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COT Reports & Weekly Market Calendar

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 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 12th, 2015

Currencies: 

  • USD:  4K Long Vs. 72K Short – Significant short position.
  • Canadian Dollar: 38K Long Vs. 52K Short – Neutral.
  • British Pound: 102K Long Vs. 35K Short- Significant long position.
  • Japanese Yen: 66K Long Vs. 34K Short – Neutral.
  • Euro: 162K Long Vs. 27K Short – Significant long position.
  • Australian Dollar: 93K Long Vs. 28K 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: 184K Long Vs. 635K Short – Heavy short position.
  • VIX: 114K Long Vs. 14K Short – Heavy long position suggests market turbulence ahead.
  • Gold: 37K Long Vs. 80K Short – Neutral

Conclusion: Based on the information above, commercial interests expect markets to decline while volatility surges higher.

Next Week’s Market Calendar: 

  • May 20 – FOMC Minutes
  • May 22 – Consumer Price Index

z33

COT Report & Weekly Market Calendar Google

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Why Most Bulls Might Be High On Drugs….Again

Daily Chart May 15th InvestWithAlex

5/15/2015 – A mixed day with the Dow Jones up 20 points (+0.11%) and the Nasdaq down 2.5 points (-0.05%)

A massive and rather rapid stock market decline is coming later on 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. 

Despite the fact that the NYSE (largest index by capitalization) hasn’t gone anywhere since July 17th, 2014 (10 months if you can’t count), bullish spirits are running red hot. Don’t believe me? Let me show you just today’s news feed.

“We think the S&P takes out 2120 and trades up to 2200.”

“If this market was going to crater, it would have done so already. At least that’s what Jani Ziedins of the Cracked Market blog believes. Instead, he says, the smart money is holding strong, waiting for the skeptics to surrender and fuel the next leg up.”

The psychology seems to be: “I better lock in this deal while I can.” We might be seeing a similar pattern play out among corporate CEOs, who could soon choose to jump into the busy M&A game as they see borrowing rates turning higher.”

WOW!!! This much bullishness at once is making my head spin. Yet, should I dare to bring up the charts below, I get the following range of responses……

  1. Who cares…..we are in a long-term secular bull market – Hint: We are not.
  2. The US Economy is about to turn around and surge higher – Fair enough, but based on what? As I have argued before, there are no drivers to propel us forward.
  3. There are too many bears!!! – This is nonsense. Even the hardcore bears I know are scared to death to touch this market on the short side. Even most mainstream bears are suggesting that this bull market will continue.
  4. The valuations are NOT too high. – Take a look at the P/E chart below. I rest my case.
  5. The FED will backstop any and all market corrections, QE forever and other nonsense – Only a fool would make an investment decision based on the statements above. And let me tell you, there are quite a lot of fools out there.
  6. The market is consolidating as it gets ready for a breakout – I can just as easily argue that it is distributing.
  7. Etc…..

You get the idea. Call me a fool, but I have heard the exact same thing at 2000 and 2007 tops.

Historic Macro Vs Stock Market Data Divergence. 

Macro Data InvestWithAlex

Inflation Adjusted S&P. 

S&P inflation adjusted

Adjusted P/E Ratio Is Near Historic Highs (only 2000 tech top stands higher). 

PE Ratio

In other words, you don’t have 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. May 15th, 2015  InvestWithAlex.com

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

Why Most Bulls Might Be High On Drugs….Again Google

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How To Make Money With Drones

Here is the coolest drone application I have seen up to date. Well, if you don’t count shooting them down with a shotgun. The next GoPro? Time will tell.

There is very little doubt that “drones” will be a huge industry moving forward. That brings up an important question.

How do we make money off of it?

That is precisely what this article/video attempts to answer.  Where the real money is in drones.

Here is the bottom line. This space is wide open and full of young start ups. And as with any other industry, there will be one or two big winners (think Microsoft or Amazon), while the rest will fail. Not much is available in terms of public markets.

