. The NYSE (largest index by capitalization) trades today just about where it was 2.5 years ago. And if we take recent lows into consideration, lows we are likely to revisit, nearly 3.5 years of market gains vanish into thin air.

Plus, numerous indicators are not confirming the most recent rally. For instance, we are experiencing low volume melt up days while the leadership is lagging. Neither of the leaders or supposed leaders (Nasdaq, Russell or Biotech) are confirming today’s rally. The Dow theory is certainly not giving a buy signal, with Transports barely moving off of recent lows.

The conclusion here is therefore simple. Today’s bullish market remarks are caused by recent market gains or bullish sentiment and should not be used as indicators for future performance. New highs or not.  After all, the sentiment above can just as easily swing negative.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. June 16th, 2016  InvestWithAlex.com

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Matt executed a trade in (TBT) on 6/16/2016 at $32.65  Find out what that trade was (buy, sell, long or short) and why at Demeter Research. 

To learn more about Demeter Research and Matt’s trading/analytical framework please Click Here.

Apparently I am not the only person out there who might be short selling Facebook’s (FB) stock. Unsuccessfully, thus far, I might add.  Other speculators are beginning to pay attention as well. A Short Seller Unfriends Facebook (FB)

The short seller, whose note on Valeant Pharmaceuticals International Inc. (VRX) last year was responsible for a steep drop in the company’s stock price, is bearish on Facebook’s future. In an interview with Bloomberg, he said Facebook “could underperform the rest of technology stocks this year.”

My view about Facebook (FB) remains the same. It is incredibly overvalued stocks and probably one of the best short opportunities out there.

Open any financial media outlet today and you will find Facebook (FB) being praised. Just as Apple was at its top exactly a year ago. For instance, Cramer: Facebook’s most picture-perfect quarter ever for tech

Nonsense. The reality is, Facebook (FB) is massively overpriced and in a speculative bubble. Regardless of its guidance beating performance.

Now, I have to admit something. I hate Facebook with passion. First, it is a cesspool of pointless narcissistic activity. Not for everyone, but the % is high enough. But, I have learned a long time ago not to make “emotional” investment decision. That is why it warms my heart to see Facebook (FB) at such dizzying valuation levels.

Here is why I believe short sellers  should drool all over Facebook (FB)

When Twitter (TWTR) was selling at $48, I wrote this….Why Twitter (TWTR) Should Go On Your “Stocks To Short” List  Less than a year later it is trading 60% lower. With that in mind, I continue to maintain that the worst is yet to come for the company. By the time upcoming bear market ends, Twitter should be below $10.

With that in mind, I believe Facebook (FB) presents us with even a better shorting opportunity. In fact, I continue to believe that Facebook is one of the best shorts out there.

And while most investors today will laugh at me when I suggest that Facebook (FB) will see $20 a share over the next 3 years, I will laugh back when it does. I promise. Here is why……

• As discussed over the last few days, Facebook is massively overpriced. At its $320 Billion market cap, the company is now worth more than GE. At 10th the revenue base and a P/E of 95. I guarantee you, investors in Facebook today will look back in 2-3 years and wonder “What the hell were we thinking?”.
• I am beginning to notice quite a bit of fraudulent activity on Facebook when it comes to likes, promotions, paid advertising, etc… That is firsthand knowledge, but you can Google the same and do your own research. That suggests the Facebook is running out of growth and its multiple is not justified. By a long shot. I wrote about it here Why Facebook Remains An Amazing Short Opportunity
• See those massive gaps all the way down to $20 a share? Yep, they will have to be closed at some point.
• We are on a verge of a multi-year substantial bear market. Click Here. When such bear markets develop, if past is any history, such overvalued and over hyped stocks tend to lose 80-90% of their value. Just as the gaps above suggest. I don’t know why this time would be any different.
• Short interest is low.

Finally, even at $20 a share, Facebook will be extremely overpriced. In other words, I just gave you a potential 80% gainer, but its up to you what you do with it. As always, TIMING is the key here. With that said, if you are willing to hold this stock short over the next two years while riding out all of the ups and downs, your gains on the short side should be significant

6/15/2016 – A negative day with the Dow Jones down 35 points (-0.20%) and the Nasdaq down 9 points (-0.18%) 

It is becoming abundantly clear that the Fed won’t be raising interest rates anytime soon. As we have maintained here for over two years.

With that in mind and as a consequence, here is the fundamental setup we are facing today.

General Overvaluation: 

The stock market is selling at the third highest valuation level in history. On par with 1929 and 2007 tops, and slightly below tech driven 2000 spike higher. 

