“Trump Denier” David Stockman explains, once again, why Donald Trump has no idea what he is doing when it comes to trade. We tend to agree. As we have said before, there is no Trade Deficit issue. There is a massive FED distorting the economy, money printing issue. You can read more about it here  Trump Is Fighting The Wrong Trade War For All The Wrong Reasons

Most importantly, our stock market work is absolutely clear. Trump’s trade war will lead to an absolute disaster in the stock market. If you would like to find out exactly when that will happen, based on our mathematical and timing work, please Click Here

6/20/2018 – A mixed day with the Dow Jones down 42 points (-0.17%) and the Nasdaq up 56 points (+0.72%) 

Are you scratching your head wondering why the Nasdaq/Russell 2000 are surging higher while the Dow is negative for the year? And no, it has nothing to do with Trump’s trade war.

The secret has to do with identifying exact patterns and time/price targets for all indices involved. That is exactly what we talked about in our daily update today. If you would like to find out exactly what the stock market will do next, based on our timing and mathematical work, please Click Here.

In the meantime, here is yet another massive red flag to consider. 

We couldn’t add very much to this article from ZeroHedge.com

Active Managers Go ‘All-In’ Again As “Growth/Value Bubble Looks Ominously Similar To Late 1999”

Despite trade wars, central bank tightening, declining economic fundamental data, and an Emerging Market crisis, according to one survey, active US investment managers are presently more than 100% invested, on average.

Source: Dana Lyons’ Tumblr

However, while US equities continue to charge ahead, alarm bells elsewhere are ringing very loud…

Judging by the reaction in China, you would’ve thought global markets were in for a thrashing after President Donald Trump’s latest escalations on trade.

However, as Bloomberg notes, the question of why American equities keep skating past a worsening trade conflagration has been baffling for strategists.

“We’ve had more negative catalysts and more negative pull this year than we’ve had for a long time, but the positives continue to prevail in the investor’s mind,” Jeff Carbone, a managing partner at Cornerstone Wealth in North Carolina, said by phone.

“They’re shrugging off the negativity and taking the positive to a greater extent that this is not the end.”

As Bloomberg notes, the ignorance of risk is everywhere: Equity funds are only a trifle less long than at the height of January’s euphoria.

It’s in markets for call options, where individual investors are engaged in a buying binge of historic dimensions.

It’s in tech stocks (favored by short sellers), and ones with shaky balance sheets, all of which recently surged…

On the back of an historic short-squeeze…

 

In credit markets, various indicators are flashing bright red. For instance Bank Loans have been pummeled the last few days…

“The scary thing is that everyone keeps warning about leverage but then keeps reaching for the yield that BBB provides,” said Andrew Forsyth, a portfolio manager with BNP Paribas Asset Management.

 

Emerging Markets have been a bloodbath in recent weeks…

With 42 straight days without inflows for the biggest EM ETF…

 

It’s not like people haven’t been warned. They have their memories of February and March, and strategists at banks like Morgan Stanley and Goldman Sachs have repeatedly urged investors to rein in optimism, citing everything from politics to peak earnings and monetary tightening. Earlier today, Citigroup Inc. flagged a potential bubble in growth stocks.

“This is fine for now, but we think by year end such a ‘risk on’ hierarchy will be misplaced given the more uncertain outlook posed by ‘peaky’ growth rates and ever tightening financial conditions,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley wrote in a note to clients Monday.

He urged investors to go defensive in anticipation of a rotation out of companies whose growth is tied to economic growth and upgraded utility stocks.

But the caveats have gone unheeded.

Wilson isn’t alone among analysts who see trouble brewing. As Bloomberg reports, the rally in growth stocks brought flashbacks of the internet bubble to Citigroup strategists led by Robert Buckland, even as valuation premiums are less than half of those from almost two decades ago.

A collapse would bode ill for a market whose gains have been increasingly anchored on tech giants such as Amazon.com Inc. and Facebook Inc.

“Price action of the U.S. growth/value trade looks ominously similar to late 1999,” the strategists wrote.

“Watch out for a growth bubble.”

With the price of call options now trading above their historic average, investors should sell them to reap extra returns in a market whose upside appears limited with valuations stretched, according to Rocky Fishman, an options strategist at Goldman Sachs. The firm predicted the S&P 500 will end next year at 3,000, or an 8 percent increase from the last close. That’d be below the 45th percentile in the index’s history over any 18-month period.

“The potential for upside surprises in U.S. equities is lower than the compensation received from elevated call prices,” he wrote in a note.

Coincidentally or not, such indications of retail euphoria flared up in January, just before the S&P 500’s first 10 percent correction in two years. It also accompanied the bull market peaks in 2000 and 2007.

Quite a few people, including small cap and tech investors, believe Trump’s trade war will be a walk in the park.

We do not share in their enthusiasm.

