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Did Biotech (IBB) Top Out TODAY?

Daily Chart AMarch 20th

3/20/2015 – An up day with the Dow Jones up 162 points (+0.94%) and the Nasdaq up 34 points (+0.68%)

Before we get to Biotech, there has been a lot of talk recently about how most markets are heavily manipulated. From gold to equities, from bonds to cocaine (not that I would know). For instance, Yardeni: Markets all rigged, it is what it is  I don’t see it. My mathematical work continues to show that the Dow continues to trace out its exact mathematical points of force. If you would like to find out what happens next, please Click Here.   

Now, to Biotech. 

The Nasdaq hit an Intraday high of 5,132 on March 10th, 2000, then promptly turned around and proceeded to collapse 80%. Is it possible that the Biotech Index (IBB) did the same thing exactly 15 years later?

Not only is it possible, it is highly probable. Back in 2000 it was Pets.com and Nortel Networks. Today, it is hundreds of impressive sounding “Genome” Biotech names that have

  • A few Ph.D’s on their payroll.
  • An impressive idea.
  • A white paper on how their new generation drug will change the world and make Trillions….a  paper that maybe 10 people on this Earth can fully understand.
  • No way in hell of making a cent or getting their drug to the market.
  • A whole bunch of stupid investors that believe they will get rich.

Make no mistake, Biotech is an a giant bubble that will pop. And it’s not only Biotech. We are witnessing the same thing in the Silicon Valley’s “Mark Cuban” illiquidity bubble and even on the Nasdaq. Alibaba deal values Snapchat at $15 billion Do I really need to say anything when an app with no revenue is valued at $15 Billion by a company that is in its own spectacular overvaluation bubble? I hope note.

Anyway, why do I believe we might have hit the top in Biotech (IBB) today? Today’s blow off (gap) open and some of my other work within the sector.  That is to say, don’t be surprised if we get a massive sell-off in Biotech over the next few months.

IBB2

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. March 20th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Did Biotech (IBB) Top Out TODAY? Google

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Investment Wisdom Of The Day

john-templeton“The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.” – John Templeton

Sounds easy enough, but how many of you would sell today?     – Alex

Z31

Investment Wisdom Of The Day  Google

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What Albert Einstein Thinks About Janet Yellen & The FED

Vice Chair of the Board of Governors of the Federal Reserve System Janet Yellen

I disagree with Peter Schiff on a lot of things, but he might be right about the FED’s inability to raise interest rates over the next few months/years. Assuming the FED knows that we are in a gigantic bubble that is about to pop. Again, their past actions bring that into question.  You can watch the video here  Schiff: The Fed is afraid to pop a bubble

Here is the question I have. I believe the next round of QE is out of the question, until and unless various asset prices go through a substantial drop. So, if the FED forgoes raising interest rates, at what point does this financial bubble collapses under its own weight?

I have a fairly good idea, based on my stock market mathematical and timing work, but I will leave it up to you to decide. If you don’t think that there is a bubble or that it will collapse, keep buying equities.It is as simple as that. However, if you do believe that there is a bubble, the FED’s actions become inconsequential. The bubble will blow up either under its own weight or as soon as the FED signals the first hike.

With that in mind, perhaps we should listen to what Albert Einstein thinks about all of this.

Einstein dies and goes to heaven only to be informed that his room is not yet ready. “I hope you will not mind waiting in a dormitory. We are very sorry, but it’s the best we can do and you will have to share the room with others” he is told by the doorman.

Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. “See, Here is your first room mate. He has an IQ of 180!”
“Why that’s wonderful!” Says Albert. “We can discuss mathematics!”

“And here is your second room mate. His IQ is 150!”
“Why that’s wonderful!” Says Albert. “We can discuss physics!”

“And here is your third room mate. His IQ is 100!”
“That Wonderful! We can discuss the latest plays at the theater!”

Just then another man moves out to capture Albert’s hand and shake it. “I’m your last room mate and I’m sorry, but my IQ is only 80.”
Albert smiles back at him and says, “So, where do you think interest rates are headed?”

Z30

What Albert Einstein Thinks About Janet Yellen & The FED Google

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What You Ought To Know About Today’s Stock Buybacks

Daily Chart AMarch 19th

3/19/2015 –  A mixed day with the Dow Jones down 117 points (-0.65%) and the Nasdaq up 9 points (0.19%)

We have talked about stock buybacks and their eventual negative impact on this forum before. The Atlantic has a fairly good expose on the subject matter from a different angle Stock Buybacks Are Killing the American Economy

The article asks a simple question. Despite corporate profits being at the highest levels on record, at 12% of GDP, the underlying economic picture continues to deteriorate. Where did the money go?

