Another up day with the Dow Jones up 10 points (0.06%) and the Nasday up 22 points (0.55%).
The stock market continues to oscillate within a very tight trading range. Driving both bulls and bear up the wall.
Short Interest S&P Chart below (courtesy of ZeroHedge) gives us yet another perspective on today’s market. While most market practitioners believe large short interest in the market will eventually lead to a strong rally (aka short squeeze), quite the opposite is true.
As the chart below shows, instead of causing rallies, “smart” short interest established at the right time eventually breaks the market. Today’s short position on the S&P is more or less where it was at 2007 top. Suggesting that the market might be ready to break, just as it did back than.
The real question is, are the short-sellers (typically more intelligent or better researched investors) right or wrong this time? Will the market break or will we see a massive short squeeze? Something tells me we are about to find out.
Longer term, my work shows a severe bear market between 2014-2017. 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 exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
(***Please Note: 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 21st, 2014. InvestWithAlex.com
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VIX, often referred to as the fear index, continues to decline to levels unseen since the 2007 or right before the collapse. While most market pundits dismiss this measure as a simple volatility gauge, it would pay big dividends to pay closer attention. Here is why.
Conclusion: Considering all of the above and with VIX at $11.77, this is a clear recipe for a disaster. The only question is when. If you would be interested in learning exactly when this bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
My favorite bear, Marc Faber, brings out a number of important issues in the video below. I agree with all of them as they tend to match my fundamental analysis. Here is a quick summary of what he says.
A big up day with the Dow Jones up 158 points (0.97%) and the Nasdaq up 34 points (0.85%).
The market continues to be stuck in a very tight trading range.
The good news? With the FOMC minutes failing to impress or add anything new, the stock market rallied on low volume while slamming VIX to a 9-month low of 11.91.
The bad news? Kind of the same. The market left a huge gap up in the morning (suggesting upcoming downside), while short squeezing the market up on low volume. Plus, with VIX pushing levels unseen since before the 2007-2009 financial crisis, the amount of risk in our financial system is immense.
It certainly feels as if something is about to break and a powerful move (either up or down) is just around the corner.
This is further confirmed by my mathematical and timing work. Again, my work shows a severe bear market between 2014-2017. 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 exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
(***Please Note: 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 21st, 2014. InvestWithAlex.com
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According to Zillow 10 Million households are still underwater on their mortgages. On top of that over 10 Million households have 20% or less equity in their homes. While both numbers represent a significant improvement from their 33% peak in 2012, they don’t tell the whole story.
What’s Next?
Most of the research/commentary associated with the numbers above assumes that the housing market will continue on it’s recovery trajectory to eventually get everyone out of this predicament. Unfortunately, I do not share in their enthusiasm.
In fact, my mathematical work continues to show that things will get much worse for the housing market. In fact, I wouldn’t be at all surprised to see the number of underwater mortgages as high as 50% by the end of 2018. Why?
As I have suggested before, what we are witnessing in the real estate market now is a Stage 2 – Dead Cat Bounce before Stage 3 – massive decline. Basically, the real estate market has the same internal 17-Year structure as the stock market associated with it. In other words, the real estate market is about to repeat what you saw in the stock market between 2007-2009. Put your helmet on, it’s going to be an ugly ride. The real estate market is already rolling over.
You can learn much more about this here. Real Estate Collapse 2.0 Why, How & When
Why would anyone pay good money to listen to what this charlatan has to say is beyond me. Not as if he can share an actionable forecast nor does he have a firm grasp on where the economy is headed. His recently released 2008 FED minutes prove that without a shadow of a doubt.
During his eight years as steward of the world’s largest economy, Mr. Bernanke’s salary was about $200,000 a year. Now he makes that in just a few hours speaking to bankers, hedge fund billionaires and leaders of industry. This year alone, he is poised to make millions of dollars from speaking engagements.
Investors are dealing with an economy that is in large part the creature of Fed policies under Mr. Bernanke, and they are willing to pay top dollar for his words of wisdom as a result.