This typical view assumes it will be an easy win (video below). Yet, this sort of an attitude often serves as a red flag. Recall, Hitler was gonna be in Moscow by November of 1941, Japanese attack would be so shocking that Americans will surrender and who could ever forget Napoleon’s “Screw Winter” comment.

You get the picture. Trade wars are very similar to shooting wars. In fact, most shooting wars start off as trade or economic wars. You just never know how much pain the other side is willing to take to prove their point. And we bet China is willing to take extraordinary amounts of pain to preserve their own growing “Empire”.

Perhaps Steven Seagal has it all figured it with the following quote.

Make no mistake, a trade war with China will be anything but easy. As our work clearly indicates, it will cause a major disaster in the US Economy and the stock market. If you would like to find out exactly when the stock market will tank, please Click Here

Trump supporters and apologists are out in force.

Don’t worry, they say. This is great for America, long-term. It will bring jobs back home, factories will once again boom and we won’t have to transfer our wealth to all of those pesky Chinese.

Perhaps. 

Yet, for the most part these people don’t know what the hell they are talking about. I wrote about it a few days ago Trump Is Fighting The Wrong Trade War For All The Wrong Reasons 

Here is another interesting look at the subject matter..

Why America’s Trade War With China Will Be Absolutely Crippling For The U.S. Economy

Can the global financial system handle a full-blown trade war between the two largest economies on the entire planet?  We have never seen anything like this happen in the modern age, and this is creating a tremendous amount of uncertainty for the financial markets.  Yes, something had to be done, and I have been writing about this for years.  China has been stealing our intellectual property, manipulating currency rates and slapping high tariffs on American goods.  We simply could not allow China to continue to take advantage of us, but now we are so dependent on the Chinese that a trade war with them is going to inevitably produce a great deal of pain.  We are all going to wish that another way could have been found to resolve this crisis, because in the short-term this is definitely going to hurt the U.S. economy.  And if President Trump chooses to press forward with trade wars against Europe, Canada and Mexico at the same time as well, the pain for our economy is going to be off the charts.

Once a trade war begins, it can potentially last for many years, and let us not forget that history has shown us that trade wars can often lead to shooting wars.

I believe that a tragic strategic mistake has been made, and this is not going to end well.

Bingo.

Not only do we have to look at the actual trade war, but we also have to consider who is waging it. In this particular case, someone with a fragile ego who has no idea what he is doing. This will not end well.

Most importantly, Trump’s trade war will send the US and Global Economies into chaos. And with S&P earnings collapsing, due to strong dollar and significant slow down in global trade, it won’t be a pretty sign when robo machines and forever bulls realize the stock market is selling at historically high valuation levels.

If you would like to find out what the stock market will do next, based on our precise timing and mathematical work, please Click Here

6/18/2016 – A mixed day with the Dow Jones down 103 points (-0.41%) and the Nasdaq up 1 point (+0.01%)

This stock market appears to be a head scratches, at least to most investors.

So much so that we are beginning to see major divergences not only in various indices, but the sentiment readings as well.

Bulls argue that things have never beet better with the headlines like this….

• Amazon CEO Jeff Bezos is now worth a record $141 billion—here’s how he became the richest person in the world
• Why tech and small cap stocks are on fire

But not all is well in the land of milk and honey

• Paul Tudor Jones warns the next recession will be ‘really frightening’

“You look at prices of stocks, real estate, anything,” he said. “We’re going to have to mean revert to a normal real rate of interest with a normal term premium that’s existed for 250 years. We’re going to have to get back to that. We’re going to have to get back to a sustainable fiscal policy and that probably means the price of assets goes down in the very long run.”

In the short run, the market is “jacked up and ready to go,” he said. Blankfein added that it’s like “pouring lighter fluid on an already lit fire.”

Confused yet? 

Our view on the subject matter is rather simple. Well, considering our overall mathematical and timing stock market work.

The indices that are currently surging to all time highs, for instance the Nasdaq/Russell 2000, are simply tracing out unfinished patterns within a predetermined time frame.

Other less speculative indices, such as the Dow/S&P might have already completed their respective bull markets. At least that is one of the scenarios.

If you would like to find out exactly what the stock market is doing and when it will crater, based on our mathematical and timing work, including exact Time/Price target charts, please Click Here

A mixed week with the Dow Jones down 226 points (-0.89%) and the Nasdaq up 101 points (+1.32%)

What was supposed to be the most important week of the year turned out to be a dud. Trump’s meeting with The Rocket Man was nothing more than a photo op, the FED did raise rates on higher inflation expectations, the ECB threatened the end of QE and President Trump launched the next stage of his misguided trade war.

To the latter point, massive trade deficits are a symptom of a cancer stricken economy, not the cause. The real cause is the FED and their insane monetary policies. There are two very important things to consider here when it comes to Trump’s idiotic trade war.

