10/1/2015 – A mixed day with the Dow Jones down 13 points (-0.08%) and the Nasdaq up 7 points (+0.15%)
One thing is certain. If you read about any given trade in the mainstream financial medial outlet, chances are, it would be foolish to go ahead and execute on it. But here you go….How to make 7 times your money in Apple: Goldman
In other words, load up on Apple (AAPL) call options and wait for the stock to rally +50% over the next few months. It is as simple as that. It appears Goldman believes that the people on the other side of the trade are outright fools. Well, either that or guess who is writing those +700% calls to retail investors right about now.
As for me, I continue to maintain the view expressed here Shocking: The Real Story Behind Apple’s (AAPL) Decline
But wait, there is more good news. Good news: No one expects much from stocks
Expectations for stocks over the next six months have dropped along with the indexes. The fresh weekly survey by the American Association of Individual Investors showed those expecting lower prices jumped 11.2 percentage points to 39.9%, while those anticipating gains fell to 28.1%.
This is close to a multi-year high in bearishness, though 40% were bearish on July 30 right before the market tanked, so this is far from a reliable contrarian indicator on its own.
Seriously? Here is the only indicator you need. Shiller Adjusted S&P P/E Ratio.
As you can see, recent decline barely made a dent. And that is on top of today’s slowing economy, deteriorating earnings and freeze up in stimulus. Valuations have been higher on only two occasions. At 1929 and 2000 tops. You very well know what happened shortly thereafter.
In summary, just to reach its historic mean P/E of 16.6, the S&P would have to fall over 35% here. And that is the only sentiment indicator you should need. Everything else is just short-term noise no one can trade.
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 1st, 2015 InvestWithAlex.com
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