InvestWithAlex.com 

China Running On Fumes. What Happens When World Economies Synchronize.

China wants 7% growth, no matter the cost. While China was able to pull it off in the past though massive infrastructure spending, real estate bubble, massive stimulus, jaw dropping growth in bank assets and shadow banking, I am afraid the party is coming to an end. As per Bloomberg report below…..

Gross domestic product grew a seasonally adjusted 1.5 percent from the previous three months, according to the median estimate in a Bloomberg News survey ahead of data released tomorrow, down from 1.8 percent in the fourth quarter. That indicates a sharper deceleration than a median projection for 7.3 percent growth from a year earlier, from 7.7 percent. 

I can only imagine what will happen to their GDP growth when any of the above mentioned bubbles blow up, let alone all of them. Yet, there is a bigger story behind the scenes. It appears, from my vantage point, that most important world economies have synchronized. The US, China, Japan and the EU now move in tandem. This becomes even more apparent when you take our mathematical and timing work into consideration.

As suggested earlier, our mathematical/timing work shows a very clear bear market and a severe US Recession between 2013-2017. When we look at the most important world economies, we find them in a very similar cyclical composition OR right on a verge of a massive slowdown. While globalization played an important role in such synchronization, I continue to believe that FED stimulus and subsequent worldwide speculative bubbles (in all asset classes) are much bigger culprits. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here.  

China Bank Assets Change

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


Click here to subscribe to my mailing list

 

China Running On Fumes. What Happens When World Economies Synchronize.  Google

Bloomberg Writes: China GDP Gauge Seen Showing Deeper Slowdown

China’s loss of economic momentum in the first quarter was deeper than the most widely-cited data will show, according to analyst forecasts for a gauge that’s gaining increasing recognition.

Gross domestic product grew a seasonally adjusted 1.5 percent from the previous three months, according to the median estimate in a Bloomberg News survey ahead of data released tomorrow, down from 1.8 percent in the fourth quarter. That indicates a sharper deceleration than a median projection for 7.3 percent growth from a year earlier, from 7.7 percent.

Investors are focused on the scale of a slowdown that prompted Premier Li Keqiang to provide what some analysts dubbed a “mini-stimulus” of spending and tax relief. While the indicator suffers from flaws including the government’s failure to give details of methodology, it provides an extra tool to analyze an economy that bond-fund manager Bill Gross calls the “mystery meat” of emerging markets.

“The quarter-on-quarter data will show growth momentum has actually bottomed out in the first quarter,” said Chen Xingdong, Beijing-based chief China economist at BNP Paribas SA, who previously worked at the World Bank. The measure “has clearly captured the changes in growth momentum,” Chen said.

Data today from the People’s Bank of China showed the nation’s broadest measure of new credit fell 19 percent from a year earlier and money supply grew at the slowest pace on record, underscoring risks of a deeper slowdown as the government tries to curb financial dangers. The Shanghai Composite Index of stocks fell 1.4 percent.

Growth Concerns

While yuan forwards declined yesterday to the lowest level in eight months on concern growth is faltering, economists are picking a rebound this quarter, forecasting quarter-on-quarter expansion of 1.8 percent, according to a separate Bloomberg monthly survey in March. The State Council on April 2 outlined spending on railways and housing, along with tax relief, with annual expansion at risk of missing the 7.5 percent goal.

Bloomberg’s survey of estimates for the first quarter-on-quarter GDP data in 2011 garnered only one forecast, from Goldman Sachs Group Inc. In contrast, the latest poll had 17.

“More and more private-sector economists are giving estimates and paying attention to it,” said Andrew Polk, an economist in Beijing with The Conference Board, a New York-based research group.

At the same time, the indicator has limitations, Polk said. While most countries revise GDP numbers as more information becomes available, the National Bureau of Statistics does so without disclosing why or how, he said.

Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said “frequent major revisions” and seasonal-adjustment difficulties curtail the data’s reliability.

Extra Tool

Still, amid a range of concerns about Chinese numbers — from inflated trade figures in 2013 to provincial GDP totals that add up to more than the national tally — the extra gauge is another tool for “measuring the dynamism in the economy,” said BNP’s Chen.

