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Is Another Bull Trap Now In Place?

all in investwithalex

This should not come as a surprise to the followers of this blog, most retail investors are fully invested on margin and extremely bullish.

Bad sign? Retail investors all in: TD Ameritrade

A broad look at the 6.5 million customer accounts at TD Ameritrade indicates that retail investors are “pretty fully invested” in stocks, the online brokerage’s CEO said Thursday.

Fred Tomczyk cited several signs of this: margin loans at high levels, client cash at low levels and account holders at the firm logging in frequently. “It’s usually a good indication that people are very engaged in the markets and watching their investments closely,” he said.

So, while there are net capital outflows from the institutional side, retail and corporates (stock buybacks) are fully committed to this “apparent” market rally. Just as they were at 2000 and 2007 tops. Some things never change and most people don’t learn from the past.

Another bull trap is now in place.

Z30

Is Another Bull Trap Now In Place?  Google

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What You Ought To Know About This Bull/Bear Market

Daily Chart May 27th InvestWithAlex

5/27/2015 – A positive day with the Dow Jones up 121 points (+0.67%) and the Nasdaq up 74 points (+1.47%) 

Bulls continue to proclaim that this market is climbing the wall of worry. Apparently, the world is full of “financial market unbelievers”. To be honest, I have no idea what they are talking about. Every bear I know is scared to death to touch this market on the short side. And I am not the only one seeing this. Let’s explore.

This average currently stands at 81.3%, which is one of its highest readings in years. As you can see from the accompanying chart, the stock market has declined over the past 18 months whenever the HNNSI rose to current levels.

newsletter sentiment

Considering the fact that the overall stock market (NYSE) hasn’t gone anywhere over the last 10 months, I would say that this is as bullish as it gets. However, you don’t have to look further than VIX/VXX to discover the same thing.

I have beaten this point to death over the last few weeks. Plus, I have shown that commercial interests have built a massive long position in VIX (COT Report). In anticipation of a bounce. In other words, everyone expects this bull market to continue and no one is hedging. Hmm, I wonder 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. May 27th, 2015  InvestWithAlex.com

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

What You Ought To Know About This Bull/Bear Market  Google

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NASA Delivers

wise-galaxy-investwithalex

Forget the fact that NASA has to pay Comrade Putin to ferry our Astronauts into space.  It appears they are doing some real scientific work after all. NASA Finds Antarctic Ice Shelf a Few Years From Disintegration Unfortunately for all of us, more people care about what Kim Kardashian had for lunch than our unsustainable way of life.

But don’t feel too bad, NASA delivers again. Here is how insignificant all of our problems really are. NASA finds distant galaxy shining as bright as 300 trillion suns That’s cool….I wonder what brand of sunscreen is the biggest seller in that Galaxy….might be a good investment.

Finally and before we all melt away, financial advisers have added an additional regret to a now famous “regret list”. Top 6 Regrets of the Dying I wish I was kidding, but no, apparently you will regret not saving enough money for your retirement right before you take that last breath. What a sad state of affair to live exist in such a materialistic culture.

Z30

NASA Delivers Google

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Investment Wisdom Of The Day

Some of Murphy’s Laws:

  1. If anything can go wrong, it will.
  2. Nothing is ever as simple as it seems.
  3. Everything takes longer than you expect.
  4. Left to themselves all things go from bad to worse.
  5. Nature always sides with the hidden flaw.
  6. Mother Nature is a bitch.
  7. It is impossible to make anything foolproof because fools are so ingenious.
  8. If everything seems to be going well, you have obviously overlooked something.
  9. If you can keep your head when, all around you, others are losing theirs, you just don’t understand the situation.
  10. For every human problem, there is a neat, simple solution — and it is always wrong.

Z31

Investment Wisdom Of The Day Google

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Bernanke Gives The Green Light To Short Stocks

CNBC Idiots

Do you ever wake up and ask yourself how you ended up on this rock they call Earth? Well, it’s one of those morning, at least for me. The amount of stupidity being peddled by the mainstream financial media is truly staggering. Let’s take a quick look at just two instances.

Bernanke sees no risk of hard landing in China, bullish on U.S. economy

If you are not paying attention, the Shanghai Composite is up close to 100% over the last 12 months and has recently went parabolic. Why? Must be China’s empty cities, money printing, massive off balance sheet debt, collapsing growth rate, day trading grandmothers and over 20K new trading accounts being opened each day.

But don’t worry, Mr. Bernanke has a perfect track record. Not only did he save us all in 2009, but he did clearly suggest that the US Economy is doing great and even overheating in Q-1 of 2008. According to the FED minutes. By that time the stock market had already completed 50% of its 2007-2009 decline. Perfection.