You might want to look at some of these companies from an angel investor angle, but your chances of finding that diamond in the rough are small. Finding a venture firm that has a portfolio of these things might be your best bet. One thing is certain, it is probably worth following this new industry closely.

z32

How To Make Money With Drones Google

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Why Was Janet Yellen Talking Down The Market?

janet yellen investwithalex

A little over a week ago Janet Yellen uttered the following words, “I would highlight that equity market valuations at this point generally are quite high.” What was she trying to convey? Here is one outlandish theory from Tom Hutchinson.

“Why is she talking about the market? Now Fed chairs are notorious for avoiding being clear about the direction of the market or their opinion evaluation. They go way out of their way to do that. When they deliberately talk about the market, there’s a reason for it. What I personally think is the reason here is that the Fed is not going to raise rates in June or maybe even September and she’s trying to talk down the market a little bit in anticipation of not raising rates.

My opinion is that if she was going to raise rates, why talk down the market? The rate hike would do that. The risks of not raising rates are that, you create a bubble. Too many people love the idea that rates aren’t going up and flood into the market and she wants to temper that a little bit and avoid overvaluation.”

So, let me get this straight. Janet Yellen does not want to raise rates and she is asking Mr.Market not to push higher? Perhaps. However, here is a scenario that makes a little bit more sense. At least to me. The FED will raise rates and Ms. Yellen is simply telling the market that it should get a little bit more serious about the upcoming rate hikes. Particularly, when you consider today’s bubble level valuations.

Z31

Why Was Janet Yellen Talking Down The Market?  Google

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Bull Or Bear? You Decide

Daily Chart May 14th InvestWithAlex

5/14/2015 – A positive day with the Dow Jones up 189 points (+1.05%) and the Nasdaq up 69 points (1.39%). 

As yours truly, David Stockman and Mohamed El-Erian continue to warn their followers that a big stock market decline and a severe recession are coming down the pipeline.

David Stockman: 

  • “The worldwide central bank money printing spree of the last two decades has generated massive excess capacity and mal-investment all around the planet.”
  • “What is coming, therefore, is not their father’s inflationary spiral, but an unprecedented and epochal global deflation.”
  • “So the central banks just keep printing, thereby inflating the asset bubbles worldwide. What ultimately stops today’s new style central bank credit cycle, therefore, is bursting financial bubbles. That has already happened twice this century. A third proof of the case looks to be just around the corner.”

Mohamed El-Erian: 

  • Financial markets have grown addicted to central bank easing, and that addiction could cause a heap of trouble when central banks tighten the credit spigot.
  • “It reminds me a little bit of 2007 and 2008,” when investors tried to discern when the turn would come away from easy credit conditions, El-Erian said. “I’m not so confident that I will see the turn coming, and turns tend to happen quite quickly.”

I couldn’t agree more. The only remaining question is…….are the US Equity markets currently going through a 10 month distribution or consolidation period? If distribution, the time to pay the piper may be soon at hand.

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 14th, 2015  InvestWithAlex.com

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

Bull Or Bear? You Decide Google

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Last Hurrah? Foreigners & Hedge Funds Buy Real Estate In Bulk

Dead-cat-bounce

Foreign investors are always the last to arrive. This should not come as a surprise to anyone. Just cycles repeating themselves.

Foreign Money Is Pouring Into U.S. Real Estate, and It’s Not Just Houses

As the pot of money set aside for U.S. commercial real estate grows, competition for the best properties is pushing investors to buy in bulk. Based on the pipeline, which includes the GE deal, the second quarter may be one of the biggest on record for property transactions, according to Real Capital. It’s so hard to get things on a single-asset basis,” said Janice Stanton, an executive managing director at commercial brokerage Cushman & Wakefield Inc. “You’re starting to see larger and larger transactions.

