Investment Grin Of The Day Google
COT Reports & Weekly Market Calendar – October 23rd, 2015
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 October 20th, 2015
Currencies:
- USD: 2K Long Vs. 56K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 42K Long Vs. 15K Short – Slight increase in short interest. Significant long interest remains.
- British Pound: 55K Long Vs. 21K Short – Significant increase in net short interest. British pound remains bullish.
- Japanese Yen: 71K Long Vs. 25K Short – No net changes. Japanese Yen is still bullish.
- Euro: 88K Long Vs. 69K Short – Slight increase in net short exposure. Euro is now neutral
- Australian Dollar: 102K Long Vs. 19K Short- Slight decrease in net short position. Significant long position remains.
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Japanese Yen and Australian Dollar rally. EU is neutral.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 550K Long Vs. 378K Short – Net neutral position remains. No major changes
- VIX: 36K Long Vs. 90K Short – No major changes.
- Gold: 51 Long Vs. 116K Short – Slight increase in net short position. Gold is now bearish.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P. Gold is now negative.
Next Week’s Market Calendar:
- Q-3 Earnings
- Tuesday: Durable Goods and Consumer Confidence
- Wednesday: FED Interest Rate Decision.
- Thursday: GDP
COT Reports & Weekly Market Calendar – October 23rd, 2015 Google
Why I Am More Bearish Today Than Ever
10/23/2015 – A positive day with the Dow Jones up 158 points (+0.91%) and the Nasdaq up 112 points (+2.27%).
I am going to go out on a limb here, at the risk of looking like a complete fool a couple of months down the road, and suggest that bears should be thanking their lucky starts. That is, for an opportunity to go short as these levels.
Before we get there, let me ask you something. What has changed between September 29th bottom and today? NOTHING FUNDAMENTAL, only investor sentiment. Where on September 29th investors were freaking out and numerous commentators were calling for an all out market crash, today it’s the opposite. Apparently, the bear market is over and we are getting ready to surge higher. Consider the following.
- Omega: August selloff in U.S. shares not end of bull market
- Don’t drink ‘Kool Aid’ behind rally: Fund manager
Yet, fundamentally speaking, we are still in the same conundrum. I continue to maintain that we are witnessing a major slow down in earnings and the US Economy. Most corporates missing and guiding lower is a clear evidence of that. Sure, some companies like Google, Amazon, etc…. are outperforming, but they are an exception, not the rule. The FED remains between the rock and a hard place. Unable to raise interest rates or stimulate the economy further.
If anything, we are getting numerous confirmations that earnings and the US Economy are falling apart.
As they say, a picture is worth a thousand words. Trust me, the bulls do not want to see these charts.
Chart #1: Hey everyone, look at all of those gaps. If you think the market won’t come back to close them, sooner or later, you are living in a fantasy land. But listen, we are all adults here. Who am I to tell you NOT to buy Amazon, Facebook, Google, etc….at today’s ridiculous valuation levels. As Citigroup suggests, “Be brave and go long”.
Chart #2: Oldie but goodie. Again, overall earnings/economy are slowing down while Shiller’s adjusted S&P ratio is at its 3rd highest level in history. Investors have paid more for stocks on two other occasions. In 1929 and 2000. But, unlike yours truly, most bulls don’t mind paying the same premium today.
Chart #3: Look at all of these non-confirmations from Russell 2000, Dow Transports and Biotech (IBB). These are just a few. There are many other. New Bull market??? Yeah, sure…..to infinity and beyond.
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. October 23rd, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
True Or False?
A Few Things That Do Not Make Sense
In addition to Nasdaq and Draghi ramp up yesterday, China has decided to cut interest rates. Because, you know, everything is so awesome.
Further, by this point most investors are 100% confident that the correction is over and that we are back on bullish track. WSJ: Dow, S&P 500 About to Exit Correction Territory
I wouldn’t be so fast to come to such a conclusion. For the following reasons.
- The market left behind a number of massive up gaps (including today). Gaps it will have to close sooner or later.
- We are witnessing extremely overbought conditions and quite a few technical divergences.
- Previous market leaders are not confirming. For instance, the Dow Transports, Russell 2000, Biotech (IBB) are all sitting close the their respective lows. That shouldn’t be happening in a broad “bull”. But who knows, maybe they will pay catch up….right???
- The angular rise thus far, off of August 24th low, has been an incredible 83 degrees. And even more incredible 87 degrees off of September 29th bottom. Add 3 more degrees and forget about the Dow 20K, it will be a straight shot to the moon at that point. Meaning, such sharp moves are corrective in nature, not structural.
