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Daily Stock Market Update & Forecast – November 29th, 2017

– State of the Market Address:

  • The Dow is rapidly approaching 24,000
  • Shiller’s Adjusted S&P P/E ratio is now at 31.86 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
  • Weekly RSI at 82 – overbought. Daily RSI is at 74- overbought.
  • Prior years corrections terminated at around 200 day moving average. Located at around 18,400 today (on weekly).
  • Weekly Stochastics at 95 – overbought. Daily at 94 – overbought.
  • NYSE McClellan Oscillator is at +25. Neutral.
  • Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest declined slightly to 75K contracts net long. 
  • Last week’s CTO Reports suggest that commercials (smart money) are shifting their positioning back to net short. Short interest has shifted slightly lower during the week. For now, the Dow is 7X, the S&P is at 3X net short, Russell 2000 is now at 5X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

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Daily Stock Market Update & Forecast – November 28th, 2017 – Elliot Wave Edition

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year. Did it already complete? Click Here

Short-Term: It appears the S&P might have completed its intermediary wave 3 and now 4. It appears the market is now pushing higher to complete wave 5 of (5). If true, the above count should terminate the bull market. Did it already complete? Click Here

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view itDa

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What George Soros’ Theory Of Reflexivity Tells Us About Bitcoin Today

If you are not familiar with George Soros’ Theory of Reflexivity, something he credits for making him incredibly rich and successful, here are a few good summary articles.

To very quickly summarize, when it comes to the stock market and investing we are always dealing with incomplete and/or imperfect information. At certain times that leads to so called positive or negative feedback loops. Leading various financial instruments or overall markets to diverge significantly from their true value.

For example….

Take a highflying tech stock like Amazon (AMZN) for example. The company has made little in the way of income (in relation to its market cap) for the majority of its existence (over 15 years) but the stock has continued to soar. This is happening because people formed a number of positive beliefs about the stock. These beliefs could be that the company will make tons of money someday because it’s innovative, eating market share, or has a secret profit switch it can flip whenever it wants. Or maybe people continue to buy the stock because it’s gone up for a long time and so they assume it will continue to go up.

Mr. Soros goes on to explain: 

Financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. This is the principle of fallibility. The degree of distortion may vary from time to time. Sometimes it’s quite insignificant, at other times it is quite pronounced.

Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend. When a positive feedback develops between the trend and the misconception, a boom-bust process is set in motion. The process is liable to be tested by negative feedback along the way, and if it is strong enough to survive these tests, both the trend and the misconception will be reinforced.

How does any of that apply to Bitcoin today?

I am glad you have asked. As we have argued many times before, Bitcoin has no real value. It is worth whatever the next fool is willing to pay for it. May it be 1 cent or $40K. The value itself is irrelevant.

It is now obvious that a massive possitive feedback loop has been established for the currency. With people arguing all sort of nonsense, from Bitcoin eventually replacing the USD, to keeping the FED honest, to the only place to hide in case of a nuclear war (good one).

Long story short, Bitcoin is the best thing since the Tulip Mania of 1636.

However and as Mr. Soros’ theory teaches us, such positive loops eventually end up imploding on themselves. And when they do, the underlying assets typically collapse in a spectacular fashion as well.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

Posted on

Daily Stock Market Update & Forecast – November 27th, 2017

– State of the Market Address:

  • The Dow is rapidly approaching 24,000
  • Shiller’s Adjusted S&P P/E ratio is now at 31.86 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
  • Weekly RSI at 82 – overbought. Daily RSI is at 74- overbought.
  • Prior years corrections terminated at around 200 day moving average. Located at around 18,400 today (on weekly).
  • Weekly Stochastics at 95 – overbought. Daily at 94 – overbought.
  • NYSE McClellan Oscillator is at +25. Neutral.
  • Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest declined slightly to 75K contracts net long. 
  • Last week’s CTO Reports suggest that commercials (smart money) are shifting their positioning back to net short. Short interest has shifted slightly lower during the week. For now, the Dow is 7X, the S&P is at 3X net short, Russell 2000 is now at 5X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

Posted on

Why Bitcoin Value Has Nothing To Do With The Value Of The US Dollar

As of this writing Bitcoin is on track to reach its $10,000 target (anticipated by 2019) by some point before lunch. Some financial observers would like to point out that this staggering run is proof enough that the USD and the whole financial system based on the currency is about to collapse. For instance….

