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Why Are Markets Collapsing…..Jobs Report Was Good.

nasdaq chart

Since markets are performing exactly as our internal forecasts have indicated (to the day), I will tell you.  The markets are not driven by the fundamentals like “the jobs report”. The markets could care less. They have a beautiful mathematical structure within them and as such, they move in perfect mathematical order between the points of force. The fundamentals simply follow. Once you have the mathematical/timing framework down it is fairly easy to calculate, way in advance, exactly what the stock market is going to do. I show you exactly how in my book. Remember, the stock market will be down 10-20% before any fundamental data begins to show any warning signs. If you would be interested in learning exactly what will happen in the stock market over the next 2 weeks or 2 years, please Click Here.   

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Why Are Markets Collapsing…..Jobs Report Was Good.  Google

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Warning: Tech Stocks Get Hammered….What’s Next?

After two weeks of heavy selling, Nasdaq investors are starting to get worried with put option volume soaring to the levels unseen since the 2010 flash crash.  Still, a lot of traders/investors are not concerned. 

The selloff last week isn’t a cause for alarm, according to BB&T Wealth Management’s Walter “Bucky” Hellwig, who said he wouldn’t be making any large changes to his stock holdings.

“For all the stocks that have done really well, there’s a trader that will say, ‘I want to nail down some of these profits,’” said Hellwig, a senior vice president at BB&T Wealth, which oversees $17 billion. “One day of sloppy trading isn’t going to cause us to change direction.”

Should you be worried?  

Absolutely!!! Listen, most market participants and pundits anticipate a typical market correction (at worst) before this “cyclical” bull market continues. However, that is not what our timing and mathematical work shows. On the contrary, it indicates that a large bear market in equities is just around the corner. When it starts it will quickly retrace a significant portion of the 2009-2014 bull move. If you would be interested in learning exactly when the bear market will start (to the day) and its internal composition, please Click Here.

As such, use market’s action over the last few weeks/days as a warning shot. 

 

fab 5 stocks

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Warning: Tech Stocks Get Hammered….What’s Next?  Google

Bloomberg Writes: Technology Traders Head for the Exit as Put Trades Surge

Two weeks of selling in the Nasdaq 100 Index, where valuations are double the rest of the market, has sent anxiety among options traders to the highest levels since the flash crash four years ago.

More than 1 million put options on anexchange-traded fund tracking the Nasdaq index changed hands on April 4 as investors sought protection during a 2.7 percent drop in the gauge. That’s the most trading in bearish contracts since May 7, 2010, the day after $862 billion was erased from the value of U.S. stocks in a matter of minutes. King Digital Entertainment Plc has slid 16 percent since going public March 26.

While the selloff has been orderly this time, technology shares with valuations twice as high as the rest of the market are being hit as traders dump the biggest winners of the bull market. The Nasdaq 100 fell the most in two years on April 4 with declines in all but four stocks. Traders took shelter in shares such as Coca-Cola Co. (INDU) and McDonald’s Corp.

“The market is preparing itself for further trouble and going to more GE instead of gee-whiz type of companies,” Matt McCormick, who helps oversee $11 billion as a portfolio manager at Cincinnati, Ohio-based Bahl & Gaynor Inc., said in a phone interview on April 4. “Their valuations are inexcusable.”

Investors have shifted money out of Internet and biotechnology stocks and favored companies with stable dividends and earnings. General Electric Co., which pays shareholders 3.4 percent (GE), is up 1.4 percent in the past month, while Tesla Motors Inc. (TSLA), Facebook Inc. and Netflix Inc. slumped more than 16 percent. The Nasdaq 100 has rallied 239 percent in five years.

Lehman Brothers

In Asia, Tencent Holdings Ltd. slumped to a two-month low today, and a gauge of Internet companies erased its advance for the year. European technology companies fell the most, with Alcatel-Lucent SA losing 3.1 percent and Nokia Oyj sliding 2.8 percent. Nasdaq 100 futures declined 0.7 percent at 6:31 a.m. in New York today.

The selloff boosted options trading as investors looked for strategies to protect equity holdings from declines and speculate on future swings. More than 2 million contracts on the PowerShares QQQ Trust changed hands on April 4, the most since Lehman Brothers Holdings Inc. filed for bankruptcy in 2008.

