6/21/2018 – A negative day with the Dow Jones down 196 points (-0.80%) and the Nasdaq down 68 points (-0.88%)

The stock market continues to perform as anticipated or as was predicted by our calculations. If you would like to find out what happens next, please Click Here

Let’s talk about the US Dollar.

Most Dollar bears, such as Peter Schiff, are in disbelief of what is happening to the currency. According to them, the US Dollar should be getting destroyed or inflated away into oblivion just about now. Yet, the opposite is true. Since April the Dollar has staged a rip your face off rally.

The Dollar missed our bottom calculations that was projecting a bottom at $88 by a few pennies and we went long at around $91. Just as was outlined here Why Peter Schiff Is Dead Wrong About Inflation & The USD

I believe quite a few people will be surprised by how far this dollar rally goes long-term. Yet, there is a much bigger reason to worry about today’s Dollar rally. The S&P earnings going forward.

Stocks Are at Risk of A SERIOUS Drop Unless the US Dollar Rolls Over Soon

The financial media are euphoric that stocks are up today. However, they’re all ignoring the fact that the issue that triggered the recent sell-off (the Fed’s colossal policy error regarding the $USD) has not been resolved.

Put another way, until the $USD rolls over, stocks are in serious danger. We need to get out of that red rectangle area ASAP and back down to the green rectangle.

That is to say, recent S&P earnings bounce from $88 in 2016 to just shy of $110 today (2014 level – what growth?) was largely driven by weaker dollar. Should this catalyst be taken away, well, the stock market will go from crazy valuations levels we see today to “are you fu*#ing kidding me” valuations levels literally overnight.

Our timing and mathematical work clears up all of the confusion associated with all of the above. If you would like to find out what happens next to the US Dollar and the stock market, please Click Here

“Trump Denier” David Stockman explains, once again, why Donald Trump has no idea what he is doing when it comes to trade. We tend to agree. As we have said before, there is no Trade Deficit issue. There is a massive FED distorting the economy, money printing issue. You can read more about it here  Trump Is Fighting The Wrong Trade War For All The Wrong Reasons

Most importantly, our stock market work is absolutely clear. Trump’s trade war will lead to an absolute disaster in the stock market. If you would like to find out exactly when that will happen, based on our mathematical and timing work, please Click Here

6/20/2018 – A mixed day with the Dow Jones down 42 points (-0.17%) and the Nasdaq up 56 points (+0.72%) 

Are you scratching your head wondering why the Nasdaq/Russell 2000 are surging higher while the Dow is negative for the year? And no, it has nothing to do with Trump’s trade war.

The secret has to do with identifying exact patterns and time/price targets for all indices involved. That is exactly what we talked about in our daily update today. If you would like to find out exactly what the stock market will do next, based on our timing and mathematical work, please Click Here.

In the meantime, here is yet another massive red flag to consider. 

We couldn’t add very much to this article from ZeroHedge.com

Active Managers Go ‘All-In’ Again As “Growth/Value Bubble Looks Ominously Similar To Late 1999”

Despite trade wars, central bank tightening, declining economic fundamental data, and an Emerging Market crisis, according to one survey, active US investment managers are presently more than 100% invested, on average.

Source: Dana Lyons’ Tumblr

However, while US equities continue to charge ahead, alarm bells elsewhere are ringing very loud…

Judging by the reaction in China, you would’ve thought global markets were in for a thrashing after President Donald Trump’s latest escalations on trade.

However, as Bloomberg notes, the question of why American equities keep skating past a worsening trade conflagration has been baffling for strategists.

“We’ve had more negative catalysts and more negative pull this year than we’ve had for a long time, but the positives continue to prevail in the investor’s mind,” Jeff Carbone, a managing partner at Cornerstone Wealth in North Carolina, said by phone.

“They’re shrugging off the negativity and taking the positive to a greater extent that this is not the end.”

As Bloomberg notes, the ignorance of risk is everywhere: Equity funds are only a trifle less long than at the height of January’s euphoria.

It’s in markets for call options, where individual investors are engaged in a buying binge of historic dimensions.

It’s in tech stocks (favored by short sellers), and ones with shaky balance sheets, all of which recently surged…

On the back of an historic short-squeeze…

 

In credit markets, various indicators are flashing bright red. For instance Bank Loans have been pummeled the last few days…

“The scary thing is that everyone keeps warning about leverage but then keeps reaching for the yield that BBB provides,” said Andrew Forsyth, a portfolio manager with BNP Paribas Asset Management.

 

Emerging Markets have been a bloodbath in recent weeks…

With 42 straight days without inflows for the biggest EM ETF…

 

It’s not like people haven’t been warned. They have their memories of February and March, and strategists at banks like Morgan Stanley and Goldman Sachs have repeatedly urged investors to rein in optimism, citing everything from politics to peak earnings and monetary tightening. Earlier today, Citigroup Inc. flagged a potential bubble in growth stocks.

“This is fine for now, but we think by year end such a ‘risk on’ hierarchy will be misplaced given the more uncertain outlook posed by ‘peaky’ growth rates and ever tightening financial conditions,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley wrote in a note to clients Monday.

He urged investors to go defensive in anticipation of a rotation out of companies whose growth is tied to economic growth and upgraded utility stocks.

But the caveats have gone unheeded.

