Investment Wisdom Of The Day Google
Marc Faber: We Are All On The Titanic Fighting For Musical Chairs
Just Marc Faber speaking the truth. I would have to agree with almost everything he says. Particularly, the FED will try to flood the market with liquidity once again in the near future. Either through QE4 or by cutting interest rates. Well, assuming they have enough time to reload NOW.
The multi trillion dollar question here is, will the bond market finally have enough and stage a massive rally in yields no matter what the FED does? At some point….YES. Once again, it is all about sequencing here. I would say a double bottom in yields over the next 2 years, then a massive rally. The stock market goes down in either scenario. Anyway, take a look, it is worth 5 minutes of your time.
Marc Faber: We Are All On The Titanic Fighting For Musical Chairs Google
Why You Shouldn’t Stop Freaking Out About Margin Debt
6/3/2015 – A positive day with the Dow Jones up 66 points (+0.37%) and the Nasdaq up 23 points (+0.46%)
Quite a few interesting things out there today. A few days ago I displayed this chart of skyrocketing margin debt and why it is yet another bearish indicator. That is to say, most investors are extremely bullish at the precise moment when they shouldn’t be.
Not everyone agrees with my assessment above. Traders are borrowing tons of money to bet on stocks … and it’s just not a big deal
“Margin debt does not, by any statistical measure, lead equity prices. They are, essentially by definition, coincident. As stock prices move higher, outstanding margin debt does as well. If and when stock prices move lower, margin debt will follow.”
While I would have to agree with the statement above, they are looking at the wrong metric. It’s not the fact that margin debt moves in tandem with the stock market, it is the fact this metric is now 33% higher than at 2000 and 2007 tops. All while the stock market hasn’t gone anywhere over the last 10 months. In other words, the market is storing a tremendous amount of fuel for a correction. And given how much margin debt is out there, any such correction can very quickly turn into a violent sell-off.
Further, I would have to agree with the following sentiment. The stock market is becoming a ‘lose-lose’ situation
Investors are in the grip of “Stockholm syndrome” because there is a trust that central bankers don’t want to hurt markets, which more or less forces investors to maintain a “risk-on” positioning, buying things like stocks and lower-rated bonds.
I couldn’t agree more. I continue to maintain that this is the worst trade out there today. The problem is, everyone is in it. By the time most investors realize the FED is not in control and cannot backstop the market, it will be too late. At least 50% of the down move will be over by that point. Oh well….
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. June 3rd, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Why You Shouldn’t Stop Freaking Out About Margin Debt Google
Are Yields Breaking Out?
About a mount ago we asked if yields were about to break out. At that time the 10-Year Note ran right into resistance at 2.25% and paused. That is no longer the case. As you can see from the chart above, yields have now pushed above that level.
The 2.25% resistance line was nothing to sneeze at. It held for well over a year. The next major long-term resistance line is at around 2.6%. This brings out a number of important questions. In fact, more questions than anyone can answer at this point. For instance,……
- Was the secondary bottom in yields set in early January?
- Will yields now stage a multi-year, even a multi-decade advance?
- Is this signaling the FED will raise rates and soon?
- Does this spell doom for the stock market?
- Etc….
Only time and market action can answer the questions above. At least for now, I am sticking to my overall long-term forecast. The secondary bottom in yields of 1.4-1.5% is not yet in and we are on schedule to see it over the next 12-24 months.
Although I might change my opinion if yields are able to break out above 2.6%. Further, this is the most important market to watch over the next few months. Should yields break out and spike, we might have another 2008 on our hands.
Investment Wisdom Of The Day
Secret Key To The Stock Maket: Our Holographic Universe
I love science and mathematics. Yet, once you start digging deeper you soon come to a realization that our physical 3-dimensional reality doesn’t make sense. So much so that what is available to our human senses is just a small fraction of our true reality. In other words, human existence is nothing more than an advanced computer simulation. Leading physicists across the globe are starting to come to the same realization.
There Is Growing Evidence that Our Universe Is a Giant Hologram
What does any of this have to do with the stock market?
Everything. Just as our human reality is nothing more than a shadow of higher dimensions, the 2-dimensional chart we all follow is just a shadow representation of true market moves. Here is how the stock market really works.