International companies are still betting on China for growth. Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, is expanding into the nation’s smaller cities and Daimler AG said this month that the maker of Mercedes-Benz cars will add 100 dealerships for a network of 400 outlets in the nation by the end of this year.

Financial Strains

The outlook may partly depend on how officials cope with financial strains after the onshore yuan bond market had its first default, by Shanghai Chaori Solar Energy Science & Technology Co.

China has yet to give annualized figures for sequential quarterly growth, which would result in figures that are more volatile than year-on-year numbers. Data compiled by Bloomberg based on the government’s figures showed annualized growth last year of 6.1 percent in the first quarter, followed by 7.4 percent, 9.1 percent and 7.4 percent.

“It looks much less attractive for the government than year-on-year, which is stable and almost always above 7.5 percent,” said Tom Orlik, a Beijing-based economist with Bloomberg LP and author of the 2011 book “Understanding China’s Economic Indicators.”

Kiev Orders “Anti-Terrorism” Operation In East Ukraine. How Long Before Russia Goes In?

The situation continues to develop exactly as we have predicted here. While the US is in full control of Kiev and Ukraine’s interim government (recent CIA Director John Brennan visit is a clear indication of that), Russia is gaining a strong hold in East Ukraine through special forces operations and infiltration.

Here is what’s going to happen over the next few days/months. As soon as Ukrainian forces arrive in East Ukraine (it’s kind of unclear where they are right now), expect a number of firefights between Ukrainian forces and Russian special forces already operating in Ukraine. Putin will make the case that Ukrainian forces are killing ethnic Russians and you will see a massive Russian army flood over the Ukrainian border, decimating any resistance in its way. 

You will see people in East Ukraine celebrating the move and I see Russia pushing all the way to Dnepr River before stopping. There is nothing in the West Ukraine that Russia wants as 90% of Ukraine’s industrial base is located in the East. As you can imagine, this will cause an international storm of epic proportions. Sanctions and counter sanctions, economic war ware, war rhetoric, cold war, etc….it’s going to get very ugly. One thing is for sure, don’t expect the stock market to react in a positive fashion. 

Time frame for all of the above to happen? 2-10 days. 

ukraine map

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


Click here to subscribe to my mailing list

 

Kiev Orders “Anti-Terrorism” Operation In East Ukraine. How Long Before Russia Goes In?  Google

RT Writes: Kiev launches military operation in eastern Ukraine

Ukraine’s coup-appointed acting President Aleksandr Turchinov has announced a crackdown on anti-government protesters in the north of the Donetsk Region, eastern Ukraine.

Read RT’s LIVE UPDATES for the latest developments in Ukraine

“The anti-terrorist operation started overnight Monday,” said Turchinov. “The aim of these actions is to protect the citizens of Ukraine.”

 

Anti-government armed men stand guard as pro-Russian supporters gather outside the mayor's office in Slaviansk April 14, 2014. (Reuters / Gleb Garanich)

Anti-government armed men stand guard as pro-Russian supporters gather outside the mayor’s office in Slaviansk April 14, 2014. (Reuters / Gleb Garanich)

 

According to Turchinov, this ‘anti-terrorist operation’ also aims to prevent “attempts to break Ukraine apart.”

The anti-government protesters in south-eastern Ukraine have recently been protesting against coup-appointed Kiev authorities. They demand constitutional reform that would take into consideration the interests of all Ukrainian regions. They also propose the federalization of the country and to make Russian the second official language in the regions.

Earlier, a clip posted to YouTube showed local people in the town of Rodinskoye, Donetsk Region, who stopped a tank allegedly on its way from Kiev to take part in the crackdown against south-eastern Ukrainian cities 

Andrey Parubiy, head of Ukraine’s National Security and Defense Council, announced the first battalion of a National Guard “comprised of volunteers from Maidan self-defense troops”, has left Kiev for the south-east.

 

Yandex Maps

Yandex Maps

 

According to Parubiy, the “battalion is comprised of volunteers from the Maidan self-defense troops”.

