Investment Grin Of The Day Google
COT Reports & Weekly Market Calendar – July 18th, 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 JULY 14th, 2015
Currencies:
- USD: 3K Long Vs. 72K Short – Significant short interest remains. No major changes.
- Canadian Dollar: 52K Long Vs. 2K Short – Net increase in commercials net long position.
- British Pound: 45K Long Vs. 23K Short – No changes. Remains neutral.
- Japanese Yen: 131K Long Vs. 48K Short – Net increase in short interest. Yet, a large long position in Yen remains.
- Euro: 131K Long Vs. 10K Short – Significant long position remains. No change.
- Australian Dollar: 110K Long Vs. 1K Short- Significant long position. Slight increase in long position
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, Euro, Yen and Australian Dollar rally.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 229K Long Vs. 509K Short – No changes. A substantial short position remains.
- VIX: 75K Long Vs. 43K Short – Decrease in net long exposure. Still, a substantial long position suggests market turbulence ahead.
- Gold: 80K Long Vs. 76K Short – No change. Still neutral.
Conclusion: Based on the information above, commercial interests expect the stock market to decline as volatility surges higher. Gold is likely to remain within its trading range.
Next Week’s Market Calendar:
- Just Q-2 Earnings.
COT Reports & Weekly Market Calendar – July 18th, 2015 Google
Is Nasdaq Breaking Out Or Playing A Cruel Joke?
7/17/2015 – A mixed day with the Dow Jones down 34 points (-0.19%) and the Nasdaq up 47 points (+0.91%)
Most people believe that the bull market is back on track. After all, the Nasdaq has broken out to a new high, Netflix is wipping out countless shorts, Google is surging and Facebook is expected to take over the world. What’s not to like?
Well, if I may, most of the other primary indices are not confirming this Nasdaq extravaganza. For instance, the Dow is still 300 points lower than its May 19th top. VIX/VXX are hitting their all time lows. The market is overbought and most primary indices look like a pound of Swiss cheese (too many down gaps).
So, is this a breakout or a false breakout that will reverse and fail. I will let you decide that, but it might be worth studying what had happened to NYSE in April and May. Here is the chart for your reference.
Now, this week’s rally has been driven by 3 primary components.
- China Has Been Fixed: As I have explained numerous times over the last few weeks, after it’s massive sell-off, China was bound to bounce. That is exactly what we are seeing. Yet, that that doesn’t mean the rally won’t be retraced back and we won’t have a further crash. In fact, it is highly probable now. The question is…. when? Hedge fund manager Bill Ackman tends to agree China Crash Is ‘Way Bigger Than Subprime’
- Greece Has Been Fixed: There is no way in hell that Greece can ever repay. Its eventual bankruptcy or default is a mathematical certainty. How long before Greece becomes an issue again? I don’t think very long. El-Erian Agrees: Greek deal only prolongs the inevitable
- Short-Covering/Bullish Sentiment/Good Earnings: The market is overbought and bullish sentiment is once again at topping levels. Then you have bulls poking fun of bears You’d be a ‘fool’ to short the market: Gartman Correct me if I am wrong, but I believe Mr. Gartman was predicting a bear market when the Dow was hitting 17,500…5-10 trading days ago. How can anyone manage money like that?
Point being, we are in a very complex short-term and long-term market environment. It would be smart not to come to a quick conclusion here either way. But, 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. July 17th, 2015 InvestWithAlex.com
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The Best Freaking Trade Out There
Now that everyone has boarded the Nasdaq’s train to prosperity and new bull market, take a look at the chart above. See those massive gaps? They are making my mouth water with anticipation.
Plus, everyone is slamming VIX/VXX at exactly the wrong time. For instance, Fear not–VIX signaling all clear for stocks: Strategist
Did anyone stop for second to think that this might be super bearish for stocks?
Of course not and I guess I”ll have to repeat what I have said here right before VIX/VXX surged higher last time.
Previous Post:
We have talked about VIX/VXX before. First, there is a massive short position against the volatility index near its all time lows. Plus, consider this. According to the COT reports……
- Commercial Interests (smart money):70K Long Vs. 27K Short
- Leveraged Fund & Speculators (dumb money): 49K Long Vs. 33K Short
As I have indicated in my COT Weekend update, commercial interests tend to win. Although, the timing is not always exact.
So, we have a massive “smart money” long position and a massive “dumb money” short position. And at the time when VIX/VXX hitting all time lows.
Something tells me that as soon as this period of low volatility ends, VIX will stage a massive rally to the upside. As much as 100% or more and within a short period of time. And I am not the only one who thinks that. You Can’t Keep the Panic Out of Stocks Forever, VIX Traders Say
So, is this the best trade out there today? Well, that’s for you to decide.
Investment Grin Of The Day
Why Iran’s Deal Is Irrelevant
Let me begin by saying that Iranians are some of the nicest people I know. I have quite a few friends and that observation definitely fits the mold. With that in mind, I do not get America’s obsession with Iran. Nuclear weapons or not.
If shove comes to push and Iran is stupid enough to attack Israel, the latter or the US have the capability to wipe Iran out in a matter of minutes. In other words, how should I put it, Iran is a sideshow that doesn’t matter.
