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Ameritrade CEO Confirms A Bull Trap

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.

Z30

Ameritrade CEO Confirms A Bull Trap Google

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Why Our 15 Year Old Bear Market Is About To Get Worse

S&P inflation adjusted

Over the last year or so I have tried to show in every possible way that we are still in a bubble and that we are still in a secular bear market. Scheduled to complete in 2017 based on my timing and mathematical work. And although most bulls believe we have started a new secular bull market from 2009 bottom, the chart above puts an end to such a speculation.

The chart above represents an inflation adjusted look at the S&P (S&P/CPI). As you can see, it clearly shows the S&P is just now approaching its 2000 top. It’s the same case for the Dow (double top at around 12,000), while the Nasdaq index would find itself at around 3,500 with the same adjustment.

What are we to make of that?

Well, it is rather simple. We are still in a secular bear market that will only complete in 2017. As I have said here so many times before. Also, we are pushing bubble level valuations in stocks while both the S&P and the Dow are hitting their respective double top formations (inflation adjusted). This does not bode well for the overall market.

z33

Why Our 15 Year Old Bear Market Is About To Get Worse Google

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The US Economy Nears “Official” Recession As The FED Blames It On The Weather. Who Is Right?

Daily Chart April 29 2015

4/29/2015 – A down day with the Dow Jones down 75 points (-0.41%) and the Nasdaq down 32 points (-0.63%)

If you have followed this blog for some time you are very well aware that I have suggested over a year ago that the US economy will continue to decelerate throughout 2014-2015. Until it slips into an official recession. Today’s GDP growth of 0.2% (vs. expected 1%) gives more credence to such a view.

The FED blamed the weather, strong US dollar, energy prices and other transitory factors for this slow down. Fully expecting the US Economy to rebound in the second half of the year. Hence, interest rate hikes are still in play.

Does any of that matter when it comes to our financial markets? YES and NO. 

YES. Today’s economic situation is rather easy to understand. At least from my vantage point. The US Economy is running on fumes of zero interest rates and QE #1-3. Nothing more and nothing less. Once this liquidity finally works its way through the system, we will see the US Economy fall back into a recessionary mode. Judging by today’s numbers we are nearly there.

Simply put, there is nothing to drive this economy forward. In fact, I would love to hear what, if anything, will force this economy to grow. That is one of the reasons we are seeing massive corporate stock buybacks and no capital expenditures. Most corporates don’t know what to do with their cash and most don’t have the need to invest in their own business.

NO. It doesn’t matter in terms of the eventual outcome. Whether or not the US Economy falls into a recession, whether or not the FED raises interest rates or introduces another round of QE, one simple truth remains. We are in a massive stock market bubble that will implode sooner or later.

As a result, it is time for investors to stop being mesmerized by the FED. Instead, it is time for them to realize that we are in a bubble that will soon pop. No matter what the FED or the US Economy does.

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. April 29th, 2015  InvestWithAlex.com

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

The US Economy Nears “Official” Recession As The FED Blames It On Weather. Who Is Right?  Google

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Trade Of The Decade Or A Disaster In The Making?

German Bunds

Last week we talked about Bill Gross and his trade of the decade. Coming Soon: Trade Of The Decade?  Also known as, shorting the 10-year German Bund.  Now, another big time money manager jumps on the bandwagon Gundlach Weighs 100-Times Levered Bet Against German Bonds

Sounds like a sure bet……..only if it was that easy!!!

In all of my life, I have yet to meet a “sure bet”. At the same time, I would be the first to admit that the trade above looks good on paper.

Here is my primary concern. Two massive bond managers are promoting this trade to mainstream investors around the world. Why? And since everyone already knows about it, what can go wrong?

Quite a few things. What if the Bund trades flat for the next 10-years…….what if today’s negative yield goes even lower……..what if the EUR/USD exchange rate surges back to 1.5. Impossible? Nothing is impossible when it comes to financial markets. And while you can hedge away the risks above, hedging is not free.

In other words, the trade above might not be as attractive as most investors believe. Plus, the same line of thinking (massive short position) in a 10-year treasury has backfired big time over the last 1.5 years.