On Monday, Turchinov signed a decree to officially begin a “special anti-terrorist operation” in the east of the country.

He ordered “that the National Security and Defense Council’s decision of April 13, 2014, ‘On urgent measures to overcome the territorial threat and to preserve the territorial integrity of Ukraine’ be put into effect.”

 

Supporters of a referendum on transforming Ukraine into a federation at the entrance to the building of the Slavyansk City Administration in the Donetsk Region. (RIA Novosti)

Supporters of a referendum on transforming Ukraine into a federation at the entrance to the building of the Slavyansk City Administration in the Donetsk Region. (RIA Novosti)

 

Russia has warned that if Kiev uses force against anti-Maidan protests in eastern Ukraine, this would undermine the effort to convene a four-party conference on resolving the crisis in the country, which would include the US, the EU, Russia and Ukraine.

Turchinov also proposed conducting a joint operation with UN peacekeeping forces, a decision that was strongly condemned by Russian FM Sergey Lavrov at a Beijing press conference on Tuesday as “totally unacceptable.”

The Kiev authorities have already tried to launch a so-called “anti-terrorist operation” in the eastern city of Slavyansk, Donetsk Region, after anti-government protesters seized several buildings in the city.

 

image from Andrey Parubiy Facebook page

image from Andrey Parubiy Facebook page

 

Gunfire broke out on Sunday, after troops in black uniforms supported by armored vehicles and several helicopters approached the roadblock set up by the locals. One person was killed and two others injured during the crackdown.

There were rumors that among the troops were the members of the radical ultranationalist Right Sector movement, who were mobilized to take decisive steps to “defend Ukraine’s sovereignty.”

Stock Market Update, April 14th, 2014. InvestWithAlex.com

daily chart Feb 14, 2014

An up day with the Dow Jones up 146 points (+0.91%) and the Nasdaq up 23 points (+0.57%). 

Out of all the major indices, only the DOW didn’t close it’s morning gap, suggesting further downside at some point in the future. Otherwise, the markets continue to perform as anticipated. This is what we have told our subscribers over the weekend….

Case For A Strong Bounce: On Friday, the Dow bottomed dead on one of our mathematical points of force. It’s not a particularly strong point of force, but it would work for a short-term bounce. Further, on Friday the Dow bottomed at a fairly strong resistance point located at around 16,000-16,050. Further, on Friday the Nasdaq bottomed at its February 5th intermediary low, without being able to break it. Finally, most indices are oversold and are due for some sort of a bounce. XXXX….etc…. 

While most markets will continue to bounce around today’s levels over the next few days, their long term future is unmistakable. Based on our mathematical and timing work, the bear market of 2014-2017 is just around the corner. If you would be interested in learning exactly when the bear market will start (to the day) and it’s internal composition, please Click Here.

(***Please Note: 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).

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


Click here to subscribe to my mailing list

 

Stock Market Update, March 14th, 2014. InvestWithAlex.com Google

Is It Possible That Ukraine’s Conflict Escalates To An All Out War Between Russia and The US?

While most people (even investors/traders) could care less about Ukraine, such a stance should bring a swift kick to the ass. American warmongers (just as their Russian counterparts) are itching for a fight. I continue to believe that Russia is going into Ukraine within the next 10 days. Based on today’s developments and my analysis of the situation, that is a foregone conclusion.

The more important question here is…..can the US and Russia somehow get into an all out military conflict over Ukraine? Which would, understandably, be devastating to both countries. While unlikely, it is certainly possible. For instance, Russia goes into Ukraine and the US sends in military assets or worse get involved directly with it’s destroyer Donald Cook(currently in the Black Sea) . Russia immediately sinks the destroyer  and we are off to the races(so to speak). It wouldn’t take much. Just a few bad decisions by either side. Here is the latest and what you need to know ……

 russian war plane

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


Click here to subscribe to my mailing list

 

Is It Possible That Ukraine’s Conflict Escalates To An All Out War Between Russia and The US?  Google

What Goldman Sachs Told Their Clients Will Shock You. Why Goldman Sachs Clients Are About To Lose A Lot Of Money

Goldman Sachs believes that the recent decline in the stock market (in tech and IBB in particular) is not indicative or the repeat of the 2000 top. Let’s take a look.

