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The Shocking Truth Behind The Bond Market Conundrum Explained

We have been overwhelmingly bullish on bonds since the beginning of the year. The bet that has paid off big time thus far. While most market participants expect the rates to rise, we disagree with their view. Here is why…

  1. Our mathematical and timing work predicts a severe bear market between 2014-2017  As it unfolds, it will push the US Economy into a severe recession.To avoid further collapse the FED will have no other choice but to introduce further stimulus into the economy. Driving the rates lower.
  2. Based on our in depth study of financial markets, secular bull/bear markets rarely end in a V shape fashion. Typically, there are longer term double or triple bottoms/tops. Bond yields have been going down for 30 years. I continue to believe that it is wrong to assume that they will simply bottom in 2012-2013 to start their bull market. At least a double bottom is highly probable.

That double bottom should coincide with the recession discussed in point #1. In fact, I wouldn’t be surprised to see the 10-Year Note at around 1.5%. Making it one of the best investment opportunities in today’s market.

10 Year Note Chart2

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The Shocking Truth Behind Bond Market Conundrum  Google

Talking Numbers: Think the bond rally is over? Think again.

Few things are weirder right now than the bond market.

The Federal Reserve continues to taper its bond-buying program as the official unemployment rate ticks down. That should mean higher interest rates.

But lots of other things are happening. For example, though the unemployment rate is at 6.3 percent, the labor participation rate is the worst it has been in over three decades. Tensions on the Ukraine-Russia border and data showing China’s manufacturing contracting have sent investors fleeing to the safety of U.S. bonds. That should mean lower interest rates.

This tug-of-war in the bond market has kept rates in a relatively tight range for much of the year. In fact, the yield on the benchmark U.S. 10-Year Treasury Note has stayed between 2.6 and 2.8 percent since February. It wasn’t long ago when a 20 basis-point move was just another humdrum week in the market.

While the 10-Year’s yield dipped below 2.6 percent briefly in the past couple of days, Chantico Global founder Gina Sanchez said, investors shouldn’t expect rates to stay this low indefinitely.

“I don’t think that we can really support going well below 2.6 percent,” said Sanchez, “only because bonds at these levels are really expensive.”

The only way for interest rates to go lower would be for economic expectations to sour, according to Sanchez, a CNBC contributor.

“That’s really not what’s happening,” Sanchez said. “Although it’s not a dramatic recovery, it is still a recovery. We are still seeing a fall in unemployment rates. There are still issues out there but we are actually seeing the consumer come back to life.  So, I think that it doesn’t make any sense to have rates down below here. I think that this is an anomaly and it’s a selling opportunity.”

However, Richard Ross, global technical strategist at Auerbach Grayson, says interest rates will be moving lower.

Ross notes the 10-Year has been trading as a “range within a range.” While it has stayed roughly between 2.6 and 2.8 for the past three months, the larger range has been between 2.5 and 3.0 percent over the course of nearly a year. Ross’ short-term chart of the 10-Year Treasury shows resistance at a yield around 2.72 percent, its 200-day moving average.

But on a longer-term chart, Ross sees rates as having made a “bearish double top” and headed down to test its 200-week moving average. “That comes in at around 2.40” percent, said Ross. “I am bearish on equities … and I think that plays right into bullish play on bonds, meaning prices go higher, rates move lower. Look for a test of that 2.40 [percent] to coincide with a bigger pullback in the equity market.”

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Is It Time To Short Homebuilders? This Answer Might Surprise You

According to Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, it is time.

“Investors should bet against the SPDR S&P Homebuilders ETF because he does not see the expected rebound in single-family housing occurring”

We like the idea as this ETF is likely to yield about a 50% return on the short side over the next few years. Why? For the following reasons.

  1. As we have outlined so many times before, the housing recovery is over and the entire real estate market is about to embark on the most vicious bear leg of it’s decline. Stage 3. You can read everything you need to know about this here. Real Estate Collapse 2.0 Why, How & When
  2. Our advanced mathematical and timing work predicts a severe bear market between 2014-2017. Under such circumstances the real estate market will not be able to maintain its upward trajectory. On the contrary, it might be one of the sectors leading the market lower.
  3. SPDR S&P Homebuilders ETF (XHB) is showing early signs of a technical price breakdown.

