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Weekly Stock Market Update & Forecast. April 26th, 2014. InvestWithAlex.com

daily chart April 25 2014

Weekly Update & Summary: April 26th, 2014

With a substantial decline on Friday, the Dow Jones lost 47 points (-0.29%) and the Nasdaq lost 20 points (-0.49%) for the week. Structurally, all markets have opened up a large gap this Friday. Suggesting a near term upswing to close it. While the short-term upswing is probable, the Dow 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.  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:

100% Of Economists Agree Yields Will Rise.
What That Means Should Send Chills Down Your Spine

As you know, I have very little (if any) respect for economists. It’s a worthless profession where they tend to do more harm than good (Greenspan, Bernanke, Yellen).Plus, things they do have very little application in the real world. Let me put it this way……if the economists knew what they were talking about they would be making millions on Wall Street instead of arguing if the GDP growth of Zimbabwe will be 2.6% or 2.9% in the year 2019.

However, when 100% of surveyed economists expect yields to rise you better perk up and pay attention. From a contrarian point of view.  In Bloomberg’s recently conducted survey, 67 out of 67 Economists expect interest rates to rise over the next 6 months. In other words, they expect continued economic growth and an eventual tightening by the FED.

10 Year Note Chart

That flies in the face of our forecast. In the past I have shown that we expect yields to fall and the yield curve to flatten as the US Economy falls into a severe recession between 2014-2017 What Does The Yield Curve Yield?  In fact, over the next 12 months the FED will be looking for ways to stimulate the economy and to print, instead of tightening. As far as I am concerned, 100% of the economists agreeing on the opposite is a direct validation of that view.

Don’t forget, our mathematical and timing work shows a severe bear market between 2014-2017. When it begins to develop, it is only rational that yields decline.

Tech Bubble 2.0 Is Here: Why High Flyers Will Collapse
To The Tune Of 70-90%. Scary!

David Einhorn of Greenlight Capital certainly thinks so…… 

“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it. The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm,” The firm said it was shorting a group of undisclosed “high-flying momentum stocks.”

We have maintained the same view for quite some time now. With unprecedented level of speculation, overvaluation, FED printing, IPO insanity and asset price inflation, today’s fundamental situation is not that dissimilar to 2007 top.  And while Mr. Einhorn is not particularly sure about the timing, we are.

The upcoming collapse in high flying tech specs will unfold in short order as our mathematical and timing work indicates. 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.

New Home Sales Plunge. Why The Upcoming Real Estate Crash Will Be Much Worse Than The 2006-2010 Decline

As per the Commerce Department report released earlier today new home sales have collapsed 14.5% to an eight month low.  While industry insiders blame everything from unusually cold weather to baby Jesus for this catastrophic drop, the reality is quite simple. The real estate market is slowly rolling over into a massive bear leg (stage 3) after it’s “dead cat” bounce between (2010-2014). I have outlined all of this in my comprehensive report dating back to October of 2013. Real Estate Collapse 2.0 Why, How & When Thus far, it’s playing out exactly as I predicted.

Here is what most people don’t get. Secular bear markets do not move in straight lines nor do they move fast. Just as bear/bull cycles in the stock markets last 17/18 years, same applies to the real estate cycles.

  • Real Estate Bull Market: Arguably, the US real estate boom began at 1991 recession bottom. It lasted until 2006/07 top or 17 years. Stock market equivalent: 1982-2000 bull market.
  • Stage 1 – Initial Bear Market Leg In Real Estate. 2007-2010 (3 years). Nationwide, prices declined 20-40%. Stock market equivalent: 2000-2003 Bear Market. The Dow declined  about 40%.
  • Stage 2 – Real Estate Bounce.  Also known as the “Dead Cat” bounce 2010-2014 (4 years). Stock market equivalent 2003-2007 bull market.
  • State 3 – Real Estate Collapse:  2014-2017. Stage 3 collapses are notoriously sharp, fast and very nasty. The stock market equivalent would be the bear market of 2007-2009 when the Dow lost 56% of it’s value in 18 months.

