Investment Grin Of The Day Google
Baltic Dry Pushes Towards New Lows
It has been quite a while since we have looked at the Baltic Dry Index last time. 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.
FedEx just confirmed the same by missing earnings and guiding lower FedEx 1st-quarter results mixed, lowers fiscal 2016 outlook
We all know that global trade is slowing down, but 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.
The Scariest Thing About Today’s Stock Market
9/15/2015 – A positive day with the Dow Jones up 229 points (+1.40%) and the Nasdaq up 55 points (+1.14%)
I have discussed this over the last few months, but I believe Robert Shiller hits the same nail on the head as well.
Robert Shiller: THIS is the sign we’re in a bubble
Just before the dot-com bubble burst, investors had very little confidence in stock valuations, but they were confident in the market in the short term, he said.
“That’s the sign of the bubble. They’re worried but they’re thinking they’ll get out,” he told CNBC’s“Squawk Box.” “This can suddenly turn, and we’re looking somewhat like that now.”
Bingo. And as I have pointed out here at least 100 times this year, today’s Shiller Adjusted S&P P/E Ratio is the 3rd highest in history. Right behind 1929 and 2000 tops.
Plus, after a 5-7 year bull run, most investors today assume 2-3 things .
- Every sell-off is a buying opportunity. “Buy the dip”.
- The FED will be able to backstop any and all declines or recessions.
- Someone will ring the bell at the top and everyone will exit the market in an orderly fashion. Holding hands and singing Kumbaya.
It is my hope that most reasonable people will quickly realize how ridiculous all of that sounds. And instead of adhering to such thinking, investors might want to ask themselves the following questions…..
- What if we have shifted gears into a bear market and every rally should now be sold?
- What if the FED is powerless….we are already at zero….what else can they do?
- What if the market corrects itself in a rapid and violent fashion? To the point where no one is able to exit? Just as the Nasdaq did in 2000.
I believe those are the right questions to ask. Everything else is just noise.
Listen, as we head into the most dangerous time of the year, not many people anticipate a further correction. Let alone a crash. My friends still laugh at me when I suggest we might re-test late August lows. An ominous sign? We will soon find out.
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. September 15th, 2015 InvestWithAlex.com
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California Is Dying. Snowpack At 500 Year Low
I do quite a bit of open ocean swimming in San Diego and I don’t remember a time when the water temperature has been this warm for this long. Last year it stayed well above 60 degrees into January. Typically the temperature falls back to around 55 degrees by mid November. This year, it is even warmer. Thus far.
This is stunning…….
- California’s Mountains Are At A 500-Year Snow Low
- California fire updates: Valley fire grows to 67,000 acres
And what do our current and future political leaders care about? Well, Mr. Obama is hell bent on destabilizing the Middle East while going out of his way to pick a fight with Russia and China. Hillary Clinton is obsessed with an apparent rape epidemic on college campuses (what?). The Republican primary, a circus without a head clown, is hell bent on gay marriage while denying any scientific evidence of a man made climate change.
And Janet Yellen? Well, Janet Yellen is just trying to keep today’s stock market and economic bubbles from imploding. For just a little bit longer.
How did we end up here? I have no idea, but grab some popcorn and sunscreen. It’s going to be a hot one. I am just curious what happens to the California’s Real Estate Bubble 2.0 when the state runs out of water and interest rates push higher. Most likely at the same time.
Investment Wisdom Of The Day
Jim Rogers: Why The FED Should Be Abolished
I would estimate that today’s fair market value is around 10,000-11,000 on the Dow. Anything and everything above that has been caused my zero interest rates, QE, the FED, stock buybacks and rampant speculation. As a result, I couldn’t agree more with Jim Rogers. Watch the video below, it is definitely worth 2 minutes of your time.
Will The FED Raise Interest Rates?
9/14/2015 – A down day with the Dow Jones down 62 points (-0.38%) and the Nasdaq down 16 points (-0.34%).
So, will the FED raise interest rates?
After all, inflation is low, we are approaching full employment (at least according to “their” numbers) and most of the mainstream economists believe that today’s environment is just “peachy”. For instance. ‘No bubbles anywhere,’ so U.S. recovery can run long after rate hike:
In reality, nobody knows what they will or will not do. Even the stock market is clueless right now as it awaits FED direction on Thursday. Or misdirection.
With that in mind, I continue to maintain that almost everyone is missing the big picture here. That is, the FED has backed itself into a corner, it is too late to hike and they don’t really know what to do now. That is why you see Janet Yellen beating around the bush in all of her recent statements. They have no exit strategy as this whole Ponzi Finance bubble is scheduled to come crashing down in the near future.
Well, unless you consider QE-4…5…6 etc…an exit strategy.
Let me put it this way. 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…….
- Last month China has launched an official currency war by devaluing the Yuan 3 times in a row. Japan is trying to do the same and the EU is threatening further easing and/or 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.
- Commodities have collapsed.
- Deflationary forces are reappearing throughout the economy.
- Etc….
As I have mentioned above, 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. September 14th, 2015 InvestWithAlex.com
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If The Market Crashes, How Will The ETF’s React?
August 24th gap down (or mini crash) of 1,000 points on the Dow was incredibly important from another angle. It has exposed a weakness in ETF’s that not many were aware of. Still not aware of. An in depth discussion can be found here…..
Wild Trading Exposed Flaws in ETFs
For our purposes and since we follow the Dow so closely, let’s take a look at DIA (chart above). But keep in mind, the analysis below was evident throughout the stock market and across most financial instruments the morning of August 24th.
The Dow and DIA typically move together (+/- 20 cents). That morning the Dow bottomed 5 minutes into trading at 15,370, while the DIA bottomed at $150.57. That’s a 2% discrepancy or arbitrage that can be recovered in a matter of minutes.We saw the same on QQQ/NDX and SPY/SPX, plus numerous other ETF’s.
Here is what I am thinking. Should the market crash over the next few months, something that is possible given today’s overvaluation/speculation environment, enterprising investors/traders might want to look at ETF’s to boost up their gains. On both the short side and subsequent reversals.
Who knows, the next discrepancy could be 2-5%, depending on the size and speed of the primary move. That is to say, put this arbitrage on your “To Watch List” and be ready to act if the market is crashing and/or moving fast.
Investment Grin Of The Day
How We Nailed May 19th, 2015 Top – To The Day.
9/11/2015 – An up day with the Dow Jones up 101 points (+0.62%) and the Nasdaq up 26 points (+0.54%)
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 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
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. September 11th, 2015 InvestWithAlex.com
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