When you combine the points the above, SPDR S&P Homebuilders ETF (XHB) becomes a very good short investment opportunity.  

homebuilders shorting

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Is It Time To Short Homebuilders? This Answer Might Surprise You  Google

Reuters: DoubleLine’s Gundlach recommends shorting homebuilders ETF

NEW YORK, May 5 (Reuters) – Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, said on Monday that investors should bet against the SPDR S&P Homebuilders ETF because he does not see the expected rebound in single-family housing occurring.

Gundlach, speaking at the Sohn Investment Conference in New York, said that problems dogging the housing market include expected rises in mortgage rates and the amount of student loan debt carried by young adults, which makes saving for a down payment difficult.

He also said that if mortgage financiers Fannie Mae and Freddie Mac were wound down by the government, mortgage rates would rise.

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Daily Stock Market Update. May 5th, 2014. InvestWithAlex.com

daily chart May 5 2014

An up day with the Dow Jones up 17 points (+0.11%) and the Nasdaq up 14 points (+0.34%).

I continue to be amazed how/why the majority of market participants relate fundamental economic growth to the future of stock market performance. Case and point……

Investors would be best served by not selling in May, according to Morganlander. “I would say that would be bad advice,” Morganlander said. “You’re starting to see a string of good economic numbers. In fact, I believe that over the coming couple of months, you’re going to start to see the housing market click in as well. That’s going to bode well for the overall markets. You just need to get through this geopolitical concern.”

Such thinking is absolute garbage that has no place in the real world (assuming that you like making money and not losing it). To prove my point, allow me to take you back to October 11th, 2007.  The GDP growth was 4.9%, full employment, the stock market was on fire and while the real estate market was showing signs of a roll over, it wasn’t that bad. In a nutshell, economic future looked as bright as it could be.

Yet, the stock market topped out on October 11, (exactly 5 years and 1 trading day from its 2002 bottom) and then proceeded to decline. Slow at first, picking up speed mid cycle and subsequently destroying everything and everyone. There was no fundamental catalyst. Was it possible to predict? I did, but if you were looking at the market from a fundamental perspective you would have never seen it coming.

This is the perfect example why its the stock market that drives the economy and not the other way around. Which brings us to today. Based on our mathematical and timing work the bear market of 2014-2017 is just around the corner.

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). 

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Daily Stock Market Update. May 5th, 2014. InvestWithAlex.com  Google

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The Secret Behind Jeremy Grantham Amazing Stock Market Timing Call.

Most financial media outlets were abuzz over an amazing and gutsy stock market timing call from one Jeremy Grantham, a veteran fund manager at GMO. His call?

Grantham believes the market bubble will burst around or after the 2016 presidential election. “That this year should continue to be difficult with the February 1 to October 1 period being just as likely to be down as up, perhaps a little more so. But after October 1, the market is likely to be strong, especially through April and by then or in the following 18 months up to the next election (or, horrible possibility, even longer) will have rallied past 2,250, perhaps by a decent margin. And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.”

WOW. I am amazed. Mr. Grantham gives a 2 year time window and everyone is either praising him or saying that he is stupid for giving such an “exact” forecast.

Yet, as I have illustrated here many times before, the stock market can be predicted and forecasted well into the future and with exact precision. How/why? The stock market is not a random entity as most people believe. Quite on the contrary, it is exact. The stock market has a beautiful mathematical structure within itself. In simple terms, it moves in multi-dimensional space while tracing out it’s points of force in accordance to it’s own DNA sequence. Once that is understood, exact forecasts could be made. To the day.

For instance, this very same mathematical and timing work predicts 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 not within a 2 year time window) and its subsequent internal composition, please CLICK HERE

jeremy-grantham-investwithalex

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The Secret Behind Jeremy Grantham Amazing Stock Market Timing Call.  Google

Business Insider Writes: Jeremy Grantham Makes A Very Specific Call About When The Bubble Will Burst

The stock market has already been volatile this year and investors are wondering what’s next.

The S&P 500 had a rough start in April, shedding about 3% halfway through the month, only to end up 0.6% for the month. The S&P 500 finished April close to a record high, while the Dow closed at a record high.

Many investors are wondering if we’re in a bubble or if there’s a correction coming.

In his latest quarterly letter, Jeremy Grantham, veteran fund manager at GMO, put out his “best guesses for the next two years.”

