How I feel every Friday afternoon. Mostly because I am a market addict.
If The Market Crashes, How Will The ETF’s React?
It appears I am not the only one who is aware of the ETF liquidity time bomb. I first published this post in September of 2015. If The Market Crashes, How Will The ETF’s React?
David Stockman tends to agree. Mutual Funds, ETFs at Risk of a Run For a different reason, but his concerns lead to the same conclusion. When the next sell-off hits, and it most certainly will, at some point ETF’s liquidity will vanish. Leading to massive gap downs (or worse) we all saw on August 24th, 2015.
Previously published analysis: September 14th, 2015
August 24th gap down (or mini crash) of 1,000 points on the Dow was incredibly important from another angle. It has exposed a weakness in ETF’s that not many were aware of. Still not aware of. An in depth discussion can be found here…..
Wild Trading Exposed Flaws in ETFs
For our purposes and since we follow the Dow so closely, let’s take a look at DIA (chart above). But keep in mind, the analysis below was evident throughout the stock market and across most financial instruments the morning of August 24th.
The Dow and DIA typically move together (+/- 20 cents). That morning the Dow bottomed 5 minutes into trading at 15,370, while the DIA bottomed at $150.57. That’s a 2% discrepancy or an arbitrage that can be recovered in a matter of minutes.We saw the same on QQQ/NDX and SPY/SPX, plus numerous other ETF’s.
Here is what I am thinking. Should the market crash over the next few months, something that is possible given today’s overvaluation/speculation environment, enterprising investors/traders might want to look at ETF’s to boost up their gains. On both the short side and subsequent reversals.
Who knows, the next discrepancy could be 2-5%, depending on the size and speed of the primary move. That is to say, put this arbitrage on your “To Watch List” and be ready to act if the market is crashing and/or moving fast.
Jim Rogers: It’s Over – Get Ready To Suffer
2/9/2016 – Another down day with the Dow Jones down 12 points (-0.07%) and the Nasdaq down 15 points (-0.35%)
An important interview with legendary investor Jim Rogers. If you participate in financial markets – I highly recommend you watch it. I couldn’t agree more with Jim and there are too many good points to mention here. Definitely worth 20 minutes of your time.
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 9th, 2016 InvestWithAlex.com
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Investment Grin Of The Day
The War Drums Are Growing Louder
I am absolutely astonished by how easy it is for politicians and corporate media to fool smart phone addicted “zombie” populations into believing anything. Case and point…..
Last September I wrote the following….Is Russia About To Annihilate ISIS?
On a more serious note, if they really go after them, Russia will be able to wipe out ISIS and all associated terrorist parties (American backed “freedom fighters” on Monday and just regular terrorist by Friday) within a few months. That should stabilize the region and stop the humanitarian/refugee disaster we are all witnessing today.
And that is exactly what is happening on the ground as ISIS rats or as Mr. Obama calls them “Freedom Fighters” flee back into Turkey. Thousands flee as Russian-backed offensive threatens to besiege Aleppo
Here is what I find truly astonishing. After destabilizing the entire region, the US, NATO, Turkey and Saudi Arabia blame Russia for what is going on in Syria. What is even more astonishing is that most Americans believe this narrative. Here is the latest.
- Pentagon wants $582bn in 2017 budget, quadrupling of spending in Europe
- Saudi Arabia ready to take part in any US-led ground operations in Syria – military spokesman
- Analysis: How Russia keeps piling pressure on Turkey
- Russia’s Lethal New Robotic Tanks Are Going Global
- Moscow slams UN chief for Syria comments
The bottom line is….. For whatever reasons, Western Powers (NATO Members) are hell bent on starting a war with Russia. Eventually they will get their wish. As was first outlined in this report. Nuclear World War 3 Is Coming Soon.When, How & Why
Where Have All The Bulls Gone?
2/8/2016 – A negative day with the Dow Jones down 177 points (-1.09%) and the Nasdaq down 79 points (-1.82%)
I wish I was kidding, but I don’t recall encountering a single bullish article today. Even the “Buy the Dip” crowd is telling investors to avoid the market.
Consider the headlines.