“We’re still seeing a significant number of put buyers” in the QQQs, Kurt Ayling, a technology, media and telecom desk analyst at Susquehanna Financial Group LLLP, said in an April 4 phone interview. “People are still putting a lot of protection on the Nasdaq.”

About $480 million was withdrawn last week from the PowerShares QQQ Trust ETF, data compiled by Bloomberg show. The fund ranks as the fourth-largest in the U.S. with $47 billion in assets, data compiled by Bloomberg show.

Price-Earnings

The Nasdaq Composite (CCMP) Index trades at 31.8 times reported earnings of the companies in the index. That’s almost twice the ratio for the S&P 500, which trades at 17 times earnings. The Nasdaq 100 Index of the biggest technology stocks sank 0.9 percent for the week after surging 35 percent in 2013.

“It feels like maybe a large liquidation in a tech fund,” Larry Peruzzi, senior equity trader at Cabrera Capital Markets in Boston, said in an e-mail. “The move seems excessive for profit taking.”

Lurches in technology shares have become more common in the last two months as traders reassess equities that have posted annual gains of 25 percent since 2009. Losses accelerated on April 4 as the Nasdaq 100 slid 2.7 percent and a measure of biotechnology shares tumbled 4.1 percent. The Standard & Poor’s 500 Index fell 1.3 percent.

Biggest Declines

Nasdaq 100 stocks with the 10 biggest declines on April 4 had rallied an average of 134 percent in 2013, according to data compiled by Bloomberg. Among them are Micron Technology Inc., Netflix and Tesla, which saw their shares triple or quadruple last year.

Concern that the retreat will worsen has made options more expensive. The Chicago Board Options Exchange NDX Volatility Index, tracking contracts on the Nasdaq 100, jumped 11 percent on April 4 to 18.79, a three-week high.

The volatility gauge is now 35 percent higher than a similar measure for the S&P 500, thebiggest gap since 2007, data compiled by Bloomberg show. That shows investors are more concerned about declines in Internet and biotechnology shares than the overall market.

No Alarm

The selloff last week isn’t a cause for alarm, according to BB&T Wealth Management’s Walter “Bucky” Hellwig, who said he wouldn’t be making any large changes to his stock holdings. The retreat may be a short-term reversal after the S&P 500 hit a record, he said in an April 4 phone interview from Birmingham, Alabama.

“For all the stocks that have done really well, there’s a trader that will say, ‘I want to nail down some of these profits,’” said Hellwig, a senior vice president at BB&T Wealth, which oversees $17 billion. “One day of sloppy trading isn’t going to cause us to change direction.”

Even after the drop, Tesla shares are still up 41 percent in 2014 and Micron is up 3.8 percent. The Nasdaq 100 ETF, known by its ticker QQQ, has slipped 1.8 percent this year to $86.37.

Seven of 10 most-owned options on the fund are bullish. April $89.63 calls, with a strike price 3.8 percent above the close, had the highest open interest, followed by $90.63 and $91.63 calls expiring at the same time.

Further Valuations

Excessive valuations mean further gains in technology stocks will be harder to come by, said Sean Sun, an equity research analyst at Santa Fe, New Mexico-based Thornburg Investment Management Inc.

Amazon.com Inc. (AMZN), an online retailer, trades at 572 times reported earnings while Netflix, an Internet video-subscription service, is valued at 141. About 15 percent of the Nasdaq 100 companies have a price-earnings ratio of 35 or more, data compiled by Bloomberg show.

“These are tech stocks trading at high valuation levels already, even with the selloff,” Sun said by phone on April 4. Thornburg oversees over $90 billion. “With the selloff accelerating, sentiment has turned more negative and given that, who knows where it ends.”

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Weekly Stock Market Update & Forecast. April 5th, 2014. InvestWithAlex.com

daily chart April 4th 2014t

Weekly Update & Summary: April 5th, 2014

An interesting week. Even though the markets sold off on Friday, the Dow ended the week with a gain. In fact, for the week the Dow Jones was up 90 points (0.55%) while the Nasdaq declined 28 points (-0.67%). Structurally, the market did very well by closing most of it’s gaps. While the Nasdaq closed all of its gaps, the Dow has a number of large gaps left, leading all the way down to around 16,050 (indicating further downside). I believe the market will go back to close these gaps when the bear market initiates.