Grantham draws on John Hussman’s research that shows “an overpricing for the U.S. markets that ranges from 75% overpriced to 125% at the end of March.” Meanwhile Grantham writes that GMO “very much agrees with the spirit of this data, but our preferred measure for our 7-Year Forecast has the market slightly less overvalued at 65%.”

He also acknowledges that the bull market could already have come to an end even as he wrote his quarterly letter, but he believes “it probably (i.e., over 50%) will not end for at least a year or two and probably not before it reaches a level in excess of 2,250 on the S&P 500.”

Grantham believes the market bubble will burst around or after the 2016 presidential election.

  1. “That this year should continue to be difficult with the February 1 to October 1 period being just as likely to be down as up, perhaps a little more so.”
  2. “But after October 1, the market is likely to be strong, especially through April and by then or in the following 18 months up to the next election (or, horrible possibility, even longer) will have rallied past 2,250, perhaps by a decent margin.”
  3. “And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.”

Grantham doesn’t think this time is different. But “given this regime of the Federal Reserve and given the levels of excess at other market peaks, I think it would be different to end this bull market just yet.”

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Weekly Stock Market Update & Forecast. May 3rd, 2014. InvestWithAlex.com

daily chart May 2 2014

Weekly Update & Summary: May 3rd, 2014

For the week the Dow gained 151 points (+0.93%) and the Nasdaq gained 48 points (+1.19%). As suggested in last week’s update, the market came back to close the gap that was opened up on April 25th. While the Dow did very well structurally this week, it continues to have two near term gaps to the downside, the one on April 14th and a large gap on April 16th. Indicating an upcoming correction. Further, there are a number of smaller gaps left leading all the way down to February 5th low.  We continue to believe that the Dow will close such gaps when the next bear leg develops at below mentioned time frames (please see mathematical analysis & timing section below).

WEEKLY REVIEW:

GDP Growth Collapses. Is The US Economy In A Recession Already?

We have argued, for quite some time, that the US Economy and/or economic growth is a giant Ponzi scheme perpetuated by careless FED policies and massive credit/liquidity infusion into our financial system. 

Take that ocean of liquidity away and you will something very ugly swimming underneath. With most of that liquidity going directly to speculation and driving most asset classes into bubble level valuations, today’s GDP growth number of +0.1% is quite shocking. Even for me.

GDP Slows to Crawl in First Quarter, Up 0.1% (Vs 1.2% growth consensus)

GDP Growth Investwithalex

Understandably, most economists will blame the weather and baby Jesus for the miss, but the story goes deeper than that.  According to some GDP observers the GDP growth would have been Negative 1.0% if it wasn’t for a temporary, government mandated and massive spending triggered by Obamacare.

Wait what?!?!….Are we in a recession already?

That in itself is irrelevant. What is relevant is that the stock market is sitting at an all time highs, the FED is talking about further tightening and you are most likely fully invested in the stock market. That is what’s really important.

Further, our mathematical and timing work confirms the notions above.Liquidity party or not, it shows a severe recession within the US Economy between 2014-2017. In the past, I have argued that we will be in “an official recession” by the end of 2014 or in Q1 of 2015. By the looks of it might happen faster than I thought.

Again, the FED will be forced to keep this liquidity party going while looking at new ways to re-inflate and stabilize the markets when the bear market of 2014-2017 kicks in. Expect a flat yield curve and much lower equity prices over the next few months/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

 Will Corporate Earnings Drive Stocks Higher? Don’t Bet On It.

Breakout makes a compelling case that corporate earnings will continue to drive stock prices higher for the foreseeable future.

“Companies are getting incremental gains from revenue, holding the line on expenses, so at the end of the day we’re likely to see modest gain in earnings for the quarter, somewhere maybe around 5%,the economy here is going to reaccelerate ”

One big problem. Today’s earnings are an illusion at best driven by artificial credit infusion into our Economy by the FED. In fact, based on our rough calculations……if you take out the QE and other stimulus out of the corporate earnings equation, the S&P P/E ratio zooms up from about 18 today to 50 – 70 it really is. Making today’s market not only incredibly expensive (by any historical measure), but “are you f&#*ing kidding me” expensive.

s&p ratio

That is exactly what the vast majority of today’s investors (professional or not) miss. We have faced the exact same situation in 2007-2009 collapse when the P/E ratio zoomed up from about 20 at 2007 top to 128 in 2008 as supposed corporate earnings vanished into thin air. Expect the same thing to happen today as the bear market/recession of 2014-2017 show their ugly face and corporate earnings vanish once again.

