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Is It Time To Short Biotech (IBB)?

IBB

Since 2009 bottom or over the last 6 years Biotech ETF (IBB) has been one of the best performing financial instruments out there. Up +310% Vs the Dow +177%. The question is…..

Will this outperformance continue or are you better off shorting the index?

I would be the first to admit that the long-term technical picture for IBB remains incredibly bullish. Despite its fundamental overvaluation and high-risk investment opportunities typically associated with this ETF. With that in mind, at least the short-term picture is starting to deteriorate, demanding our further attention. 

For instance, the spike lower into February 4th low suggests that the index might be ready to go lower. Not that it will, that it might. Here is the bottom line. Whether you are long the index or thinking about going short, pay particularly close attention to IBB over the next 2-8 weeks. Should this ETF break below February lows, we might see a very quickly re-test of October lows (20% decline). And that wouldn’t be a bad short-term move on the short side. So, pay close attention.

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Is It Time To Short Biotech (IBB)? Google

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What You Ought To Know About Today’s Bearish Sentiment

bearish sentiment

The Nasdaq is approaching its benchmark print of 5,000 exactly 15 years after we saw it first in March of 2000. And while the Dow and the S&P are doing a little bit better, their compounded ROI of 2.7% over the last 15 years make Treasury investing over the same time appear genius.  Yet, you wouldn’t know it by reading financial press. According to most investors out there and despite today’s extreme overvaluation levels, this “secular bull market” (it’s not) is about to surge higher. For instance…..

“I don’t see too much concern because it really is a question of where else are you going to put your money. In a low-rate environment with concerns about Europe, Japan and China, U.S. equities are the preferred asset class.”  said Erin Gibbs, equity chief investment officer at S&P Capital IQ Global Markets Intelligence.

Yes, the old “no concern, where else are you going to put your money” garbage. I can’t tell you how many times I have heard that back in 2000 and 2007. The unfortunate reality remains. No matter how positive things might appear to look, the stock market can turn on a dime and begin its bear market at any moment. And just as we saw back at 2000 and 2007 tops, there doesn’t have to be a fundamental catalyst.

As the bearish sentiment chart above so clearly illustrates, when most investors find themselves on the same side of the trade, things tend to unfold in the opposite manner.

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What You Ought To Know About Today’s Bearish Sentiment Google

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Two Hedge Fund Managers Discuss The Stock Market, Currencies, Commodities & Investment Ideas – Weekly Podcast

ALL NEW & FRESH: February 14th, 2015: We have a great show for you this week. Hedge fund managers Matthew Demeter and Alex Dvorkin discuss the following topics….

  • What the stock market is doing and what we expect to happen over the next few weeks.
  • COT Report and what the big guys are buying. Listen to make sure you are not on the wrong side of the trade.
  • Swiss Frank, Australian Dollar, Interest Rates, Gold/Silver, Oil, Bond Yields, Copper, Agriculture, Natural Gas and what we expect to happen in these markets.
  • A multitude of great investment ideas and various tops/bottoms that can make you a ton of money.
  • And of course, much…..much more.

Don’t miss this one and join us again next Saturday. 

Listen to the podcast by clicking on the player above. If you prefer iTunes, please Click Here

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Two Hedge Fund Managers Discuss The Stock Market, Currencies, Commodities & Investment Ideas – Weekly Podcast Google

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Investment Wisdom Of The Day

Jon Stewart illustration“If I’d only followed CNBC’s advice, I’d have a million dollars today. Provided I’d started with a hundred million dollars”.   -Jon Stewart

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Investment Wisdom Of The Day  Google

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How Russia Won The War In Ukraine

NATO expansion2

I have said this since 2013 and I will say it again. There are only two reasons there is a conflict in Ukraine.

  1. NATO expansion.
  2. Russia’s willingness to go into an all out war (even nuclear war) to ensure that Ukraine doesn’t join NATO.

It is as simple as that. So, will the peace treaty hold? Well, if the EU/US/NATO stay out of Ukraine, you will see this conflict die off over time. Although an eventual regime change in Ukraine becomes unavoidable. In other words, Mr. Putin will once again setup a puppet government. To victor go the spoils.