WEEKLY REVIEW:

Is Another 1987 Type Of A Market Crash Around The Corner?

1987 crash investwithalex

The chart above has spread around the financial community like a wildfire, predicting a 1987 type of a crash (20% down in 1-2 trading days) Is it legit? The chart is legit, but comparing today’s market environment to 1987 is like looking up horses ass to see its teeth -OR- it confuses cause and effect. 

While I am not suggesting that the crash is not possible, you could compare today’s market to many of the 5-year cycles I have described on this blog. Click Here to read some of it. In a nutshell, today’s market matches many other 5 year cycles, not only 1987….1924-1929, 1932-1937, 1961-1966, 1982-1987, 1994-2000, 2002-2007, 2009-2014, etc…there are many others. 

When the 5 year cycle completes itself the market tends to roll over. It will not be different this time around. Whether the market will crash or simply roll over into a sustain long term bear market is irrelevant here. What is relevant? The bear market of 2014-2017 is just around the corner and it will slam stocks over the next few years. If you would like to know exactly when it will start (to the day) and its internal composition, please Click Here.

Why Job Numbers Are Irrelevant

While everyone is scouring recently released Bureau of Labor Jobs Report, looking for any sign of economic clarity, I am here to tell you that such data is for the most part irrelevant when it comes to forecasting financial markets and/or the economy. If you are still wondering, March payroll came in it at 192,000, keeping the unemployment rate unchanged at 6.7%. Giving further indication that any tapering or tightening by the FED might come later than anticipated and not be as benign as some have feared. Great news for Wall Street. 

Yet, all of the above is irrelevant. If you have been following this blog for any period of time you know that I have stated, a number of times, that the FED will not be raising interest rates anytime soon due to an upcoming bear market of 2014-2017 and the subsequent US recession. While the job report above could be viewed as “no tightening”, it should be viewed as “any existing economic recovery/growth is running out of gas”.  Once that settles is, expect the markets to sell off. 

Janet Yellen: Forget About Rate Hikes

As per report below, according to Janet Yellen’s indicators the US Economy is nowhere near where it should be for the rates to rise anytime soon. That is despite the stock market being up over 150% over the last 5 years. In fact, today’s ADP Job Report missed the mark for the 4th month in a row with 191,000 jobs created VS 195,000 expected. Becoming just another confirmation of what we have been saying all along here.

Forget about any rate increases over the next few years. That becomes more apparent when you look at our mathematical and timing work forecasts. Once again, they predict a sharp bear market between 2014-2017 and a subsequent deep recession in the US Economy. Under such circumstances, the FED will be looking for every possible avenue to re-inflate the markets instead of raising rates. In other words, as of today, most market participants are positioned in precisely the wrong way.  If you would be interested in learning exactly when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here.  

MACROECONOMIC ANALYSIS:  

Ukraine/Russia  continues to  be the most important issue. In fact, things might escalate significantly over the next few weeks.  

Even though it seems as if the situation in Ukraine is de-escalating and no invasion will occur, that in itself might be misleading.  I continue to believe the US/NATO 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.  Such a move 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.

TECHNICAL ANALYSIS:  

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. The Dow did set a new high during the week, indicating continuation of the bull market. 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: While the short-term trend remains bullish, it might be misleading as per our timing analysis discussion below.  

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:  

First, a review. Thus far, our forecasts have been, right on the money.

(*** 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).  

Based on our mathematical and timing work the next turning point is located at

Price: XXXX
Time: XXXX

Trading:

I am now fully committed to the short side of the market with 10 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 might add just one more short position over the next few weeks. That would be XXXX

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, most of the positions below have already been triggered.    

Stock

Entry Point ($)

Action Taken

Stop Loss @

XXXX

XXXX

Went Short

XXXX

XXXX

XXXX

Went Short

1250

XXXX

110

Went Short

121-123

XXXX

74

Went Short

80

XXXX

XXXX

Went Short

260

XXXX

XXXX

Went Short

460

XXXX

35

Went Short

39

XXXX

65

Went Short

70

XXXX

120

Went Short

120-130

XXXX

100

To Short

 

XXXX

112

Went Short

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 forecast 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. 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. April 5th, 2014. InvestWithAlex.com  Google

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Stock Market Update. April 4th, 2014. InvestWithAlex.com

daily chart April 4th 2014t

A massive down day with the Dow Jones down 160 points (0.96%) and the Nasdaq down a bone crushing 110 points (2.60%). 