Conclusion: While the analysis above is fairly simplistic, it is also extremely accurate when we take our mathematical, timing and cycle work into consideration. The analysis above clearly indicates that the real estate market/sector is about to eat dirt in a massive and a severe Stage 3 decline. This is further confirmed by the undying love for Real Estate in today’s American culture.

Remember, before any bear market terminates itself any sense of “love for an asset class” must be crushed out of the prevailing culture. I am afraid we are at least a decade away from that point when it comes to the American Real Estate.

MACROECONOMIC ANALYSIS:  

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

As predicted in last week’s report, Geneva Accord  did not hold up. As of today, it is nothing but a distant memory for all involved.  I continue to believe the US/NATO, Ukraine’s Interim Government, Pro-Russian Movement In the East Ukraine and Russia are one spark away from reigniting this conflict and going at each other on multiple levels.  While I don’t believe NATO and Russia will get involved into a direct military conflict (for the time being), any misstep here by either side might lead to Russia invading East Ukraine. In fact, I continue to believe it is just a matter of time. 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.  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 two weeks. 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 long-term turning point is located at

Date: XXXX
Price: XXXX

XXXX

Trading:

I am now fully committed to the xxxx 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.

END OF UPDATE——–

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. April 26th, 2014. InvestWithAlex.com  Google

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Stock Market Update. April 25th, 2014 InvestWithAlex.com

daily chart April 25 2014

A significant down day with the Dow Jones down 140 points (-0.85%) and the Nasdaq down 73 points (-1.75%). 

Even though both the S&P and the Dow are a stone throws away from their all time highs, market internals are getting ugly. We have already discussed that in the past. What concerns me the most today is to what an extent the Obama Administration is going to play chicken with Russia.

If you have been reading this blog, you know that I have maintained a fairly accurate stand (for over a month now) that Russia will invade Ukraine one way or the other. It has no other option as it must stop NATO’s expansion up to it’s borders.  For Russia it’s a matter of national security.  With Russian jets entering Ukrainian airspace as I write this and with Russian special forces already operating in East Ukraine, it’s a forgone conclusion.

The real question here is how far the US is willing to go and what impact Obama’s actions will have on the US Economy. That’s right, the US Economy….not Russian economy. While most media pundits are completely oblivious to the subject matter with their American chest beating patriotism, economic warfare against Russia will only accelerate the upcoming and severe US Recession/Bear Market of 2014-2017. Make no mistake about that.

This is further confirmed by our mathematical and timing work. 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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Is Gold Really Going To $5,000? My Answer Will Shock You

I have very little respect for Peter Schiff. His predictions and timing in the past have been notoriously wrong. Plus, from what I have heard his clients are losing a lot of money. With that said, his call for Gold $5,000 (see the article below) might actually hold water. Believe it or not, his prediction somewhat matches our forecast.

The macroeconomic setup for gold today is very similar to what we have experienced back in 2007 when the gold price ran up from $600 an ounce to over $1,800 an ounce over a 5 year period of time. Are we in for a repeat? I believe so.

As per our mathematical and timing work we are about to enter a sever bear market that will last between 2014-2017. With the US Economy in deep recession, the FED will be looking at any possible avenue to re-inflate the markets and flood the system with more liquidity. Not tighten. As you can imagine, collapsing equity markets and loose monetary policy by the FED are great drivers for Gold. As such, we wouldn’t be surprised to see Gold between $4,000-5,000 over the next 3-5 years.

Just as a quick note. Stay away from Crazy Perma Bears (like Peter Schiff) who expect an outright stock market collapse and the DOW 1,000. Based on our timing and mathematical work it’s not going to happen. Not even close. 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

gold investwithalex

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Is Gold Really Going To $5,000? My Answer Will Shock You  Google

Market Watch Writes: Peter Schiff: Reckless Fed may push gold to $5,000

SAN FRANCISCO (MarketWatch) — Peter Schiff, chief executive officer of Euro Pacific Capital, has been known to make forecasts outside the mainstream, and his long-running belief that gold has the potential to hit $5,000 an ounce is no exception. Prices, after all, are struggling to get a grip on $1,300.

