11/19/2018 – A negative day with the Dow Jones down 395 points (-1.56%) and the Nasdaq down 219 points (-3.03%) 

As we have been saying for some time, the stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here

Some of Wall Street’s biggest firms are beginning to say that a prolong bear market might be already upon us. Can they possibly be right?

Morgan Stanley Calls It: “We Are In A Bear Market”

More ominously, Wilson notes that what’s notable about Exhibit 1 is the fact that the only years the Buy the Dip hasn’t worked was during bear markets, or the beginning of one (1982, 1990, 2000, 2002). In the cases of 1982, 1990, and 2002 it was also accompanied by a recession. In the case of 2000, it was the year preceding a bear market and recession and the topping of the TMT bubble.

In other words, while 2018 is clearly not a year of recession, the market is speaking loudly that bad news is coming. Our view is that the market is sniffing out an earnings recession and a sharp deceleration in economic growth–something we have written about extensively.

To be sure, there are exceptions: did buying dip work in 2008-09, however Wilson has a specific explanation for this: “in 2008-09, the Fed was easing aggressively and began its QE program along with TARP. That’s a lot of stimulus that probably offset the very real concerns about the economy and corporate earnings.” Furthermore, Wilson adds, while the S&P 500 was down in both 2008 and 2009, buying the market on weakness was still a profitable strategy because the rallies were just as vicious given the incredible uncertainty and unprecedented volatility which also made it almost impossible to execute.

Whether or not the bear market has started is not necessarily the right question. This is –  Investors Might Want To Start Wondering Why The Hell They Are Fully Invested In The Biggest Bubble Of All Time

Still, if you would like to find out if a bear market has started and exactly what the stock market will do next, based on our mathematical and timing work, please Click Here. 

OR Maybe, Just Maybe, You Should Be Loading Up On The US Dollar

A negative week with the Dow Jones down 576 points (-2.21%) and the Nasdaq down 159 points (-2.14%)

As we have been saying for some time, the stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here

Just a few weeks ago we pointed out how two world class idiots, Obama and Trump, were fighting over who is truly responsible for the “Everything Bubble”

Trump Vs Obama: When Two Idiots Fight Over The ‘Economic Miracle’ …AKA… The Biggest Financial Bubble Of All Time

Trump was absolutely correct in labeling Obama’s economy as a massive bubble during his Presidential campaign. Too bad he proceeded to “re-imagine” it with his tax cuts and MAGA nonsense. Something he will pay dearly for over the next few years. Then again, the can always blame the FED and/or democrats.

And while a little late to the party, yet another fool would like to take credit. 

Powell credits Fed policy for the US economy being ‘in a good place’

• Federal Reserve Chairman Jerome Powell said the U.S. economy “is in such a good place right now” and credited monetary policy for helping to engineer that growth.

• He also cautioned markets that every Fed meeting from now on will be “live” for the possibility of an interest rate hike.

• On the global economy, Powell said there has been “a gradual chipping away” at growth.

In other words, none of these geniuses have any idea of what they have done or what is to come. Allow me to summarize…….

Obama/Yellen/Bernanke team juiced the stock market/economy with zero interest rates for nearly nine years, including multiple rounds of QE. When the Trump team came in they have decided to add fuel to the fire with their late cycle tax cuts.

And the result? 

Arguably the biggest asset bubble in human history. The Everything Bubble. I say arguably because only 2000 market valuations were higher (see chart below). Yet, at that time most of the bubble was concentrated in money losing tech companies, hence the higher P/E ratio. Today, the bubble is across the board and in all asset classes.

To summarize, the ones in power have no idea of what they have done and/or what is to come. And instead of trying to figure out how they will deal with all of the above, they are running around and taking credit for Trump’s “Best Economy In The History Of Humanity.”

This will all end in tears. 

Like we have said before, it is not a question of if, but when. If you would like to find out exactly when the stock market will crater, in both price and time, please Click Here

11/14/2018 – A down day with the Dow Jones down 206 points (-0.81%) and the Nasdaq down 64 points (-0.90%) 

As we have been saying for some time, the stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here

Here is an interesting thought. Even the very few bulls who acknowledge the possibility of a correction, might be underestimating its true potential. For instance….

Would you be prepared if the Dow Jones Industrial Average were to fall 5,700 points?

To those who have not been investing for a long time, the prospect of the Dow Jones Industrial Average falling 5,700 points in one day may seem ridiculous. But is it?

On Black Monday, 31 years from last Friday, the Dow Jones Industrial AverageDJIA, -0.50% fell about 23%. If the same percentage drop were to happen today, it would be about 5,700 points. I lost millions that day, and so did many others. Of course, today is not 1987.

Some of the most dangerous words in investing are “this time it’s different.” Basic human emotions of greed and fear that drive the markets do not change. Let’s explore this issue with two charts.

And while the author concentrates on a one day crash, the same line of thinking applies on the longer time frame. In other words, BTFD!!!

Allow me to challenge that line of thinking very quickly. 

Shiller’s Adjusted S&P P/E Ratio is about 31.5 today with a mean of 16. For the S&P to reach its mean valuation it would have to fall 50%…..today. And we are not even talking about overshooting to the downside.

But it gets worst. The S&P earnings are at about 120 today. When a recession hits (not if) they will very likely slide to at least 70, if not much worse.

When we combine these two valuation metrics, it is not out of the question for the market to slide 70-80% in order to get back to its mean.

So, instead of trying to figure out what you will do when the Dow corrects 10%, you might start wondering why the hell are you fully invested in arguably the biggest stock market bubble of all time.

The best part is, you don’t have to guess. If you would like to find out what the stock market will do next, in both price and time, please Click Here.