On Monday, both the WSJ and CNBC stated that statistically April is the best month to be LONG. Apparently, April has missed the memo thus far. In fact, you wouldn’t have been caught off guard if you were following our mathematical and timing work within our subscription section.  Not only was this sell off predicted a long time ago, but what comes next is as clear as night and day as well. Plus, believe it or not, today’s sell off had nothing to do with the jobs report, as my post at the open indicated. 

In particular, the Nasdaq and the iShares Nasdaq Biotechnology (IBB) took the brunt of the beating with IBB collapsing 4.01%. While most market pundits will view this in a typical “buy the dip” kind of mentality, this is so much more than that. It will be just a matter of time before the S&P and the Dow begin to play catch up. Remember, as our mathematical and timing work shows, the bear market of 2014-2017 is just around the corner. As I have mentioned yesterday, it will pay off to be very conservative here.

If you would be interested in learning exactly when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here. 

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Stock Market Update. April 4th, 2014. InvestWithAlex.com  Google

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Idiots Can’t See Bubbles Through The Bubble Forest

I am constantly amazed how people can look at today’s market and declare that the market is cheap or as this gentleman puts it… “market have pockets of silliness”. Sure, it’s all fun and games until stocks get slammed 20-40% on the downside. Which is exactly what is going to happen over the next few years according to our mathematical and timing work. I have already discounted the notion that markets are cheap based on the P/E ratio or any other similar nonsense. Click Here To See The markets are, indeed, in a massive speculative bubble perpetuated by a huge amount of credit. In other words, everyone maxed out their borrowing ability to speculate in the stock market. When such environments end, stocks tend to collapse.

That is exactly where we find ourselves today. As mentioned earlier, our mathematical work clearly shows a bear market and a severe US Recession between 2014-2017. If you would be interested in learning exactly when this bear market will start (to the day) and it’s internal composition, please Click Here.  

can't see bubbles investwithalex

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Idiots Can’t See Bubbles Through The Bubble Forest  Google

The Daily Ticker Writes: Market has “pockets of silliness” but is “far away from a bubble”: Howard Lindzon

Even as U.S. markets flirt with new highs, Stocktwits Chairman Howard Lindzon has only 40% of his portfolio invested in stocks. But this conservative approach can’t be attributed to concerns about a market bubble: “We’re as far away from a bubble as possible,” he says in the video above.

Lindzon believes there are pockets of “silliness” right now and chooses to invest in stocks that he can “explain to his children,” including Charles Schwab (SCHW), Interactive Brokers (IBKR) and robot maker iRobot (IRBT).

“There’s enough good companies to own,” he declares. “I am bullish on stocks.”

He’s avoided some of the sectors that have risen just as sharply as they have fallen — namely biotechs — and explains that a “stealth” rotation has been happening — investors are moving away from momentum stocks to previously unloved sectors like banks.

He admits that this market may seem “confusing” to many investors but he steadfastly dismisses talk that today’s indices resemble the dot com era.

“This is a very different environment from 1999,” he says.

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At Least One Industry In Afghanistan Is Booming. Truly Disturbing

The US has a perfect track record at least in one thing. Every country we have directly invaded or meddled in over the last 20-30 years if fucked up beyond repair. Iraq, Afghanistan, Syria, Egypt, Libya, Ukraine, Kosovo, etc… are all disasters. But, it’s not all bad. America has helped one industry in Afghanistan to fully recover, boom and dominate worldwide markets. HEROIN.  

“Since the US came down on the Taliban and occupied Afghanistan in 2001, heroin production in the country has surged almost 40-fold. One year ago the estimated number of heroin addicts dying due to Afghan heroin in the preceding decade surpassed well over one million deaths worldwide. Last year, Afghanistan harvested a record quantity of opium. The annual report of the International Narcotics Control Board maintains that Afghan poppy fields now occupy a record 209,000 hectares, a 36 percent increase from 2013.Today more than half of the provinces in Afghanistan are growing opium poppies. Reports say Afghanistan is responsible for production of around 80 percent of the world’s opium and heroin.”