We caught up with Schiff to ask him how gold, a big disappointment for commodities investors last year, gets back its groove. Last year, gold futures GCM4 +0.79%   and heavyweight ETF SPDR Gold Trust GLD +0.59% lost 28%, breaking at least eight years of annual gains.

First off, Schiff’s gold forecast isn’t brand new. The author of “The Real Crash — America’s Coming Bankruptcy” has talked about the possibility of gold hitting $5,000 or higher since at least 2011, when prices for the metal topped $1,900 in intraday trading.

Schiff reiterated his call on the potential for $5,000 gold and beyond during a heated debate with Paul Krake of View from the Peak onCNBC’s “Futures Now” episodeposted on April 15.

In an email interview with MarketWatch this week, he offered his thoughts on exactly why he expects gold prices to continue to climb and under what circumstances, what it would take to change his bullish outlook on gold and whether prices for the metal have already hit bottom this year.

Here’s MarketWatch’s full email interview with Schiff that concluded Wednesday:

Q: Before this year began, what were your expectations for gold prices and how does that compare with the metal’s performance year to date?

Schiff: I thought that the selloff in 2013 was completely out of touch with reality, so I expected the price to rise this year. In this, I was virtually alone in the financial community. Just about every major investment house had predicted even more losses for gold in 2014.

So far this year, gold is the best-performing asset class, but I think the pullback we have seen over the last few weeks is just another indication of how much negative sentiment remains. Ultimately however, the fundamentals will prevail. The Fed will keep printing [dollars] and gold will keep rising.

Q: In a recent interview with CNBC, you said the Federal Reserve’s quantitative-easing program will push gold to $5,000 an ounce. Could you explain that a bit further? What’s your time frame for that forecast? [Watch: Gold bear takes on bug: ‘You’re miles off base’]

I believe the consensus expectation that the U.S. recovery is real and that the Fed will end its [quantitative-easing] program and normalize interest rates is wrong.

Over the past few years the Fed had become [a] serial mover of goal posts, delaying the decision to end stimulus more than anyone would have predicted. When the Fed has to admit that its forecast of a sustained recovery is wrong, it will come to the aid of a faltering economy with even more QE. When that happens, gold will rally.

Last year’s selloff was based [on] the expectation that a strong recovery will lead to tighter monetary policy, which would then undercut the reason for buying and holding gold. That is a false assumption.

Q: Could you offer your thoughts on other factors you see as most influential to the gold market this year, including China?

A renewed weakness in the dollar and strength in oiland other commodities will add to gold’s appeal during 2014. Also, any major geopolitical concerns, particularly if there is a deterioration of the situation in Ukraine, will add to gold’s appeal. I also expect renewed physical demand from emerging markets like India and China.

The World Gold Council recently forecast that Chinese gold demand will rise 20% by 2017 from the current level of 1,132 metric tons a year.

Q: What might alter your bullish outlook on gold?

Gold would certainly be hurt if the Fed surprised the markets by actually ending QE and tightening policy. But that is very unlikely to actually occur.

Q: What would you say to investors who are discouraged by gold’s performance so far this year? (Futures are prices up around 7% year to date, but only partially making up for last year’s plunge.)


FactSetEnlarge Image

Be patient. Many investors in the 90’s believed that gold was a dead asset class. But in the 10 years from 2001 to 2011, gold increased almost 900%. The moves come in waves.

Q: With prices currently under $1,300 an ounce, have prices hit bottom for this year? Is gold a bargain at these levels — is it a good time to buy now? Please explain.

Most likely prices have bottomed, as too many speculators are looking for lower prices. The fundamental case for gold has also never been stronger. From a gold short seller’s perspective, this will prove to be the equivalent of a perfect storm. Their losses will be severe. [Read about gold contrarians saying it’s time to start buying.]

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Stock Market Update. April 24th, 2014. InvestWithAlex.com

margin debt2 investwithalex

A volatile day with the Dow Jones up 0.1 points (0.00%) and the Nasdaq up 21 points (0.52%).

