InvestWithAlex.com 

Subscribe Today
My Account

Category: Invest with Alex

Posted on

These Shocking Charts Lead To Bullish Nightmares. At Least They Should.

Daily Chart AAMarch 24 InvestWithAlex

3/24/2016 – A positive day with the Dow Jones up 13 points (+0.08%) and the Nasdaq up 5 points (+0.10%).

As we push into the long weekend, the market is as complex as ever. From a bearish standpoint the market is extremely overbought, at least short-term. Plus, the rally off of January/February bottom has most of the trademarks of a bear market rally.

On the flip side, bulls have quite a few things going in their favor. For one, overall investor sentiment remains bearish. Open any financial media terminal and you will find it full of “Bear Market” or “Market Crash” articles. Further, no one seems to believe this rally, with quite a few big investment banks recently coming out with an actual sell recommendation.

Can it be that easy?

Let’s skip the philosophical discussion and go straight to some important charts.

Chart #1: Hey everyone, look at all of those gaps. If you think the market won’t come back to close them, sooner or later, you are living in a fantasy land.

dow gaps

Chart #2: Oldie but goodie. Again, overall earnings/economy are slowing down while Shiller’s adjusted S&P ratio is at its 3rd highest level in history. And on par with 2007. Investors have paid more for stocks on two other occasions. In 1929 and 2000. But, unlike yours truly, most bulls don’t mind paying the same premium today.

s&p shiller

Chart #3: NYSE (largest index by capitalization) is in a clear bear market. Despite the recent rally.

NYSE chart 4

Chart #4: The USD is refusing to sell-off. Despite the FED’s super duper “Dovish Tone”.

Dollar index

Chart #5: Oh, in case you forgot, inflation adjusted S&P hasn’t gone anywhere in 16 years.

S&P inflation adjusted

Chart #6: Risk assets that would typically lead a bull market rally are not confirming. Just take a look at this Russell 2000 chart. Plus, the previous market leader Biotech (IBB) is refusing to cooperate as well. These are just a few. There are many other.  New Bull market??? Yeah, sure…..to infinity and beyond.

iwm chart ibb index3

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. March 23rd, 2016  InvestWithAlex.com

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


Posted on

If Our Entire Universe Is Holographic, What About The Stock Market?

holographic universe

I love science and mathematics. Yet, once you start digging deeper you soon come to a realization that our physical 3-dimensional reality doesn’t make sense. So much so that what is available to our human senses is just a small fraction of our true reality. In other words, human existence is nothing more than an advanced computer simulation. Leading physicists across the globe are starting to come to the same realization.

There Is Growing Evidence that Our Universe Is a Giant Hologram

What does any of this have to do with the stock market?

Everything. Just as our human reality is nothing more than a shadow of higher dimensions, the 2-dimensional chart we all follow is just a shadow representation of true market moves. Here is how the stock market really works.

The markets being, at minimum, a 3-Dimensional phenomena, exactly like a large molecule rotating in space, in and out of the Z plane, with DNA coding sequences governing the entire process. Without understanding that the market is 3-D, twisting like a plant governed by the phyllotactic laws of dual number series and harmonic composition and decomposition, all measurements taken on a 2-D chart become misleading.

Mind blowing. By the way, human beings have the ability to jump to this higher dimension of reality through extensive meditation. Most traditions around the world call this “enlightenment”. In scientific terms, it is identical to electrons jumping between quantum levels. Once enough energy is accumulated within the human mind/body structure (through meditation), this quantum jump is automatically made.

Z30

If Our Entire Universe Is Holographic, What About The Stock Market? Google

Posted on

It’s The Valuations, Stupid

Daily Chart AAMarch 23 InvestWithAlex

3/23/2016 – A negative day with the Dow Jones down 80 points (-0.45%) and the Nasdaq down 53 points (-1.10%) 

David Stockman summarizes why today’s bear market is just getting started. My thoughts exactly.

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. March 23rd, 2016  InvestWithAlex.com

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

Posted on

The Death Of The USD? Not So Fast

Dollar index

Last week Janet Yellen and the FED delivered what appeared to be, at least at that time, a death blow to the US Dollar. I wrote about it here Central Bank Mafia Goes All In…Stocks Rally…A Little

Yet, and as the chart above suggests, the USD has started to recover after its initial spike lower. Hardly a down move most market bulls or “inflationists” would expect.

The question is….why?