“I was far too bullish last December,” Siegel admitted, referring to his call on “Squawk Box” that “valuations can stay on the high side.” He also had predicted on CNBC in November that Dow 20,000 was a “real possibility” in 2016. It was above 15,900 on Monday. The Wharton School finance professor on Monday summed up his view on the headwinds to the market. “Those deflationary forces … from China, from commodities are really, in the presence of debt that so many of these energy and other companies have, … causing the market turmoil right now.”
I have been at odds with Mr. Siegel for quite some time. While he predicted the Dow 20K by the end of 2015, exactly a year ago, I wrote the following. Who Do You Believe: Dow 20,000 Or Ripped To Smithereens.
Point being, with all of this excessive bearishness, is the market overdue for a bounce?
That is exactly the question the chart below is helping us answer. In both price and time.
And what does it tell us?
While that information is available only to my subscribers, I can share this. Today’s market environment will continue to drive both bulls and bears up the wall. Until a certain point is reached in both PRICE and TIME. When that happens the market will start an incredibly fast directional move.
But…… will it stage a powerful bounce or will the sell-off continue? That is the billion dollar question. You can Click Here to find out.
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 8th, 2016 InvestWithAlex.com
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Investment Wisdom Of The Day
How We Perfectly Timed November 2015 Market Top
2/5/2016 – A down day with the Dow Jones down 212 points (-1.29%) and the Nasdaq down 146 points (-3.25%).
I’ll be very frank and to the point here. This update falls under my “$100,000 Guarantee”
I first introduced my TIME turning point of November 27th (+/- 2 trading days) to my subscribers in early September of 2015. At that point I have suggested that this TIME turning point is one of the most powerful TIME turning points of the year. Just as strong as May 19th TIME turning point was.
As the market bottomed (higher low) on September 29th and then surged higher it became evident that Nombember 27th would be a top and not a bottom. As a result, I then introduced the elliptical structure above. Displaying clear resistance levels.
To summarize, as we pushed into this top we knew two things.
- The exact TIMING – Nobember 27th and…
- The price level where the market is likely to top out (at resistance).
In fact, this is the chart to my subscribers, first posted in our subscriber section on October 31st, 2015. Before the projected top was put in and subsequent decline.
Actually, this top was quite a bit uglier than the work above indicates. The actual PRICE top on the Dow arrived on November 3rd. The top on our TIME turning point of November 27th was slightly lower (secondary top). Then, the market proceeded to run into our elliptical resistance at lower levels twice more. Once on December 17th and once on December 29th, before the massive sell-off in early January. I discuss why we had those attempts at resistance in our subscriber section in greater detail.
The chart above also helps explain the market action thus far and most importantly, what happens next. There are two things to consider at this time……
- The market will remain within a tight trading range until the elliptical structure above terminates. My subscribers know the exact date and price of such termination.
- Something incredibly important will happen as soon as this structure terminates. Unfortunately, what that is, is only available to my subscriber.
If this type of Price/Time analysis is of interest to you, please Click Here
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 5th, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
COT Reports & Weekly Market Calendar – February 5th, 2016
COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.
While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.
Latest data, as of February 2nd, 2016
Currencies:
- USD: 1K Long Vs. 57K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 76K Long Vs. 10K Short – Slight decrease in net long exposure. Significant long interest remains.
- British Pound: 190K Long Vs. 5K Short – No changes. British pound remains bullish.
- Japanese Yen: 67K Long Vs. 72K Short – Neutral.
- Euro: 128K Long Vs. 64K Short – Significant increase in net short exposure. Yet, Euro remain bullish.
- Australian Dollar: 75K Long Vs. 2K Short – Slight decrease in net long exposure. Significant long position remains.
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Euro and Australian Dollar rally. Japanese Yen is neutral. This is consistent with our view that the FED won’t raise rates by much.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 411K Long Vs. 334K Short – Net neutral position remains.
- Nasdaq 100-Mini: 43K Long Vs. 118K Short – Sizable short position. Slight decrease in net short position.
- VIX: 22K Long Vs. 68K Short – No changes. VIX remains bearish.
- Gold: 46 Long Vs. 76K Short – Gold remains neutral.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P and gold. At the same time, commercials now have a very large short position on the Nasdaq. That is important. VIX turned bearish.
Next Week’s Market Calendar:
- Q-4 Earnings.
- Wednesday: Janet Yellen’s testimony.
- Friday: Retail Sales.
COT Reports & Weekly Market Calendar – February 5th, 2016 Google