The short answer, according to Mr. Kostin:  Current valuations and the market’s historical performance indicate it’s unlikely that the S&P 500 and the Nasdaq Composite are poised for similar 50% and 75% declines they suffered in the early 2000s. The bull market since March 2009 is likely to remain intact.  “We believe the differences between 2000 and today are more important than the similarities and the recent momentum drawdown is unlikely to precipitate a more extensive fall in share prices,” he said in a note to clients.

While I agree that we will not suffer a 50-75% on the DOW, momentum tech stocks are another matter.  Further, why would the bull market of 2009-2014 remain intact? There is no rationale behind such thinking.  I have already outlined the 5-Year and the 17-Year cycles (among many others) that basically kill any hope for continuation of this bull market. 

Even the stocks hit hardest this year aren’t nearly as overvalued as they were in 2000. The S&P 500 biotech index, for example, traded last week at about 29 times component companies’ earnings, which is above its median of 26 but far below the level of 57 at which it traded in 2000. The Morgan Stanley Technology Index trades at 22 times earnings, near its median of 23 and far from the 65 level of March 2000.

Yes, of course, the valuation argument. As I suggested before, today’s valuations are incredibly expensive. Much more expensive than they were at 2000 top, even though various valuation metrics do not reflect it. Why? Most of the earning over the last 5-Years were the direct result of a massive credit infusion by the FED. If you take such earnings out, the valuations you will see in today’s market will be astronomical. To the tune of P/E ratio of 50 – 80, making today’s market no only highly speculative, but “Are you f&#$ing kidding me” expensive. 

Once the bear market of 2014-2017 starts, you will see P/E ratios surge as earnings disappear. In the same fashion they did in 2007-2009, going from 18 to 128 at the height of the recession. In fact, our mathematical and timing work clearly shows that we will go through such a severe bear market between 2014-2017. If you would be interested in learning when this bear market will start (to the day) and its subsequent internal composition, please Click Here. 

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


Click here to subscribe to my mailing list

 

What Goldman Sachs Told Their Clients Will Shock You. Why Goldman Sachs Clients Are About To Lose A Lot Of Money  Google

goldman sachs investwithalex2

Goldman Sachs: Why This Isn’t 2000 All Over Again

Check the calendar. Turns out this isn’t the year 2000. And it isn’t Groundhog Day either.

Goldman SachsGS +1.24% is telling clients that the stock market is unlikely to pull off a repeat of its antics in March 2000, when the tech bubble peaked and a market crash ensued.

The selloff in the so-called momentum names, such as biotech and social-media stocks, “dominated client discussions” last week, with many investors concerned that the selloff among these high fliers could lead to more widespread weakness, said Goldman Sachs’s stocks strategist David Kostin.

Two questions that Mr. Kostin says garnered the most attention from clients: “When will the reversal end?” and “Will the sell-off in momentum stocks drive a market-wide price decline as occurred in 2000?”

The short answer, according to Mr. Kostin:  Current valuations and the market’s historical performance indicate it’s unlikely that the S&P 500 and the Nasdaq Composite are poised for similar 50% and 75% declines they suffered in the early 2000s. The bull market since March 2009 is likely to remain intact.

“We believe the differences between 2000 and today are more important than the similarities and the recent momentum drawdown is unlikely to precipitate a more extensive fall in share prices,” he said in a note to clients.

The S&P 500 is 4% off its record high hit earlier this month. The Dow Jones Industrial Average has dropped 3.3% for the year. The tech-heavy Nasdaq Composite, which has suffered the brunt of the selling in recent weeks, is down 8.2% from its 14-year high hit early last month.

Goldman isn’t the only one suggesting comparisons to the previous tech bubble aren’t warranted. As others have noted, stocks in general still aren’t nearly as expensive as they were in 2000. That is one reason selling has focused mainly on the volatile Nasdaq while the Dow Jones Industrial Average, made up of more-established blue-chip stocks, has been less-affected.