- Etc…..
That begs the question, is this a new bull market or are we witnessing the mother of all short squeezes/bounces. Time will tell, but I wouldn’t necessarily jump to a conclusion that we are back in a bull market.
Bulls Declare Victory – End Of Story.
10/22/2015 – A positive day with the Dow Jones up 320 points (+1.87%) and the Nasdaq up 80 points (+1.65%)
I have discussed this over the last few months, but I believe Robert Shiller hits the same nail on the head as well.
Robert Shiller: THIS is the sign we’re in a bubble
Just before the dot-com bubble burst, investors had very little confidence in stock valuations, but they were confident in the market in the short term, he said.
“That’s the sign of the bubble. They’re worried but they’re thinking they’ll get out,” he told CNBC’s“Squawk Box.” “This can suddenly turn, and we’re looking somewhat like that now.”
Bingo. And as I have pointed out here at least 100 times this year, today’s Shiller Adjusted S&P P/E Ratio is the 3rd highest in history. Right behind 1929 and 2000 tops.
Plus, after a 5-7 year bull run, most investors today assume 2-3 things .
- Every sell-off is a buying opportunity. “Buy the dip”.
- The FED will be able to backstop any and all declines or recessions.
- Someone will ring the bell at the top and everyone will exit the market in an orderly fashion. Holding hands and singing Kumbaya.
It is my hope that most reasonable people will quickly realize how ridiculous all of that sounds. And instead of adhering to such thinking, investors might want to ask themselves the following questions…..
- What if we have shifted gears into a bear market and every rally should now be sold?
- What if the FED is powerless….we are already at zero….what else can they do?
- What if the market corrects itself in a rapid and violent fashion?
I believe those are the right questions to ask. Everything else is just noise.
Listen, as we head into the most dangerous time of the year, not many people anticipate a further correction. My friends still laugh at me when I suggest we might re-test late August lows. An ominous sign? We will soon 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. September 15th, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Investment Wisdom Of The Day
Can Negative Interest Rates Save The US Economy/Markets?
I should have said negative interest rates and more QE. The short answer is, don’t bet on it.
Is the US headed for negative interest rates?
While most investors still think the FED will raise interest rates in the near future, quite a few people are beginning to realize that it will not happen. On the contrary, given the state of today’s economy and earnings, the FED is just as likely to go negative.
That works perfectly with our notion that a double bottom in 10-Year Note is still coming.
Listen, interest rates can only invert so far. I would say that an inversion over 3% would point to all out monetizations. And that’s an entirely different story with its own set of problems.
And while rates can invert up to that extent, I don’t believe such a change will have a meaningful impact. The velocity of that credit/capital has already worked itself through the system between 2008 and now. Additional capital will have minimal impact. Simply put, there is nothing to invest in. On both capital and expenditure side.
Can Negative Interest Rates Save The US Economy/Markets? Google
Are We Witnessing Early Stages Of “Earnings” Down Spiral?
10/21/2015 – A down day with the Dow Jones down 48 points (-0.28%) and the Nasdaq down 40 points (-0.84%).
I believe so. Just a few quick bearish data points for today.
First, Economy ‘caught in a vicious cycle’: Larry Summers
“We’re caught in a vicious cycle. Incomes are too low, therefore investments are too low. … We need to get out of that cycle,” he said. He called for smart tax reform and rules to discourage the kind of activism that strips cash out of companies.
He is right about both low interest rates and this vicious cycle. The problem is, we have pushed today’s “Economic Miracle” just about as far as it can go. That is, before it promptly blows sky high. The demand won’t go up because Zero Interest Rates and QE have created overcapacity in just about every sector.
And give today valuation levels, there is nothing to invest in. To speculate in, sure, but not to invest in. Unfortunately, this “vicious cycle” cannot be resolved until and unless we go though another recession, financial crisis or worse.
Second, the market’s hottest sector is about to face trouble: Technician
“The discretionary sector might be in store for the same a corrective move within the broader long-term uptrend,” predicted Stockton.
My question is, how many more sectors would have to correct before a bear market is evident? It is important to remind everyone that, despite this massive rally off of August 24th lows, most indices and sectors are selling well below their May/Summer highs.
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. October 21st, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Are We Witnessing Early Stages Of “Earnings” Down Spiral? Google
Investment Wisdom Of The Day
Ferrari (RACE) is going public. Not that we need another reference point to suggest that we are at a major long-term top, but there you go. Like its cars, Ferrari shares won’t come cheap or easily Should you load up? Well, with a ticker symbol like RACE and its general overvaluation, the advice below is more appropriate than ever.
