On 3/31/2016, we bought 3 contracts of Cotton for $0.5820 and on 4/18 we sold 2 contracts for $0.6181, gaining 6.3% in 19 days. Why?
Find out what we are doing with our third contract now and what our targets are. The trade has been structured in such a way that we now have a guaranteed gain and unlimited upside going forward.
To learn more about Demeter Research and Matt’s trading/analytical framework please Click Here.
4/15/2016 – A negative day with the Dow Jones down 29 points (-0.16%) and the Nasdaq down 7 points (-0.16%)
On April 21st, 2015 I wrote the following article Why Short Sellers Should Be Thanking GOD And after getting an earful for using “GOD” from one of my subscribers, the Dow proceeded to top out just 160 points higher on May 19th at 18,351. The assessment was indeed correct and shorts should have been shorting everything in sight.
On February 10th of this year I pointed out that everyone was too bearish. Financial Media Predicts Armageddon – Time To Go Long? The market proceeded to bottom a few trading hours later, staging a powerful bounce we are still witnessing today.
Which brings me to my new proposition. Not only should short sellers thank every lucky star in this universe and the next, they should actually spend a few dollars and send Janet Yellen a “Thank You” card. For this Central Bank Mafia Goes All In…Stocks Rally…A Little
On a more serious note, I remember seeing such blatant imbalances, overvaluation levels and rampant speculation on only two other occasions. In 2000 on the Nasdaq and in 2007 in most asset classes. Consider the following as we push into the weekend.
Bearish Case:
Bullish Case:
At first glance it appears the analysis above is overly bearish. Just as it was at February’s low. It is not. We are now dealing with an overbought market with numerous red flags, too numerous to mention here, appearing all over the place.
Is the breakout possible?
Most certainly, but that would just take the entire market into the Nasdaq’s March of 2000 type of a setup.
I think the last headline speaks volumes about today’s investor sentiment. I am witnessing the exact same mindset in most of my daily dealings. I also remember perfectly well that bulls didn’t care about the valuation of Pets.com in 2000 nor credit spreads in 2007.
The funny thing is, eventually, everyone cares.
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. April 15th, 2016 InvestWithAlex.com
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As you already know, Matt Demeter’s (Demeter Capital) weekly coverage concentrates on some of the most popular worldwide indices, futures, bonds, stocks, commodities and currencies. Matt’s work is some of the most accurate I have ever seen and it shows. The table below represents just a small portion of work available from Demeter Research. To learn more and to see Matt’s work in action, please Click Here.
Report Date: April 1th, 2016 (Including COT Reports).
For up to the minute long-term and short-term analysis on all of the markets below, please Click Here
4/14/2016 – A mixed day with the Dow Jones up 17 points (+0.09%) and the Nasdaq down 2 points (-0.03%).
I typically shy away from giving direct “financial advice”, but this one is a no-brainer. At least based on my long-term mathematical and timing work.
I am executing this “Trade” for myself and I have instructed my entire family to do the same. Most importantly, I believe this “Trade” will allow individuals to do the incredible. That is, to legally loot the bank of their choice. Literally. A truly once in a lifetime opportunity.
Let’s start from the beginning.
Whether we still push lower, into a double bottom, perhaps even lower is pointless for the purposes of this post. The time to act is NOW. I would say you have about 1-12 months to get this trade done. And the sooner you do it, the better.
What is this trade?
Why/How?
Here is what will happen over the next 10-20 years. At least based on my mathematical and timing work.
We are are about to go through a major bear market leg. Since the FED is sitting at zero interest rates already, they will be forced to do additional rounds of QE and to even go Interest rate negative. My work suggests that the US Dollar and Interest rates will have none of that. At a certain point.
The US Dollar will decline while Interest rates head higher (market rates). Additional stimulus will finally get inflation going. An inflation that will accelerate over the next 10-15 years. Think in terms of 1966-1982 period of time.