The real circus is amassing on Russia’s eastern border. On both sides (NATO vs Russia). Here is the latest Russian Air Force Receives New Su-34 Bombers, Su-35S Fighters As Military Expansion Continues
If I was Obama I wouldn’t worry about a small country that may or may not (one day in the future) get a nuclear bomb. I would worry about a country that already has 8000 active nuclear warheads/ICBMs (the US has 7300). You know, the country that NATO is currently and actively trying to pick a fight with.
Carl Icahn’s Epic Market Prediction
7/16/2015- An up day with the Dow Jones up 70 points (+0.39%) and the Nasdaq up 64 points (+1.24%).
If you participate in financial markets the video below is a must watch.
Carl Icahn and Larry Fink, BlackRock Chairman and CEO discuss the state of today’s financial market. As a quick summary…..
Carl Icahn: High-yield market is about to blow up (he indicated previously that he has a large short position there or building one). Just as it did in 2007-2009. This will have a net negative impact on the stock market. Just as it did in 2008.
Larry Fink: No way in hell, we don’t have the leverage we had in 2007.
My Comments: I believe Carl Icahn is on the right side of the trade here. The massive amount of leverage Larry Fink dismisses is still there. Its just that a large chunk of it got shifted onto the FED’s balance sheet and the stock market.
Here is what I believe the trigger point will be: As soon as investors lose “net faith” in the FED you will see this whole thing fall apart. Fast. As far as I am concerned they have already lost the window of opportunity to raise interest rates. They will now be stuck in the worst case scenario…..zero interest rates, no way to stimulate as another round of QE can backfire and collapsing capital markets. As soon as investors come to this realization, the jig will be up. And that should happen much sooner than most people anticipate.
Anyway, watch this video. It is definitely worth 50 minutes of your time.
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. July 15th, 2015 InvestWithAlex.com
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Investment Wisdom Of The Day
What Amazon Prime Tells Us About The US Economy
I am in the market for a new laptop. Nothing urgent, but I have been looking and studying various models, prices, etc….. So, imagine my disappointment when a highly hyped Amazon Prime Day rolled around and I wasn’t able to find anything.
For what I wanted, prices barely changed and after browsing for half an hour I couldn’t find anything worthwhile. It was the same situation at the matching Walmart sale. In fact, I could have probably found better deals at a local Staples or Best Buy store. And while my story is anecdotal at best, apparently other people had a similar experience. Amazon Prime Day is on and customers are bummed out by the virtual ‘garage sale’
As an investor, this leads me to two quick observations.
- If even Amazon and Walmart were unable to squeeze “Deals” out on their highly hyped sales, corporate margin expansion or corporate earnings must be at their peak right now.
- Based on what I have read thus far, it appears people were not in a shopping mood. This seems to coincide with Bank of America’s Consumer Spending Survey which has been showing signs of a rather rapid deterioration since the beginning of this year.
Although there is no data set available yet to prove all of the above, if true, we should see earnings compression appear on corporate income statements over the next few quarters. And that’s not good when Shiller’s S&P P/E ratio is at 27.
Chinese Idiocracy & Greek Revolution
7/15/2015 – A negative day with the Dow Jones down 3 points (-0.02%) and the Nasdaq down 6 points (-0.12%)
Imagine a heroin addict who is knocking on death’s door after an overdose. The attending physician only has the following two options. Flash the system, then hope/pray the patient makes it. Or give the patient an adrenaline/morphine short so he/she has few more minutes to say goodbye.
It doesn’t take a genius to figure out what the EU, China and Greece did over the last two weeks.
But not everyone thinks that way. Jamie Dimon on Greece and China: Crisis? What crisis?
“You have to separate the financial markets from the economy,” he said. “You can’t expect any economy to have perpetual growth at 10%. Dimon described the recent choppiness as “bumps in the road” and that he thinks Chinese banks and regulators will be able to handle things even if loan quality in China is a bit worse than expected.
Here is the problem with the presumption above. Who gave the “All Clear” signal? Just because China had a fairly substantial bounce after a massive sell-off, something I have talked about here, doesn’t mean the worst is behind us. One look at any of the Chinese indices and you realize that China left a number of massive down gaps behind. Gaps that the market will have to close.
That is to say, at the very least the Chinese market is set to re-test recent lows (when the bounce is over).
And I don’t care what kind of GDP growth China is reporting (today’s number showed a 7% GDP growth). I’ll put it this way. When even the CNN questions China’s accounting practices, Is China cooking its books?, you know the end is near.
But it’s not only China. It’s everyone. Maybe in a more subtle way, but it is there. Today’s US Financial system is a one giant Ponzi Scheme that makes Bernie Madoff look like a boy scout. If you don’t think our financial markets are highly distorted at Shiller’s P/E of 27 though intervention, QE and stock buybacks, I am afraid you might be in for a rude awakening.
In terms of Greece, there is absolutely no way way in hell Greece can avoid default. Bailout or not and now or later. It is mathematically impossible. For Greece’s sake, the people of Greece need to overthrow their spineless Government, immediately default and then follow Iceland’s 2008 bankruptcy model. That is the only chance they have.
As I am writing this, Greek protesters are starting their clashes with police. I sincerely hope that they won’t stop until Greek default becomes a reality. I remind you, something that the entire country voted for. If they fail, they are to suffer the consequences of economic tyranny/slavery for many years to come.
So, is it possible that our adrenaline/morphine shot is wearing off. I will let you decide.
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. July 15th, 2015 InvestWithAlex.com
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