I often talk about how important investor psychology is. The videos below represent the mindset of most investors today. When every sell-off is viewed as a buying opportunity, despite today’s extreme speculation and overvaluation levels, it might be time to adjust your expectations. Certainly be careful when someone tells you that the time to jump back in is NOW….after a relatively small 3 day correction.
2/25/2015 – A big down day with the Dow Jones down 290 points (1.62%) and the Nasdaq down 118 points (-2.37%).
Jim Stack was fortunate enough to pick the 2009 bottom. Now, the president of InvesTech Research, which is on the Hulbert Financial Digest’s Honor Roll of top newsletters over the past 15 years, and Stack Financial Management, which manages more than $1 billion of investors’ money, believes we are on the verge of a bear market.
Here is what concerns him.
Nothing that I haven’t covered here before, but it nice to hear the same thing from somebody else. The question is, if a bear market does start, how low will it go? Jim suggests the following
A more likely outcome, he said, was for the S&P 500 to retrace about half of its bull market gains. If March 2 was the peak, that would mean it could fall to around 1,400, roughly a 35% decline.
I would say that is a fairly good estimate. And as I have suggested before and despite the fact that I am bearish, I don’t anticipate the markets to collapse as they did in 2007-2009. That was a mid-cycle panic. The upcoming decline will be more reminiscent of 2000-2002 decline on the Dow. Still, it wouldn’t make sense to be long 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. March 25th, 2015 InvestWithAlex.com
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Couldn’t agree more with Bill Gross. Watch the video below. It’s definitely worth 2 minutes of your time.
Corporate America Is Doing A Great Job, Bullish On America, Bullish On The Markets…. A self promoting buy Amercica “Booyah” piece, but nevertheless. The view below represents how some of the biggest mutual fund managers out there see today’s market environment or any market environment. Then they claim it was impossible to see a bear market coming. Foolish.
3/24/2015 – A down day with the Dow Jones down 104 points (-0.57%) and the Nasdaq down 16 points (-0.32%)
So, is it time to cash out of this stock market? Let’s take a closer look.
Investors have added $46.8 billion to equity mutual funds and exchange-traded funds in March, the most for any month since October 2013.The basic idea is that once everyone buys, there’s less money left to go into the market. Additionally, heavy buying could be seen as a sign of investor exuberance, indicating that stocks are in “overbought” territory.
Here is the most important factor that most investors are dismissing. At their own peril. Despite heavy inflows most stocks haven’t gone anywhere since July 17th, 2014. This can be seen on the chart below. This is a bearish divergence as it suggests a prolonged period of distribution, not consolidation.
“I think reconciliation between what markets think and what the committee thinks will have to happen at some point,” Bullard told reporters at London’s City Week financial conference. That’s a potentially violent (encounter) … and I am concerned about that. I am hopeful that markets and the policy committee can come to some kind of meaningful meeting of the minds in the coming months and quarters.”
We can argue about what the FED will do until the sun explodes, but it won’t do any of us any good. If we wish to read between the lines, the FED believes the market might have misinterpreted their “more dovish” statement last Wednesday. Hence, Bullard is going out of his way to suggest rate hikes are still on. The futures market tends to agree.
In a sense, the stock market is now playing chicken with the FED. Who will win? Based on my work, extreme bullish optimism appears to be misplaced at this juncture. If so, right now might be, indeed, a good time to cash out.
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. March 24th, 2015 InvestWithAlex.com
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Many bears believe the future is quite simple. The FED will forgo raising interest rates, the US Dollar will collapse, gold will surge and the stock market will crater. For instance, Peter Schiff: ‘Real Move of Dollar Is Going to Be Crash’
I do not share in such an apocalyptic view. The reality or the financial markets we are dealing with today are a lot more complex. Take a look at the chart above. It clear shows that the US Dollar broke out of a decade long downtrend late last year. This appears to be a structural move higher, not just a quick speculative blow off top.
In other words, the chances of the USD collapsing here are slim. Don’t get me wrong. Nothing moves straight up/down and some volatility is to be expected, but I wouldn’t proclaim that the dollar is about to crash. The market doesn’t see it and I tend to agree.
Investors often claim how easy it is to follow Warren Buffett’s advice. Well, there you go, follow it. I have witnessed the 2000 and 2007 tops first hand and I have studied every single top going back to May 20th of 1790 (first day of trading). Including generational tops of 1929 and 1835. Arguably, investors have never been more greedy than they are today. – Alex Dvorkin
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”-Warren Buffett
St. Louis Federal Reserve President James Bullard is great at practicing the art of “talking quite a bit without saying anything”. And while some investors might interpret that as a net positive, with the FED having the flexibility to move in multiple directions, I see it differently. I see the FED being stuck and not knowing what to do next. They have run out of options, as I have illustrated here so many times before, and it is just a matter of time before reality catches up. Watch and judge for yourself.
3/23/2015 – A down day with the Dow Jones down 11 points (-0.06%) and the Nasdaq down 15 points (-0.31%)
According to quite a few market pundits, the party in the equity markets hasn’t even started yet. Case and point
I cannot stop shaking my head in disbelief. To save you some time, here is what was said:
“This is an extraordinary buying opportunity, buy any and all dips, with zero interest rates the price of equities could be infinite, this bull market will continue, valuation don’t matter anymore, etc….”
Valuations don’t matter……infinite run ups are just around the corner …..buy now. That sounds familiar. If I didn’t hear the exact same thing at 2007 and 2000 tops, well, call me a fool.
Again, the underlying assumption in both cases is the same. We are in such a unique monetary easing environment that there is no way in hell the markets can go down. Maybe so, but here is the major point that most investors miss. Today’s market environment becomes a matter of psychological setup as opposed to a fundamental background.
When everyone and their day trading grandmother believe that we are in such a bullish environment, the market is getting ready to reverse. Why? Well, it’s rather simple, everyone has already bought into the long side of the market. Contrary to the opinion of the market pundits above, I would argue that the only opportunity here is on the short side (or in cash).
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. March 23rd, 2015 InvestWithAlex.com
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This Party Is Just Getting Started. Stock Market Valuations Can Go Infinite Google
