Category: Stock Market

Actually, that is exactly what we talked about in our last night’s update to subscribers. You see, both the US Dollar and Euro are approaching important support/resistance levels, suggesting an important turn. If you would like to lean more, please Click Here

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the Wilshire 5000. Charts courtesy Daneric’s Elliott Waves

Explanation:

Long-Term: It appears the Wilshire 5000 is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year. Did it already complete? Click Here

Short-Term: It appears the Wilshire 5000 might have completed its intermediary wave 3 and now 4. It appears the market is now pushing higher to complete wave 5 of (5). If true, the above count should terminate the bull market. Did it already complete? Click Here

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

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ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it. 

– State of the Market Address:

• The Dow is now above 26,000
• Shiller’s Adjusted S&P P/E ratio is now at 34.34 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
• Weekly RSI at 91 – overbought. Daily RSI is at 85 – overbought.
• Prior years corrections terminated at around 200 day moving average. Located at around 18,800 today (on weekly).
• Weekly Stochastics at 98 – overbought. Daily at 96 – overbought.
• NYSE McClellan Oscillator is at 14. Neutral.
• Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest remained the same at 50K contracts net long. 
• Last week’s CTO Reports suggest that commercials (smart money) have maintained their positioning.  For now, the Dow is 6X, the S&P is at 4.5X net short, Russell 2000 is now at 4X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

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ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

If you are not familiar with George Soros’ Theory of Reflexivity, something he credits for making him incredibly rich and successful, here are a few good summary articles.

• Soros: General Theory of Reflexivity
• UNDERSTANDING GEORGE SOROS’ THEORY OF REFLEXIVITY IN MARKETS

To very quickly summarize, when it comes to the stock market and investing we are always dealing with incomplete and/or imperfect information. At certain times that leads to so called positive or negative feedback loops. Leading various financial instruments or overall markets to diverge significantly from their true value.

For example….

Take a highflying tech stock like Amazon (AMZN) for example. The company has made little in the way of income (in relation to its market cap) for the majority of its existence (over 15 years) but the stock has continued to soar. This is happening because people formed a number of positive beliefs about the stock. These beliefs could be that the company will make tons of money someday because it’s innovative, eating market share, or has a secret profit switch it can flip whenever it wants. Or maybe people continue to buy the stock because it’s gone up for a long time and so they assume it will continue to go up.

Mr. Soros goes on to explain: 

Financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. This is the principle of fallibility. The degree of distortion may vary from time to time. Sometimes it’s quite insignificant, at other times it is quite pronounced.

Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend. When a positive feedback develops between the trend and the misconception, a boom-bust process is set in motion. The process is liable to be tested by negative feedback along the way, and if it is strong enough to survive these tests, both the trend and the misconception will be reinforced.

Sounds like today’s stock market, doesn’t it?

Over the last couple of days/weeks we have shown a number of scary charts on this site. Most importantly……

• Shiller’s Adjusted P/E is now at 34.35. Which is 4 points above its 1929 peak. Last week we had a chart showing we are at the highest valuation level in the stock market’s history.
• Margin debt has double since 2007 peak.
• Most bullish sentiment readings are either at record highs or getting very close.

That is to say, it is now obvious that a massive positive feedback loop has been established in the stock market. With people arguing all sort of nonsense, from tax cuts not being priced in, to hyper inflationary fears, to this bull market running another 20 years.

Long story short, as Bridgewater’s Ray Dalio pointed out yesterday ‘if you’re holding cash, you’re going to feel pretty stupid’ And god forbid you are short.

However and as Mr. Soros’ theory teaches us, such positive loops eventually end up imploding on themselves. And when they do, the underlying assets typically collapse in a spectacular fashion as well.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the Wilshire 5000. Charts courtesy Daneric’s Elliott Waves

Explanation:

Long-Term: It appears the Wilshire 5000 is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year. Did it already complete? Click Here

Short-Term: It appears the Wilshire 5000 might have completed its intermediary wave 3 and now 4. It appears the market is now pushing higher to complete wave 5 of (5). If true, the above count should terminate the bull market. Did it already complete? Click Here

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

---

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it. 

– State of the Market Address:

• The Dow is now above 26,000
• Shiller’s Adjusted S&P P/E ratio is now at 34.28 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
• Weekly RSI at 91 – overbought. Daily RSI is at 85 – overbought.
• Prior years corrections terminated at around 200 day moving average. Located at around 18,700 today (on weekly).
• Weekly Stochastics at 99 – overbought. Daily at 95 – overbought.
• NYSE McClellan Oscillator is at -5. Neutral.
• Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest remained the same at 50K contracts net long. 
• Last week’s CTO Reports suggest that commercials (smart money) have maintained their positioning.  For now, the Dow is 6X, the S&P is at 4.5X net short, Russell 2000 is now at 4X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

---

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

– State of the Market Address:

• The Dow is at 26,000
• Shiller’s Adjusted S&P P/E ratio is now at 33.90 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
• Weekly RSI at 91 – overbought. Daily RSI is at 84 – overbought.
• Prior years corrections terminated at around 200 day moving average. Located at around 18,700 today (on weekly).
• Weekly Stochastics at 99 – overbought. Daily at 94 – overbought.
• NYSE McClellan Oscillator is at -5. Neutral.
• Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest remained the same at 50K contracts net long. 
• Last week’s CTO Reports suggest that commercials (smart money) have maintained their positioning.  For now, the Dow is 6X, the S&P is at 4.5X net short, Russell 2000 is now at 4X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

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ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year. Did it already complete? Click Here

Short-Term: It appears the S&P might have completed its intermediary wave 3 and now 4. It appears the market is now pushing higher to complete wave 5 of (5). If true, the above count should terminate the bull market. Did it already complete? Click Here

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

---

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.