And that’s where your taxpayer money went. Well, that, plus blowing up a few mountain caves and an an inhalation of 351 of 1976 Toyota Pickups full of Taliban fighters. I guess I shouldn’t be surprised since the US has destroyed its own financial base, political system and any hope for true future economic growth (anytime soon). Oh well, at least the Biggest Loser is on tonight.   (see full report below). 

one industry in afghanistan is booming

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At Least One Industry In Afghanistan Is Booming. Truly Disturbing  Google

 

RT Writes: Afghan H-bomb: Record opium harvest, billions burn in ‘war on drugs’

Finding a solution to the thriving heroin production in Afghanistan has been on the back burner ever since the Americans occupied the country. The new Afghan president who will be elected next weekend will have to battle record opium harvests.

Since the US came down on the Taliban and occupied Afghanistan in 2001, heroin production in the country has surged almost 40-fold. One year ago the estimated number of heroin addicts dying due to Afghan heroin in the preceding decade surpassed well over one million deaths worldwide.

Last year, Afghanistan harvested a record quantity of opium. The annual report of the International Narcotics Control Board maintains that Afghan poppy fields now occupy a record 209,000 hectares, a 36 percent increase from 2013.

Today more than half of the provinces in Afghanistan are growing opium poppies. Reports say Afghanistan is responsible for production of around 80 percent of the world’s opium and heroin.

US soldiers from 4th platoon Alpha company 5/2 ID Stryker Brigade Combat Team (SBCT) 1-17 infantry batallion patrol near a poppy field in Shahwali Kot district Kandahar on May 11, 2010. (AFP Photo / Tauseef Mustafa)

US soldiers from 4th platoon Alpha company 5/2 ID Stryker Brigade Combat Team (SBCT) 1-17 infantry batallion patrol near a poppy field in Shahwali Kot district Kandahar on May 11, 2010. (AFP Photo / Tauseef Mustafa)

Heroin takes toll on Afghan society

Yet the country’s probably most disastrous problem is that the Afghan people not only produce record amounts of opiates, they are actively consuming them, with a heroin vortex sucking in more Afghanis every year.

According to the UN, 1 in 30 Afghani is a drug addict – that’s over a million people in a 30-million population. This makes Afghanistan not just the main producer, but at the same time one of the world’s leading drug consumers.

Afghan drug addicts smoke heroin on a street in Jalalabad on February 7, 2014. (AFP Photo / Noorullah Shirzada)

Afghan drug addicts smoke heroin on a street in Jalalabad on February 7, 2014. (AFP Photo / Noorullah Shirzada)

The new Afghan president will have to find ways to save his people from domestically produced drugs, which also form the backbone of the national economy.

Despite declaring war on drugs in Afghanistan, all efforts to disrupt the production of heroin have not helped to solve the problem in the slightest, with more drugs flowing out of the country every year. Earnings from the trade are clearly considered worth the risks. And Afghan heroin is spreading in all directions, and in particular – Russia.

Because the International Security Assistance Force (ISAF) headed by the US remains the dominant power in Afghanistan for the second decade now, Russia has been repeatedly asking Washington to curb heroin production in the Afghan mountains, albeit with poor results.

Russia’s President Vladimir Putin blamed the ISF for doing almost nothing to eradicate drug production in the occupied country. At the same time the US maintains that since 2002 it has spent $7 billion on fighting drug production in Afghanistan, and allocated $3 billion on agricultural programs trying to encourage Afghan nationals to grow other crops in place of the opium poppy.

 

An Afghan government official (L) and two Afghan National Army soldiers (C and R) cut down opium poppies in Bihsood district, some 25 kms north of Jalalabad , 08 April 2004. (AFP Photo / Shah Marai)

An Afghan government official (L) and two Afghan National Army soldiers (C and R) cut down opium poppies in Bihsood district, some 25 kms north of Jalalabad , 08 April 2004. (AFP Photo / Shah Marai)

 

In 2014 things deteriorated with the escalation of the political crisis in Ukraine and the Russia-US row over Crimea separating from Ukraine to reunite with Russia.

The US introduced sanctions against Russia and a number of its officials, thus breaking many contacts established over the years.

The new blacklist included the head of the Russian Federal Drug Control Service, Viktor Ivanov, who also co-chairs the Russia-US Presidential Commission workgroup on countering the illegal drug trade. Russia’s anti-drug tsar accused Washington of attempting to hide its responsibility for the drug crisis in Afghanistan.