That is what Matt Demeter attempts to answer in his research. Here is what I can tell you. Last week or post the FED announcement Matt was looking for a major Dollar bottom at around 94.70. DXY bottomed on Friday at around 94.60.

But it gets even better. According to Matt’s mathematical projections the Dollar isn’t done with its bull market. A major higher high is still in its future. Take that Janet Yellen.  If you would like find out more about Matt’s work and what the USD (and other currencies/commodities) will do, please Click Here. 

Z31

Posted on

Did The Stock Market Bottom?

Daily Chart AAMarch 22 InvestWithAlex

3/22/2016 – A mixed day with the Dow Jones down 41 points (-0.23%) and the Nasdaq up 13 points (+0.27%) 

The bulls are back. As confident as ever……

Investors are getting caught paddling upstream, and as they turn their bearish boats around, the tide will continue to rise for stocks, argues Tom Lee of Fundstrat Global Advisors.

“Economic indicators this week may show the U.S. economy experienced a mild slowdown but is not headed for a recession,” Richard Turnill, the global chief investment strategist, wrote in a report Monday on the company’s website. Investors should have an “underweight” position in Treasuries, according to the report. New York-based BlackRock manages $4.6 trillion

But not everyone thinks that way.

I wouldn’t necessarily say “Untradeable”. We need a longer-term perspective here.

NYSE chart 4

NYSE is the largest index by capitalization. One can argue that the index topped out in June of 2014. Exactly 5.25 years after an important March 2009 bottom. Or right on schedule as per my 5 year cycle forecast.

Throughout last year I told your that the NYSE was either distributing or consolidating. Hinting at distribution due to slowing economy, overvaluations, the end of QE, higher interest rates, etc….. It is now clearly evident that the index was indeed distributing throughout 2014 and 2015.

Today’s question is……..is the bottom in? 

My answer is simple. Why would it be? If anything, things are worst now then they were 6-24 months ago. Particularly if you take today’s valuation levels into consideration.

GAAP earnings are down 18% year over year. More worrisome, many expect this trend to accelerate. Shiller’s Adjusted S&P P/E ratio is close to 26. The 3rd highest level in history of the stock market.

So, unless the US Economy stages some sort of miraculous double digit growth recovery here, I think the answer fairly clear.

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. March 22nd, 2016  InvestWithAlex.com

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

Posted on

How Yuan Devaluation Will Play Out

china concrete

The chart above is truly jaw dropping. I have written about China quite a few times last year. For instance, Is China About To Collapse – Drag Us All Down

Hedge fund manager Kyle Bass has a very good take on the same subject matter. A view worth studying.

Over the last ten years, China’s banking system has grown from less than $3 trillion to $34 trillion, equivalent to around 340% of Chinese GDP. To put it in perspective, the US banking system had about $16.5 trillion of assets heading into the financial crisis, equivalent to 100% of US GDP. “Credit has never grown faster or larger than it has in China over the past decade,” Bass wrote in a letter to investors dated February 10. There is no precedent.

He goes on to say….

What does this mean for Chinese banks? There is a bad answer and a worse answer. The bad answer is that Chinese bank capital – the equity buffer – is significantly overstated. A TBR requires much less capital to be set aside (only 2.5c as opposed to 11c for an on-balance sheet loan) at the time of origination (anyone thinking Fannie and Freddie?). Adjusting reported bank capital ratios for this effect changes reasonable 8-9% Core Tier 1 capital ratios (CT1) to undercapitalized 5-6% levels. Now, the worse news. TBRs are one of the biggest ticking time bombs in the Chinese banking system because they have been used to hide loan losses.

Finally…..

“One can make many assumptions regarding the collectability of such loans, but our takeaway is that the system is already full of massive losses,” he said. WMPs, TBRs, and the 8,000+ credit guaranty companies constitute the majority of China’s shadow banking system. This system has grown 600% in the last 3 years alone. This is where the first credit problems are emerging, away from the eyes of regulators. The Chinese government has the capacity and the willingness to do what it needs to do to prevent a banking system collapse. China will save its banks, and the renminbi will be the valve for normalization. It is what any and every government would do if put into a similar situation. China should stop listening to Kuroda, Lagarde, Stiglitz, and Lew and start thinking about how to save itself from the impending disaster in its banking system.

What does all of that mean? 

China only has two options. An outright banking and economic blowup/collapse or substantial Yuan devaluation. Invest accordingly. The problem is, everyone is trying to devalue their own currency, with the FED/USD attempting to join the party this past week.