Wisdom? LOL. As I have suggested here a number of times before, the FED doesn’t know what is going on within the US Economy. It is a reactionary force at best. For instance, while there were a number of brilliant money mangers and economists out there who predicted the 2008 collapse as early as 2005, Mr.Benranke was not one of them. Not even close.
While others saw clear signs of a collapse, the FED and Mr. Bernanke talked about accelerating economy and “a hot” housing market as late as Q1 of 2008.
Today, we have an identical environment. While I am against any soft of stimulus, tightening today (as the FED is doing) is equivalent to financial suicide. Given the amount of speculation, leverage and leverage driven earnings in the system, any tightening here will set off the next recession. And that’s exactly what we will see when the bear market of 2014-2017 will rear its ugly head ……as per my mathematical work.
Point being, whoever uses Bernanke’s wisdom to invest in today’s environment will get their head handed back to them.
A strong down day with the Dow Jones down 138 points (-0.83%) and the Nasdaq down 29 points (-0.70%)
Despite today’s sell off the market remains within its tight trading range. Yet, today’s sell off and other seasonal factors should raise a number of red flags. For instance, the market is fast approaching its important short-term support at 16,300. Once broken, it might present us with the ominous sign of what is to come for the overall market.
Plus, the now famous saying “Sell In May And Go Away” didn’t just appear out of thin air. There is a certain cyclical composition within the stock market structure that sets it off in May of each year. (Hint….find out when the market first started trading).
With that said, the market left a number of gaps to the upside since starting it’s decline on May 13th. Suggesting an upcoming rally. Which side (bull or bear) will prevail over the next few weeks? That in itself is not very relevant. What is relevant is that a vicious bear market of 2014-2017 is just around the corner.
This is further confirmed by my mathematical and timing work. Again, my work shows a severe bear market between 2014-2017. 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 exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
(***Please Note: 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 20th, 2014. InvestWithAlex.com
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At least at the Citigroup, the bull market never ends. That is unless and until they have to beg the American taxpayer for billions in bailout money.
“We think [the reason for falling yields is] pretty technical. Look at jobs, auto sales, planned capital expenditures — none of that is indicative of something ominous in the economic data.”
So what explains it? Levkovich believes the justification for the bond rally has been driven by technical factors like people covering short positions, which he’s heard that banks and a number of institutions have had to do.
The bottom line in his view is that “people have been reading a little too much into it.”
Reading a little bit too much into it? Huh. I am not sure how many times investors have to learn the hard way not to discount what the bond market is telling them. What is the bond market saying?
As the most recent action indicates, it is screaming out that the recession is just around the corner. You can learn more about it in my previous post The Shocking Truth Behind The Bond Market Conundrum Explained
This is further confirmed by our mathematical and timing work. It shows a severe bear market between 2014-2017 that will retrace most of the gains accrued over the last few years. One thing is for sure, ignoring today’s yield curve compression (at this stage of the bull market) will be very detrimental to your overall wealth.
Now that the Obama Administration has succeeded in utterly destroying the US/Russian relationship, all in three very short months, it is time to move on to greener pastures.
Who’s next to get a taste of Freedom?
China, of course, as the U.S. accuses China of cyber spying on American companies. Does China spy on the US companies. Sure, but I highly doubt it is to the extent that the NSA spies on everyone and everywhere. Either way, under normal diplomatic circumstances you just don’t pull out 5 random foreign military operatives and blast them in worldwide media. Other than looking idiotic and infuriating China to no end, the accusations above didn’t accomplish anything worthwhile.
Yet, China didn’t hold any punches. China confronts U.S. envoy over cyber-spying accusations. Now, I wonder how long it will take for the Obama Administration to utterly destroy our relationship with China over Japan, Taiwan and the Philippines. I doubt that it will take more than six months.
In the meantime, China and Russia continue on with their strategic alliance Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China. I am just wondering how long it will be before Russia and China end up forming a military alliance to counterbalance NATO, leading to an eventual war. A few years….give or take?