Back in 2000, broad stock indexes had been rising at 20% annual rates for five years. The S&P 500 was trading at 29 times its component companies’ earnings for the prior 12 months, according to Birinyi Associates. Inflation was running at 3.8% and the Federal Reserve was raising interest rates in an effort to cool off the economy.

Market watchers have noted in recent days that much has changed this time around. Inflation is running at just over 1%. The S&P 500 trades at 17 times earnings, slightly above average but far from 2000 levels. While the S&P gained 30% in 2013, it was up 13% in 2010 and 2012 and little-changed in 2011. Economic growth has been running below 3% and the Fed has been stressing how reluctant it is to raise its target interest rates any time soon.

Even the stocks hit hardest this year aren’t nearly as overvalued as they were in 2000. The S&P 500 biotech index, for example, traded last week at about 29 times component companies’ earnings, which is above its median of 26 but far below the level of 57 at which it traded in 2000. The Morgan Stanley Technology Index trades at 22 times earnings, near its median of 23 and far from the 65 level of March 2000.

Goldman calculates a basket of momentum stocks has dropped 7% from its recent highs. Since 1980, there have been 46 other instances in which momentum stocks suffered similar declines over comparable time frames. Following those selloffs, the S&P 500 averaged about a 5% gain over the following six months, while those momentum names dropped another 4%, on average.

“The S&P 500, but not momentum, will likely recover during the next few months,” Goldman’s Mr. Kostin says.

Ukraine Is About To Explode As Cold War Continues To Escalate

The situation in Ukraine continues to escalate and is now days, if not hours, away from turning into an all out armed conflict. After watching and analyzing Russian TV over the weekend, I am certain of it. Remember, this conflict has nothing to do with freedom/democracy for the Ukrainians and everything to do with the US/Russia/NATO/EU balance and positioning in the region. The bottom line is, Russia doesn’t want NATO in Ukraine and it will go to extraordinary length, including an all out war, to make sure it doesn’t happen.  

The amount of Anti-American propaganda on Russian TV at this juncture is truly incredible. While their American counterparts are for the most part clueless about what is truly going on in Ukraine, Russian media is releasing classified files showing that the disintegration of Ukraine was caused by the US/CIA involvement. Ukraine’s interim government is viewed as illegitimate and/or as an extension of the West.  Overall, I got a feeling that Russia is going in one way or another to wrestle away control and to regain stronghold over Ukraine.

All we need now is a trigger point. With multiple deadlines, shootings and counter terrorist actions already in progress, I believe we are days (if not hours) away from any such a trigger. I fully expect Russia to go in within this week, triggering a massive international conflict. I doubt that financial market will react to such a development in a positive fashion.  

Pro-Russian armed men stand guard while pro-Russian protesters gather near the police headquarters in Slaviansk

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


Click here to subscribe to my mailing list

 

Ukraine Is About To Explode As The Cold War Continues To Escalate  Google

 

Reuters Writes: Ukraine gives rebels deadline to disarm or face military operation

(Reuters) – Ukraine has given pro-Russian separatists a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces, raising the risk of a military confrontation with Moscow.

Angered by the death of a state security officer and the wounding of two comrades near the flashpoint eastern city of Slaviansk, acting president Oleksander Turchinov gave rebels occupying state buildings until 0600 GMT to lay down their weapons.

“The National Security and Defence Council has decided to launch a full-scale anti-terrorist operation involving the armed forces of Ukraine,” Turchinov said in an address to the nation.

He blamed Russia, which annexed Ukraine’s Crimea region when Moscow-backed former president Viktor Yanukovich fled after months of pro-Western protests, for being behind the rash of rebellions across Russian-speaking towns in eastern Ukraine.

“We will not allow Russia to repeat the Crimean scenario in the eastern regions of Ukraine,” Turchinov said.

Russia’s foreign ministry called the planned military operation a “criminal order” and said the West should bring its allies in Ukraine’s government under control.