The chart above (courtesy of Elliot Wave) contains everything you need to know about the state of today’s stock market. In a nutshell, today’s stock market is being driven by excessive levels of speculation with a smidge of margin debt.  Well, a record $178 Billion of margin debt to be exact.

While we have talked about margin debt before, this chart drives the point home. Most investors have overextended themselves at exactly the wrong time (as they always do). With margin debt levels being substantially higher than their 2000 and 2007 stock market top counterparts, the near term outlook for the stock market is anything but bright.

This is further confirmed by our mathematical and timing work. 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. April 24th, 2014. InvestWithAlex.com  Google

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Shocking Secret Revealed: Why Facebook’s Earnings Are Irrelevant & Why It’s Stock About To Crash

Even though Facebook (FB) reported very impressive results for Q1 ($2.5 Billion in revenue and 72% growth y-o-y), the only place it’s stock price is heading is south….way south. While we can talk about the fundamentals, growth projections, user engagement, mobile Vs. PC, acquisition, new revenue streams, etc…… none of such things are relevant to what will happen to Facebook’s stock price over the next 2 years. Here is why……

  • Highly Speculative & Overpriced: Facebook is selling at about 20 X revenue. I don’t care what the growth or it’s future is, this valuation is extreme. Just as a reference point, two other highly overpriced and speculative companies, Apple (AAPL)  and Tesla (TSLA) are selling at 2.6X  and 12X revenue. Putting Facebook in a league of it own.
  • We Are On A Verge Of A Massive Bear Market: Based on our mathematical and timing work the bear market of 2014-2017 is about to start. When it starts it will very quickly retrace most of the gains accrued over the last few years. High flyers like Facebook will suffer the most. 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

In conclusion, based on a simple premise above we believe that Facebook (FB) will see the $20-25 range over the next two years. Basically, at today’s valuation levels, their growth story becomes inconsequential.  As you can imagine, right now would be a good time to sell or better yet, go short.

facebook

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Shocking Secret Revealed: Why Facebook’s Earnings Are Irrelevant & Why It’s Stock Price About To Crash Google

Reuters: Facebook’s next growth engines still warming up

By Alexei Oreskovic

SAN FRANCISCO, April 23 (Reuters) – Facebook Inc has a message for Wall Street: Don’t expect new revenue streams anytime soon.

The world’s No. 1 Internet social network delivered its strongest revenue growth in several years during the first quarter, as its mobile ad business gained steam.

But even as Facebook gave investors the good news, buoying its stock by roughly 3 percent in after-hours trading, the company made it clear that other money-making efforts such as video ads and ads within its Instagram photo-sharing app would not bear fruit in the near future.

“That will probably be the most disappointing statement to come out of the call,” said Macquarie Research analyst Ben Schachter. “Many folks were anticipating a next leg of growth.”

Facebook Chief Operating Officer Sheryl Sandberg told analysts on a conference call on Wednesday that Instagram ads, video ads and a nascent mobile ad network were all still in experimental phases and that none of them would make a meaningful contribution to revenue in 2014.

That may dash the hopes of some investors, who had expected Instagram to start generating revenue two years after Facebook acquired it for $1 billion.

“We’re very focused on consumer growth, and we move slowly and deliberately in monetization,” Sandberg said, referring to the limited number of ads on Instagram. “We don’t see the need or the urge to ramp this as quickly as we possibly can.”

Facebook is also going slow with auto-play video ads. Facebook said earlier this year it would allow a small group of advertisers to display 15-second video ads on Facebook, but Sandberg said on Wednesday the company was still gauging users’ response and was in no hurry to open the service up broadly to advertisers.

The comments are likely to cause financial analysts and investors to re-appraise Facebook’s near-term prospects. In notes to investors released prior to Wednesday’s earnings report, Morgan Stanley estimated that video ads could contribute $900 million to Facebook’s top line this year, while Cowen & Co targeted $1 billion in video ad revenue.

Shares of Facebook remained up in after hours trading, even after the company warned that its advertising revenue growth would slow throughout the year, as it faces tougher year-on-year comparisons.

Investors are willing to give Facebook some leeway, given its strong performance building the mobile ad business, said Macquarie’s Schacther.

