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Year End #5 – Hotel California…..This Could Be Heaven or This Could Be Hell

Daily Chart ANovember 23 InvestWithAlex

11/23/2015 – A down day with the Dow Jones down 33 points (-0.17%) and the Nasdaq down 2 point (-0.05%). 

Today’s real estate news wasn’t very encouraging.

Weakest annual growth since about the January of this year. What is even more troubling is the fact that home sales put in a lower top, just below 2013 high. That suggests the top is in and the market is ready to accelerate down. Luckily, that shouldn’t come as a surprise to the readers of this blog.

I have now maintained for over two years that the real estate market is putting in a massive double top. Driven by the FED, zero interest rates, liquidity and speculation. That hasn’t changed. What I find interesting is the fact that we have reached a mental plateau where no one believes real estate prices can even go down.

That is a fallacy. They can and they will. Bellow you will find a number of real estate articles that I have published throughout 2015.  My view hasn’t changed a bit. Enjoy.

houseingbubble-investwithalex

The good news is, some people in the article above do have their heads screwed on right.

Hanson, often criticized for being a housing bear, points to the institutional and foreign buyers who have flooded the market since 2012, buying up distressed and lower-priced homes, as well as some new construction, all with cash. He calls it an exact replay of the last housing boom, “when unorthodox demand with unorthodox capital would pay any price it took to hit the bid. In short, end-users today are being handed a red-hot potato market already in a bubble larger than 2006.

And while some Americans might feel house rich for the time being, there is this gem to consider Most Americans have less than $1,000 in savings

As for yours truly, I continue to maintain the view that the US Housing Market is putting in a multi decade double top. And anyone who is buying a house today, will regret that decision a couple of years down the road. In fact, my analysis remains exactly the same…..

The only hope homeowners have at this stage is the FED going into a full out “Monetization” mode. And while that will create a whole set of terrible economic problems, at least mortgages will be monetized and/or inflated away. At the same time, I wouldn’t bet on it. z32

Is Today’s Real Estate Bubble Bigger Than 2006?  Google

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Year End #6 – Get Your Unicorn Today

silicon-valley-bubble-investwithalex

Don’t tell Warren Buffett, but apparently Silicon Valley’s start up sector is selling at dirt cheap valuations. At least according to Marc Andreessen. We’re in a long-term tech bust,’ not a bubble

“I think we’re in a bust. We’re in a long-term technology bust. I think technology has been undervalued since 2000, and we’re still undervalued,” Andreessen said. “The entire basket of unicorns is worth half of Microsoft.”

Well, I am sure if these so called “unicorns” had the same revenue/income base as Microsoft does, innovation or not, they wouldn’t be as “cheap” as Mr. Andreessen claims.

Considering the above, should you run out and start investing in tech startups? 

Not so fast. First, here is what another industry insider, Marc Cuban, has to say about the sector.

Mark Cuban is dead on in identifying Silicon Valley’s Tech Bubble 2.0: Why This Tech Bubble is Worse Than the Tech Bubble of 2000.  At the end of the day, Silicon Valley has about as much liquidity as California’s dried up reservoirs. Something that Angel investors, venture capitalists and stock option millionaires are about to find out.

How big is this bubble? Consider the following. Uber’s valuation went from $60 Million in 2011 to $50 Billion today(not a typo).  They must be making a ton of money…..right?WRONG. Bloomberg estimates that Uber showed $470 million in operating losses with $415 million in revenue last year. Plus, the company was set a major legal blow in California by requiring their drivers to be classified as employees. And as far as I am concerned, it is just a matter of time before other states and countries regulate Uber out of business to protect taxi drivers.

In other words, the valuation above is not only outrageous, it is, how should I put it, retardedly outrageous.

Back to Mark Cuban. It is now evident that most market pundits out there are dismissing Mark’s view. And while Mark talks about Angel Investors and illiquidity in that market, his analysis can just as easily be applied to today’s stock market. More about that in a second.

First, here is what most people don’t realize about Mark Cuban. After selling his first business Mark became a heck of a trader and investor in the 1990’s. His returns were so good at the time that Goldman Sachs tried to bring him in order to figure out what he was doing. This same ability helped him unload Broadcast.com for $5.7 Billion to Yahoo right at the top of the tech bubble. Here is what he thinks.

