As you already know, Matt Demeter’s (Demeter Capital) weekly coverage concentrates on some of the most popular worldwide indices, futures, bonds, stocks, commodities and currencies. Matt’s work is some of the most accurate I have ever seen and it shows. The table below represents just a small portion of work available from Demeter Research. To learn more and to see Matt’s work in action, please Click Here.

Report Date: June 6th, 2016  (Including COT Reports). 

For up to the minute long-term and short-term analysis on all of the markets below, please

6/9/2016 – A negative day with the Dow Jones down 20 points (-0.11%) and the Nasdaq down 16 points (-0.32%)

Consider the following charts.

Chart #1: Inflation Adjusted S&P. Despite all of the hoopla about all time highs, the Dow/S&P are sitting at double tops achieved in early 2000. Over 16 years ago. Inflation adjusted that is. The Nasdaq is still down 20%. You would have been the smartest person in the room if you bought 20-30 year Treasury in 2000 yielding 4.5%.

Chart #2: Shiller’s Adjusted S&P P/E ratio. Shows the stock market that is selling at the third highest valuation level in history. Right behind 1929 and 2000 tops and on par with 2007 top. Do I really have to remind you what had happened shortly after those valuation peaks reversed?

Where am I going with this?

I will let John Hussman tell you.

John Hussman: Expensive Stocks Will Lead to Losses, Paltry Returns

“From present valuations, a market loss of that magnitude would not be a worst-case scenario, but merely a run-of-the-mill completion of the current market cycle. Since the dividend yield on the S&P 500 exceeds 2 percent here, that also implies that we fully expect the S&P 500 Index to trade at a lower level in 10-12 years than it does today.”

Most bulls are extremely happy with what Janet Yellen and the FED where able to accomplish over the last few weeks. Particularly, Why Short Sellers Should Send Janet Yellen a “Thank You” Card

Well, they shouldn’t be. All they have done is set up a massive “bull trap” in what is otherwise the last stage of a secular bear market that started in 2000. And considering valuation/earnings imbalances we are witnessing today, long side investors might be in for a beating of a lifetime.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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). Daily Stock Market Update. June 9th, 2016  InvestWithAlex.com

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6/8/2016 – A positive day with the Dow Jones up 68 points (+0.38%) and the Nasdaq up 13 points (+0.26%) 

One of the effects of today’s low interest environment is bubble level valuations we see in the stock market. In fact, according to some, zero interest rates mean an infinite valuation range for all stocks. At least in theory.

• Why U.S. interest rates will stay low forever

The sad reality is that until and unless the U.S. posts employment metrics that are consistently strong, or inflation rises significantly and stays elevated, there simply isn’t a case for hiking interest rates this month, this year — and even next year.

Forever is a long time. Many investors also assume, wrongfully I might add, that the Fed can control the entire yield curve.

We have been arguing here for about 2.5 years or since the 10-Year Note hit 3% in early 2014, that the 35 year bull market in bonds will put in a double bottom before surging higher. Well, we are nearly there.

Sure, the Fed will attempt to keep interest rates low, flooding the market with excess cash at onset of any trouble, but I still believe in the market. That believe leads me to a simple conclusion. When long side of the yield curve bottoms, and we are nearly there, yields will eventually surge higher.

On their own and no matter what the Fed does. It is at that time that the illusion of “infinite valuations” will come crashing down back to Earth.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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). Daily Stock Market Update. June 8th, 2016  InvestWithAlex.com

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6/7/2016 – A mixed day with the Dow Jones up 18 points (+0.10%) and the Nasdaq down 7 points (-0.14%).

If you have no short-term memory, as is the case with most “professionals” on Wall Street, investment sentiment was downright scary just a few months ago. On or around February 11th low to be exact. With numerous investors and market pundits calling for an all out crash and financial Armageddon. I wrote about it at that time.

