7/17/2015 – A mixed day with the Dow Jones down 34 points (-0.19%) and the Nasdaq up 47 points (+0.91%)
Most people believe that the bull market is back on track. After all, the Nasdaq has broken out to a new high, Netflix is wipping out countless shorts, Google is surging and Facebook is expected to take over the world. What’s not to like?
Well, if I may, most of the other primary indices are not confirming this Nasdaq extravaganza. For instance, the Dow is still 300 points lower than its May 19th top. VIX/VXX are hitting their all time lows. The market is overbought and most primary indices look like a pound of Swiss cheese (too many down gaps).
So, is this a breakout or a false breakout that will reverse and fail. I will let you decide that, but it might be worth studying what had happened to NYSE in April and May. Here is the chart for your reference.
Now, this week’s rally has been driven by 3 primary components.
- China Has Been Fixed: As I have explained numerous times over the last few weeks, after it’s massive sell-off, China was bound to bounce. That is exactly what we are seeing. Yet, that that doesn’t mean the rally won’t be retraced back and we won’t have a further crash. In fact, it is highly probable now. The question is…. when? Hedge fund manager Bill Ackman tends to agree China Crash Is ‘Way Bigger Than Subprime’
- Greece Has Been Fixed: There is no way in hell that Greece can ever repay. Its eventual bankruptcy or default is a mathematical certainty. How long before Greece becomes an issue again? I don’t think very long. El-Erian Agrees: Greek deal only prolongs the inevitable
- Short-Covering/Bullish Sentiment/Good Earnings: The market is overbought and bullish sentiment is once again at topping levels. Then you have bulls poking fun of bears You’d be a ‘fool’ to short the market: Gartman Correct me if I am wrong, but I believe Mr. Gartman was predicting a bear market when the Dow was hitting 17,500…5-10 trading days ago. How can anyone manage money like that?
Point being, we are in a very complex short-term and long-term market environment. It would be smart not to come to a quick conclusion here either way. But, 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. July 17th, 2015 InvestWithAlex.com
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