Yet, if we see more sanctions, if we see the US military training Ukrainian army, if the US supplies weapons, if NATO continues its expansionary march……expect this war to re-ignite over night. With one primary difference. Ukrainian army is on a brink of collapse and it will be over fast. That is to say, expect Russian victory either way.

My “War Cycle Work” confirms the conclusion that this war in Ukraine will be over soon. What war cycle? The one discussed here Nuclear World War 3 Is Coming Soon.When, How & Why (Full Report) Basically, this cycle and its derivatives can predict every single war the US will fight.

Here is an example that I kept out of the report. The US entered World War 1 on April 6th, 1917. Exactly 84 years from that date (war cycle discussed in the report) brings us to April of 2001. Just 5 months shy of September 11th, 2001 and the start of wars in Iraq and Afghanistan. Make no mistake, the big war between Russia/China Vs. NATO/EU/US is coming. Just not yet. It will start in 2029 and it will literally devastate this planet.

Until that happens, Ukrainian conflict will go on a back burner and Russia will claim its victory. No other outcome is possible at this juncture.

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How Russia Won The War In Ukraine Google

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Is The Market Is Getting Ready To Slingshot To The Moon?

Daily Chart February 12th

2/12/2014 – A positive day with the Dow Jones up 109 points (+0.61%) and the Nasdaq up 56 points (+1.18%).

Here we go again. Extremely bullish market pundits are out in force. Predicting the Dow 20K within a few months and all other kind of nonsense. Case and point: Here’s what can ‘slingshot’ Dow toward 20K: CIO Just as they did at all previous tops.

According to quite a few people the market has been consolidating over the last few months and is now getting ready for a break out. A few closes above 18,000 would do the job and subsequently skyrocket this market to 20K and beyond. In other words…..buy, buy, buy.

Unfortunately, I do not share in their enthusiasm. First, this period of proposed consolidation can as easily be viewed as a period of distribution. Right before a major down leg starts. There is no conclusive technical evidence either way. Plus, most market sentiment indicators are flashing an “overbought” signal.  Most importantly, my calculations do not allow the Dow to go much higher at this juncture.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. 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 2014/15-2017 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. February 12th, 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 The Market Is Getting Ready To Slingshot To The Moon? Google

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Is Apple (AAPL) Really Worth $1 Trillion?

aapl

Apple (AAPL) has been on a tear since reporting its earnings. It broke above its previous resistance levels of $115 – $120 and the stock looks unstoppable. Further, everyone believes that AAPL is a strong buy and that the company is worth at least a Trillion. Consider the following.

While I don’t typically bet against Carl Icahn, you might want to be very careful here. Here is why. As illustrated above, the overall bullish overtone on the stock is excessive. And if I had a penny for every “no brainier” investment that went sour, well, I would have a lot of pennies.

Would Apple be properly valued at $1 Trillion? That’s debatable. There are a lot of people who believe that Apple is worth a lot more. As Carl Icahn does. Then there quite a few people who believe that Apple is excessively overpriced here. Pick your medicine. Finally, should a bear market develop as anticipated, it is highly unlikely that AAPL will be able to maintain today’s levels. In other words, Apple might be at or near its top.

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Is Apple (AAPL) Really Worth $1 Trillion? Google

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Investment Wisdom Of The Day

warren_buffet“None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling. Unfortunately, Bertrand Russell’s observation about life in general applies with unusual force in the financial world: “Most men would rather die than think. Many do.” – Warren Buffett

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Investment Wisdom Of The Day  Google

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Subprime Short Bets Big Against Junk Bonds

high yieldSince about the start of 2014 I have maintained that when a bear market of 2014/15-2017 kicks in, a number of things will happen. Junk bonds will blow sky high, 10-Year Note will test 1.4% (double bottom) and the stock market will drift lower. Driving both bulls and bears up the wall in the process.

Joshua Birnbaum, the Ex-Goldman trader who correctly shorted subprime mortgages during the financial crisis tends to agree.

Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.

I believe he is absolutely right in his assessment. The situation is not that dissimilar from 2007-2009 period. Except, instead of “subprime” bubble we are currently going though a stock market overvaluation and junk debt bubble. There is just way too much risk in our financial system to warrant today’s valuation levels. Once the tide goes out, you will see junk yields surge. Counterparty risk associated with Greece or Russia (discussed earlier) might get this party going.

Z31

Subprime Short Bets Big Against Junk Bonds Google