NATO has also announced that it is suspending all military and civilian cooperation with Russia over the Ukrainian crisis.

On Wednesday news came that NATO is giving up its joint program with Russia, which is currently teaching Afghan helicopter pilots. Washington also intends not to buy original spare parts for Russian-made helicopters used by the Afghan army.

Although NATO Secretary General Anders Fogh Rasmussen announced that the alliance will continue cooperating with Russia in countering drugs in Afghanistan, the real future for such cooperation looks grim, particularly after the US President’s deputy drug czar, Michael Botticelli, refused an invitation by his Russian colleague to come to Moscow, citing Russia’s actions in Crimea as the major reason.

The lack of international dialogue could allow this business to grow even further, Dr. Bidit Dey, an expert on Afghanistan from the University of Northumbria told RT.

“The West, and of course the US in particular, have to set aside all geopolitical interests when it comes to global security,” Bidit Dey said, stressing that “There is a lack of cooperation between Russia and the West and that would be a huge threat to Europe’s security and also to overall social stability.”

While Washington is trying to avoid shouldering the responsibility for allowing heroin production in Afghanistan to burgeon, there is growing agreement that this deadly business simply can’t go on forever.

With the presidential election set in Afghanistan for April 5 and the American troops expected to leave the country by the end of 2014, does the world stand a chance for a real change?

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Is Another 1987 Type Of A Market Crash Around The Corner?

1987 crash investwithalex

The chart above has spread around the financial community like a wildfire, predicting a 1987 type of a crash (20% down in 1-2 trading days) Is it legit? The chart is legit, but comparing today’s market environment to 1987 is like looking up horses ass to see it’s teeth -OR- it confuses cause and effect. 

While I am not suggesting that the crash is not possible, you could compare today’s market to many of the 5-year cycles I have described on this blog. Click Here to read some of it. In a nutshell, today’s market matches many other 5 year cycles, not only 1987….1924-1929, 1932-1937, 1961-1966, 1982-1987, 1994-2000, 2002-2007, 2009-2014, etc…there are many others. 

When the 5 year cycle completes itself the market tends to roll over. It will not be different this time around. Whether the market will crash or simply roll over into a sustain long term bear market is irrelevant here. What is relevant? The bear market of 2014-2017 is just around the corner and it will slam stocks over the next few years. If you would like to know exactly when it will start (to the day) and it’s internal composition, please Click Here. 

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Is Another 1987 Type Of Market Crash Around The Corner?  Google

Breakout Writes: Dow hits record as 1987 crash comparisons continue

Has a longtime Minnesota bull turned bearish? Jim Paulsen, Chief investment strategist at Wells Capital Management, came out with a peculiar research note earlier in the week. Paulsen highlighted some similarities with an S&P 500 (^GSPC) chart from our current bull market with one that shows a similarity to the 1982 bull market that culminated int the Black Monday crash in 1987:

 

the contemporary bull market has been following the 1982 bull market fairly closely. As recently as last year-end, both bulls were up about 175% from their respective bear market lows! The important anniversary passed just a couple days ago was the 1274th trading day of both bull markets – the day on 8/25/1987 when the 1982 bull market reached a notable peak. On that day, the S&P 500 Index peaked for the year at 336.77. Moreover, we are now just 37 trading days from another important anniversary in financial history – 10/19/1987 when the S&P 500 Index suffered its biggest single day collapse ever!

As intriguing as the comparison sounds, and with the Dow (^DJI) and S&P 500 hitting new all-time highs today, Breakout viewers will remember these comparisons with past market moves have usually been non-predictive. But fun market talk, sure.

Paulsen will be the first say he doesn’t see a big, ugly 20% move coming. “I’m not anticipating that [1987 type crash] at all,” he says, but he does point out the genesis of both bull markets as very similar – born out of extremely tough economic times in 1982 and 2009.

“I would suggest that history won’t repeat, i don’t think we’ll have a big collapse… but sometime in the next several months, good news on the economy might become bad news for the market like it did in 1987.” Paulsen says a 10% move wouldn’t surprise him in the least.