“They’ve earned the benefit of the doubt, that even if it doesn’t come this quarter, or the next quarter, that it will come,” he said of the company’s additional revenue opportunities.

TURNAROUND

Facebook’s newsfeed ads, which inject paid marketing messages straight into a user’s stream of news and content, have ignited Facebook’s revenue growth and bolstered its stock price during the past year. The ads are ideally suited for the smaller-sized screens of smartphones and other mobile devices.

Facebook said mobile ads contributed 59 percent of its ad revenue in the first quarter, up from 30 percent in the year-ago period. Facebook’s overall revenue grew 72 percent year-on-year to $2.5 billion in the first quarter, above the $2.36 billion expected by analysts polled by Thomson Reuters I/B/E/S.

Facebook’s first-quarter results underscore how far the company has come since its rocky 2012 initial public offering, when concerns about slowing revenue growth cut its stock price in half. At the time, investors questioned Chief Executive Mark Zuckerberg’s commitment to the financial side of the business, spooked by the hoodie-wearing founder’s comments about that Facebook does not build services to make money, but rather that it makes money to build better services.

Many of the key investor concerns about Facebook’s ability to transition its ad business to mobile phones and a perception that consumers were cutting back their time on the social network have been dispelled, said FBN Securities analyst Shebly Seyrafi.

He noted the proportion of Facebook users who access the site daily increased to nearly 63 percent in the first quarter, up from 61.5 percent at the end of 2013.

“If you look at user growth, engagement rates and monetization, the three key levers of value, Facebook delivered on all three,” he said.

While Seyrafi said he believed Instagram has the potential to turn into a near-term money-maker, he said he was not concerned by Facebook’s comments.

“All these things are new shoots of growth for the company,” Seyrafi said. “But I think that they want to deliver first and report it afterwards, rather than guiding beforehand.” (Reporting by Alexei Oreskovic; Editing by Richard Chang)

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100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine

When 100% of surveyed economists expect yields to rise you better perk up and pay attention. From a contrarian point of view.  In Bloomberg’s recently conducted survey, 67 out of 67 Economists expect interest rates to rise over the next 6 months. In other words, they expect continued economic growth and an eventual tightening by the FED.

That flies in the face of our forecast. In the past I have shown that we expect yields to fall and the yield curve to flatten as the US Economy falls into a severe recession between 2014-2017 What Does The Yield Curve Yield?  In fact, over the next 12 months the FED will be looking for ways to stimulate the economy and to print, instead of tightening. As far as I am concerned, 100% of the economists agreeing on the opposite is a direct validation of that view.

Don’t forget, our mathematical and timing work shows a severe bear market between 2014-2017. When it begins to develop, it is only rational that yields decline. 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

10 Year Note Chart

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100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine  Google

Market Watch: 100% of economists think yields will rise within six months

Economists are unwavering in their assessment of where yields are headed in the next half year.

Jim Bianco, of Bianco Research, points out in a market comment Tuesday that a survey of 67 economists this month shows every single one of them expects the 10-year Treasury  10_YEAR +0.41% yield to rise in the next six months.

The survey, which is done each month by Bloomberg, has been notably bearish for some time now, with nearly everyone expecting rising rates. In March, 97% expected rising rates. In February, 95% expected yields to climb. And in January, 97% held that expectation. Since the beginning of 2009, there have only been a handful of instances where less than 50% expected rates to rise.

10_Year

Still, the fact that every single survey participant is bearish is striking. The last time the survey had that result was in May 2012, when benchmark yields were well below 2%.

“Literally there is maybe one economist in the United States straddling the bullish/bearish divide on interest rates. The rest are bearish,” Bianco writes.

He adds that a J.P. Morgan client survey shows that the percentage of money manager respondents who said they are underweight Treasurys is the second highest in seven years.

This is all the more surprising when we consider that investors went into 2014 thinking yields would rise significantly. Instead, the benchmark yield is lower than when the year started, as the market waded throw subpar economic data, geopolitical tensions, and uncertainty over the Federal Reserve. The 10-year note last traded at a yield of 2.72% on Tuesday, down from just over 3% on Dec. 31.