Blackstone is a prime example of the thinking above. Their investment thesis in real estate is very simple. 1. The bottom is in. 2. There is a massive housing shortage. 3. Real estate prices will continue to rise.  That sounds great, except for one thing, it’s a bunch of nonsense that can easily be discredited.

Now, remember, while these guys have been somewhat correct thus far by being one of the largest real estate buyers/investors in the nation, the market hasn’t spoken yet. All they have done is bought a huge amount of illiquid real estate that they will be unable to unload when a bear market in real estate prices resumes. As often is the case, one minute you are a financial genius and a half an hour later you are a retarded idiot (after the market moves against you).

In another sign that the “Dead Cat Bounce” for the Real Estate market is now over, Blackstone Group has announced that it’s real estate acquisition pace has slowed 70% from last years pace due to higher prices. In fact, this is the trend seen across the industry. Investors, hedge funds, institutions are all slowing down their real estate acquisitions to the tune of 70-90%.

“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”

What happens next?

Easy. The real estate market might hover here for some time. Not too long thought. As soon the Bear Market of 2015-2017 hits and the US falls back into a severe recession, you will see housing going down once again. Once investors realize where we are in the real estate cyclical composition (dead cat bounce and not expansion) you will see the likes of Blackstone trying to get rid of their properties as fast as possible. With investors heading for the doors, mass volume of real estate should hit the market. Collapsing existing values just as fast, if not faster, than their initial descend between 2006-2010.

Good luck selling your 43,000 rental properties Blackstone. 

z32

Last Hurrah? Foreigners & Hedge Funds Buy Real Estate In Bulk Google

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Are The Bears Stupid Or Something?

Daily Chart May 13th InvestWithAlex

5/13/2015 – A mixed day with the Dow Jones down 7 points(-0.04%) and the Nasdaq up 5 points (+0.11%) 

Is there a party at the Hamptons during the week? The stock market remains within the confines of its “Mind Numbing” trading range. We have had the same situation in the summer of 2014. At that time I have suggested that such a low period of volatility will result in a violent move thereafter. And so it was. Today, we are facing a very similar outcome.

A massive and rather rapid stock market decline is coming later on 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. 

At least for now, the bulls continue to point their finger at the bears and laugh.

Bears Beware: Bond Rout Puts Investors on the Wrong Side of Central Banks

The article suggests that it is suicidal to fight the majority of central banks today. As their primary concern remains inflationary stability and asset price appreciation.

And while the premise above sounds about right, the author and the money managers in question make a fatal mistake. They have create a direct correlation between zero interest rates/QE and subsequent asset price bubbles we are experiencing today.

That is a fatal assumptions because the link might not have anything to do with the reality. As I often suggest, the stock market traces out its exact mathematical points of force. It will decline when the TIME/PRICE are right. Not before nor after. That is to say, the stock market will start its decline when the time is right, no matter what the fundamental picture is and no matter what central banks are doing.

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 13th, 2015  InvestWithAlex.com

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

Are The Bears Stupid Or Something?  Google

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Greenspan And Paulson Expect A Sell-Off….Should You?

Alan-Greenspan-Investwithalex

The biggest “Economic Miracle”…aka… fraud of all time, Mr. Alan Greenspan thinks that A. The FED will raise rates and B. The stock market will sell-off. Mr. Paulson shares in his view.

This comes on top of Janet Yellen recent admission that the stock market is overpriced. But wait, this gets even better. Mr. Greenspan comes through with an excellent investment advice.

“The best strategy for equity investment has always been buy and hold, and forget it.  Once you start to try and trade the market. I don’t care how good you are, how smart you are, you will not beat an index fund.”

That sounds nice in theory until you are sitting at 2009 bottom with a 50-60% loss. So, let’s recap. Greenspan, Paulson and Yellen think that we are in some sort of a bubble, the rates will rise and the market will sell-off. If you still believe that today is a good time to be fully invested, well, you are on your own.

Z30

Greenspan And Paulson Expect A Sell-Off….Should You?  Google