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The Baltic Dry Index Is Still Crashing

baltic dry index is breaking down

It has been quite a while since we have looked at the Baltic Dry Index. There you have it. The index is stuck in a clear downtrend and is once again pushing towards multi-year lows. Quite an opposite take on the  “Economy Is Great & Getting Better” view perpetuated by most mainstream economists and media outlets.

The index is down 75% in a little over a year and is now hitting levels unseen since 1986. Inflation adjusted, it is now much lower. In other words, if this does not suggest a massive global slow down while piercing the bubble of “perceived” economic prosperity, I don’t know what will.

And whle we all know that global trade is slowing down, I think there is a bigger story here. That is, the stock market must catch up to this economic reality. And as of now it has quite a bit of ground to cover to the downside to accomplish just that.

Z31

The Baltic Dry Index Is Still Crashing Google

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Someone Is Spectacularly Wrong….But Who?

Daily Chart ANovember 17 InvestWithAlex

11/17/2015 – A positive day with the Dow Jones up 6 points (+0.03%) and the Nasdaq up 1 point (+0.03%) 

Today, you can easily find very smart people on both sides of the market. And while some suggest that a new secular bull market is just starting up, others see nothing but trouble ahead. Let’s explore.

“We’re actually kind of early or still maybe in the middle innings of a bull market, and we’re not near the end as many think,” she said. Where we think investors want to go now are dividend growth stocks,” she said. “These are companies that might not have the highest yields around, but they have the best potential to grow their yields.”

Well, that’s kind of exciting….isn’t it?  According to both analysts the stock market is about to surge higher. And while one suggests a bull market will continue for many years to come, the other implies it will terminate soon, but only after a blow off top is put in place.

In other words, load up on call options.

I am just a little confused as to why it would start now if this bull leg initiated at 2009 bottom. Also, I find it curious that everyone is awaiting some sort of a blow off top. First, the market rarely repeats itself and/or gives investors what they want. And second, couldn’t we all be friends and consider May 19th top on the S&P/Dow and June 20th on the Nasdaq as blow off tops? I was there and they definitely felt like “blow off” tops to me. At least at the time and if you were shorting the market. On the flip side……

I would encourage you to check out the last article. It has quite a bit more substance than your average “buy the dip, asset allocation, bull market never ends, etc…” nonsense.

Given two widely different view points from equally intelligent people, who is right? 

I think we have to concentrate on the fundamentals to ascertain what happens next. Here is all you need to know.

  • Shiller’s S&P P/E Ratio is at 26. Third highest level in history. Right behind 1929 and 2000 tops. That measure alone suggests we are in a massive bubble.
  • Forward guidance in Q-3 was down 2%. Biggest drop since 2008. That suggests economic and earnings slowdown. Something I have covered here extensively.
  • Multiple technical patterns suggest the market is ready for another bear leg. For instance, the NYSE (largest index by capitalization) has been in distribution for 1.5 years.
  • Etc..

Point being, I don’t think one has to be a genius to figure out what happens next.

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. Noveber 17th, 2015  InvestWithAlex.com

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

Someone Is Spectacularly Wrong Google

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The Next BIG Investment Opportunity?

As investors we are always looking for that next runaway investment opportunity. The future is exciting and we have already covered some medical advances, 3-D printers and self driving cars.

In the video below Mark Zuckerberg talks about Facebook’s Oculus and supposed virtual-reality revolution. Devises are scheduled to go on sale at some point next year. Mr. Zuckerberg believes that virtual-reality technologies and associated devices will be the next BIG thing. Watch the video below and decide for yourself.

Personally, I have my doubts. While virtual-reality technologies will have numerous applications in the real world they seem to lack in the area that have made so many tech companies successful over the last two decades. At least for the time being. Narcissism. The common denominator I have found in most successful tech and social media companies. Plus, Facebook (FB) is way overpriced to warrant an investment at this time.