What Today’s Job Report Shows About The Future Of The US Economy Is Shockingly Scary.

Here is what we got.

  • 288K new jobs added in April, far higher than 218K expected.
  • The unemployment rate tumbled down to 6.3% from 6.7%.
  • Labor participation rate collapsed from 63.2% to 62.8%

That’s great…..right? Not so fast there sparky.  If there was ever a fundamental setup for a massive bear market to start, we got it today. Think about it the following way.

As Janet Yellen has suggested on a number of occasions, jobs or job creation is her primary concern. Today’s job report validates her view that the US Economy is recovering at a good clip and that full employment is just around the corner. As such, further monetary tightening is now a certainty.  Yet, the reality is quite different……

  • Incredibly overpriced financial markets and most other asset classes.
  • Extreme levels of speculation driven by cheap money and FED printing.
  • An economy and a financial market environment that is entirely dependent on cheap credit and/or stimulus.
  • Technically negative GDP growth and slowing economy.

Job creation is a lagging indicator. As I suggested a number of times before, the worst thing the FED can do right now is tighten further.  I hate going back to 2007, but the “fundamental” setup we face today is identical to the one we have faced at 2007 top. Jobs were plentiful, markets were in extreme overvaluation and the FED was tightening. It was not until the mid 2008 (or well after the stock market peaked in October of 2007) that the unemployment rate started surging higher. Expect the same thing to happen now.

unemployment rate 3 investwithalex

Our mathematical and timing work confirms this notion. It 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

MACROECONOMIC ANALYSIS:  

Ukraine/Russia/USA/EU/NATO  continue to  be the most important issue. In fact, I continue to believe that things will escalate significantly over the next few weeks.

As I write this (on Friday night), the situation in Ukraine is critical. 31 people die after radicals set Trade Unions House on fire in Ukraine’s Odessa  In short, we are witnessing the start of a civil war.  At this stage only one question remains. Will this be enough for Putin to go in and put a stop to all of this nonsense instigated by the US/NATO/EU ….-OR-…. will Putin play some sort of a long term strategic game against the West that very few of us are aware of? To be honest with you, I have no idea as this has become a very complex matter.  If I had to guess, if the civil war in Ukraine escalates over the next few days you will see the Russian Army invade, very quickly decimate any opposition and re-install Pro-Russian government.

This would be the best possible outcome for the Ukrainian people.  Unfortunately, such a move by Russia will spark a number of economic sanctions (from both sides), political storm, war rhetoric and a million other unforeseen consequences.  As you can imagine, this would be incredibly unsettling for financial markets.  I can tell you one thing, the market does not have this event priced in. The upcoming week is critical.

TECHNICAL ANALYSIS THE FOR DOW JONES:  

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. Same applies to the market action over the last few months. Yet, that in itself can be misleading as per our timing analysis discussion below.

Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.

Short-Term: Short-term trend remains positive for the time being. The Dow would have to break below 16,000 for the short-term trend to shift from positive to negative.

Again, even though all 3 trends are bullish for the time being, that might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.    

MATHEMATICAL & TIMING ANALYSIS:  

(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).

In conclusion, xxxx

Longer-Term Overview:

The next turning point is located at……

Date: XXXX 
Price: XXXX

TRADING: 

I am now fully committed to the XXXX side of the market with 11 individual positions taken at the prices outlined below. A lot of them have done incredibly well thus far and I hope you were able to benefit as well. I will be updating you of any changes or anticipated changes before they take place.

Remember, you should have an exact strategy and entry/exit points based on the forecast above. 

The list below is for your reference point. It entails my investment strategy for my own investment purposes. While you are free to follow me, please do so at your own risk. Do not take this as a trading advice. Please note, all of the positions below have been triggered.    