Then again, a separate poll of economists recently showed that exactly zero expect the economy to contract.

But when the entire market thinks one thing is about to happen, the opposite outcome is often in store, notes James Camp, managing director of fixed income at Eagle Asset Management. So don’t count out that result with Treasurys, he advises.

“It’s the most hated asset class,” says Camp, but Treasurys are some of the best performers year-to-date.

 

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Stock Market Update. April 23rd, 2014. InvestWithAlex.com

daily chart April 23 2014

A negative day with the Dow Jones down 13 points (-0.08%) and the Nasdaq down 34 points (-0.83%). 

The Dow volume remained low as share distribution continued. Even though both the S&P and the Dow are sitting just a smidge away from their all time highs, that in itself doesn’t tell the whole story. For instance, please note a possible head and shoulder technical pattern developing on the Dow. All we need now is a quick leg to the downside to finish a textbook head and shoulders. Such patterns, of course, are indicative and most often seen at stock market tops. What follows thereafter is typically fairly ugly.

This sort of thinking is further confirmed by our mathematical and timing work as it continues to show that 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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Tech Bubble 2.0 Is Here: Why High Flyers Will Collapse To The Tune Of 70-90%. Scary!

David Einhorn of Greenlight Capital certainly thinks so…… 

“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it. The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm,” The firm said it was shorting a group of undisclosed “high-flying momentum stocks.”

We have maintained the same view for quite some time now. With unprecedented level of speculation, overvaluation, FED printing, IPO insanity and asset price inflation, today’s fundamental situation is not that dissimilar to 2007 top.  And while Mr. Einhorn is not particularly sure about the timing, we are.

The upcoming collapse in high flying tech specs will unfold in short order as our mathematical and timing work indicates. 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

fab 5 stocks

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Tech Bubble 2.0 Is Here: Why High Flyers Will Collapse To The Tune Of 70-90%. Scary! Google

CNBC Writes: Einhorn: Bubble brewing, shorting momentum stocks

David Einhorn has a clear warning for technology investors: we’re in a bubble.

“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years,” Greenlight Capital said in an investor letter Tuesday. “What is uncertain is how much further the bubble can expand, and what might pop it.”

The firm said there were several indications of the over-exuberance, including the rejection of conventional valuation methods; short sellers forced to cover their positions because of losses; and “huge” first-day stock appreciations after their initial public offerings.

“The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm,” the letter said. The firm said it was shorting a group of undisclosed “high-flying momentum stocks.”

A spokesman for Greenlight declined to comment.

The firm also disclosed a number of new long positions, including retailer Conn’s (CONN), Japanese regional bank Resona Holdings and solar plant company SunEdison (SUNE). Shares of Conn’s and SunEdison rose sharply on the news. The firm also closed four short positions: Chipotle Mexican Grill (CMG), Fortescue Metals Group(ASX:FMG-AU), Loblaw Cos. (Toronto Stock Exchange: L-CA) and Michael Kors Holdings (KORS). All lost the firm money, according to the letter.

Greenlight’s main fund fell 1.5 percent in the first quarter, according to the letter. The largest winner was a long bet on Micron Technology (MU) and Green Mountain Coffee Roasters (GMCR), a short, was the most significant loser.

The firm’s largest long positions at the end of March were Alpha Bank, Apple (AAPL), gold, Marvell Technology(MRVL) and Micron.

Separate from its stock holdings, Greenlight discussed its trading costs because of the high-frequency trading concerns raised in the new book, “Flash Boys.”

The firm said the abuses described in the Michael Lewis book “don’t significantly impact us” but said it supports new alternative trading platform IEX. Greenlight said it holds a small stake in the exchange, which has styled itself as a safer place to trade for investors worried about HFT front running.

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Stock Market Update. April 22nd, 2014. InvestWithAlex.com

daily chart April 22 2014

Another up day with the Dow Jones up 65 points (0.40%) and the Nasdaq up 40 points (0.97%).