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The Next BIG Investment Opportunity?  Google

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COT Reports & Weekly Market Calendar – November 16th, 2015

Daily Chart ANovember 16 InvestWithAlex

11/16/2015 – A positive day with the Dow Jones up 238 points (+1.37%) and the Nasdaq up 56 points (+1.15%) 

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 November 11th, 2015

Currencies: 

  • USD:  3K Long Vs. 58K Short – No changes. Substantial short interest remains.
  • Canadian Dollar: 43K Long Vs. 14K Short – Slight decrease in short interest. Significant long interest remains.
  • British Pound: 76K Long Vs. 6K Short – Slight decrease in net short interest. British pound remains bullish.
  • Japanese Yen: 135K Long Vs. 6K Short – Slight increase in net long exposure. Japanese Yen is now very bullish.
  • Euro: 127K Long Vs. 30K Short – Slight decrease in net short exposure. Euro is now bullish.
  • Australian Dollar: 115K Long Vs. 3K Short – Slight increase 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: 529K Long Vs. 377K Short – Net neutral position remains.
  • Nasdaq 100-Mini: 26K Long Vs. 220K Short – Sizable short position. Slight increase in net short position.
  • VIX: 58K Long Vs. 64K Short – Slight decrease in net short exposure. Neutral
  • Gold: 62 Long Vs. 64K Short – Descrease in net short exposure. Gold is back to being neutral.

Conclusion: Based on the information above, commercial interests are now net neutral the S&P, VIX and gold. We have also witnessed a decline in net short exposure in VIX. At the same time, commercials now have a very large short position on the Nasdaq. That is important. 

Next Week’s Market Calendar: 

  • Q-3 Earnings
  • Tuesday: CPI Index
  • Wednesday: FOMC Minutes

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COT Reports & Weekly Market Calendar – November 16th, 2015 Google

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Find Out Why Gold Is Going Much Lower

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. 

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Find Out Why Gold Is Going Much Lower Google

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Just A “Healthy” Correction Or Something More?

Daily Chart ANovember 12 InvestWithAlex

11/12/2015 – A negative day with the Dow Jones down 254 points (-1.44%) and the Nasdaq down 62 points (-1.22%) 

At this juncture most investors have assumed that the correction is over and that the market will push higher over the next few months/years. In fact, the Dow 20K is once again just around the corner. As is illustrated in the video here  Fed must weigh impact of new financial market landscape: Yellen

“It is crucial to understand the effect of regulations and possible changes in financial intermediation on monetary policy implementation and transmission,” Yellen added.

In other words, “Blah, blah, blah”, we have no idea how we will raise rates without setting off a major correction in MOST asset classes.

On the flip side, I believe this guy has the right idea. The Fed’s going to trick the market, again: Trader

Which is the view I have expressed here so many times before. Particularly, what the FED will do is as clear as night and day. It goes something like this…..

  1. 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 If the FED members have even an ounce of intelligence, and I believe they do, they realize the same. Point being, they won’t raise in any meaningful way. If at all.
  2. If the market declines, issue a “Dovish” statement. Bring it up. (Late September)
  3. If the market recovers, issue a “Hawkish” statement. As they did last week. Remember, they don’t want things too overheated.
  4. Rinse and repeat while praying the market and/or the US Economy won’t implode on their own.

Finally, no one has stopped to consider the other alternative. That the rally off of August 24th or September 29th lows is not the beginning of the next leg up, but a corrective motion. For instance, the market left quite a few down gaps. Down gaps it will have to close sooner or later. The angular composition of this move higher, at 85 degrees, suggests a counter trend rally, not a structural move higher.

In other words, the market is suggesting this move higher might be a bounce as opposed to a new bull market. If true, today’s “Healthy” correction can very well turn into a major sell-off.

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. Noveber 12th, 2015  InvestWithAlex.com

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

Just A “Healthy” Correction Or Something More? Google

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Carl Icahn: Earnings Are Way Overinflated

Carl Icahn believes earnings are overinflated by at least 20%. Watch the video below. Plus, he reaffirms his view that the stock market is overpriced and most likely in a bubble.

I have been saying the same thing for quite a while now. For instance, Is Today’s “Real” Stock Market P/E Ratio Above 30? -OR- BlackRock: Most Of Corporate Earnings Growth (If Any) Is Accounting Driven

I have said it before and I will say it again. Today’s distortions are so great that the FED’s Ponzi Finance makes Bernie Madoff look like a boy scout. But its more than that. Everyone is playing the same accounting game. Whether it is through low interest rates, share buybacks or outright accounting gimmicks.

While impossible to calculate, I would say that a more normalized environment would add 5 to 10 points to today’s P/E ratios. By the way, Shiller’s Adjusted P/E Ratio is still at 26. Turning an already expensive market into “are you freaking kidding me overpriced accident” waiting to happen.

Interesting times ahead, that’s for sure.

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Carl Icahn: Earnings Are Overinflated Google