According to Bank of America investors are exiting the market in droves.

Bank of America: We are witnessing a stock market ‘exodus’

Investors pulled a whopping $44 billion out of the stock market in the past five weeks. BAML’s Michael Hartnett, who characterized this as an “equity exodus,” noted that this was the largest redemption over a 5-week period since August 2011.

So where is that money going?

In the past week, $3.5 billion went into bond funds and $1.0 billion went into precious metals funds, which offer exposure to gold. There was also $10.9 billion poured into money market funds, the largest inflow in 13 weeks.

Here is another interesting fact. As of last week commercials (smart money) have increased their net long VIX exposure to an all time high. As per out weekly COT reports.

And that’s just the start Goldman Sachs downgrades stocks

With stocks selling near historic high valuations levels and considering today’s fundamental backdrop, it is a literal miracle that the stock market is trading where it is today.

As you can imagine, I can keep going with the bearish premise. And there lies the problem.

Everyone is too bearish. Or are they?

The setup above can fire off in one of two ways. We either get a major sell-off in capital markets or the market is able to rally higher, to climb the proverbial wall of worry.

If you would like to find out what it will actually do, based on our timing and mathematical work, please Click Here.

5/17/2016 – A negative day with the Dow Jones down 183 points (-1.03%) and the Nasdaq down 60 points (-1.25%). 

Before we get to that, consider the following.

• There’s another sign the US could be headed for recession
• Get ready for return of volatility: Bernstein CIO
• By this measure, the S&P 500 is overvalued by 72%

“The reality is, there should be a relationship between GDP growth and profit growth, and that has largely been absent. We’ve been supporting profits growth with things like share buybacks and other unsustainable factors, and fooling ourselves into thinking that that’s actually sustainable profits. What this is pointing out is that… we are paying too much for the growth that we can expect to get out of the S&P 500,”

Now, let’s take a look at the following valuation metric. Shiller’s Adjusted S&P P/E Ratio.

Coincidentally, both metrics tend to agree. The market is overvalued by 50-75%.

Now, an argument can be made that today’s zero interest rates, future earnings, lower anticipated dollar, etc…. justify current valuation levels. I don’t believe that such a “This Time Is Different” notion is appropriate here. Today’s environment is NOT that different.

Long-term metrics that measure internal health and valuation levels of the market agree. The overall stock market is in a clear bubble territory. Reminiscent of the 1929, 2000 and 2007 tops.  If so, long-term investors should anticipate no further gains from this point on. If anything, they should prepare for a big drop…..if history is any guide. Invest accordingly.

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. May 17th, 2016  InvestWithAlex.com

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5/16/2016 – A positive day with the Dow Jones up 175 points (+1.00%) and the Nasdaq up 58 points (1.22%)

Over the last couple of weeks we have witness a number of headlines from the industry heavyweights.

• First, Carl Icahn revealed that he liquidated his entire Apple position. Something that we predicted on this blog exactly a year ago. Billionaire Icahn Exits Apple Stake After Three Years
• But that wasn’t enough. Mr. Icahn went from being net long to an extremely short position at about 150% net short. As was shown on this blog about a week ago Carl Icahn Is Betting Big on a Stock Market Crash

But here is where it gets interesting. Warren Buffett is buying whatever Icahn is selling.

• Warren Buffett buys stake in Apple
• Buffett is bullish on America

Who is right? 

Both are. I believe it would be little unfair to compare what Mr. Icahn is doing to what Mr. Buffett is doing. It is a bit like comparing oranges to avocados.

First, Mr. Buffett takes an extremely long-term approach. He doesn’t necessarily care what the stock market will do this year or the next. It is more like a 5-20 year time frame. Second, by this point Mr. Buffett and Berkshire Hathaway are the stock market. Entirely too big and slow to move in and out.

Mr. Icahn on the other hand plays an entirely different game. He is a speculator who is small enough, in relative terms, to have the ability to move in and out at his heart’s content. When he sees short-term opportunities present themselves, he takes them.

And that’s the difference. At least based on my analysis. Carl Icahn sees the market a lot lower over the next 12 months. Mr. Buffett might see the same thing, but he is building his positions out with a much longer time frame in mind. Invest accordingly.

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. May 16th, 2016  InvestWithAlex.com

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5/13/2016 – A negative day with the Dow Jones down 185 points (-1.05%) and the Nasdaq down 20 points (-0.41%) 

If you follow mainstream financial media, apparently there is a “no brainier…. sure thing” kind of a trade out there. That is, to short the USD and to go long Gold.

• Gold has entered a new bull market: JPMorgan
• Sell the almighty dollar even as retail sales shine

“We’re recommending our clients to position for a new and very long bull market for gold,” JPMorgan Private Bank’s Solita Marcelli said Tuesday on CNBC’s “ Futures Now .” After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that’s just the start of the next leg higher, according to Marcelli. “$1,400 is very much in the cards this year.”

I am not sure about you, but I wouldn’t be too keen on executing this “brain dead” trade just yet. Gold technically remains in a long-term bear market. Its recent rally hasn’t confirmed any sort of a breakout. The same applies to the USD…..in reverse.  But I have been telling you a little secret over the last few weeks. Here it is again….Gold Hasn’t Bottomed Yet, But We Know Exactly Where It Will

Now, let’s talk about 9/11 for a second and the US trying to pick a fight with the wrong country.

• Saudi officials were ‘supporting’ 9/11 hijackers, commission member says
• FBI has 80,000 files on possible Saudi links to 9/11 – report
• Putin: Russia will consider tackling NATO missile defense threat
• Russia speaks of nuclear war as US opens missile defense system

I am finally rendered speechless. Well, almost. It appears the US Military & Intelligence machine carpet bombed the wrong country in retaliation for 9/11. Or did they? In the meantime, the Obama Administration is hell bent on starting a nuclear war with Russia. As has been described on this blog so many times before. But do not worry, transgender folk will finally get to use the right restroom, perhaps even before we are all vaporized into the next dimension.

And finally, to Mr. Trump. Earlier in the week I shared a staggering prediction with you. Allow me to repeat in this week’s update……

To be clear, I am no longer affiliated with any political party nor do I support anyone.

With that in mind, our primary stock market timing and mathematical model yielded an important projection. It gave us a very clear sign that Donald Trump will be the 45th President of the United States.

Unfortunately, I cannot go into details of my projection, due to the risk of jeopardizing our primary premium subscriber forecast. All I can say is this. Our mathematical work and its application to the stock market lines us perfectly with what Mr. Trump has outlined in his campaign. And that can only lead to one conclusion. He will execute on his promises as the next President, unifying our long-term projections with his real world outcome.

It is my intention to reference back to this post in November and to proclaim “I told you so”.

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. May 13th, 2016  InvestWithAlex.com

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