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What You Ought To Know About Grexit -Guest Post

grexit investwithalex

When the next great financial crisis strikes, millions will be blindsided by what is coming and will be shocked in to “New Great  Depression of The 21 th Century”.  But that doesn’t have to happen to you.  It is empowering to know what is coming and to understand why it is coming.  It is empowering to get prepared in advance for turbulent times.  It is empowering to have a plan for the years ahead and we will prepare you in advance.

When we take away the Fuzz Math that the Federal Government uses, The Real GDP for the 1st Quarter of 2015 was -2.00%.

Greece will have a series of massive debt payments come due this week and we know that Greece cannot afford to make these payments. But contrary to many opinions, Greece cannot and will not be thrown out of the Euro-zone. There will be no “Grexit,” unless Greece chooses to leave.

According to Article 50 of the Treaty of Lisbon, which governs the EU, no member can be thrown out of the Euro-zone. There is only one way to exit via this treaty, and that is by the choice of each country only. Withdrawal from the European Union is a right of European Union (EU) member states under Treaty on European Union (Article 50), which states, “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”

Greece can choose to leave the EU whenever she wants, but Greece cannot be forced to leave against her will. The same is true with Germany. Thus, it is more likely that Germany would leave the Euro Union before Greece, since essentially, Germany – more than anyone else – is on the hook for Greece’s debt. Furthermore, many people in Germany (and France and Netherlands) share opinions similar when it comes to distrust for the power of central banks, financial institutions, and multinational corporations. One wonders how long they (especially Germany) will stay in the Euro Union if other entities expect them to keep picking up the debts of their fiscally (and perhaps morally) challenged siblings.

Therefore, it is likely that this can will be kicked down the road once again by the members of the Eur ozone. In fact, it is possible that this drama will continue for many year to come   In other words, something will be worked out shortly that no one is really happy with, and leads the matter a little closer to an ultimately sour ending.

This global financial drama is also part of the “incubation” effect of as part of the 2008-2015  There would be a much larger financial crisis. Decisions were made that seemed to resolve that crisis, but in reality, probably only delayed it. The world is not in less debt due to the decisions of central bankers during that 7-year period. To the contrary, the nations of the world are in more debt and require a rise in inflation to help bring them out of this crisis. But, will they be able to tame the forces of inflation once they really get underway? We will know shortly, within the next 1-5 years

Thus, we may see many unenforceable threats being made, but all Greece needs to do is… nothing, which of course, angers others who are owed by Greece.

Post By: Mark Ackerman: A Financial Engineer,Brilliant Wharton Graduate Using Elliot Wave Principle Fractals and Fibbs as well as Quant Models for analysis of different 18 Asset Classes, 35 years of trading experience.Click Here To Learn More

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What You Ought To Know About Grexit -Guest Post  Google

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COT Reports & Weekly Market Calendar – May 30th, 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 26th, 2015

Currencies: 

  • USD:  5K Long Vs. 72K Short – Significant short interest remains.
  • Canadian Dollar: 38K Long Vs. 56K Short – Neutral -No change from last week.
  • British Pound: 76K Long Vs. 41K Short – Commercials decreased their long position – more neutral now.
  • Japanese Yen: 111K Long Vs. 13K Short – Big increase in net long exposure.
  • Euro: 143K Long Vs. 22K Short – Significant long position.
  • Australian Dollar: 97K Long Vs. 32K Short- Significant long position.

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

Markets/Commodities/Volatility: 

  • E-Mini S&P 500: 200K Long Vs. 597K Short – Slight decrease in short interest. However, a heavy short position remains.
  • VIX: 111K Long Vs. 15K Short – Heavy long position suggests market turbulence ahead.
  • Gold: 60K Long Vs. 102K Short – Slight decrease in short interest. More neutral now.

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

Next Week’s Market Calendar: 

  • June 1 – ISM Manufacturing PMI

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

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The FED Juiced 2009-2015 Stock Market Rally By 50%

Daily Chart May 29th InvestWithAlex

5/29/2015 – A down day with the Dow Jones down 115 points (-0.64%) and the Nasdaq down 28 points (-0.55%). 

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. 

A few interesting things to discuss before the weekend hits

The United States warned on Friday of a possible accident for the world economy if Greece and its creditors miss their June deadlines to avert a debt default.

That’s an interesting twist. There is no question that Greece will default, one way or another. Well, unless someone is stupid enough to offer them another line of credit and Greek politicians are stupid enough to make IMF/ECB payments with that money.

Yet, that is not my primary concern as I always read between the lines.  Are the US Officials (fed, treasury, etc…) staring to positions themselves for an eventual market tantrum later on this year? Most likely in conjunction with interest rate increases. Are they planning to blame Greece for their shortcomings and failures (today’s bubble, QE, speculation, zero interest rates)?

We shall see, but that does sounds awfully suspicious to me.

A fascinating look at what has transpired over the last 6 years and how much the FED juiced the stock market.

It took the Fed 95 years to build up a balance sheet of $1 trillion and only six years to go from there to the present level. The Federal Reserve was providing this stimulus to improve the growth of the economy, but it is my view that three quarters of the money injected into the system through the purchase of bonds went into financial assets pushing stock prices up and keeping yields low. If I am right, the Fed contributed almost $3 trillion (some may have gone into bonds) to the $13 trillion rise in the stock market appreciation from the 2009 low to the current level, earnings increases explained $9 trillion (1.5 x $6 trillion) and other factors accounted for $1 trillion. You could argue that the monetary stimulus financed the multiple expansion in this cycle.