Revenues, Earnings and Economic Data: 

There are too many data points to cover in this short summary, but we have been talking about them for years. For instance, GAAP Earnings Collapse 18% As Valuations Approach “Insane Levels”  So much so that multiple observers or analysts might argue that the US Economy is already in recession. You can presently find quite a few economic indicators at their respective 2008 and 2009 lows.

No Fuel Left:

Simpy put, the Fed is done. Even today’s more dovish tone has failed to produce a rally. Here is the hard cold truth. The FED can cut interest rates by a laughable 25 bps before we are at zero again.

Sure, they can talk tough and suggest another round of QE or even negative interest rates. At the same time, they won’t do so until the stock market receives a good beating. Even then, how much can the above propel the market…… a few hundred or a thousand points on the Dow? Perhaps.

All things being equal the EU and Japan point to an unsettling conclusion. Crazy talk, zero interest rates, QE and outright monetization will eventually fail to push the market further.

That is to say, call me insane, but I don’t see how any of this ends well.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. June 15th, 2016  InvestWithAlex.com

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6/14/2016 – A negative day with the Dow Jones down 58 points (-0.33%) and the Nasdaq down 5 points (-0.10%)

I have maintained for close to two years that the Fed won’t be able to raise interest rates in any meaningful way going forward. And what was a delusional forecast to some just a few years ago, is a now a reality. Here is what was said two years ago Why The FED Will NOT Be Raising Rates Next Year

In terms of tomorrow, I will simply repeat what I have said here a year ago. But with one slight adjustment. While the Fed is unable or unwilling to raise interest rates on their own, the market might be getting ready to do it for them. At least according to the charts.

Previous Forecast:

I am 75% confident that the FED will not raise interest rates at all and 100% confident that they will not raise it in any meaningful way. What is meaningful? Even 8 separate hikes at 25 bps each would be laughable here.  And while anything above that will matter, I am extremely confident that we will not even get close to that over the next 2-5 years.

Here is why…….

• China has launched an official currency war by devaluing the Yuan 6 times (thus far) over the last few months. Japan is trying to do the same and the EU is now implementing further easing and QE. In this ocean of devaluation, the US cannot afford to have a strong currency.
• Plus, the US Economy is rolling over into a recession. Some of today’s official numbers are starting to reflect that.
• We are on the verge of a massive down leg in our equity markets. At least based on my mathematical and timing work. The stock market is extremely overpriced.
• Commodities have collapsed.
• Deflationary forces are reappearing throughout the economy.
• Etc….

As I have mentioned before, this is the worst case scenario for the FED. They are already TOO LATE. Now they are stuck in a situation where our economy and capital markets collapse while they are rendered powerless. As soon as other investors realize that……well…….watch out below.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. June 14th, 2016  InvestWithAlex.com

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Jim Cramer, not Kramer as pictured above, is once again making fun of the bears. Just as he did prior to all other market declines. Jim Cramer — ‘The Real Market’s Healthier,’ So Ignore the Bears

We know that the big guns, investors like Icahn, Soros, Druckenmiller, El-Erian and Gundlach all hate this market. It’s so easy to hate. The economic backdrop seems phony: the Fed can wipe away the gains in a heartbeat, oil controls the tape, rates are so low that they artificially drive capital into equities, and the global drive to negative rates could frighten anyone. But here’s the thing: while the market always feels like it is about to roll over, the widening breadth is staggering, with new groups gaining strength seemingly out of nowhere.

Now, consider this. Just as the market was hitting multi year lows in January, Mr. Cramer turned super bearish. Calling for an outright market crash. I wrote about it here. Cramer Turns Super Bearish. Time To Go Long?

And, just a few trading days prior to the Dow topping out on April 20th Mr. Cramer incouraged his follower to load up on some of the most speculative issues out there. I wrote about that as well. Cramer Predicts A Massive Rally. Time To Go Short?

In other words, Mr. Cramer simply comments on the current state of the market or psychological backdrop at any given moment. That is very different from actually forecasting what the stock market will do next. For that, Click Here. 

I just thought you should know.

6/13/2016 – A negative day with the Dow Jones down 133 points (-0.74%) and the Nasdaq down 46 points (-0.94%).

Shockingly, RT is emerging as a good source of financial information in our tightly controlled corporate media environment.  An excellent interview with Marc Faber is below. Covering a wide range of topics including politics, upcoming presidential election, financial markets, investment opportunities, etc…. Definitely worth a few minutes of your time. 

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. June 13th, 2016  InvestWithAlex.com

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