timing is everything

November 27, 2015November 27, 2015

Year End #1 – Why This Analysis Scares The Bejesus Out Of Bulls – Holiday Hiatus

11/27/2015 – A mixed day with the Dow Jones down 15 points (-0.08%) and the Nasdaq up 11 points (+0.22%)

I AM TAKING A LITTLE BREAK FROM BLOGGING. BACK ON JANUARY 2nd.

Below are the 10 most important things I have published thought 2015. A summary of sorts and a view I still maintain today.

And while I am taking a short break from our free blog, our premium service remains fully functional. To learn more about it and our timing approach, please CLICK HERE.

After a scary August and September, bulls have been able to declare a victory of sorts in October/November. Erasing most of the earlier losses and leading the market to one of the best performing months in years (October). So much so that most investors now believe the correction is over and that the Dow 20K is just around the corner.

I would hate to rain on everyone’s parade……BUT…..parabolic moves like this, off of September 29th lows, are typically corrective. Not directional. In other words, the market is correcting its down cycle before turning lower again. That SHOULD cause some concern. Then, there is this analysis……

Below is a comprehensive longer-term review of the stock market and what the next few years hold.

In the early January of 2000, the US Economy wa s booming. The Dow was fast approaching 11,800 and the Nasdaq was a stone throws away from its improbable benchmark of 5,000. Everyone was making a ton of money and as far as most people were concerned, the future looked very bright. So much so, that very few people predicted a bear market of 2000-2002, let alone a secular 2000-2017 bear market that was about to begin.

The only way to do so was to know and to understand the cyclical TIME structure oscillating within the stock market. For instance, an analyst working with such time cycles would know that the stock market’s 17-18 year cycle was topping out in conjunction with the 5 year cycle that started at 1994 bottom. The bull market that started at the bottom in August of 1982 was coming to a conclusion. In fact, it would top out exactly 17.5 years after it had started or on January 14th, 2000 at 11,800. The 5 year cycle that started in December of 1994 would top out at exactly the same time; 5 years and 35 trading days after it had started.

What does this have to do with predicting a severe bear market of 2014/15-2017?

Everything. Based on my work the stock market is a mathematically precise entity. And while there are hundreds of TIME cycles oscillating within the stock market at any one time, I will concentrate on only two to prove my point. The 17-18 cycle and the 5 year cycles. We will look at these cycles over the last 100+ years and I will prove to you, without a shadow of a doubt, they work.

THE 17-18 YEAR CYCLE IN THE STOCK MARKET:

Long Term Dow Structure3

Long-term cycles within the stock market tend to oscillate going all the way back to the first day of trading, in May of 1790. If you would be inclined, I would encourage you to verify that information for yourself. For our purposes we will start our analysis a little bit later or exactly 100 years ago. As the chart above indicates, the stock market tends to oscillate in clearly defined 17-18 year alternating Bull/Bear market cycles.

17.5 Year Bull Market (1914 bottom to 1932 bottom): The previous bear market terminated in July of 1914. At that time the US stock market shut down for World War 1. The stock market remained closed between August of 1914 and December of 1914 (a very rare occurrence). When the market finally reopened in December of 1914 it immediately began a rally that would not terminate until October of 1929. Followed by a now famous 1929 stock market crash and a massive 90% 3 year decline. The cycle terminated at the bottom in 1932, completing the 17.5 year bull market cycle at that time.

*Note: It is important to address the 1929-1932 bear market and its impact on the overall 1914-1932 Bull Market cycle. It is a complex matter to discuss without sufficient background or understanding, but the final (short-term) structural composition of this Bull Cycle inverted over the last 3 years (1929-1932). Mostly due to a massive rally between 1924-1929 and a number of down cycles converging on this time period at the same time. Regardless, the overall cycle lasted 17.5 years.

17 Year BEAR Market (1932 bottom to 1949 bottom): The cycle originated at the bottom in July of 1932 and lasted until June of 1949. During this period of time we had a post great depression bounce, 1937 crash and World War 2. Yet, despite the overall upward trajectory, this clearly defined 1949 bottom remained 60% below its 1929 top and well below both its 1937 and 1942 tops.

17 Year BULL Market (1949 bottom to 1966 top): The market surged higher between 1949 bottom and 1966 top. This was the so called “Golden Age” of post war reconstruction and the American industrial boom. During this time the Dow appreciated over 500% in a clearly defined bull market cycle.