I would have to agree with Mr. Wein, but with one slight adjustment. He did not account for how much impact the velocity of capital had on today’s valuations. Here is what I mean. This $3 Trillion then created a self perpetuating loop in terms of earnings, stock buybacks, speculation, etc….

While impossible to calculate, I would say that the real number is closer to $6 Trillion. In other words, the FED has artificially added  $6 Trillion to today’s stock market. A number that will have to vanish. And sooner rather than later.

That would put S&P’s fair value at about 1,400. Meaning, it would have to decline 30-40% from today’s levels. Hmm, that sounds about right to me.

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 29th, 2015  InvestWithAlex.com

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The FED Juiced 2009-2015 Stock Market Rally By 50% Google

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Why Most Bulls Are Delusional

bull-vs-bear1

Just because they like to stick their heads in the sand and pretend that we are in a newly formed secular bull market, doesn’t make it so. Let’s take a closer look.

Expert: Stocks are underowned-here’s why. Buy the dips, markets likely going higher.   

First, buying the dip only works until it doesn’t. The next dip can very easily transition into a 20-30% decline. Or have we forgotten that since the FED’s liquidity party started?

“When you look at fund flows over the last couple of years in ETF mutual funds, two-thirds have gone into fixed income; only one-third has gone into stocks. I think valuations suggest the market is fully priced, but not overly expensive, looking broadly.”

I have already shown here at least a half a dozen times that valuations are in a bubble. With the stock market being more expensive in only two other instances. Right before the 1929 crash and 2000 tech bubble (due to lack of tech earnings at that time).

She is not concerned about a Fed interest rate hike since “we have a ton liquidity out there,” and she thinks the stock market is poised to keep going higher for at least another year. A rate hike has already been priced in,” she said. “The short-term impact on the equity market is basically nothing. It’s insignificant. I think that’s what the Fed wants. They want to telegraph this. Rates go up, and nobody cares.”

A ton of liquidity? Try telling that to a real money manager who is trying to liquidate his 1-2% stake in any given stock today. This is sheer nonsense. Already priced in…..nobody cares….there will be no impact!!! Alright, based on what? If anything, the only thing that is priced in at this time is how much money the bulls will lose.

I will tell you one thing. If these people are on the other side of the trade, it will be as easy as taking candy from a two year old. And I mean no disrespect to the latter.

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Why Most Bulls Are Delusional Google

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Sussan: This Listing Is Special John

Hey, remember this commercial from 2006. That was about the time when I scratched my head and said to myself “There is no freaking way this housing and mortgage finance bubble can go on for much longer”. Boy, was I wrong. It went on for another 2 years before blowing sky high in a matter of weeks.

Why am I bringing this up? Well, it appears that Sussan is back. In a different form, but she is definitely back. Not buying a home could cost you $65,000 a year

Penalties for not buying today? Not buying a home will cost you self respect, dignity, the American dream ? Wow, take it easy there Realtor propaganda machine. Even Kremlin would be proud of such a spin.

Despite this rubbish, the hard cold reality remains. Housing prices are bouncing for the exact same reason the stock market is where it is today. Zero interest rates, QE, the FED and speculation. Once this nonsense works itself out, housing prices will collapse in a 3rd leg down decline. In other words, buying a house today is equivalent to buying a house in 2005-2006. Take that Sussan.

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Sussan: This Listing Is Special John Google

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Janet Yellen’s Dirty Little Secret

Daily Chart May 28th InvestWithAlex

5/28/2015 – A down day with the Dow Jones down 37 points (-0.20%) and the Nasdaq down 10 points (-0.17%) 

John Hussman had quite a few things to say about today’s market environment. Nothing that you haven’t read here before, but it is important to compare notes.

“The Fed has now created the third financial bubble in 15 years,” he writes in his latest market commentary. “Focusing on two variables — inflation and unemployment — the Fed has missed the most important consideration: the risk to financial stability.”

That’s what happened in last decade’s housing bubble, and “this mistake will ultimately end just as tragically” both for the economy and financial markets, Hussman states.

He is absolutely right. I wrote about the same thing in Peak BubbleS??? And it cannot possibly end in any other fashion.

As for stocks, “our concerns remain extremely high due to the combination of obscene valuations and unfavorable market internals,” he explains. “While we continue to monitor the evidence for any shift, it’s important not to assume that Fed easing (or a delay of Fed rate hikes) would necessarily provoke a favorable shift in market internals, or would necessarily produce a shift back to risk-seeking.”

Don’t count on a delay in Fed rate hikes boosting stocks, Hussman says. “Examine the worst market collapses in history, and you’ll often find the Federal Reserve easing the whole time,” he writes. “Don’t fight the Fed, indeed.”

Bingo. On two fronts. I can attest that I cannot find a single undervalued company in today’s market. Not to speculate in, but an undervalued company that I would feel comfortable holding over a long period of time. Everything has been driven to exuberant valuation levels. Second, the FED might be powerless to stop the next decline. No matter what they promise or how many more QEs they bring to the table. Once perception changes, the market will overshoot to the downside. As it always does.

(***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 28th, 2015  InvestWithAlex.com

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Janet Yellen’s Dirty Little Secret Google

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Just A Few Charts To Think About

The only other time the stock market was this expensive: 1929 and 2000 tech bubble.
PE Ratio

Inflation adjusted S&P: Setting in a double top.

S&P inflation adjusted

Dow Transports Are Not Confirming

dow transports5

NYSE (largest index by capitalization) hasn’t gone anywhere in 10 months. Now breaking below 200 day moving average.

NYSE Chart investwithalex

Massive divergence between collapsing macro data and stock valuations.

Macro Data InvestWithAlex

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Just A Few Charts To Think About  Google

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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.

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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