Investment Grin Of The Day
Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video
11/24/2015 – A mixed day with the Dow Jones up 19 points (+0.11%) and the Nasdaq flat at 0 points (+0.01%)
I don’t know about you, but I am absolutely fed up with the US Government and Media. It is nice to see someone of Carl Icahn’s statue to come out and put them on the spot. Directly. And wait till you hear what he has to say about our financial markets.
“God knows where this is going. It’s very dangerous and could be disastrous. It’s like a movie theater and somebody yells fire. There is only one little exit door. The exit door is fine when things are OK, but when they yell fire, they can’t get through the exit door…and there’s nobody to buy those junk bonds. Stocks are way overpriced.
I found myself agreeing with 95% of what he had to say and I command him for coming out and speaking his mind. If you participate in financial markets and/or care about what happens in the US, the video below is a MUST watch.
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. November 28th, 2015 InvestWithAlex.com
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Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video Google
Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools
11/19/2015 – A flat day with the Dow Jones down 4 points (-0.02%) and the Nasdaq down 2 points (-0.03%)
The original post was published on May 21st, when Apple’s (AAPL) stock price was putting in an important all time high (double top). At that time I have suggested that smart money was distributing the stock. Apple’s stock price is down about 10% since then.
It appears nothing has changed. If anything, big guys are trying to unload at a faster pace. This Goldman Sachs analysis was released just a few days ago. Apple’s shares are going to soar 43% Sure, and I am nominated for a Nobel Prize in literature.
That is to say, don’t be a pawn in their game. My view on Apple hasn’t changed.
A few weeks ago Apple (AAPL) has reported yet another great quarter. Yet, despite the outperformance, Apple’s stock price is barely up. So much so that most investors, market pundits and money managers are dumbfounded by company’s recent decline. After all, it was not supposed to happen. Apple is the best performing company in the world (which is technically true) with like a zillion dollars in cash on their balance sheet.
What gives? I will simply repeat here what I first said on May 21st. When AAPL was putting in its top.
May 21st Update: Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools
I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..
- CARL ICAHN: Apple is worth $240 per share
- Morgan Stanley says Apple shares could rise 50%
- Here’s the top stock pick from each of 50 biggest hedge funds – Quite a few of these hedge funds have a massive long Apple position.
There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.
Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.
I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not the long.
Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools Google
Was Victory Just Snatched Away From The Bulls?
11/13/2015 – Another down day with the Dow Jones down 203 points (-1.16%) and the Nasdaq down 77 points (-1.54%)
At the end of last week most bulls were celebrating. The market was pushing close to previous highs and the Dow 20K was just a few weeks away. That is, if you listen to CNBC. Around that time I published the following article Why I Am More Bearish Today Than Ever. Today, most primary indices, except the Nasdaq, are negative YTD.
But don’t worry…….right? According to most investors, this is just a healthy correction. Maybe. At the same time, very few people have considered the fact that this might be the next leg down. As outlined here yesterday. Just A “Healthy” Correction Or Something More?
Quite a few things to get through as we head into the weekend.
“There is remaining concern about global growth, and it does seem to be slow and, if anything, heading slower,” Keon told CNBC’s “Squawk Box.” “Right now it seems to me the market is still very nervous about growth and also very nervous that the Fed may move and that may have a negative impact.”
I have said it many times before and I will say it again. August 24th low was untradable. Meaning, the stock market is likely to revisit those levels sooner rather than later.
U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.
This should not come as a surprise to readers of this blog. At the same time, I am having a very difficult time reconciling where the FED and other investors see this “proposed growth” coming from. Not a good sign when the Shiller’s S&P P/E is at 26.
The maximum size of such “margin lending” will be cut by half to the equivalent of the amount of cash an investor puts up to buy stocks, down from the previous level of double that amount, the China Securities Regulatory Commission announced.
How is that supposed to be good for the stock market?
- Despite tail winds, eurozone economy loses momentum
- Is Europe’s Economy So Bad the ECB Will Run Out of Things to Buy?
Official figures on Friday showed the 19-country eurozone only expanded 0.3 percent in the July-September period from the previous quarter. That was below market expectations for a second straight 0.4 percent rise and piles further pressure on the European Central Bank to offer more stimulus.