Stock Entry Point ($) Action Taken Stop Loss @
xxxx xxxx xxxx 91
xxxx xxxx xxxx 1250
xxxx 110 xxxx 121-123
xxxx 74 xxxx 80
xxxx xxxx xxxx 260
xxxx xxxx xxxx 460
xxxx 35 xxxx 39
xxxx 65 xxxx 70
xxxx 120 xxxx 120-130
xxxx 100 xxxx 108-112
xxxx 112 xxxx 120

Otherwise, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action. (This is continuation of our previous positioning).

If You Are A Trader:  XXXX

If No Position:  XXXX

If Long: XXXX

If Short:  XXXX

CONCLUSION: 

An incredibly important week is coming up. We are now looking for our forecasts above to be confirmed over the next few trading days/weeks. I have also described what to anticipate over the next few months and exactly what you should do now. With increased volatility, multiple interference patterns and an incredibly important long-term turning points coming up over the next few months we must be very careful and risk averse here.  Those anticipating the moves and those who can time them properly will be rewarded appropriately.

Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. 

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Weekly Stock Market Update & Forecast. May 3rd, 2014. InvestWithAlex.com Google

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Daily Stock Market Update. May 2nd, 2014. InvestWithAlex.com

daily chart May 2 2014

A down day with the Dow Jones down 46 points (-0.28%) and the Nasdaq down 4 points (-0.09%). 

The market has, more or less, flat lined since it’s bounce rally termination point on April 22nd. Over the last 10 trading days the Dow barely moved in net terms, putting most investors and traders into the state of sleep (my subscribers knew of this likely development since April 24).

As I insinuated here before, low energy/flat markets/ low volume/no volatility periods are often followed by powerful and high velocity moves. Remember, it’s the market’s job to bore you to death and put you into a comfortable state of sleep before surging higher or slamming the market lower.  In fact, 1987 crash is a perfect case study of such a time.

While I am not suggesting that we will have a 1987 style crash here, I am suggesting that you should be very alert here. Based on our mathematical and timing work the bear market of 2014-2017 is just around the corner.

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). 

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Daily Stock Market Update. May 2nd, 2014. InvestWithAlex.com Google

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Outrageous Secret Revealed: Who Is Insane Enough To Buy Stocks At Today’s Levels?

who is buying this market

Thanks to Bank of America and this chart from ZeroHedge we have our answer. While hedge funds and institutions (supposed smart money) were net sellers, retail mom and pop investors (supposed dumb money) more than picked up the slack since the 2012.

This sort of behavior is typical at market tops. Retail investors are always too late to the party and way too excited to pay exuberant prices for highly speculative stocks. Only to be shocked and swear off the stock market when the stock market proceeds to collapse.

Is it different this time? 

It’s never different. The only question is, how much longer will this insanity last and if you will be able to get out on time. Well, most investors never get out on time as they tend to liquidate their equity holdings closer to the bottom. As to when, our mathematical and timing work clearly shows that the bear market of 2014-2017 is just around the corner.

AKA…..right now would be a great time to get out.

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Outrageous Secret Revealed: Who Is Insane Enough To Buy Stocks At Today’s Levels?Google

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What Today’s Job Report Shows About The Future Of The US Economy Is Shockingly Scary.

Here is what we got.

  • 288K new jobs added in April, far higher than 218K expected.
  • The unemployment rate tumbled down to 6.3% from 6.7%.
  • Labor participation rate collapsed from 63.2% to 62.8%

That’s great…..right? Not so fast there sparky.  If there was ever a fundamental setup for a massive bear market to start, we got it today. Think about it the following way.

As Janet Yellen has suggested on a number of occasions, jobs or job creation is her primary concern. Today’s job report validates her view that the US Economy is recovering at a good clip and that full employment is just around the corner. As such, further monetary tightening is now a certainty.  Yet, the reality is quite different……

  • Incredibly overpriced financial markets and most other asset classes.
  • Extreme levels of speculation driven by cheap money and FED printing.
  • An economy and a financial market environment that is entirely dependent on cheap credit and/or stimulus.
  • Technically negative GDP growth and slowing economy.

Job creation is a lagging indicator. As I suggested a number of times before, the worst thing the FED can do right now is tighten further.  I hate going back to 2007, but the “fundamental” setup we face today is identical to the one we have faced at 2007 top. Jobs were plentiful, markets were in extreme overvaluation and the FED was tightening. It was not until the mid 2008 (or well after the stock market peaked in October of 2007) that the unemployment rate started surging higher. Expect the same thing to happen now.

