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Bullish Downfall: 2008 Correction Wiped Out S&P Gains Back To 1995 Levels

Daily Chart January 12th

1/12/2014 – Another down day with the Dow Jones down 93 points (-0.53%) and the Nasdaq down 39 points (-0.84%). 

Over a year ago I have decided to come out of hibernation in order to warn as many people as I can about the upcoming bear market leg of 2014/15-2017. After seeing the devastating impact the 2007-2009 bear leg had on 99% of investors out there, I continue to believe it is a prudent thing to do.

What I find interesting is that most of today’s bulls have already forgot about the lessons of 2000-2002 and 2007-2009. Never mind the fact that most bulls believe that we are in the early stages of a secular bull market that has another decade to go. Nothing could be further from the truth as a we are still in a bear market that started in January of 2000. The final leg down is still ahead of us. Consider the following.

“The 2007-2009 collapse wiped out the entire total return of the S&P 500 in excess of Treasury bill returns, all the way back to June 1995. If the S&P 500 was to experience nothing but a run-of-the-mill 34% bear market decline over the coming three years, it will have underperformed Treasury bills for what would at that point be an 18-year period since 1999.”

Scary!!! NO? Here is something even scarier. I continue to maintain that today’s market is sitting at an all time high “overvaluation/speculation” levels. Considering my cyclical/mathematical forecast and the fact that the market is extremely overvalued, a typical 20-40% correction here has the possibility to wipe out Treasury adjusted gains to as far back as 1995-94. Impossible? I wouldn’t bet on it.

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. January 12th, 2015  InvestWithAlex.com

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

Bullish Downfall: 2008 Correction Wiped Out S&P Gains Back To 1995 Levels Google

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What Stocks Will Appreciate At Least 500% Over The Next 2 Years? – Daily Podcast

Visitor Question: What Stocks Will Appreciate At Least 500% Over The Next 2 Years? – Listen to our short 5-10 minute podcast to find out. Plus, don’t forget to email me your questions.

Book Cover-small

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What Stocks Will Appreciate At Least 500% Over The Next 2 Years? Google

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Drums Of War

drums of war

I get at least a few emails per week telling me that I am wrong about the start of my Nuclear World War 3 mathematical forecast/prophesy. You can read it here Nuclear World War 3 Is Coming Soon.When, How & Why  Most of the objections have to deal with the fact that many people expect the war to start much sooner. As soon as this year. Just consider the news flow over the weekend.

Relax everyone. We still have plenty of time. At least 15 years before any real action begins. Here is why. First, my mathematical work does NOT show a stock market crash before 2029. For as long as stocks don’t crash, no war will occur. Second, the amount of hate and propaganda hasn’t reached critical levels. Finally, these sort of things take time to develop. At least another decade is needed.

Otherwise, a year after it was first published, my original forecast continues to develop as anticipated.

Z31

Drums Of War Google

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Crazy Markets. More To Come

Daily Chart January 9th

1/9/2014 – A down day with the Dow Jones down 170 points (-0.95%) and the Nasdaq down 32 points (-0.68%).

Despite the massive rally from Tuesday’s bottom, the Dow ended the week 90 points lower. 

Plus, a lot of important stuff to consider over the weekend as we prepare for what happens next. Let’s start with….

Stocks Aren’t Done Getting Crushed

A fairly good look at the markets with one message to drive home. If you still believe that every sell-off is a buying opportunity you might want to reconsider. The sell-offs have been getting progressively larger. By about 250 points on the Dow. All while the Dow hasn’t really gone anywhere since the middle of September.

Stephen Roach Discusses Interest Rates & FED Stupidity.

Watch the video above as it is definitely worth your time. I couldn’t agree more. What the FED has done over the last 10-15 years is borderline criminal. It is unfortunate, but we now exit in an artificial environment where capital is being miss allocated on a massive scale while the stock market enjoys bubble level speculative valuations. An environment where any FED official can launch a massive stock market rally just by opening their mouth. And if you don’t think this will backfire, just as it did in 2000 and 2008, you are living in a fantasy land.

On the flip side…...Fed pays record $98.7 bn in profits to US Treasury

It’s a nice business model if you can get in on it. Print money out of thin air and buy assets at liquidation level prices. Sign me up. Still, this sort of intervention will never work. The amount of distortion in our economic system today is a clear evidence of that. An upcoming massive bear market in equities will be the eventual outcome.

Finally and for a good laugh 35% of workers say they’ll quit if they don’t get a raise

Yeah, good luck with that. Despite mainstream media’s propaganda of a red hot jobs market, a closer look at today’s jobs report reveals a completely different picture. Mostly due to the economic miss management by FED discussed above.  Let’s take a closer look.

Hourly earnings plunged by 0.2% in December (a significant move) and it is estimated that  about 75% out of 250,000 newly created jobs were in the low paying service related industries. Throw in a 38 year low for labor participation rate and this job report begins to stink.  Particularly if you consider massive liquidity perpetuated by the FED. In other words, it’s not going to get better and good luck with that whole raise, quitting and eventual unemployment.

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. January 9th, 2015  InvestWithAlex.com

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

Crazy Markets. More To Come  Google

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What Are Your Thoughts On The Dow Theory And The Fact That It Is Not Confirming Your Bear Market? – Daily Podcast

Visitor Question: What Are Your Thoughts On The Dow Theory And The Fact That It Is Not Confirming Your Bear Market Forecast? – Listen to our short 5-10 minute podcast to find out. Plus, don’t forget to email me your questions.

DowTheoryTrend

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What Are Your Thoughts On The Dow Theory And The Fact That It Is Not Confirming Your Bear Market? – Daily Podcast Google

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Carl Icahn: Don’t Expect Fast Oil Recovery

Over the last few weeks I have argued that oil price collapse appears to be more structural in nature as opposed to “temporary”.

What’s the difference?

Well, I believe investors and/or traders who are trying to time the oil market bottom in anticipation of making a large fortune will be mostly on the net negative side of the trade. Don’t get me wrong. Oil prices will bounce, at times significantly. Yet, anyone anticipating or betting on a large V shape recovery will be disappointed. Carl Icahn has the same view. If you follow the oil market I highly encourage you to watch the video below. A very solid point of view.

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Carl Icahn: Don’t Expect Fast Oil Recovery Google

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Subprime Short Bets Big Against Junk Bonds…..Should You Follow?

high yieldSince about the start of 2014 I have maintained that when a bear market of 2014-2017 kicks in, a number of things will happen. Junk bonds will blow sky high, 10-Year Note will test 1.5% (double bottom) and the stock market will drift lower. Driving both bulls and bears up the wall in the process.

Joshua Birnbaum, the Ex-Goldman trader who correctly shorted subprime mortgages during the financial crisis tends to agree.

Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.

I believe he is absolute right in his assessment. The situation is not that dissimilar from 2007-2009 period. Except, instead of “subprime” bubble we are currently going though a stock market overvaluation and junk debt bubble. There is just way too much risk in our financial system to warrant today’s valuation levels. Once the tide goes out, you will see junk yields surge. Counterparty risk associated with collapse of Russia (discussed earlier) might get this party going.

Z31

Subprime Short Bets Big Against Junk Bonds…..Should You Follow.  Google