Financial Media Predicts Armageddon – Time To Go Long? (Feb 10th)

Today, the situation is entirely reversed. You would be hard pressed to find a bear. With most market participants and pundits already celebrating new all time highs.

Too soon…..time to go short? Perhaps.

Before we can answer that question with any degree of certainty we have to ask ourselves the following question……has anything changed since February 11th bottom?

Not fundamentally, but the investment sentiment did swing in the opposite direction.

Now, one can argue that the Fed’s inability or unwillingness to raise interest rates is what’s driving this market higher. It might be, but you won’t find me in that analytical camp. I have been posting for over a year here that the Fed will not raise interest in any meaningful way going forward. Why The FED Will NOT Be Raising Rates Next Year That should have been clear a long time ago.

In short, the fundamental backdrop we have faced in February of this year remains there. With a few notable exceptions. The US Economy, earnings and guidance continue to deteriorate, all while valuations remain at sky high bubble valuations levels. The chart below just about says it all.

Invest accordingly.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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). Daily Stock Market Update. June 7th, 2016  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

All primary World War 3 parties, Russia, China and NATO, continue on with their respective arm races. Let’s take a look at the latest news dump…..

• RUSSIA FEARS NATO ‘GLOBAL STRIKE’ FROM EASTERN EUROPE – Quite a few very good points in this article. Just imagine what would have happened if either Russia or China were amassing a massive military presence, bases, supply chains, etc….. on the US/Mexican border.
• US asks Russia not to target Al-Qaeda branch in Syria – Is this treason?
• US drops weapons to rebels in Syria – Again, is this treason?
• China says it doesn’t fear ‘trouble’ in S. China Sea – how many wars can the US fight at once?
• Russia Is Set to Build 12 New Monster Warships Armed with 200 Missiles Each – invest in defense?
• NATO is sending troops to Poland to stare down Russia – Didn’t Hitler and Napoleon do the same thing?
• KREMLIN CANNOT INTIMIDATE ROMANIA, SAYS PRESIDENT – Congratulations Romania. Once the war starts there will be a big hole where Romania once was.

Point being, what was outlandish just a few years ago (my forecast – Nuclear World War 3 Is Coming Soon.When, How & Why), is now becoming crystal clear. With all superpowers arming themselves to the teeth, war comes closer with each passing day. Sad.

6/6/2016 – A positive day with the Dow Jones up 113 points (+0.64%) and the Nasdaq up 26 points (+0.53%).

According to quite a few bulls, the stock market is about to breakout. Finally.

US stock market is getting closer to a ‘melt up’: HSBC

Two major components of the S&P 500 could break out, according to the note sent out by Murray Gunn and team. They are industrials and the “FANG” stocks, composed of Facebook Inc., Amazon.com Inc., Netflix Inc., and Alphabet Inc. “The S&P 500 industrials sector has given a bull signal with momentum turning higher on the back of a positive cyclical trend indicator,” the analysts write, meaning that the slope of the 200-day moving average is showing positive momentum that could preface a further move higher.

Wonderful……right? Perhaps, but just as some analyst expect the most speculative stocks to surge higher, others see major trouble ahead.

Did the S&P just crush this ‘irrefutable’ sell signal?

I may disappoint permabears when I say this, but just because it happened twice before, doesn’t mean it will happen again. Also, no stock market signal is ever irrefutable.

Wow, as soon as it is not convenient, “doesn’t mean it will happen again” tends to come out. Perhaps. Or, is it as simple as this?

Investors paying too much for growth

I believe the reality here is rather straight forward. The Fed has distorted the markets to such an extent that things no longer make sense. For either bulls or bears. With the market flashing technical signals that both support a bull market rally or an outright collapse.

Which way will it go?

One think is certain, we are about to find out.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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). Daily Stock Market Update. June 6th, 2016  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

6/3/2016 – A negative day with the Dow Jones down 32 points (-0.18%) and the Nasdaq down 29 points (-0.58%).