“It is now the West’s responsibility to prevent civil war in Ukraine,” the ministry said in a statement.

A United Nations Security Council diplomat told Reuters on condition of anonymity that the council would meet at 8 p.m. (0100 GMT) in New York at Russia’s request. Another diplomat said negotiations were under way on Ukraine’s participation.

Earlier, the American ambassador to the U.N., Samantha Power, said on ABC’s “This Week” that the latest events in Ukraine bore “the telltale signs of Moscow’s involvement”.

“The president has made clear that, depending on Russian behavior, sectoral sanctions in energy, banking, mining could be on the table, and there’s a lot in between,” she added.

With East-West relations in crisis, NATO described the appearance in eastern Ukraine of men with specialized Russian weapons and identical uniforms without insignia – as previously worn by Moscow’s troops when they seized Crimea – as a “grave development”.

Ukraine has repeatedly said the rebellions are inspired and directed by the Kremlin. But action to dislodge the armed militants risks tipping the stand-off into a new, dangerous phase as Moscow has warned it will protect the region’s Russian-speakers if they come under attack.

One Ukrainian state security officer was killed and five were wounded on the government side in Sunday’s operation in Slaviansk, interior minister Arsen Avakov said. “There were dead and wounded on both sides,” he wrote on his Facebook page.

The Russian news agency RIA reported that one pro-Moscow activist was killed in Slaviansk in clashes with forces loyal to the Kiev government. “On our side, another two were injured,” RIA quoted pro-Russian militant Nikolai Solntsev as adding.

Russian TV broadcast grainy footage of what it said was the body of the militant. The images, which Reuters could not verify independently, showed a man in black clothes, slumped against the door of a car, with a pool of blood between his legs. A rifle lay next to him.

“UNDERMINING ELECTIONS”

The separatists are holed up in the local headquarters of the police and of the state security service, while others have erected road blocks around Slaviansk, which lies about 150 km (90 miles) from the Russian border.

However, details of the fighting remain sketchy. A statement from the administration of the eastern Donetsk region indicated the security officer may have been killed between Slaviansk and the nearby town of Artemivsk. It said nine were wounded.

An eyewitness in Slaviansk said a gunman walked up to a car in the city centre and fired four or five shots into it. Video footage from the scene later showed a man being pulled out of the car, either seriously wounded or dead. It was not clear what links the shooting had with the unrest in the town.

Kiev accuses the Kremlin of trying to undermine the legitimacy of presidential elections on May 25 that aim to set Ukraine back onto a normal path after months of turmoil.

However, Russian Foreign Minister Sergei Lavrov said Kiev was “demonstrating its inability to take responsibility for the fate of the country” and warned that any use of force against Russian speakers “would undermine the potential for cooperation”, including talks due to be held on Thursday between Russia, Ukraine, the United States and the European Union.

WELL ORGANISED ATTACKERS

Relations between Russia and the West are at their worst since the Cold War due to the crisis that began when Moscow-backed Yanukovich was pushed out by popular protests in February.

Moscow then annexed Crimea from Ukraine, saying the Russian population there was under threat. Some Western governments believe the Kremlin is preparing a similar scenario for eastern Ukraine, something Moscow has strenuously denied.

In Kramatorsk, about 15 km south of Slaviansk, gunmen seized the police headquarters after a shootout with police, a Reuters witness said.

The attackers were a well-organized unit of over 20 men, wearing matching military fatigues and carrying automatic weapons, who had arrived by bus. Video footage showed the men taking orders from a commander. Their identity was unclear.

Their level of discipline and equipment was in contrast to the groups who have occupied buildings so far in Ukraine. They have been mostly civilians formed into informal militias with mismatched uniforms.

NATO Secretary-General Anders Fogh Rasmussen expressed concern about similarities in some of the rebels’ appearance to that of the Russian troops who seized control in Crimea.

Calling on Russia to pull back its large number of troops, including special forces, from the area around Ukraine’s border, he said in a statement: “Any further Russian military interference, under any pretext, will only deepen Russia’s international isolation.”