16.5 Year BEAR Market (1966 top to 1982 bottom): The market stayed relatively flat during this period of time with a few notable declines of 30-50%. With the 1972-1974 mid cycle decline of 54% being the largest one. This clearly defined bear market completed in August of 1982. Approximately 25% below its 1966 top.

17.5 Year BULL Market (1982 bottom to 2000 top): A very well known period and a clearly defined bull market. The market surged higher from its August of 1982 bottom to reach its historic top in January of 2000. During this time the Dow appreciated over 1,400% in one of the strongest bull markets in history.

17 Year BEAR Market (2000 top to 2017 bottom): Even though the market is sitting near all time highs (as of this writing in January of 2014) and even though most people have assumed that the new bull market has started, in relative terms the market hasn’t appreciated very much since its top in 2000. The Nasdaq is still down. Plus, with the final down leg of this bear market being ahead of us (based on my mathematical and timing work), the BEAR market of 2000-2017 should complete itself in a negative territory or below its 2000 top.

It is important to note that the small variation (of +/- 1 year) in duration of these cycles is caused by smaller or larger cycles arriving at the same time. As such and based on the cycles above, we are no longer working in an arbitrary fashion when it comes to predicting the stock market. In other words, if the stock market repeats a clearly defined 17-18 year Bull/Bear cycle over a 220 year period of time (since 1790) and does so without interruption, it is safe to assume that the future is predictable and not random.

THE 5 YEAR CYCLE IN THE STOCK MARKET

One other easily identifiable cycle within the stock market is the 5 year cycle. These 5 year cycles represent one completed growth pattern or one completed Bull or Bear cycle. Typically, they tend to appear for 5 years, disappear and then reappear at a certain point in the future. While they are not sequential as the 17-18 year cycle above, once their place within the overall stock market is understood, they show up at exactly the right time. For instance,

1914 -1920: Bull Market
1924-1929: Bull Market (followed by a 1929 crash)
1932-1937: Bull Market (followed by a 1937 crash)
1937-1942: Bear Market
1966-1971: Bear Market
1982-1987: Bull Market (followed by a 1987 crash)
1994-2000: Bull Market (followed by a 2000 crash)
2002-2007: Bull Market (followed by a 2007 crash)
2009- July of 2014: Bull Market

One thing to understand about these 5 Year cycles is that they are exact. They have much lower level variance as compared to their longer counterparts. Essentially, we are NOT talking about 5 years +/- 6 months. We are talking about 5 years +/- a few days. For instance, the 2002-2007cycle started on October 10th, 2002 (at 2002 bottom) and terminated on October 11th, 2007. If you are counting, that is exactly 5 Years and 1 day or scary accurate. I encourage you to study the other cycles outlined above in order to prove to yourself how shockingly accurate they all are.

CONCLUSION:

In summary, predicting a bear market of 2015-2017 is rather simple. All 17-18 year bear cycles end with a 2-3 year bear market. For instance, 1912-1914, 1946-1949 and 1979-1982. And while most believe that the secular bear market ended at 2009 bottom, that is not the case. The secular bear market of 2000-2017 is still in effect and will terminate only when the year 2017 is reached. Although the final price bottom will be higher than the mid-cycle bottom reached in March of 2009.

Further, the 5-Year cycle that started on March 6th, 2009 bottom terminated on July 16th, 2014 (Look at NYSE for confirmation). Suggesting that the stock market is now ready to initiate its bear leg (despite recent higher highs). When I combine this cyclical analysis with the rest of my mathematical and timing work, the outcome is crystal clear. A severe bear market of 2015-2017 is just around the corner.

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. November 27th InvestWithAlex.com

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Year End #1 – Why This Analysis Scares The Bejesus Out Of Bulls – Holiday HiatusGoogle

November 25, 2015

Year End #2 – Global Indices, Futures, Bonds, Stocks, Commodities & Currencies. Plus, Find Out Why Gold Is Going Much Lower

I am incredibly excited to announce our partnership with Demeter Research and Demeter Capital. To increase our product offering and to offer you access to some of the most popular markets out there. Plus, an active trading environment.

Matt’s work is some of the most accurate I have ever seen and it shows. I will let our sales letter below explain everything in greater detail. Should you have any questions, please don’t hesitate to contact me.