Bitcoin crushing US dollar & governments can do nothing to stop it

“I think we are seeing fiat currencies in a hyperinflationary collapse against bitcoin,” he said, adding that we’ll see a major price correction somewhere at the $25,000 per bitcoin level. “Up until that price is achieved it looks like we’ll see a pretty strong upward move.”

Bitcoin is a perfect currency, something that is utterly changing the global finance and market and is putting banksters and the central banks out of business,” which, according to Keiser, “should be applauded because they’ve been horribly bad actors. We need to get rid of them and let bitcoin transform our world.”

Fair enough about the FED, but the “hyperinflationary collapse of the USD and other currencies against Bitcoin is, how should I put it, crazy talk. 

For the above to be true, world’s economy or payments for most goods/services would have to transition to digital currencies in a violent fashion. Something we view just about as likely as Vladimir Putin winning the US Presidential election in 2020.

That is to say, there is a simpler explanation to Bitcoin’s most recent ‘amazing’ run. It is in a massive speculative bubble.  As was outlined here Bitcoin Investors Expect To See $10,000 By 2019 – We Ask, Why Not Next Tuesday

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

Posted on

Weekly Stock Market Update & Forecast – November 24th, 2017

– State of the Market Address:

  • The Dow remains well above 23,000.
  • Shiller’s Adjusted S&P P/E ratio is now at 31.58 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
  • Weekly RSI at 78 – overbought. Daily RSI is at 62- neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 18,400 today (on weekly).
  • Weekly Stochastics at 92 – overbought. Daily at 84 – neutral.
  • NYSE McClellan Oscillator is at +23. Neutral.
  • Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest declined slightly to 75K contracts net long. 
  • Last week’s CTO Reports suggest that commercials (smart money) are shifting their positioning back to net short. Short interest has shifted slightly lower during the week. For now, the Dow is 7X, the S&P is at 3X net short, Russell 2000 is now at 5X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the “smart money” is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year. Did it already complete? Click Here

Short-Term: It appears the S&P might have completed its intermediary wave 3 and now 4. It appears the market is now pushing higher to complete wave 5 of (5). If true, the above count should terminate the bull market. Did it already complete? Click Here

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.

Posted on

Explaining Today’s ‘Beyond Belief’ Bull Market

It is no secret that the stock market is historically overpriced. So much so that I have argued we are experiencing the highest valuation levels in history. Higher than 1929, 2007 and even 2000 (if we adjust for lack of tech earnings). Prior smaller peaks of 1937, 1966, 1972, 1987, etc…. don’t even come close.

This is best illustrated by the Shiller’s Adjusted P/E Ratio below. 

So, what gives?

First, the sentiment….. Retail investors haven’t been THIS bullish since (gulp) you know when

Since February 2016, the overall index has soared 98 points, “the largest increase in the 20-year history of the index that is not a rebound immediately after a major drop in optimism.” This is the kind of move contrarians eat up.

“In 1999 and early 2000, high enthusiasm for stocks was a powerful sign the stock-market bubble was on its last legs,” Richter said. “Of course, no one can say how much higher their enthusiasm will surge this time around. Hype works, until it doesn’t.”

Buy High Sell Low…….Right?

Second, the driving force….Central Banks Have Purchased $2 Trillion In Assets In 2017

In his latest “flow report”, BofA’s Michael Hartnett looks at the “Disconnect Myth” between rising stocks and bonds and summarizes succinctly that there is “no disconnect between stocks & bonds.”

Why? The best, and simplest, explanation for low yields & high stocks is simple: so far in 2017 there has been $1.96 trillion of central bank purchases of financial assets in 2017 alone, as central bank balance sheets have grown by $11.26 trillion since Lehman to $15.6 trillion. Hartnett concedes that the second best explanation is bonds pricing in low CPI (increasingly a new structurally low level of inflation due to tech disruption of labor force) while equities price in high EPS (with little on horizon to meaningfully reverse trend), although there is no reason why the second can’t flow from the first.

And there you have it ladies and gentlemen. 

  1. The market is incredibly expensive. Record breaking expensive. Even if we take low yields into consideration.
  2. Idiot central bankers are terrified of what happens next. Instead of letting the bubbles deflate they have juiced them to unimaginable levels. And in nearly all assets classes.
  3. So much so that most retail investors now believe stocks will never go down. And even if they do it will be a BTFD situation.

We all have been here before and we all know what happens next.  It is different this time as so many believe? Perhaps, but if you truly believe that I still have some Pets.com stock to sell you.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.