Bill Gross certainly believes that might be the case.

• BILL GROSS: The last 40 years of investing history are a ‘black swan’ that won’t be repeated

But my take from these observations is that this 40-year period of time has been quite remarkable – a grey if not black swan event that cannot be repeated. With interest rates near zero and now negative in many developed economies, near double digit annual returns for stocks and 7%+ for bonds approach a 5 or 6 Sigma event, as nerdish market technocrats might describe it.

Based on my mathematical and timing work Bill Gross is both right and wrong.

Now, most investors today would certainly believe that the statement above is insane. After all, over the long-term markets always go up. Or so they have been told. Yet, if we look at the charts going back to the first day of trading, May 19th, 1790, we will find two important periods of time that suggest otherwise.

• 1790-1860: During this 70 year period of time the Dow was able to eke out an impressive return of about 150%. That represents an annualized compounded rate to return of just 1.3%. Now, I am sure that if we take inflation into consideration, over the same period of time, the net result would be negative.
• 1899-1949: A 50 year period of time during which the Dow gained just 185%. That represents an annualized compounded rate of return of just 2.4%. Or net negative inflation adjusted rate of return during the same period of time.

Is it so hard to believe that we are in for another one of these periods?

I don’t think so and that is where Bill Gross is both right and wrong.

He is absolutely right to state that we might experience flat or even negative returns going forward. Possibly for an extended period of time. Considering today’s valuation levels, massive debt, zero interest rates and insane monetary policy, he is absolutely right.

Here is where he is wrong.

This prolonged period of time actually started in January of 2000. At least on the Dow. Before bullish investors dismiss this as insane, consider the following.

Inflation adjusted S&P/Dow are still slightly down since January of 2000.  As represented by the chart below. The Nasdaq is still down in net terms, let alone inflation adjusted terms. 

Plus, as suggested above and multiple times on this blog, we are sitting at bubble valuation levels. Today. That doesn’t bode well for future market performance.

Don’t get me wrong. We will still have bull markets and bear markets. The market will rally to new all time highs only to collapse to today’s levels. What my work suggests is the following. When we look back from the year 2040, the Dow WILL find itself just north of 20,000. Again, based on my long-term mathematical and timing work.

And that would be after significant inflationary pressures the FED will unleash over the next decade. In other words, ladies and gentlemen, Bill Gross is dead on. Brace yourself.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, 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 when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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). Daily Stock Market Update. June 3rd, 2016  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.

While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.

Latest data, as of May 31st, 2016

Currencies: 

• USD:  1K Long Vs. 25K Short – No changes. Substantial short interest remains.
• Canadian Dollar: 5K Long Vs. 73K Short – Significant short interest.
• British Pound: 147K Long Vs. 48K Short – No changes. British pound remains bullish.
• Japanese Yen: 11K Long Vs. 22K Short – Neutral.
• Euro: 72K Long Vs. 38K Short – Yet, Euro remain bullish.
• Australian Dollar: 34K Long Vs. 21K Short – Neutral.

Conclusion: Based on the information above, commercial interests expect the US and Canadian Dollars to decline while British Pound and Euro to rally. Japanese Yen and Australian Dollar remain neutral. 

Markets/Commodities/Volatility: 

• E-Mini S&P 500: 407K Long Vs. 329K Short – Net neutral position remains.
• Nasdaq 100-Mini: 30K Long Vs. 77K Short – Small net short position.
• VIX: 150K Long Vs. 13K Short –  Record net long VIX position. VIX is at extreme bullish levels. That is net bearish for the market.
• Gold: 41 Long Vs. 176K Short – Large net short position against the gold.

Conclusion: Based on the information above, commercial interests are now net neutral the S&P. Short the Nasdaq and gold, long the volatility. It is important to note a record breaking net long position in VIX. 

Next Week’s Market Calendar: 

• No important developments. 

COT Reports & Weekly Market Calendar – June 3rd, 2016 Googles