The markets being, at minimum, a 3-Dimensional phenomena, exactly like a large molecule rotating in space, in and out of the Z plane, with DNA coding sequences governing the entire process. Without understanding that the market is 3-D, twisting like a plant governed by the phyllotactic laws of dual number series and harmonic composition and decomposition, all measurements taken on a 2-D chart become misleading.
Mind blowing. By the way, human beings have the ability to jump to this higher dimension of reality through extensive meditation. Most traditions around the world call this “enlightenment”. In scientific terms, it is identical to electrons jumping between quantum levels. Once enough energy is accumulated within the human mind/body structure (through meditation), this quantum jump is automatically made.
Secret Key To The Stock Maket: Our Holographic Universe Google
What Are We Waiting For?
6/2/2015 – A down day with the Dow Jones down 28 points (-0.16%) and the Nasdaq down 6 points (-0.13%).
The overall stock market continues to trade within a very tight trading range, but that will soon change. A massive and rather rapid stock market decline is coming later on this year. And while we won’t have a crash, considering the amount of margin debt out there, quite a few people will get wiped out. If you would like to find out exactly when this move will develop, to the day, please Click Here.
Over the last few months a few analysts suggested that a bear market and a possible crash will occur in 2016. Something to do with the presidential cycle, the need to have a blow off top and increased gravitational forces in Andromeda Galaxy. For instance, Analyst Says Bull Market Will Not End With Top Tech Stocks So Cheap.
Excuse my ignorance, but why exactly is it impossible for us to have a large scale decline, maybe even a crash, in 2015?
Personal preferences and wishful thinking aside, here is our current setup…..
- Extreme overvaluations in most sectors of the stock market.
- Outright bubbles in Tech and Biotech.
- An adjusted P/E ratio above 1937, 1966, 1987, 2007, etc…. tops. Only 1929 and 2000 tops were higher.
- The FED is about to raise interest rates.
- Any remaining QE velocity is quickly dissipating.
- Macroeconomic data is collapsing (previous charts).
- The US Economy is on a verge of an official recession. Q1 growth of 0.2%. Inventory build up saved the GDP from going negative.
- Earnings growth estimates are accelerating down (previous charts).
- We are still in a secular bear market.
- 10 Months of market distribution. (NYSE since July of 2014)
- Extreme bullish sentiment.
- Margin debt is at an all time high.
- Fund outflows continue to accelerate (weekend update).
- Etc….
I am sure I have missed quite a few points, but you get the idea. Sounds like a perfect recipe for a disaster to me. The best part is, I don’t think we have to wait until 2016.
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. June 2nd, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
My Challenge To Mr. Bernanke
Forget bubble level valuations. Despite the mountain of evidence to the contrary, including the chart above, Mr. Bernanke believes the stock market is not even that expensive. In his recently published blog post Mr. Bernanke writes…
Stock prices have risen rapidly over the past six years or so, but they were also severely depressed during and just after the financial crisis. Arguably, the Fed’s actions have not led to permanent increases in stock prices, but instead have returned them to trend.To illustrate: From the end of the 2001 recession (2001:q4) through the pre-crisis business cycle peak (2007:q4), the S&P 500 stock price index grew by about 1.2 percent a quarter.If the index had grown at that same rate from the fourth quarter of 2007 on, it would have averaged about 2123 in the first quarter of this year; its actual value was 2063, a little below that. There are of course many ways to calculate the “normal” level of stock prices, but most would lead to a similar conclusion.
I can poke so many holes in the statement above that it will end up looking like a pound of Swiss cheese. But I am not going it. Instead, I would like to issue a rather simple challenge to Mr. Bernanke.
If you truly believe the stock market is nowhere near being expensive, why don’t you BUY today. Why don’t you show us all that you truly believe in your own BS, make that information public and allocate a large chunk of your portfolio/wealth in an index fund of your choosing. I will be waiting right here.
Investment Grin Of The Day
Carl Icahn: A Matter Of Time Before Stocks Implode
Carl Icahn is extremely worried about today’s stock market valuation levels. He goes on to suggest that it is just a matter of time before it all comes crashing down. I tend to agree. I am still not sure how Apple is supposed to reach $240 a share in such a market environment, but that’s beside the point. Listen below…..I highly recommend it.