The answer is as simple as it is surprising: Much of it went to stock buybacks—more than $6.9 trillion of them since 2004, according to data compiled by Mustafa Erdem Sakinç of The Academic-Industry Research Network. Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock.

Here is the scariest part. Not only was this money more or less wasted, this money was also borrowed away from future growth…..in the form of QE and zero interest rates. And the result? Overpriced and highly speculative stock market that is set to fall as soon as this “buyback” stimulus is withdrawn.

Finally, keep in mind that most corporations behave as individual investors would. They always buyback at the top while hoarding cash at the bottom. As was evident during the 2006-2010 period. That is not a good omen for the future.

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. March 19th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

What You Ought To Know About Today’s Stock Buybacks  Google

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The S&P Suggests It Might Be Ready To Breakdown

S&P chart3

If you are familiar with technical analysis, you know exactly what you are looking at above. A massive rising wedge (it goes back further) on the S&P. The Dow has a very similar structure.

If you are not familiar, rising wedges typically resolve to the downside when the bottom line (support) is broken. If so, the chart above suggests that the market might be getting ready to breakdown. Further, the near completion of the compression on the wedge indicates that it might happen soon. Finally, given the extent of this wedge, the downside is like to be significant. If you want a more detailed analysis, actual dates and prices, please Click Here. 

Just FYI.

z32

The S&P Suggests It Might Be Ready To Breakdown   Google

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Crash Protection Cost Doubles, Big Decline Ahead?

Long-term crash protection put option cost has doubled.Traders pay up for crash protection-time to worry. Just a structural change or an ominous sign of things to come?

“Long-dated crash put protection costs on the have more than doubled over the past 9 months,” a Goldman Sachs options research team led by John Marshall wrote. “We believe it is an important development to watch as it implies investors are increasingly concerned about downside risk even as U.S. equities trade near all-time highs.”

Specifically, the options that have more than doubled in value are 55 percent out-of-the-money puts that expire in five years. That is to say, in order for these derivatives to pay off come expiration, the S&P would have to lose more than half its value over the next five years.

“We see reason for concern as put prices were up a similar amount in 2007 ahead of the financial crisis, diverging from credit and equity at that time as well.”

This is a complex matter to discuss and the increase above could be caused by a number of different things. Changing dynamics in the options markets, hedging, balance sheet issues, etc…. With that in mind, maybe some smart folks are building large short positions in an anticipation of a large decline or worse, a crash. That would make even more sense.

Z31

Crash Protection Cost Doubles, Big Decline Ahead?  Google

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Is It Time To Short Janet Yellen & The FED?

Daily Chart AMarch 18th

3/18/2015 – An up day with the Dow Jones up 227 points (+1.27%) and the Nasdaq up 45 points (+0.92%)

If you recall, in the last two weeks of February the market barely moved. And towards the end of February I suggested that this period of low volatility is coming to an end. Boy, did it ever. After the market topped out on March 2nd, the Dow has delivered close to 2,500 points in short-term market swings. That’s pretty impressive!!!

What happens next?

Today’s market rally was obviously FED induced. What did they say? Blah, blah, blah…….blah, blah. Literally. The FED wanted flexibility, to raise or not to raise, and that is precisely what their statement entails. Nothing more or less. In the final analysis, the talking heads can now spend another month dissecting every word in their never ending quest to find meaning.

In terms of the stock market, the bulls are large and in charge. Or so it appears. The stock market played out exactly as one of our scenarios suggested (subscriber section). And while the bulls feel vindicated, I wouldn’t get too excited just yet. The volatility we have experienced over the last few weeks is here to stay and the bulls might very quickly find themselves on the other side of the FED’s stupidity.

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. March 17th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Is It Time To Short Janet Yellen & The FED? Google

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The Shocking Secret Behind The Stock Market

stock market DNAHere is the best explanation I came across when I first started research into my mathematical and timing work. After more than a decade of development work behind me, I can attest that the statement below is 100% accurate.

“Markets being, at minimum, a three-dimensional phenomena, exactly like a large molecule rotating in space, in and out of Z plane, with DNA coding sequences governing the entire process. Without understanding 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” – Dr. B.

Z30

The Shocking Secret Behind The Stock Market  Google

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Investment Wisdom Of The Day

tudor jones“Were you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt. After a while size means nothing. It gets back to whether you’re making 100% rate of return on $10,000 or $100 million dollars. It doesn’t make any difference.” – Paul Tudor Jones

z33

Investment Wisdom Of The Day  Google