I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher. Why? Because there is ZERO liquidity for any of those investments. None. Zero. Zip.

So why is this bubble far worse than the tech bubble of 2000 ?

Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?

We often talk about the stock market, but we rarely look at this side of the equation. Mark is absolutely right. If you are an Angel Investors, good luck getting your money out. Especially when today’s Silicon Valley’s bubble bursts. Plus, the chances of hitting a good exit in tech are about as good as winning a lottery.

What’s more, the bubble Mark Cuban has identified in the tech industry is the same bubble I see in the stock market. The drivers behind both are the same. The only difference is the amount of liquidity available.

Z31

Year End #6 – Get Your Unicorn Today Google

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Year End #7 – How We Nailed May 19th, 2015 Top -To The Day.

Daily Chart ANovember 20 InvestWithAlex11/20/2015 – An up day with the Dow Jones up 91 points (+0.51%) and the Nasdaq up 31 points (+0.62%) 

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 mid-term 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.

STOCK MARKET

At that time, April of 2015, my basic forecast was as follows (without getting into intricacies of it). 

  1. 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.
  2. 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:

1 ellipse

Pay particularly close attention to the following.

  1. We had a very powerful TIME turning point arriving on May 19th (+/- 1 trading day)
  2. The market ran right into elliptical resistance at the same time.
  3. 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. November 20th, 2015  InvestWithAlex.com

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

How We Nailed May 19th, 2015 Top – To The Day.  Google

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Year End #8 – Why The Chinese Downfall Is Just Starting.

china concrete

Just how big is China’s bubble? Credit or otherwise.

The chart above is one way to look at it. Here is another. China breaks up $64 billion underground banking network

Recently, quite a few financial media outlets have suggested that China has been fixed. Has it been? 

If your think in a linear fashion, which would eventually be devastating to your investment returns, the answer is YES. One Less Hurdle for Fed Hike: China Comes Back From Danger Zone

When the Federal Reserve in September held off from its first interest-rate increase since 2006, the U.S. central-bank head cited growing concerns about China’s market turmoil among the reasons. “A lot of our focus has been on risks around China,” she said in a press conference after the decision.

The above is just another data point confirmation that the FED is now a market puppet. The reality is quite different. Take a look at this 3-year Chinese Large Cap ETF (FXI).

China Market Investwithalex

Does it look like the worst is behind us?  

Well, one can argue that the bottom has been put in place and that the Chinese market is now ready to stage a come back rally.  Yet, I can just as easily argue that we are in the early stages of a more severe decline. Think 2000-2002 on the Nasdaq. There are no technical confirmations either way. At least not yet. As a result, we have to rely on the fundamentals. And the picture there is kind of scary.

In other words, it is kind of presumptuous to assume that China has somehow bottomed. If anything, their fundamentals continue to deteriorate. In July of this year I have suggested the following China’s Nasdaq 2000 Crash Is Set For A Bounce  And while I was a few weeks early, we did get that bounce. A bounce that might now be over.

Z30

Year End #8 – Why The Chinese Downfall Is Just Starting.  Google

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Year End #10 – Dip Buyers Who Bid This Market Up Are Insane Daredevils

Daily Chart ANovember 18 InvestWithAlex

11/18/2015 – A positive day with the Dow Jones up 247 points (+1.42%) and the Nasdaq up 89 points (+1.79%) 

Well, what a surprise. The FED continues to verbally play with the market. Something I have outlined here so many times before. The FED’s End Game Is Finally Unveiled.

Now, do me a favor. Watch the video below. You can also view a different (shorter) version of the same thing here Expect a market meltdown before the 2016 election

Dip Buyers Who Bid This Market Up Are Insane Daredevils

If you participate in financial markets, this video is a must watch. His view is my own. To the tune of 100%.. 

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 18th, 2015  InvestWithAlex.com

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

Dip Buyers Who Bid This Market Up Are Insane DaredevilsGoogle

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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.

Z30

The Next BIG Investment Opportunity?  Google