Despite his call for a modest correction, Paulsen still feels strongly that investors should be positioned aggressively in cyclicals (XLY), with this morning’s “Goldilocks” payrolls number keeping the market happy, and leaving the Fed little option but to continue its low rate policy and slow taper.

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Warning: Is NASDAQ’s Bloodbath Just Starting?

nasdaq selloff investwithalex

Today sell off should not come as surprise to anyone. Particularly those who have access to our premium subscribe section. In fact, we are making a lot of money on some of our short positions established over the last two weeks. Again, all trades and positioning is available in our premium section.  Further, today’s action might be just the prelude of what is to come. As I have said before, the bear market of 2014-2017 is just around the corner. If you would like to learn exactly when the bear market will start (to the day) and it’s internal composition, please Click Here.  

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Warning: Is NASDAQ’s Bloodbath Just Starting?  Google

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Food Prices Continue To Surge. Time To Invest?

Outside of inflation within the stock market and some other asset classes (due to FED’s credit expansion), food prices is the only other category where you can witness the so called inflation.  Otherwise, core inflation dropped to a 10 Year low of 1.1% Y-O-Y or 0.1% in February. 

Is it time to load up on food commodities or related stocks? 

It might be a good idea. Corn and soybeans in particular are starting looks good. The fundamental case for food commodities is fairly strong as well. The continuation of low interest rates and stimulus, potential rotation out of crude oil and into food commodities, various weather related disasters to crops around the world, etc….. can all play well in making the bull case for the markets in question. While I do not currently have the cyclical/timing breakdown of the commodities markets, I would wait for a technical confirmation of the bull market here (use corn) before committing capital.     

commodity prices

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Food Prices Continue To Surge. Time To Invest?  Google

 

Rising food prices pinch consumers, but could enrich investors

Drought and severe cold mean hardship for farmers and headaches for strapped consumers facing higher grocery prices.

But on Wall Street, the severe California water shortage and extreme winter weather conditions across the country are among reasons to warm to agriculture-related investments, which appear well-positioned to continue recovering after having spoiled in the commodity bust of recent years.

Large harvests and cash exiting from the once-popular “commodity trade” among fund managers led to a serious slump in crop prices last year. But so far in 2014, the PowerShares DB Agriculture exchange-traded fund (DBA) has climbed 15% in price. This fund invests directly in a broad spectrum of crop and livestock commodity futures.

This likely means an end of the brief reprieve from food inflation U.S. households were granted in 2013. The USDA forecasts retail food prices as a whole are likely to climb 2.5% to 3.5% in 2014, driven largely by drought-impacted supply strains on fruits, vegetables, dairy products and eggs.

The United Nations’ food organization likewise reported global food prices jumped in March to their highest level in a year, with political turmoil in Ukraine – a major grain producer – adding to weather-related difficulties.

Some individual food goods are seeing outsized price shocks. Market prices for the world’s most popular variety of coffee beans are up more than 60% this year to a two-year high, due in part to drought and then disruptively heavy rains in Brazil. (Consumers going to their local coffee houses for a cup have not been affected by this surge and are generally less likely to feel the hit from upward movement of raw commodity prices.) In a quirkier development, lime prices have more than doubled in recent months due to bad weather, disease and disruptions by organized crime.

Nasty winter weather fouled transport networks and has stranded plenty of wheat in storage facilities, and years of summer drought have left the nation’s cattle herd at multi-decade lows. As Yahoo Breakout points out in the attached video, corn prices in particular are on the climb, helped along this week by a USDA report estimating American farmers will allot 4% less acreage to corn this year.

Add all these supply issues to a still-hungry and growing world, and the case for hunting for some agricultural plays appears even brighter – especially given that shares of so many big ag-related companies still trade well below their peak levels of a few years ago, even as the broad stock market clicks to new all-time highs.

The most popular proxy for the barnyard economy, the MarketVectors Agribusiness ETF (MOO), is almost exactly flat over the past two years, left behind by the 35% advance in the Standard & Poor’s 500 index. The ETF is heavily weighted in seed, fertilizer, crop-processing and farm-equipment leaders such as Monsanto Co. (MON), Potash Corp. of Saskatchewan (POT), Archer-Daniels-Midland Co. (ADM) and Deere & Co. (DE).

In the past month, “the Moo,” as the fund is cheekily known, has shown some life, outpacing the broad market and gaining the attention of investors looking for overlooked opportunities in a picked-over market.