Global Stock Indices, Futures, Bonds and Stocks
Commodities & Currencies

Active Short-Term & Long-Term Trading Environment

Just How Much Money Would You Be Able To Make While Minimizing Risk
-OR-
Just How Much Would Your Investment Returns Improve
If You Knew….With a High Degree of Certainty
Where The Next Turning Point Is
Short-Term & Long-Term

Sometimes To The Penny and In All Of Your Favorite Markets.

WELL, NOW YOU CAN HAVE THIS INFORMATION AT YOUR FINGERTIPS
(***First, take a look at the video below)And that is exactly what happened.

GOLD

Quite a few investors are passionate about Gold. And while their fundamental case that Gold must sell at much higher prices might very well be right, the market could care less about what people think. The market will do what it needs to do in order to hit important mathematical points of force.

Matt Demeter believes Gold will head much lower as the long-term bottom for the metal is not yet in. As a matter of fact, GOLD will have to fall quite a bit more before a bear market bottom is put in place. Please watch the video below for more information. The same type of an analysis applies to the rest of the financial markets we follow. To learn more about Matt’s work and Gold please CLICK HERE.

Who is Matt Demeter?

Matt Demeter is a hedge fund manager at Demeter Capital and the person behind Demeter Research. Matt graduated from Duke University with a Bachelor’s degree in Biology and Genetics. And after seven years as a laboratory scientist, Matt entered the money management business in 2004 by starting his own hedge fund and developing a unique technical analysis system. The system you see here. Click Here To Learn More.

One thing is guaranteed; you will not find this work and analysis anywhere else.

Here is just a brief summary of Matt Demeter’s approach…..

Matt’s work is based on calculating moving averages, trend lines and support/resistance lines in 3-Dimensional Space. As Alex Dvorkin has shown and proven in his book “Timed Value”, the stock market is a multidimensional entity that moves in at least 3-Dimensional Space. Matt’s work approaches the market in a similar fashion, leading to astonishing accuracy in selected markets. Learn More
Fast deployment in multiple markets and most popular financial instruments.
Incredible accuracy. Matt’s support and resistance calculations allow him to pin point minor and major reversal points within the 0.5% margin of error 50% of the time. The other 40% fluctuate within the 0.5-1% variance band.
Highly active long-term and/or short-term trading environment.
Minimization of risk. Matt’s system often yields the margin of error of just a few ticks or pennies. Allowing him to set stop loss or reversal points shockingly close to the original entry points.
Matt’s approach concentrates only on high probability trades in multiple markets. This allows for further risk minimization while positioning the overall portfolio for large gains.
Ability to know exactly where and when major tops and/or bottoms are put in place.
And much more……Lean More

In other words, Demeter Research system above allows investors to….

Know exactly when most popular financial instruments are at their respective short-term or long-term turning points. Sometimes to the penny.
Take position at the above mentioned turning points. At times with the tightest stop loss or reversal points in the industry.
And as you can very well understand, all of the above leads to market beating gains, often by a considerable margin, and in a low risk environment.

P.S. And don’t forget, you can start using Matt’s approach today to achieve market beating performance. What are you waiting for? Just Click Here.

MARKETS COVERED

STOCK INDICES	BONDS	COMMODITIES	CURRENCIES
Dow, S&P 500, Nasdaq DAX and Euro Stoxx Nikkei, Shanghai Composite Brazilian Bovespa, Emerging Markets	US 10 Year Treasury Rate Long-Term Treasuries ETF Junk Bond ETFs Municipal Bond ETF	Gold, Silver, Copper and Mining ETFs Crude Oil and Energy ETFs Wheat, Corn, Soybeans Agricultural ETFs	Australian Dollar British Pound Canadian Dollar Euro US Dollar Index Japanese Yen

November 24, 2015

Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video

Daily Chart ANovember 24 InvestWithAlex

11/24/2015 – A mixed day with the Dow Jones up 19 points (+0.11%) and the Nasdaq flat at 0 points (+0.01%)

I don’t know about you, but I am absolutely fed up with the US Government and Media. It is nice to see someone of Carl Icahn’s statue to come out and put them on the spot. Directly. And wait till you hear what he has to say about our financial markets.