Europe is a basket case and it’s getting worse. No surprise there. Mr. Draghi has gone all in with his overbearing stimulus and negative interest rate insanity. The next step, if they ever get there, is an outright monetization.
Considering all of the above, let me ask you something. How can the stock market rally here when the worldwide growth is collapsing, centrals banks have already went all in and the stock market is sitting at bubble level valuations?
Sure, stranger things have happened, but HOPE cannot be an investment strategy. If you would like to find out what happens next, please Click Here.
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. Noveber 13th, 2015 InvestWithAlex.com
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Something Interesting
I love historic pictures. This car crash is form 1921 New York. As a reference point, the Dow Jones bottomed in August of 1921 at 63.9. That was just 10% higher than an important top 22 years earlier. The Dow would go on to surge to 390 by 1929. At 1932 bottom the Dow was selling 40.56. Price first achieved in 1872. In other words, 1929-1932 collapse wiped out 60 years worth of market gains. 
COT Reports & Weekly Market Calendar – November 6th, 2015
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 November 4th, 2015
Currencies:
- USD: 3K Long Vs. 56K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 43K Long Vs. 18K Short – Slight decrease in short interest. Significant long interest remains.
- British Pound: 57K Long Vs. 16K Short – Slight decrease in net short interest. British pound remains bullish.
- Japanese Yen: 96K Long Vs. 2K Short – Slight increase in net long exposure. Japanese Yen is now very bullish.
- Euro: 127K Long Vs. 48K Short – Slight increase in net long exposure. Euro is now bullish.
- Australian Dollar: 107K Long Vs. 12K Short – Slight increase in net long exposure. Significant long position remains.
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Euro Japanese Yen and Australian Dollar rally. This is consistent with our view that the FED won’t raise rates.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 489K Long Vs. 382K Short – Net neutral position remains.
- Nasdaq 100-Mini: 25K Long Vs. 195K Short – Sizable short position.
- VIX: 47K Long Vs. 75K Short – Slight decrease in net short exposure.
- Gold: 57 Long Vs. 89K Short – Descrease in net short exposure. Gold is back to being neutral.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P, VIX and gold. We have also witnessed a decline in net short exposure in VIX. At the same time, commercials now have a very large short position on the Nasdaq. That is important.
Next Week’s Market Calendar:
- Q-3 Earnings
- Friday: Retail Sales
COT Reports & Weekly Market Calendar – November 6th, 2015 Google
Investment Wisdom Of The Day
True Or False?
Shocking: Is The Next Recession Already Priced In?
10/20/2015 – A negative day with the Dow Jones down 12 points (-0.07%) and the Nasdaq down 25 points (-0.50%)
As you are very well aware, Q-3 earnings are not off to a good start. A large percentage of corporates are either missing earnings, just as IBM did last night, or guiding lower. In fact, the S&P earnings expectations are down 2% year over year.
Yet, despite all of that, the stock market is slowly grinding its way up. After a massive rally and clearly oblivious to this fundamental conundrum.
But don’t worry, the bulls have a feasible explanation for all of us. Has the market priced in an ‘earnings recession’?
These trends are all far along and are showing reduced efficacy. And the market’s certainly not outright cheap at 17-times the coming year’s projected profits, as the S&P runs up against levels that have thwarted it in the past. Maybe if we all worry real hard about all this a while longer, the market can make its peace with such concerns and move on.
There a number of problems with their thesis. First, they somehow assume that this is a mid-cycle earnings recession that will last only one quarter. Right!!! On the contrary, I believe this is a “we went all in and maxed out all of our credit cards with QE and Zero Interest rates” kind of a earnings recession.
Second, I would be inclined to agree with them if today’s S&P P/E ration was, umm….let’s say, below 10. However, the chart below speaks for itself.
You are probably sick and tired of me saying this, but what can I do, we are selling at the 3rd highest valuation level in history. Right behind 1929 and 2000 tops. And on par with 2007 top.
Fine, let’s assume that this is, indeed, a temporary earnings recession and the US Economy will surge higher next year and the year after that, etc… Even with that, today’s valuation levels and historical data suggest that the stock market will stay flat to down over the next few years. If not decades. And that is the best case scenario.
Yet, if this is not a temporary earnings recession, as my mathematical work suggests, and earnings will accelerate down over the next few years…….OH, BOY……it doesn’t look good for the overall market.
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. October 20th, 2015 InvestWithAlex.com
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