Just imagine for a second that your plane is cruising at 30,000 ft, or in the case of the Dow at 18,000 ft, when one of its engines suddenly blows. Let’s call that engine “zero interest rates and QE”. Not a big deal. Most planes will land without a problem with just one of its engines being operational.
Stocks with big buyback programs are struggling this year, and according to one technician, a similar lag has previously preceded two market crashes.
As was mentioned here before, when it comes to the stock market and buybacks, Corporates tend to behave in the same fashion as most individual investors. They buy at the top and sell at the bottom.
Sure, it is easy enough to borrow at zero interest rates and then use that money to purchase stocks. Artificially driving up the prices. But there is another ominous sign to watch for. Credit spreads. Should credit spreads continue to widen, as has been the case lately, our proverbial second engine might blow too. If it hasn’t already.
That is to say, the stock market finds itself in an incredibly vulnerable place. At dizzying valuation heights and with no fuel/engines left to support its flight. I doesn’t take a genius to figure out what happens next.
1/12/2015 – A positive day with the Dow Jones up 118 points (+0.72%) and the Nasdaq up 48 points (+1.03%).
When legendary money manager Jim Rogers speaks, you better pay attention. Or not, at your own detriment. I don’t think he can be any more clearer here and I found myself agreeing with most of the things he had to say. If you participate in financial markets, this 5 minute video below is a must watch.
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 mySubscribers 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, pleaseClick Here). Daily Stock Market Update.January 12th, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Most technicians will look at today’s oversold technical indicators and suggest that the market is ready for a strong bounce. If not an all out market rally.
And they might be right. Last week’s sell-off was marked by a number of inconsistencies. For instance, a number of down gaps leading all the way up to 17,500 on the Dow. Suggesting that the market will experience a strong bounce sometime in the near future.
A fairly good technical overview of today’s oversold conditions and what that means can be found here…..
But here is what I find interesting. Despite the bloodbath last week, and contrary to some of the indicators above, very few people are panicking. And while this is anecdotal at best, everyone I know expect this market to recover and then push to new highs. You can say that the “Buy The Dip” mentality is very well entrenched.
My question is………what if the market is not done selling off?
And while we will certainly get a bounce in the near future, any such bounce might be short lived or not what most investors would expect. And considering today’s investor complacency, it might take another move to the downside, to the tune of 1,000+ point on the Dow, before investors see today’s market in a different light.
Of course, this is just another view point to consider.
1/11/2015 – A mixed day with the Dow Jones up 52 points (+0.32%) and the Nasdaq down 6 points (-0.12%)
While the US stock market is massively overpriced, Russian market is being sold at give away valuations. Here is another way to look at it, the capitalization of the entire Russian Stock Market is equal to that of Apple (AAPL). Both are at around $540 Billion.
I continue to maintain that Russia is the most undervalued market in the world. Let’s take a closer look at their 3 year chart – represented by (RSX)
A number of things become immediately apparent.
RSX remains in a clear long-term technical downtrend. There is nothing to suggest that the market has shifted gears into a bull leg.
RSX might be putting in an important double bottom. And if this double bottom holds, RSX might soon start its Bull Market.
The RTS collapsed 75% during the financial crisis and the bear market of 2007-09. Our mathematical and timing work indicates that the US will have a severe bear market between 2015-2017. If so, Russian market is likely to continue with its downtrend.
Which interpretation is correct?
It is too soon to tell. Yet, if you are long-term investor (3-10 years) I believe Russia represents an amazing buying opportunity. On valuation basis alone. It can’t go to zero and sooner or later this market will recover. And considering today’s valuation levels any such recovery will be spectacular. Most likely at 10X or more.
If Mr.Putin is able to bring “The House of Saud” down, plunging Saudi Arabia into the chaos it deserves, the price of oil should immediately recover. Stabilizing the Russian Economy and giving RSX the pretext it needs to start a multi-year rally.
For now, it might be a little too early to invest in the Russian market. However, this investment opportunity should definitely be on your radar screen. Even in your portfolio if you are a long-term investor.
Fun fact: the Russian market is still up 2,600% from its 1998 crisis bottom.
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 mySubscribersI 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, pleaseClick Here). Daily Stock Market Update.January 11th, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
With most stocks remaining in an “extreme overvaluation” category, you might as well blow your money on lottery tickets. It appears the ROI might be a little bit better. At least this coming up Wednesday.
The odds of matching all six numbers are 1 in 292.2 million. Many underestimate just how small that probability is because 292.2 million is so large that it’s “almost impossible” for people to wrap their heads around, said Ron Wasserstein, executive director of the American Statistical Assn.
Yeah, yeah, yeah….the chances of you winning are slim to none, but you can’t win unless you buy a ticket. Someone will win this one and it might as well be you.