“God knows where this is going. It’s very dangerous and could be disastrous. It’s like a movie theater and somebody yells fire. There is only one little exit door. The exit door is fine when things are OK, but when they yell fire, they can’t get through the exit door…and there’s nobody to buy those junk bonds. Stocks are way overpriced.

I found myself agreeing with 95% of what he had to say and I command him for coming out and speaking his mind. If you participate in financial markets and/or care about what happens in the US, the video below is a MUST watch.

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Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video Google

November 24, 2015November 24, 2015

Year End #4 – What The FED Will Do & Multiple Market Non-Confirmations

Janet yellen printing money investwithalex

Here is the latest.

Excuse my language, but the FED continues to BS the market. And as far as I can tell, the FED is attempting to maintain the market within a certain range. At the same time, it is now crystal clear what their actual game plan is. It goes something like this…..

Can’t raise or won’t raise. Today’s economy or financial markets won’t be able to digest any rate increases at this juncture. Period. As talked about on this blog so many times before. Why The FED Will Not Raise Interest Rates in any meaningful way. If the FED members have even an ounce of intelligence, and I believe they do, they realize the same.
If the market declines, issue a “Dovish” statement. Bring it up.
If the market recovers, issue a “Hawkish” statement. As they did last week. Remember, they don’t want things too overheated.
Rinse and repeat while praying the market and/or the US Economy won’t implode on their own.

That about covers it. There is only one fatal flaw with the plan above. It only works until it doesn’t. It only works until the FED has any credibility left. The problem is, more and more people are beginning to realize all of the above.

And while the stock market continues to rally for the time being, the real economy (Global/US) is accelerating down. Steel demand ‘evaporating at unprecedented speed’

But hey, who needs steel demand for as long as iPhone sales are strong and/or Facebook user growth goes parabolic….Right??? Point being, FED or not, the economic/earnings/overvaluation reality will catch up to this market sooner rather than later.

Now, to multiple market non-confirmations.

Investors should concentrate on what the market charts are telling them.

Before we get there, let me ask you something. What has changed between September 29th bottom and today? NOTHING FUNDAMENTAL, only investor sentiment. Where on September 29th investors were freaking out and numerous commentators were calling for an all out market crash, today it’s the opposite. Apparently, the bear market is over and we are getting ready to surge higher.

Yet, fundamentally speaking, we are still in the same conundrum. I continue to maintain that we are witnessing a major slow down in earnings and the US Economy. Most corporates missing and guiding lower is a clear evidence of that. Forward guidance is down 2%. Sure, some companies like Google, Amazon, etc…. are outperforming, but they are an exception, not the rule. The FED remains between the rock and a hard place. Unable to raise interest rates or stimulate the economy further.

If anything, we are getting numerous confirmations that earnings and the US Economy are falling apart.

As they say, a picture is worth a thousand words. The charts below should at least give bulls indigestion. Please note, some of the charts below are a few days/weeks old. Yet, their meaning or composition have not changed.

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. But listen, we are all adults here. Who am I to tell you NOT to buy Amazon, Facebook, Google, etc….at today’s ridiculous valuation levels. As Citigroup suggests, “Be brave and go long”.
Untitled

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. 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. shillers PE Chart #3: Look at all of these non-confirmations from Russell 2000, Dow Transports and Biotech (IBB). These are just a few. There are many other. New Bull market??? Yeah, sure…..to infinity and beyond.

rut

transports

ibb 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.

Year End #4 – What The FED Will Do & Multiple Non-Confirmations Google

November 23, 2015November 23, 2015

Year End #5 – Hotel California…..This Could Be Heaven or This Could Be Hell

Daily Chart ANovember 23 InvestWithAlex

11/23/2015 – A down day with the Dow Jones down 33 points (-0.17%) and the Nasdaq down 2 point (-0.05%).

Today’s real estate news wasn’t very encouraging.

Existing-Home Sales Fell 3.4% in October

Weakest annual growth since about the January of this year. What is even more troubling is the fact that home sales put in a lower top, just below 2013 high. That suggests the top is in and the market is ready to accelerate down. Luckily, that shouldn’t come as a surprise to the readers of this blog.

I have now maintained for over two years that the real estate market is putting in a massive double top. Driven by the FED, zero interest rates, liquidity and speculation. That hasn’t changed. What I find interesting is the fact that we have reached a mental plateau where no one believes real estate prices can even go down.