By now, the trauma bottom of a week ago is a long distant memory. With the Dow and the S&P approaching their all time highs the bull market is back on. Or is it? Not to rain on bulls parade but the current rally has all of the trademarks associated with a bear market rally. Low volume, short covering, divergences and sharp advances. While we are not in a technical bear market (not by any traditional measure anyway) it would pay off to start paying close attention to a possibility of a roll over.

In fact, our mathematical and timing work continues to show that the bear market 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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Stock Market Update. April 22nd, 2014. InvestWithAlex.com  Google

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The US Economy Is On Fire. Stocks About To Surge Lower?

According to CNBC and Jim Paulsen the US economy is on fire. No surprise there. 

“We’re just getting the spring thaw, and we’re going to get better numbers,” Paulsen said on “ Squawk on the Street .” “If you look aggregately at the economy it’s been awful good. The market is going to pay more attention to the economic reports out right on the ground, outside their windshield, than it is through the rearview mirror at an earnings season that everyone knows was highly distorted by the weather,” Paulsen said. 

Unfortunately, Mr. Paulsen suffers from a case of mass delusion. While the economy might look good on the surface, it is anything but. Again, most of the economic growth we have seen over the last few years has been driven by a massive amount of speculative credit infused into our economy by the FED. A lot of it flowing directly into the real estate and the stock market to cause massive asset bubbles. Further, our mathematical and timing work does not share in the optimism. It clearly shows that a severe bear market of 2014-2017 is just around the corner. I have a funny feeling that Mr. Paulsen will see the S&P at 1,200 before he sees it at 2,000

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The US Economy Is On Fire. Stocks About To Surge Lower?  Google

CNBC: This pushes S&P toward 2,000: Jim Paulsen

Economic growth has picked up as business activity thaws out from a frigid winter, investment strategist Jim Paulsen told CNBC on Monday, and that could push Wall Street past the recent volatility and into record highs.

Paulsen, chief investment strategist for Wells Capital Management, said he believes the U.S. economy is growing at a 4 percent clip in the second quarter of 2014. The Commerce Department will release GDP estimates for 2014’s first quarter at the end of the month. Paulsen said the pickup in economic activity will boost the S&P 500 (INDEX:^GSPC – News) past an all-time high of 1,900 and toward 2,000 points.

“We’re just getting the spring thaw, and we’re going to get better numbers,” Paulsen said on “ Squawk on the Street .” “If you look aggregately at the economy it’s been awful good.”

Economic conditions will hold more weight than the flood of earning reports hitting Wall Street this week, Paulsen said. The biggest factor coming out of earnings season will be forecasts, he added.

“The market is going to pay more attention to the economic reports out right on the ground, outside their windshield, than it is through the rearview mirror at an earnings season that everyone knows was highly distorted by the weather,” Paulsen said.

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This pushes S&P toward 2,000: Jim Paulsen

Adam Jeffery | CNBC

The department is scheduled to release the advance second-quarter GDP estimate on July 30.

Paulsen added that the boost stocks receive from the strengthening economy could turn into too much of good thing. The Federal Reserve could find itself fighting inflation as bond yields rise and as Wall Street deals with a “mini-overheat panic,” he said.

“Before the year is out, we’re going to bring the Fed back into the equation in a big way,” Paulsen said. “What’s going to do that is economic growth. … There’s a part of me that thinks we’re stirring an overheat cocktail here.”

On the other hand, UBS’ senior vice president of investments, Jim Lacamp, told CNBC the economy may end this year where it started, at around 2.5 percent growth.

“The economy to me is not a runaway economy,” Lacamp said during a later appearance on “Squawk on the Street.” “It seems to be more of a runaway bride economy. Every year we get some promise in the economy and everybody’s optimistic. And then by the end of the year we end up right where we were.”

Read More Earnings are beating estimates-but don’t be fooled

Lacamp believes the markets could still end the year higher. Though he warned investors to remain wary over a variety of factors: rising prices, a poor earnings season so far and stagnant wage growth.

“I don’t want to sound too negative,” Lacamp said. “I think the market goes higher by the end of the year, but over the next several months we’ve got a lot to work through economically.”