Obama says Russia adopting ‘increasingly aggressive posture’

Ummm, must I remind Mr. Obama that it is the US troops that are in Ukraine right now. That NATO has expanded all the way up to the Russian border and for no apparent reason. Well, unless their intention is to start a war. That everything the US touched over the last 15 years has turned to absolute shit (Iraq, Afghanistan, Libya, Syria, Georgia, Egypt, Ukraine, etc…).

The only difference here is that Russia has the capability of striking back and is not bending over to NATO’s will. Western warmongers do not like that. Unfortunately, we will all pay for their stupidity.

z33

Bernanke Gives The Green Light To Short Stocks Google

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Bond Conundrum: Who Is Right?

Daily Chart May 26th InvestWithAlex

5/26/2015- A big down day with the Dow Jones down 190 point (-1.04%) and the Nasdaq down 57 points (-1.11%)

A massive and rather rapid stock market decline is coming later this year. And while we won’t have a crash, considering the amount of margin debt out there, quite a few people will get wiped out. If you would like to find out exactly when this move will develop, to the day, please Click Here. 

The bond market continues to defy expectations. So, who is right, bulls or bears?

Let’s take a closer look.

Some very smart bond investors are betting that yields will continue to decline. Why? Because the farce that is the US Economy today is about to blow sky high. The US Economy is rolling over into an “official” recession and it is just a matter of time before the FED cuts (if they have anything to cut) and/or introduces another round of QE. Plus, a bear market in yields in not yet over. You will probably find me in this camp. On the flip side….

As the theory goes, the bond market is about to go on a rampage as yields surge and stocks collapse. Legendary bond investor Bill Gross is not shy when it comes to supporting this view. Put me down for this one as well.

So, who is right? 

I believe both scenarios are correct. As a result, it becomes a matter of timing and sequencing. Here is what I believe will happen over the next 2-3 years. Based on my mathematical and timing work.

  1. The FED will raise interest rates just a few times this year before realizing that we are already in another recession.
  2. As soon as that happens they will cut back to zero and introduce QE-4.
  3. Yields will drop and the 10-Year Note will set a bear market bottom in yields.
  4. Thereafter, inflationary pressures will begin to appear in conjunctions with bond vigilantes and yields will surge higher. The bottom will be in (Bill Gross’s forecast).
  5. At this time the FED will be trapped and unable to do anything. Massive pain all around.

By the way, the stock market will decline either way.

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. May 26th, 2015  InvestWithAlex.com

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

Bond Conundrum: Who Is Right?  Google

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The FED Has No Idea

Remember that time when Cramer melted down? Screaming over and over again that “they (the FED) have no idea”. The video below might refresh your memory.

As erroneous as it may sound, Mr. Cramer is right. The FED has no idea. Not before and certainly not now. Case and point, Regulation should be main tool against bubbles: Fed’s Mester

I would opt to use the macroprudential tools as the first line of defense, since they can be more targeted to the markets and institutions where the risks are emerging.

Earth to the FED, we are already in a massive bubble. This is equivalent to a drug dealer telling an overdosed junkie who is 2 minutes away from a massive cardiac arrest that he shouldn’t be doing drugs.  I have said it before and I’ll say it again, anyone who believes the FED will bail this market out forever is playing with fire. It is the worst trade out there.

Now, if we had a bear who is just as passionate as Mr. Cramer, I am sure he would be screaming “They have no idea” right about now.

z32

The FED Has No Idea Google

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The Truth

It’s a breath of fresh air when someone actually speaks the truth. I highly encourage you to watch this video. The only remaining question is……when will all of this blow sky high??

Z31

The Truth Google

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COT Reports & Weekly Market Calendar – May 23rd, 2015

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 May 19th, 2015

Currencies: 

  • USD:  4K Long Vs. 72K Short – Significant short interest remains.
  • Canadian Dollar: 39K Long Vs. 57K Short – Neutral -No change from last week.
  • British Pound: 84K Long Vs. 43K Short – Commercials decreased their long position – more neutral now. .
  • Japanese Yen: 81K Long Vs. 35K Short – Neutral – Slightly increased their long exposure.
  • Euro: 150K Long Vs. 29K Short – Significant long position.
  • Australian Dollar: 93K Long Vs. 35K Short- Significant long position.

Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while British Pound, Euro and Australian Dollar rally. 

Markets/Commodities/Volatility: 

  • E-Mini S&P 500: 187K Long Vs. 647K Short – Heavy short position remains.
  • VIX: 107K Long Vs. 19K Short – Heavy long position suggests market turbulence ahead.
  • Gold: 54K Long Vs. 118K Short – Significant increase in short interest. Gold might decline.

Conclusion: Based on the information above, commercial interests expect the stock market to decline as volatility surges higher. Gold might decline further.

Next Week’s Market Calendar: 

  • May 26 – Durable Goods

z33

COT Reports & Weekly Market Calendar – May 23rd, 2015Google