That is a fallacy. They can and they will. Bellow you will find a number of real estate articles that I have published throughout 2015. My view hasn’t changed a bit. Enjoy.

houseingbubble-investwithalex

Housing today: A ‘bubble larger than 2006’

The good news is, some people in the article above do have their heads screwed on right.

Hanson, often criticized for being a housing bear, points to the institutional and foreign buyers who have flooded the market since 2012, buying up distressed and lower-priced homes, as well as some new construction, all with cash. He calls it an exact replay of the last housing boom, “when unorthodox demand with unorthodox capital would pay any price it took to hit the bid. In short, end-users today are being handed a red-hot potato market already in a bubble larger than 2006.

And while some Americans might feel house rich for the time being, there is this gem to consider Most Americans have less than $1,000 in savings

As for yours truly, I continue to maintain the view that the US Housing Market is putting in a multi decade double top. And anyone who is buying a house today, will regret that decision a couple of years down the road. In fact, my analysis remains exactly the same…..

The only hope homeowners have at this stage is the FED going into a full out “Monetization” mode. And while that will create a whole set of terrible economic problems, at least mortgages will be monetized and/or inflated away. At the same time, I wouldn’t bet on it.

Is Today’s Real Estate Bubble Bigger Than 2006? Google

November 23, 2015

Year End #6 – Get Your Unicorn Today

silicon-valley-bubble-investwithalex

Don’t tell Warren Buffett, but apparently Silicon Valley’s start up sector is selling at dirt cheap valuations. At least according to Marc Andreessen. We’re in a long-term tech bust,’ not a bubble

“I think we’re in a bust. We’re in a long-term technology bust. I think technology has been undervalued since 2000, and we’re still undervalued,” Andreessen said. “The entire basket of unicorns is worth half of Microsoft.”

Well, I am sure if these so called “unicorns” had the same revenue/income base as Microsoft does, innovation or not, they wouldn’t be as “cheap” as Mr. Andreessen claims.

Considering the above, should you run out and start investing in tech startups?

Not so fast. First, here is what another industry insider, Marc Cuban, has to say about the sector.

Mark Cuban is dead on in identifying Silicon Valley’s Tech Bubble 2.0: Why This Tech Bubble is Worse Than the Tech Bubble of 2000. At the end of the day, Silicon Valley has about as much liquidity as California’s dried up reservoirs. Something that Angel investors, venture capitalists and stock option millionaires are about to find out.

How big is this bubble? Consider the following. Uber’s valuation went from $60 Million in 2011 to $50 Billion today(not a typo). They must be making a ton of money…..right?WRONG. Bloomberg estimates that Uber showed $470 million in operating losses with $415 million in revenue last year. Plus, the company was set a major legal blow in California by requiring their drivers to be classified as employees. And as far as I am concerned, it is just a matter of time before other states and countries regulate Uber out of business to protect taxi drivers.

In other words, the valuation above is not only outrageous, it is, how should I put it, retardedly outrageous.

Back to Mark Cuban. It is now evident that most market pundits out there are dismissing Mark’s view. And while Mark talks about Angel Investors and illiquidity in that market, his analysis can just as easily be applied to today’s stock market. More about that in a second.

First, here is what most people don’t realize about Mark Cuban. After selling his first business Mark became a heck of a trader and investor in the 1990’s. His returns were so good at the time that Goldman Sachs tried to bring him in order to figure out what he was doing. This same ability helped him unload Broadcast.com for $5.7 Billion to Yahoo right at the top of the tech bubble. Here is what he thinks.

I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher. Why? Because there is ZERO liquidity for any of those investments. None. Zero. Zip.

So why is this bubble far worse than the tech bubble of 2000 ?

Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?

We often talk about the stock market, but we rarely look at this side of the equation. Mark is absolutely right. If you are an Angel Investors, good luck getting your money out. Especially when today’s Silicon Valley’s bubble bursts. Plus, the chances of hitting a good exit in tech are about as good as winning a lottery.

What’s more, the bubble Mark Cuban has identified in the tech industry is the same bubble I see in the stock market. The drivers behind both are the same. The only difference is the amount of liquidity available.

Year End #6 – Get Your Unicorn Today Google

November 20, 2015

Year End #7 – How We Nailed May 19th, 2015 Top -To The Day.