Our mathematical and timing work confirms this notion. It 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

unemployment rate 3 investwithalex

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What Today’s Job Report Shows About The US Economy Is Shockingly Scary.  Google

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Stock Market Update. May 1st, 2014. InvestWithAlex.com

daily chart May 1 2014

A mixed day with the Dow Jones down 22 points (-0.13%) and the Nasdaq up 13 points (+0.31%). 

David Zervos, chief market strategist at Jefferies, says stocks are not overvalued and investors should buy the dips.

“A lot of the valuation metrics that are typical of the stock market…they fail to take into account the extraordinary monetary policy that’s been put into place. We’ve done a lot of healing. We have a lot of risk-taking in the pipeline and a lot of that risk-taking is going to start to generate real returns.” If you would like to read the rest of this garbage Click Here

Of course, he would like nothing more than to take that risk with your money…not his. The stock market has, more or less, flat lined since its April 11th bounce rally terminated on April 22nd (the bounce we told you about here). With the Dow and the S&P unable to go higher and with the Nasdaq and Russell 2000 in a technical downtrend, is this the “buy the dip” or “buying opportunity of a lifetime” that Mr. Zervos is talking about?

Don’t bet on it if you value your money. According to our mathematical and timing work the market is approaching an important juncture that will make Mr. Zervos look very foolish….. soon enough.

Again, our 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). 

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Stock Market Update. May 1st, 2014. InvestWithAlex.com  Google

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Shocking S&P Chart Begs For A 20% Correction. Fact or Fiction?

According to Richard Ross, global technical strategist at Auerbach Grayson, certain technical indicators are calling for a serious correction.

“I’m going to be completely clear here: I’m quite bearish and I think the market’s going significantly lower,(see chart below)”

From our point of view it’s no longer the question of IF, but of WHEN. Today, the market sits at an incredibly important juncture. From the fundamental point of view, it is substantially overpriced and highly speculative. Most of it as a direct result of FED intervention and credit infusion. With FED tightening, things will only get worse.

And while most technical indicators remain bullish for the time being, our mathematical and timing work does not share in the optimism. For instance, with the 5-year cycle terminating in early March and with the 17-year bear market cycle scheduled to complete in 2017, the market has very little (if any) upside left here.

Finally, a 20% decline from today’s levels would be just a starting point for the upcoming bear market of 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

S&P Chart

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Shocking S&P Chart Begs For A 20% Correction. Fact or Fiction?  Google

Talking Numbers: This chart says we’re in for a 20% correction

We all know about the Marc Fabers, Peter Schiffs and Nouriel Roubinis of the world, endlessly calling for the mother of all crashes. But now a different source is sounding the alarm: the charts.

Despite the Dow Jones industrial average reaching a new record high, Richard Ross, global technical strategist at Auerbach Grayson, says certain technical indicators are calling for a serious correction.

“I’m going to be completely clear here: I’m quite bearish and I think the market’s going significantly lower,” said Ross, a “Talking Numbers” contributor.photo

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Ross sees a big problem with the S&P 500’s chart—a 20 percent problem to be exact. In 2011, the index corrected by about that much to its 150-week moving average after making moves very similar to its most recent price action.

“I think that we’re in exactly the same scenario,” said Ross, who notes that a similar decline to the current 150-week moving average would also be roughly 20 percent to around the 1,500 level. “I think that’s what we’re staring at right here. I think that there’s still time to get out of this market.”

Charts are one thing. But is there a fundamental reason to back up Ross’ bearish views?

Recent economic data have been soft, including this week’s first-quarter U.S. GDP report that showed the slowest growth since the fourth quarter of 2012. The earnings front has not been much better for growth stocks either (see Twitter and Facebook).

Yet according to Gina Sanchez, founder of Chantico Global, investors were already prepared for a slow first-quarter number.

“The stock market has been reflecting defensiveness all year,” said Sanchez, a CNBC contributor. “The market already had a handle on the fact that it would already be weak.”

In particular, Sanchez says the recent weakness in housing is sounding the alarm for investors.

“If you look at the pillars of the economy that should be holding us up, one of the biggest that’s been doing poorly is housing,” Sanchez said. “If we see further (declines) in housing, that could be very negative. So, I do think that there is some reason for caution right now.”