Z31

Posted on

What You Ought To Know About Q-1 Earnings

Daily Chart AAMarch 19 InvestWithAlex

3/21/2017 – A positive day with Dow Jones up 21 points (+0.12%) and the Nasdaq up 13 points (+0.28%) 

In the past we have looked at how out of touch with reality today’s GAAP vs. non-GAAP earnings are. Case and point…..

Here is the latest.

Companies haven’t fudged their numbers this much since the financial crisis

“The gap between GAAP (reported) and pro forma (adjusted) EPS continued to widen in 4Q, with the GAAP/Pro forma ratio of 0.74 still at its most extreme levels since 2009,” Bank of America Merrill Lynch’s Savita Subramanian said on Monday. “Trailing four-quarter (2015) GAAP EPS came in at $87 vs. $118 for pro forma EPS.”

And that goes to the heart of the matter. GAAP earnings are collapsing at the fastest pace since 2008 financial crisis. Meanwhile, stocks are still selling at historic “bubble” level valuations.

s&p shiller

Once again, the market was selling at higher prices in 1929 and 2000 tops. We are now on par with 2007 top. We all know how all of that ended.

Now, an argument can be made that the US Economy and earnings are about to accelerate higher and resolve the imbalances above. Yet, I would like someone to explain to me exactly how that would happen.

Recall, most of the earning growth over the last few years, or since 2009, was liquidity driven (QE, zero interest rates, stock buybacks, etc). There very little evidence to suggest that we will miraculously recover.

For that to happen we would need to see productivity gains, new technologies, CAPEX and growing wages across corporate America. We are not seeing any of that. Again, what the FED did is it infused a dying patient (post 2008 economy) with massive amounts of “heroin and cocaine” in order to stimulate economic activity. Now that the effects of those drugs are wearing off, there is no fuel left.

What’s more, any more “stimulus” is likely to kill the patient. Invest accordingly.

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. March 21st, 2016  InvestWithAlex.com

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

Posted on

Central Bank Mafia Goes All In…Stocks Rally…A Little

Daily Chart AAMarch 18 InvestWithAlex3/18/2016 – A positive day with the Dow Jones up 118 points (+0.68%) and the Nasdaq up 20 points (+0.43%). 

The last two weeks were quite extraordinary. In a sense that all major central banks have gone “All In“. The Bank of Japan has already gone negative. China continues to devalue the Yuan while injecting more capital. Last week the ECB and Mario Draghi went all in. I wrote about it here……ECB & Draghi Go All In……Markets Yawn This week, Janet Yellen followed up with FED’s Stunning Admission

An independent observer might just inquire……What the hell is going on? 

I think you will find most of the answers in this article.

Did central bankers make a secret deal to drive markets? This rumor says yes

Rumors are flourishing that global policy makers made a secret deal at the G-20 meeting in Shanghai late last month. This “Shanghai Accord” to weaken the greenback was aimed at calming the financial markets, which had gotten off to an awful start to the new year, according to the chatter.

That sounds about right. And the result? Most bulls are rejoicing….at least for the time being.

Wonderful……right? Not so fast.

Basically, here is what you have to understand from all of the above. 

  • The Fed/ECB/BJ/PBOC have gone all in and then some. And what did that intervention get them? A weaker dollar (not by much) and a 2,000 point rally on the Dow (thus far).
  • Yet, the fundamental reality remains the same. The worldwide economy and earnings are coming to a screeching halt while the stock market is selling at historic bubble valuation levels. As described in multiple previous posts on this blog.

As a result, the real question investors should be asking here is…..

What happens when earning decline and economy rolls over into a recessionary environment…… all while investors realize that stocks are selling at dizzying valuations levels and that central bankers have already gone “all in”???

I can think of quite a few scenarios, with none of them being too kind to today’s bulls.

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. March 18th, 2016  InvestWithAlex.com

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

Posted on

Demeter Capital Weekly Report & COT

As you already know, Matt Demeter’s (Demeter Capital) weekly coverage concentrates on some of the most popular worldwide indices, futures, bonds, stocks, commodities and currencies. Matt’s work is some of the most accurate I have ever seen and it shows. The table below represents just a small portion of work available from Demeter Research. To learn more and to see Matt’s work in action, please Click Here.

Report Date: March 13th, 2016  (Including COT Reports). 

For up to the minute long-term and short-term analysis on all of the markets below, please Click Here Demeter Research