By the time it is all said and done, in about 20 years, your fixed mortgage might be inflated away to the tune of 75-90%. To the point where a $500,000 fixed 30 year loan and $3,000 monthly payment today, might only be worth about $100,000 or $500 monthly in today’s money. The rest of its value will simply vanish.
In other words, you win and banks lose……..for once.
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. April 14th, 2016 InvestWithAlex.com
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I couldn’t agree more. Let’s take a look
Not nearly enough attention has been paid to the toll these low rates — and now negative rates — are taking on the ability of investors to save and plan for the future. People need to invest more today to achieve their desired annual retirement income in the future. This reality has profound implications for economic growth: consumers saving for retirement need to reduce spending if they are going to reach their retirement income goals and retirees with lower incomes will need to cut consumption as well.
I have said it before and I will say it again. The FED has pushed the envelope to such an extent that I cannot see how we can get out of this unscathed. To say the least. Today’s environment is equivalent to a dying patient being pumped full of drugs just to stay alive for a few minutes more. Yet, the final outcome is now a foregone conclusion.
It’s hard to figure out exactly what the Sputnik moment will be, but it will come from one of three areas.
One is a market accident. This notion that suddenly there is an instability and you get very large moves in financial markets that then threaten the economy. We got close to that in January and February.
To be honest I am amazed by the blatant disregard of risk in today’s market environment. Particularly when the wheels are coming off of the economic growth and stocks are selling at Shiller’s P/E of 26. But this is not the first time I am seeing this kind of an environment. I saw the same in 1999-2000 on the Nasdaq and in 2007 in real estate/credit markets.
Invest accordingly.
4/13/2016 – A positive day with the Dow Jones up 187 points (+1.06%) and the Nasdaq up 75 points (+1.33%)
The Dow topped out on October 11th, 2007 at 14,280. By March 6th, 2009 it was sitting at 6,460 or with a 55% loss. But here is what’s interesting. The imbalances we are witnessing today are exponentially greater than what we saw in 2007-2009. Consider the following……
2007 Imbalances:
U.S. government debt (as narrowly defined) stood about $8 trillion.
- The Federal Reserve’s balance sheet was under $800 billion.
- 10-year Treasuries yielded approximating 4.5%, giving the Fed had some leeway to cut interest rates if necessary to fight a crisis or business downturn.
- The subprime-mortgage bubble peaked at about $1.3 trillion.
- Aggregate government debt was under $10 trillion.
- The derivatives market’s notional value was $182 trillion.
- A homeless man named Johnny Moon was reportedly able to get some $600,000 of mortgages to speculate in the U.S. housing market.
As bad as all of that was, consider Today’s Imbalances:
- U.S. government debt totals about $19 trillion, or some $11 trillion more than it was in 2008.
- The Fed’s balance sheet is approaching $5 trillion vs. $800 billion in 2008.
- Short-term interest rates are 0.25% compared to 4.5% back in the day. With interest rates at near-record lows, there’s little opportunity for the Fed to further expand its balance sheet.
- The derivatives market is currently larger than $500 trillion vs. $182 trillion in 2008.
- Central-bank capital has dropped to 0.8% of assets from 4.5%.
- The size of the subprime bubble was $1.3 trillion, but the size of sovereign borrowing is $7 trillion today.
- Our government has to borrow money to simply pay interest, and monetary policy is hamstrung by near-zero interest rates.
- There are no more homeless people getting mortgages to buy homes, but there’s a Danish sex therapist whose bank is paying her interest (instead of the other way around) on a loan that’s financing her matchmaking Web site.
Not a big deal???
I would certainly disagree. The imbalances above will have to be addressed one way or another. They will not simply go away. We do not live in a magical world where the FED geniuses have created a perpetual money machine.
If anything, it is highly probable, especially if you consider today’s general overvaluation levels, that the imbalances above will be addressed in a violent fashion. And I would say sooner rather than later.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. 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 2014/15-2017 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. April 12th, 2016 InvestWithAlex.com
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