So, go ahead and buy $10 worth of tickets. But do it today. Then you can spend the entire 3 days imagining what kind of useless crap you will blow your $1.3 Billion on. At the end of the day, that is exactly what you are buying. A dream. And this one is much better than dreaming that Apple (AAPL) will hit $250 a share as Carl Icahn said it would (right before he unloaded).
COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.
While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.
Latest data, as of January 5th, 2016
Currencies:
USD: 1K Long Vs. 53K Short – No changes. Substantial short interest remains.
Canadian Dollar: 81K Long Vs. 2K Short – Significant increase in long interest. Significant long interest remains.
British Pound: 132K Long Vs. 3K Short – Significant increase in net long exposure. British pound remains bullish.
Japanese Yen: 72K Long Vs. 35K Short – Neutral.
Euro: 142K Long Vs. 13K Short – Slight decrease in net short exposure. Euro remains bullish.
Australian Dollar: 60K Long Vs. 3K Short – Significant decrease in net long exposure. Significant long position remains.
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Euro Japanese Yen and Australian Dollar rally. This is consistent with our view that the FED won’t raise rates.
Markets/Commodities/Volatility:
E-Mini S&P 500: 239K Long Vs. 313K Short – Net neutral position remains.
Nasdaq 100-Mini:12K Long Vs. 169K Short – Sizable short position. Slight increase in net short position.
VIX: 57K Long Vs. 57K Short – Neutral
Gold:55Long Vs. 35K Short – Gold is back to being neutral.
Conclusion:Based on the information above, commercial interests are now net neutral the S&P, VIX and gold. At the same time, commercials now have a very large short position on the Nasdaq. That is important.
Mainstream financial media has pinned this week’s sell-off on China. Proclaiming that it is a termporary mattern and that the US Economy is good and getting better.
Perhaps. Yet, one doesn’t have to look further than the Baltic Dry Index chart above to realize that we are in deep trouble. The index continues to crash to new lows and is now down a stunning 80% from its October 2014 intermediary top.
This is a rather simple question. If the global economy is doing fine, why are shipping rates collapsing?
I think you know the answer to that question. And that is the situation we are faced with today. Rising interest rates, slowing economy and who could forget, an outrageously overpriced stock market. As has been shows on this blog so many times before.
I wonder how long it will take the stock market to catch up to this fundametal reality.
1/7/2016 – Another big down day with the Dow Jones down 392 points (-2.32%) and the Nasdaq down 146 points (-3.03%)
Over the last few months I have consistently shared with you a view held by some of the best money managers in the world. A view that I very much agree with. Unfortunately, most investors have tuned them out. Just as they did at 2000 and 2007 tops. It might be time to revisit that view one more time.
What do Carl Icahn, Marc Faber and Stanley Druckenmiller have in common? The were all dead on in terms of predicting 2000 and 2007 disasters. Here is what they have to say today.
“There are going to be real problems. We’re walking into a minefield of what’s going on with the Fed,” Icahn said. “I could go on and on here, but I think we have problems.”
“All you do when you’re doing this is you’re pulling demand forward to today,” Druckenmiller said Tuesday at the annual DealBook conference. “This is not some permanent boost you get. You’re borrowing from the future. I think there’s been such a misallocation of resources that this has gone on so long and unnecessarily (and) the chickens will come home to roost.”
“The Fed has basically created with their colleagues in Japan and at the European Central Bank (ECB) and the Bank of England (BOE), they’ve created a colossal asset bubble. And the returns going forward will be disappointing.”
The question you have to ask yourself as an investor is……Have these successful money managers lost their minds -OR- maybe, just maybe, they are once again seeing things that other investors do not. Things that will lead to an outright bloodbath in stocks in not so distant future. Read all of the above links and decide for yourself.
Now, Soros Fund has a large short position. Just a few weeks ago, Jim Rogers said the following Jim Rogers: Major Correction Ahead…Central Banks To Panic. Now, Carl Icahn is warning people that we are once again at 2000 and 2007 tops.
“What is better…..making 1-2% or losing 30% as people did in 2008? Right now is extremely dangerous.”
Forget about my line of thinking here for a second. Who else do you need to tell you that we are in a massive bubble and that a big correction is coming. Warren Buffett? Actually,WSJ ‘Buffett Indicator’ Flashes Warning for Stocks
Anyway, if you are sick and tired of your typical Wall Street analysis…… “We are in the early stages of a secular bull market and right now is a buying opportunity of a lifetime”, do yourself a favor and watch the videos 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 mySubscribers 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, pleaseClick Here). Daily Stock Market Update.January 7th, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
With most stocks remaining in an “extreme overvaluation” category, you might as well blow your money on lottery tickets. It appears the ROI might be a little bit better. At least this coming up Wednesday.