First, trade deficits are great for the stock market. The bigger the deficit the better as it suggests higher levels of economic activity. The more we buy, the higher the earnings.

This has been more true in recent decades at our trade with China has exploded. Just look at the chart above. When our economy collapsed in 2008, so did our trade deficit. And while that was a ‘natural’ correcting, Trump’s attempt at deficit reduction is anything but.

Second, history teaches us that trade wars always escalate and always end bad for all involved. Often turning into hot wars when it is all said and done. Historians and economists still argue that trade wars were the primary cause of the 1929 crash and subsequent depression. Perhaps no one can explain this better than David Stockman

Once again, the real culprit behind nearly all imbalances and ailments associated with the US Economy and Financial markets is the FED.

I once supported President Trump, even voted for the guy, primary for that reason. He clearly identified the stock market bubble and the FED as the main problems with the US Economy during the primary process. Will The Plunge Protection Team Turn On President Trump Unfortunately for all of us Mr. Trump has flipped since then, transforming into some sort of a Jim Cramer want to be stock market cheerleader.

As a result, all is lost. 

President Trump is fighting the wrong war and exactly at the wrong time (stock market bubble top). And that will lead to disastrous consequences in short order. If you would like to find out exactly when the stock market craters, based on our mathematical and timing work, please Click Here. 

While no one has been listening, I have been saying for years that Social Media will make your kids fat, stupid, lazy and suicidal. It is a cancer. Now the data is finally coming in and this simple assumption is indeed being confirmed.

Web giants ‘fuel child mental health crisis’

Responding to comments from the chief executive of the NHS that web giants are fuelling a “crisis” and should come under tough scrutiny, Anne Longfield said: “The urgent response must be fast and effective. Children for whom the internet can be a powerful and positive resource do need protection from the negatives of social media and require the best mental health support.

Child mental health epidemic crisis is being fuelled by web giants including Facebook and Instagram with NHS left to pick up the pieces, its chief executive warns

Earlier this week a coalition of charities called for social media firms to have a ‘duty of care’ – enshrined by law – to protect children from potential mental health conditions.

They said the sites were responsible for increases in online bullying, internet addiction and self-harm amongst children which were very often undetected by parents.

Mr Stevens warned that children of today were facing a ‘double epidemic’ of obesity and mental health conditions, caused by the ‘stresses and strains of adolescence.’

In other words, if you love and care about your kids, get them the hell off of Social Media. They will thank you later as their mindless counterparts grow up to be self hating cry baby sheepish liberals.

According to official economic numbers and our cheerleader in chief Mr. Trump, things have never been better. According to them, the US Economy is not only accelerating, it will take us to the promise land of enormous wealth in just a few short years.

Yet, if you are breathing, eating and employed red blooded American you know something is horribly wrong. You feel it at the supermarket and you see it in your weekly paycheck.

What’s the problem? 

For starters, the official numbers coming out of Washington are complete and utter bullshit. A properly run Ponzi Scheme wouldn’t even come close to their number fudging. Consider the following….

The Real Economic Numbers: 21.5 Percent Unemployment, 10 Percent Inflation And Negative Economic Growth

Every time the mainstream media touts some “wonderful new economic numbers” I just want to cringe.  Yes, it is true that the economic numbers have gotten slightly better since Donald Trump entered the White House, but the rosy economic picture that the mainstream media is constantly painting for all of us is completely absurd.  As you are about to see, if honest numbers were being used all of our major economic numbers would be absolutely terrible.  Of course we can hope for a major economic turnaround for America under Donald Trump, but we certainly are not there yet.  Economist John Williams of shadowstats.com has been tracking what our key economic numbers would look like if honest numbers were being used for many years, and he has gained a sterling reputation for being accurate.  And according to him, it looks like the U.S. economy has been in a recession and/or depression for a very long time.

Of course it isn’t just the U.S. economy that is troubled either.

We are living in the terminal phase of the greatest debt bubble in global history, many nations around the globe are already experiencing a very deep economic downturn, and our planet is literally in the process of dying.

So please don’t believe the hype.

Yes, we definitely hope that things will get better, but the truth is that things have not been “good” for the U.S. economy for a very, very long time.

Impossible? 

Ask yourself the following questions my dear reader.

• If there is no inflation, why is everything in your local supermarket is going up in price and has been for years? What about your rent, insurance, gas, etc……?
• Ask yourself, if the official unemployment number is indeed 3.8% (classified as full employment), why the hell is your salary not going up? Why aren’t employees fighting over you?

I think you know the answer by now. The FED has distorted everything to such a degree with their money printing that the only way forward is complete and utter lying in all of their official reports.

Unfortunately, the laws of physics still apply. In other words, this massive Ponzi Scheme will come crashing down soon enough. If you would like to find out exactly when that is, based on our timing and mathematical work, please Click Here.