Wilson isn’t alone among analysts who see trouble brewing. As Bloomberg reports, the rally in growth stocks brought flashbacks of the internet bubble to Citigroup strategists led by Robert Buckland, even as valuation premiums are less than half of those from almost two decades ago.

A collapse would bode ill for a market whose gains have been increasingly anchored on tech giants such as Amazon.com Inc. and Facebook Inc.

“Price action of the U.S. growth/value trade looks ominously similar to late 1999,” the strategists wrote.

“Watch out for a growth bubble.”

With the price of call options now trading above their historic average, investors should sell them to reap extra returns in a market whose upside appears limited with valuations stretched, according to Rocky Fishman, an options strategist at Goldman Sachs. The firm predicted the S&P 500 will end next year at 3,000, or an 8 percent increase from the last close. That’d be below the 45th percentile in the index’s history over any 18-month period.

“The potential for upside surprises in U.S. equities is lower than the compensation received from elevated call prices,” he wrote in a note.

Coincidentally or not, such indications of retail euphoria flared up in January, just before the S&P 500’s first 10 percent correction in two years. It also accompanied the bull market peaks in 2000 and 2007.

Quite a few people, including small cap and tech investors, believe Trump’s trade war will be a walk in the park.

We do not share in their enthusiasm.

This typical view assumes it will be an easy win (video below). Yet, this sort of an attitude often serves as a red flag. Recall, Hitler was gonna be in Moscow by November of 1941, Japanese attack would be so shocking that Americans will surrender and who could ever forget Napoleon’s “Screw Winter” comment.

You get the picture. Trade wars are very similar to shooting wars. In fact, most shooting wars start off as trade or economic wars. You just never know how much pain the other side is willing to take to prove their point. And we bet China is willing to take extraordinary amounts of pain to preserve their own growing “Empire”.

Perhaps Steven Seagal has it all figured it with the following quote.

Make no mistake, a trade war with China will be anything but easy. As our work clearly indicates, it will cause a major disaster in the US Economy and the stock market. If you would like to find out exactly when the stock market will tank, please Click Here

Trump supporters and apologists are out in force.

Don’t worry, they say. This is great for America, long-term. It will bring jobs back home, factories will once again boom and we won’t have to transfer our wealth to all of those pesky Chinese.

Perhaps. 

Yet, for the most part these people don’t know what the hell they are talking about. I wrote about it a few days ago Trump Is Fighting The Wrong Trade War For All The Wrong Reasons 

Here is another interesting look at the subject matter..

Why America’s Trade War With China Will Be Absolutely Crippling For The U.S. Economy

Can the global financial system handle a full-blown trade war between the two largest economies on the entire planet?  We have never seen anything like this happen in the modern age, and this is creating a tremendous amount of uncertainty for the financial markets.  Yes, something had to be done, and I have been writing about this for years.  China has been stealing our intellectual property, manipulating currency rates and slapping high tariffs on American goods.  We simply could not allow China to continue to take advantage of us, but now we are so dependent on the Chinese that a trade war with them is going to inevitably produce a great deal of pain.  We are all going to wish that another way could have been found to resolve this crisis, because in the short-term this is definitely going to hurt the U.S. economy.  And if President Trump chooses to press forward with trade wars against Europe, Canada and Mexico at the same time as well, the pain for our economy is going to be off the charts.

Once a trade war begins, it can potentially last for many years, and let us not forget that history has shown us that trade wars can often lead to shooting wars.

I believe that a tragic strategic mistake has been made, and this is not going to end well.

Bingo.

Not only do we have to look at the actual trade war, but we also have to consider who is waging it. In this particular case, someone with a fragile ego who has no idea what he is doing. This will not end well.

Most importantly, Trump’s trade war will send the US and Global Economies into chaos. And with S&P earnings collapsing, due to strong dollar and significant slow down in global trade, it won’t be a pretty sign when robo machines and forever bulls realize the stock market is selling at historically high valuation levels.

If you would like to find out what the stock market will do next, based on our precise timing and mathematical work, please Click Here

6/18/2016 – A mixed day with the Dow Jones down 103 points (-0.41%) and the Nasdaq up 1 point (+0.01%)

This stock market appears to be a head scratches, at least to most investors.

So much so that we are beginning to see major divergences not only in various indices, but the sentiment readings as well.

Bulls argue that things have never beet better with the headlines like this….

• Amazon CEO Jeff Bezos is now worth a record $141 billion—here’s how he became the richest person in the world
• Why tech and small cap stocks are on fire

But not all is well in the land of milk and honey

• Paul Tudor Jones warns the next recession will be ‘really frightening’

“You look at prices of stocks, real estate, anything,” he said. “We’re going to have to mean revert to a normal real rate of interest with a normal term premium that’s existed for 250 years. We’re going to have to get back to that. We’re going to have to get back to a sustainable fiscal policy and that probably means the price of assets goes down in the very long run.”

In the short run, the market is “jacked up and ready to go,” he said. Blankfein added that it’s like “pouring lighter fluid on an already lit fire.”

Confused yet? 

Our view on the subject matter is rather simple. Well, considering our overall mathematical and timing stock market work.

The indices that are currently surging to all time highs, for instance the Nasdaq/Russell 2000, are simply tracing out unfinished patterns within a predetermined time frame.

Other less speculative indices, such as the Dow/S&P might have already completed their respective bull markets. At least that is one of the scenarios.

If you would like to find out exactly what the stock market is doing and when it will crater, based on our mathematical and timing work, including exact Time/Price target charts, please Click Here