4/21/2016 – A negative day with the Dow Jones down 113 points (-0.62%) and the Nasdaq down 2 points (-0.05%) 

Let’s get straight to the point.

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. April 21th, 2016  InvestWithAlex.com

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4/20/2016 – A positive day with the Dow Jones up 43 points (+0.24%) and the Nasdaq up 8 points (+0.16%) 

If you are ever in Moscow stop by Kitezh-Grad Restaurant and get yourself an order of “Roast Bear Meat”.  Well, either that or take a look at some of the most prominent bears on Wall Street today. I fathom the smell should be about the same.

Consider the following onslaught of bullish news…..

• Jim Paulsen sees record 2,200 for S&P—here’s why
• Quant Buying May Add `A Few Percent’ to Stocks, Kolanovic Says
• DEUTSCHE BANK: Stocks can rally another 25%… but then get smoked
• Tom Lee: S&P could be up double digits this year

Now, before you max out your margin on the long side, understand. What we are witnessing today is the flip side of what we saw just two short months ago. Financial Media Predicts Armageddon – Time To Go Long?

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. April 20th, 2016  InvestWithAlex.com

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4/19/2016 – A mixed day with the Dow Jones up 50 points (+0.28%) and the Nasdaq down 20 points (-0.40%)

Who cares about earnings??? The stock market certainly doesn’t, at least not at this juncture. With the Dow Jones just 250 points shy of its May 2015 high, most bulls are already celebrating the new highs. Well, maybe they shouldn’t..

There quite a few divergences in this market. With one of them being attributed to a now well tested “Dow Theory”. In essence, the Dow Transports are not confirming today’s market rally. Just take a look at the chart below (and above).

While the Dow has retraced most of its down move, the Dow Transports have recovered just a little over 50%.  That is not a good sign as the transports typically take a leadership positions in a full blown bull market.

Instead, the said divergence points to a different conclusion. That is, what we are witnessing on the Dow is a bounce. A bounce that might fail in the very near future. Which interpretation is the correct one? The Dow Theory points to the latter, but only time will yield the right answer.

Finally, it is not only the Dow Transports. The NYSE (largest index by capitalization), Biotech Index (IBB), low volume and multiple other divergences are not buying this rally. 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. April 19th, 2016  InvestWithAlex.com

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Maybe not worried, but at the very least prepared. Recent massive earthquakes along the ring of fire in Japan and Ecuador, should be cause for concern. Oftentimes such large events tend to set off other earthquakes somewhere down the chain. Which appears to be the case here.

• Ecuador and Japan earthquakes: Are they related?
• The Big Ones: Scientist warns up to 4 quakes over 8.0 possible under ‘current conditions’

Sunday’s devastating earthquake in Ecuador might just be the beginning, according to a seismologist who says that current conditions in the Pacific Rim could trigger at least four quakes with magnitudes greater than 8.0. Roger Bilham, a University of Colorado seismologist, told the Express, “If (the quakes) delay, the strain accumulated during the centuries provokes more catastrophic mega earthquakes.”A total of 38 volcanoes are currently erupting around the world, making conditions ripe for seismic activity in the Pacific area.

In other words, if you live along the west coast of North America, as I do,  you should at the very least put together an emergency bag/cash. In addition to making sure your earthquake insurance is all set.

4/15/2016 – A negative day with the Dow Jones down 29 points (-0.16%) and the Nasdaq down 7 points (-0.16%)

On April 21st, 2015 I wrote the following article Why Short Sellers Should Be Thanking GOD And after getting an earful for using “GOD” from one of my subscribers, the Dow proceeded to top out just 160 points higher on May 19th at 18,351. The assessment was indeed correct and shorts should have been shorting everything in sight.

On February 10th of this year I pointed out that everyone was too bearish. Financial Media Predicts Armageddon – Time To Go Long? The market proceeded to bottom a few trading hours later, staging a powerful bounce we are still witnessing today.

Which brings me to my new proposition. Not only should short sellers thank every lucky star in this universe and the next, they should actually spend a few dollars and send Janet Yellen a “Thank You” card. For this Central Bank Mafia Goes All In…Stocks Rally…A Little

On a more serious note, I remember seeing such blatant imbalances, overvaluation levels and rampant speculation on only two other occasions. In 2000 on the Nasdaq and in 2007 in most asset classes. Consider the following as we push into the weekend.

Bearish Case:

• The US economy is facing an ‘impossible trinity’ that will be a nightmare for investors
• Why this market rally looks like a classic investor trap
• The Dow Theory just flashed a buy signal — or did it?
• The Market Is In A ‘Spinning Top Candlestick Pattern’
• Why short sellers are loving this ‘as good as it gets’ market
• The World’s Most Bearish Hedge Fund” Has A Terrible March, Goes Even Shorter

Bullish Case: 

• 3 reasons stocks will drift higher despite bad earnings
• These 4 forces are lifting the S&P 500 toward a breakout

• Big banks will continue to lose money, but bulls don’t care: trader

At first glance it appears the analysis above is overly bearish. Just as it was at February’s low. It is not. We are now dealing with an overbought market with numerous red flags, too numerous to mention here, appearing all over the place.

Is the breakout possible?

Most certainly, but that would just take the entire market into the Nasdaq’s March of 2000 type of a setup.

I think the last headline speaks volumes about today’s investor sentiment. I am witnessing the exact same mindset in most of my daily dealings. I also remember perfectly well that bulls didn’t care about the valuation of Pets.com in 2000 nor credit spreads in 2007.

The funny thing is, eventually, everyone cares.

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. April 15th, 2016  InvestWithAlex.com

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

I couldn’t agree more. Let’s take a look

The world’s largest investor says negative rates are breeding a disaster for the economy

Not nearly enough attention has been paid to the toll these low rates — and now negative rates — are taking on the ability of investors to save and plan for the future. People need to invest more today to achieve their desired annual retirement income in the future. This reality has profound implications for economic growth: consumers saving for retirement need to reduce spending if they are going to reach their retirement income goals and retirees with lower incomes will need to cut consumption as well.

I have said it before and I will say it again. The FED has pushed the envelope to such an extent that I cannot see how we can get out of this unscathed. To say the least. Today’s environment is equivalent to a dying patient being pumped full of drugs just to stay alive for a few minutes more. Yet, the final outcome is now a foregone conclusion.

How bad a slowdown do you need for a real wake-up call?

It’s hard to figure out exactly what the Sputnik moment will be, but it will come from one of three areas.

One is a market accident. This notion that suddenly there is an instability and you get very large moves in financial markets that then threaten the economy. We got close to that in January and February.

To be honest I am amazed by the blatant disregard of risk in today’s market environment. Particularly when the wheels are coming off of the economic growth and stocks are selling at Shiller’s P/E of 26.  But this is not the first time I am seeing this kind of an environment. I saw the same in 1999-2000 on the Nasdaq and in 2007 in real estate/credit markets.

Invest accordingly.