 

Josh Brown, financial advisor at Ritholtz Wealth Management and writer of the Reformed Broker blog, has flagged the sector as a potential outperformer this year, and a growing group of chart-studying technical traders have warmed to the Moo as it flirts with breaking out from its longstanding range between about $50 and $55.

Deere shares in particular have shown new life in recent weeks, climbing nearly 6% in the past month to approach $92, after going sideways for a year. The stock is intriguing for its combination of a modest valuation – about 11-times forecast 2014 profits of $8.43 a share – and for being largely disliked by the Street. Only four analysts among the 23 who follow Deere rate the stock a Buy, versus eight with Sell-equivalent ratings. That’s encouraging to Deere bulls, from a contrarian perspective. 

Jim Larkins, manager of the Wasatch Small Cap Value fund, (WMCVX) focuses in large part on “fallen angel” stocks – one-time high-riding favorites that have fallen temporarily out of favor. He’s eyeing a handful of agricultural plays as possible rebound candidates. He reports that he hasn’t yet pulled the trigger, in fear that the broad ag cycle might not have durably bottomed, “but we can’t be too far away.”

Among the names on his watch list are Titan International Inc. (TWI), a maker of tires and wheels for tractors and other off-road vehicles; Intrepid Potash Inc. (IPI), a rare U.S.-based potash producer for fertilizers that might become an acquisition target someday; and American Vanguard Corp. (AVD), which distributes older, “orphaned” herbicide and pesticide products many farmers are rediscovering. All three stocks are well below their highs of a couple of years ago, but have stabilized at cheaper prices. 

It’s hard to find a less dazzling economic sector than this one. But that’s exactly why these earthier names might prove to be ripe opportunities in a market captivated by buzzy Internet and consumer “story stocks.”

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Attention: VIX Foretells A Major Market Beating Ahead

The VIX is scratching the bottom of the barrel here, indicating outright complacence in this highly speculative and overpriced market. Selling around $12.75 VIX is not that far from it’s all time low. Just as a reference point, we faced a very similar situation in 2007 when VIX got into $10 territory. Right before the 2007-2009 collapse initiated. Today, we face a very similar situation. Not only in VIX, but in market’s fundamental setup. As per out mathematical and timing work the bear market of 2014-2017 is just around the corner. When it starts expect VIX to spike. If you would be interested in learning when the bear market of will start (to the day) and it’s internal composition, please Click Here. 

VIX

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Attention: VIX Foretells A Major Market Beating Ahead  Google

Why the market may be underpricing fear

Is the market too complacent? 

Right now, it looks like fear has been in a little bit of a bear market, at least when measured by the CBOE Volatility Index, or “the fear index” as it’s affectionately called.

The index basically measures the cost of insuring stocks against a fall, and from the looks of it, the market isn’t all that fearful. As of Thursday, the VIX was trading around 13. Just two weeks ago, it was as high as 17 and, in early February, it was above 21.

That may not be a good thing. The VIX and stocks tend to move inversely. Often times, a low VIX can signal complacency. And despite some global turmoil, judging by the VIX, investors don’t seem that concerned.    

“Trading the VIX has really been tough,” says CNBC contributor Andrew Busch, editor and publisher of the Busch Update. “People have been trying to buy breakouts on this, expecting bad things to happen like the Ukraine.”

However, those expecting the VIX to break above the 21 handle have thus far been disappointed. Busch notes that the VIX has stayed well within a range of between 21 and 11 for the past couple of years, a far cry from exactly four years ago when it hit 48.2.

CNBC contributor Gina Sanchez, founder of Chantico Global, said that although issues such as shake-ups in emerging market currencies and the Crimea crisis have caused the VIX to spike ever so slightly, the market is still pricing risk down.

“They’re ignoring [risk issues] and they’re looking towards the fact that we’re coming out of a cold weather spell that has kept macro data down,” said Sanchez. “That macro data is starting to pick back up. We’re starting to see better jobs numbers. The general positivity in the markets is basically causing the markets to underprice risk.”

Sanchez believes the market is underestimating risk at a time when she thinks stocks are fully priced if not slightly expensive.

“Any of those risks could actually have a devastating effect on the markets,” said Sanchez. “That’s why it’s important to watch the VIX when it gets this low.”