2/2/2016 – A negative day with the Dow Jones down 294 points (-1.79%) and the Nasdaq down 103 points (-2.24%)
Exactly one year ago I wrote the following…….Subprime Short Bets Big Against Junk Bonds
Since about the start of 2014 I have maintained that when a bear market of 2014/15-2017 kicks in, a number of things will happen. Junk bonds will blow sky high, 10-Year Note will test 1.4% (double bottom) and the stock market will drift lower. Driving both bulls and bears up the wall in the process.
In October of 2015 Carl Icahn issued the following warning….Just A Friendly Reminder From Carl Icahn
“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.
And just a few weeks ago Jim Rogers told you the following Jim Rogers: I Am Shorting US Markets & Junk
Therefore, it shouldn’t come as a surprise when we see this
The rating agency said its Liquidity Stress Index jumped to 7.9% in January from 6.8% in December, its highest level since Dec. 2009 and biggest one-month change since March 2009. The index measures the number of companies that carry Moody’s lowest liquidity rating of SGL-4. It rises when more issuers are placed in that category, and it falls when liquidity improves.
An important chart to consider…..
You can very easily come to the following two conclusions here. First, that Icahn, Soros, Rogers are full of it and that most problems will be contained within the energy sector. Somehow the overall economy will recover and everyone will hold hands with Janet Yellen and sing Kumbaya.
The other possibility is, of courses, that we have reached an acceleration point and that the entire junk composite yield is about to spike higher. Just as it did in 2007-2009. I certainly believe, in addition to the gentlemen above, that today’s fundamental and technical environment supports that notion.
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. February 2nd, 2016 InvestWithAlex.com
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