A better trade might be……going long the 10-Year US Treasury. As outlined here before, and with any luck, it might follow the trajectory of the German Bund above.

z32

Trade Of The Decade Or A Disaster In The Making?  Google

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Julian Robertson: The Repeat Of 2008 Sell-Off Is Now Highly Probable

Here is a question for you. Who would you rather listen to…..some Charles Schwab yahoo financial adviser who keeps screaming that today’s market is a “buying opportunity of a lifetime” or hedge fund legend Julian Robertson (founder of Tiger Management).  I will leave that decision up to you. But if you are wondering, here is what Mr. Robertson thinks.

  • Twin bubbles: In bonds and equities.
  • The FED is frightened to death.
  • It is possible the market will boil over into an explosion. The bigger this bubble gets the bigger the burst will be. The repeat of 2008 sell-off is now a real possibility.
  • The FED will raise interest rates….be ready.
  • The stock market is in a bubble that will surely pop.

I’ll tell you one thing. It’s nice to be on the same analytical side as Julian.   


Z30

Julian Robertson: The Repeat Of 2008 Sell-Off Is Now Highly Probable Google

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Investment Grin Of The Day

Out in space two alien life forms are speaking with each other.

The first alien says, “The dominant life forms on the earth planet have developed satellite-based nuclear weapons.”

The second alien, who looks exactly like the first, asks, “Are they an emerging intelligence?”

The first alien says, “I don’t think so, they have them aimed at themselves.”

Z31

Investment Grin Of The Day Google

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Is Warren Buffett Shorting Everything?

PE Ratio

The chart above is as clear as night and day. Based on the adjusted P/E ratio, the stock market is more expensive today than it was at 1907, 1937, 1966 and 1987 tops. Just as expensive as it was at 1929 and 2007 tops. Only 2000 top stands above (due to the tech bubble and no earnings – it can be discounted away).

Now that I think about it, I am a little confused. I haven’t heard from a single value investor, or so called value investors, that the stock market is overvalued. David Stockman tends to agree.

David Stockman: ‘There Are No Markets, Just a Raging Casino’

“There are no markets left in any meaningful sense of the word, just a raging casino infected with the madness of the crowds and the central bank pied pipers who mesmerize them,” he writes on his blog.

Well said and I couldn’t agree more. Benjamin Graham must me spinning in his grave right about now. The only remaining question is, what is Warren Buffett and his disciples are up to? If they are to follow traditional Graham & Dodd valuation metrics, they should be completely out of the market by now. If not 100% short.

And while Warren Buffett’s corporate structure makes that impossible, the rest of the so called value investors should start asking this very same question.

z33

Is Warren Buffett Shorting Everything? Google

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Is Today’s Excessive Bullishness Warranted?

Daily Chart April 27 2015

4/27/2015 – A down day with the Dow Jones down 41 points (-0.23%) and the Nasdaq down 32 points (-0.63%)

I would hate to poop on everyone’s parade, BUT the Dow is still sitting well bellow its March 2nd top, IBB is collapsing and I can still argue that we have been in a period of distribution or consolidation since July of 2014.

So, why is that I get the same feeling I had at 2007 top? For instance, Stocks can handle whatever the Fed throws at them

Wow, apparently everything is coming up roses and this market is getting ready to surge higher. That’s one way to look at things. And the other? How a $17 Trillion Bull Market Falls Short Relative to Past

“I look at U.S. stocks as very fully priced,” said Robert Arnott, the chairman of Research Affiliates in Newport Beach, California, and a pioneer in the field of fundamental indexing. About $170 billion is managed using his firm’s investment strategies. “Do I view them immediately vulnerable and dangerous? No. I view them dangerous for long-term investors.”

Now we are getting somewhere. I only have one problem with the statement/article above. “Not immediately vulnerable and dangerous….only for long-term investors?”. Based on my work the stock market can correct in one of two ways. A prolonged decline, similar to what we have experienced on the Dow between 2002 and 2003. Or, a quick drop followed by a prolonged period of consolidation. For instance, 1937.

That is to say, today’s stock market environment, given all of the things I talk about on this blog, is about as dangerous as you can imagine. So much so that investors might see a rapid 20-30% correction in a matter of months. And in an environment where most investors truly believe that such an adjustment is impossible, well, that could be a devastating move for quite a few people.

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. April 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!!!

Is Today’s Excessive Bullishness Warranted?  Google