11/20/2015 – An up day with the Dow Jones up 91 points (+0.51%) and the Nasdaq up 31 points (+0.62%)

May 19th was incredibly important. First, the stock market was celebrating its 225th birthday. The first official day of trading in the US was May 19th, 1790. Second, the Dow put in an important mid-term mathematical, timing and structural TOP at the time. Finally, it was also my birthday. Which explains why I am obsessed with the stock market. Since our birthdays are the same, we tend to vibrate at the same frequency.

Anyway, as the Dow pushed higher in mid May, 95% of market pundits, money managers and economists were predicting the Dow 20,000 by the end of the year. I was NOT in that camp. Not by a long shot. On the contrary, I was building into 100% short position at the time and so were my subscribers. Here is why…..take a look at the chart below.

My subscribers first saw this chart in early April of 2015.

At that time, April of 2015, my basic forecast was as follows (without getting into intricacies of it).

The Dow will remain within the confines of the elliptical structure above until the ellipse terminates at the right hand side mid-point in late July of 2015.
The market will not move fast or we will remains within the confines of a low energy market until we terminate the ellipse in late July. But as soon as we do, energy levels and volatility should spike higher. In other words, we will move fast.

Here is the actual outcome:

Pay particularly close attention to the following.

We had a very powerful TIME turning point arriving on May 19th (+/- 1 trading day)
The market ran right into elliptical resistance at the same time.
Plus, wedge compression line terminated at the same time.

All of that was indicative of a major top being put in place. So, while everyone was extremely bullish, I was telling my subscribers….

“Do not wait for elliptical termination point, go short NOW. We are unlikely to see these top levels again anytime soon”

Finally, notice what has happened right after the market fell out of the ellipse. Just as suggested above, we have had a major spike in volatility and the market covered more ground to the downside in 7 trading hours, than it did in the 3 months prior. I have posted quite a few blog posts prior to that, warning people of the same. For instance, Is Our Historically Boring Market About To Get Exciting? You Bet – Published on July 31st, 2015

If you would be interested in this type of an analysis and/or if you would like to find out what happens next, please Click Here

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How We Nailed May 19th, 2015 Top – To The Day. Google

November 20, 2015November 20, 2015

Year End #8 – Why The Chinese Downfall Is Just Starting.

china concrete

Just how big is China’s bubble? Credit or otherwise.

The chart above is one way to look at it. Here is another. China breaks up $64 billion underground banking network

Recently, quite a few financial media outlets have suggested that China has been fixed. Has it been?

If your think in a linear fashion, which would eventually be devastating to your investment returns, the answer is YES. One Less Hurdle for Fed Hike: China Comes Back From Danger Zone

When the Federal Reserve in September held off from its first interest-rate increase since 2006, the U.S. central-bank head cited growing concerns about China’s market turmoil among the reasons. “A lot of our focus has been on risks around China,” she said in a press conference after the decision.

The above is just another data point confirmation that the FED is now a market puppet. The reality is quite different. Take a look at this 3-year Chinese Large Cap ETF (FXI).

China Market Investwithalex

Does it look like the worst is behind us?

Well, one can argue that the bottom has been put in place and that the Chinese market is now ready to stage a come back rally. Yet, I can just as easily argue that we are in the early stages of a more severe decline. Think 2000-2002 on the Nasdaq. There are no technical confirmations either way. At least not yet. As a result, we have to rely on the fundamentals. And the picture there is kind of scary.

In other words, it is kind of presumptuous to assume that China has somehow bottomed. If anything, their fundamentals continue to deteriorate. In July of this year I have suggested the following China’s Nasdaq 2000 Crash Is Set For A Bounce And while I was a few weeks early, we did get that bounce. A bounce that might now be over.

Year End #8 – Why The Chinese Downfall Is Just Starting. Google

November 18, 2015November 18, 2015

Year End #10 – Dip Buyers Who Bid This Market Up Are Insane Daredevils

Daily Chart ANovember 18 InvestWithAlex

11/18/2015 – A positive day with the Dow Jones up 247 points (+1.42%) and the Nasdaq up 89 points (+1.79%)

Well, what a surprise. The FED continues to verbally play with the market. Something I have outlined here so many times before. The FED’s End Game Is Finally Unveiled.

Now, do me a favor. Watch the video below. You can also view a different (shorter) version of the same thing here Expect a market meltdown before the 2016 election