Category: Stock Market

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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 January 12th, 2016

Currencies: 

• USD:  1K Long Vs. 56K Short – No changes. Substantial short interest remains.
• Canadian Dollar: 80K Long Vs. 2K Short – No changes. Significant long interest remains.
• British Pound: 160K Long Vs. 4K Short – Significant increase in net long exposure. British pound remains bullish.
• Japanese Yen: 72K Long Vs. 70K Short – Neutral.
• Euro: 136K Long Vs. 17K Short – Slight decrease in net short exposure. Euro remain bullish.
• Australian Dollar: 80K Long Vs. 1K Short – Significant 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: 304K Long Vs. 313K Short – Net neutral position remains.
• Nasdaq 100-Mini: 16K Long Vs. 161K Short – Sizable short position. Slight decrease in net short position.
• VIX: 48K Long Vs. 56K Short –  Neutral
• Gold: 48 Long Vs. 45K Short – Gold is back to being neutral.

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

Next Week’s Market Calendar: 

• Q-4 Earnings. 

COT Reports & Weekly Market Calendar – January 8th, 2016 Google

1/15/2016 – A big down day with the Dow Jones down 392 points (-2.39%) and the Nasdaq down 127 points (-2.74%)

Quite a bit of ground to follow as we head into the weekend.

With the FED’s James Bullard trying everything to prop up the markets, Fed’s Bullard Shows Signs of Rate Hike Waffling, a certain forecast published here a few months ago comes to mind.

To be exact: The FED’s End Game Is Finally Unveiled. Here is a quick summary of what was said.

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…..

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 in any meaningful way. If the FED members have even an ounce of intelligence, and I believe they do, they realize the same.
2. If the market declines, issue a “Dovish” statement. Bring it up.
3. If the market recovers, issue a “Hawkish” statement. As they did today. 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.

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.

Now, open any financial media outlet today and you will find it filled with bearish gloom and doom. And when even prominent bulls start calling for a market decline, some sort of a bottom shouldn’t be far away. I present to you…..

• Prepare for stocks to fall another 10%: Larry Fink

“We’re in the midst of a real market decline, bordering on a bear market,” he told “ Squawk Box” on CNBC. “But the speed at which this is happening is just a reassessment of the risk, reassessment of where we’re going.”

Fair enough and Mr. Fink can very well be right. At least long-term. But investors can’t forget that markets do bounce and/or stage rallies from time to time. In other words, today’s excessive bearishness might represent an opportunity to “buy the dip”. Or maybe NOT, as markets tend to crash in oversold conditions. The exact conditions we are witnessing today.

But don’t worry, Mr. Cramer is here to teach you how to perfectly pick out bottoms. Cramer: How I knew to buy before the big rebound Thursday’s bottom that is and right before Friday’s beat down. I can’t help but wonder if Mr. Cramer sold or went short right at the top as well.

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.January 15th, 2016  InvestWithAlex.com

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

FED’s Mouthpiece Confirms My Action Plan, Excessive Bearishness & Cramer Teaches You How To Pick A Bottom Google

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. 

Find Out Why Gold Is Going Much Lower Google

1/14/2016 – A positive day with the Dow Jones up 226 points (+1.40%) and the Nasdaq up 89 points (+1.97%). 

Open any financial media outlet today and you will see doom and gloom. Here is just a small sample.

• Are These the Death Throes of the Seven-Year Bull Market?
• The S&P 500 could go to 1,600: Merrill strategist
• Analyst: Here Comes the Biggest Stock Market Crash in a Generation

And they don’t come much more bearish than Albert Edwards, strategist at Société Générale. He’s not had much nice to say about the global economy in years, and recent events have only hardened his convictions that the world is headed for disaster, and will take the prices of equities down with it. How much? Edwards predicts the U.S. stock market could plunge as much as 75%. That would be worse than during the financial crisis, in which stocks from their peak to trough dropped a brutal 62%.

My goodness, and people say that I am bearish.

First, let’s address the long-term picture. While a 75% drop might appear fundamentally feasible, it is not going to happen. Analysts must understand where we are in the cyclical composition of the market. The sell-off that we had between 2007-2009 was the worst of it. It is called a mid-cycle panic for a reason. It is identical to 1907-1909, 1937 and 1972-1974 sell-offs. In other words, we will not see such steep sell-off going forward or anytime soon.

Short-term, the market is lingering in an extremely oversold territory. As we have discussed earlier in the week. Everyone Expects A Bounce. Will We Get One?

And while it is reasonable to assume that some sort of a bounce is coming, the question is, how far will it go? Opinions differ here as well.

• History says this 6-year-old bull market is only getting started
• Goldman Sees 11% Upside in S&P 500 After an `Emotional’ Selloff

“What is happening is really very much an emotional response,” Cohen told Elliot Gotkine on Bloomberg Television. “We need to put things into perspective. Stocks are probably the best place to be.”

I wouldn’t necessarily classify this as an Emotional Sell-Off, but hey, what do I know. I will simply point out the following. Despite today’s oversold conditions, most investors continue to believe that we are still in a bull market. A bull market that has quite a few years to run. Not only that, the “Buy the Dip” mentality remains very well entrenched. Finally and despite the recent sell-off, most people are not at all concerned with the Dow at lower 16,000.

What does all of that mean? 

While we will certainly get powerful bounces along the way, most investors continue deny the possibility of a full fledged bear market. That is to say, a possible bear market might be just getting warmed up here and no one is yet aware of the fact.

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.January 15th, 2016  InvestWithAlex.com

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

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Just imagine for a second that your plane is cruising at 30,000 ft, or in the case of the Dow at 18,000 ft, when one of its engines suddenly blows. Let’s call that engine “zero interest rates and QE”. Not a big deal. Most planes will land without a problem with just one of its engines being operational.

But, what happens when the other one blows. Well, it’s a long way down. Buybacks no longer work to boost stock prices. 

Stocks with big buyback programs are struggling this year, and according to one technician, a similar lag has previously preceded two market crashes.

As was mentioned here before, when it comes to the stock market and buybacks, Corporates tend to behave in the same fashion as most individual investors. They buy at the top and sell at the bottom.

Sure, it is easy enough to borrow at zero interest rates and then use that money to purchase stocks. Artificially driving up the prices. But there is another ominous sign to watch for. Credit spreads. Should credit  spreads continue to widen, as has been the case lately, our proverbial second engine might blow too. If it hasn’t already.

That is to say, the stock market finds itself in an incredibly vulnerable place. At dizzying valuation heights and with no fuel/engines left to support its flight. I doesn’t take a genius to figure out what happens next.

What You Ought To Know About Stock Buybacks Slowing Down  Google