NATO has effectively ruled out military action over Ukraine, which lies outside the Western alliance. However, Washington and NATO leaders have made clear they would defend all 28 member states, including former Soviet republics in the Baltic that are seen as the most vulnerable to Russian pressure.

NATO allies have beefed up their air and sea firepower in eastern Europe. The alliance has also cut off cooperation with Russia and stepped up work with Ukraine, including advising its military on reforms and promising to increase joint exercises.

With EU foreign ministers due to discuss the crisis in Luxembourg on Monday, Britain called on Moscow to disown the rebels. “Assumptions that Russia is complicit are inevitable as long as Moscow does not publicly distance itself from these latest lawless actions,” a Foreign Office spokesman said.

GAS WAR RISK

The crisis over Ukraine could trigger a “gas war”, disrupting supplies of Russian natural gas to customers across Europe. Moscow has said it may be forced to sever deliveries to Ukraine – the transit route for much of Europe’s gas – unless Kiev settles its debts.

For now, though, the focus of the crisis was in eastern Ukraine, the country’s industrial heartland, where many people feel a close affinity with neighboring Russia.

In the eastern city of Kharkiv, supporters of the revolution that brought the Kiev leadership to power clashed with opponents who favor closer ties with Russia. Police said 50 people were hurt, 10 of whom received hospital treatment.

In another eastern town, Zaporizhzhya, Interfax news agency said 3,000 pro-European supporters turned out in a unity rally and faced off with several hundred pro-Moscow supporters, many of them waving the Russian flag.

“We are ready to defend ourselves,” said separatist Vyacheslav Ponomaryov, who said he had taken over leadership of Slaviansk after the city’s mayor fled.

Weekly Update & Stock Market Forecast. April 12th, 2014 InvestWithAlex.com

daily chart April 11 2014

Weekly Update & Summary: April 12th, 2014

An ugly week with the Dow Jones down 386 points (-2.35%) and the Nasdaq down 128 points (-3.1%). Structurally, the market did very well by closing most of its gaps. In fact, just today the Dow finally closed the before mentioned large gap located at around 16,050. There are a number of smaller gaps left leading all the way down to February 5th low, but the Dow will close them as the bear leg develops further at below mentioned time frame. Overall, it has been a fairly clean week.

WEEKLY REVIEW:

Mortgage Origination Collapses….Real Estate To Follow

According to Black Knight, monthly origination volume was the lowest on record and down 23% month-over-month. This is wonderful in depth look into the state of today’s real estate market. Anyone who believes the real estate market will stay at these levels or move higher is smoking some good quality crack. Click Here to see this outstanding report. Here are just a few points.  

  • Origination volume is the lowest on record with prepay speeds signaling more drops in refi originations. 
  • Monthly sales were essentially flat year over year, but traditional sales were up almost 15% 
  • The government share of originations has decreased, led by a sharp drop in HARP originations 
  • Credit standards have shown few signs of loosening,  with very little origination activity in the lowest credit score bucket.  

mortgage origination

Russia Outlines It’s Economic Warfare Plans Against The USA

In no uncertain terms, Gazprom CEO Aleksander Dyukov outlined Russia’s Economic Warfare plans against the USA in case of further sanctions or any further meddling associate with Ukraine.  To summarize….

  • Fundamental Shift & Move From EU/West To Asia/India: As discussed here earlier, Russia is currently making a major push to shift it’s gas and oil markets from the West to the East by signing a number of large longer-term contracts with both China and India.  
  • Move Away From The “PetroDollar” As A Reserve Currency: To demand payments for gas and oil in Euro, Yuan, Rubble, Gold or whatever else…..as long as it is not the US Dollar. As the theory goes,  since the US is heavily reliant on it’s Reserve Currency status for it’s ability to maintain a heavy debt load, any move away from the US Dollar would collapse the US Economy.  

I don’t buy this for the time being. Any such move by Russia will have a very limited impact, if any, on the US Economy or it’s financial markets as a whole. The US Financial System is way too large, too well diversified and there are way too many international players involved in the system to destabilize it that fast. Plus, our mathematical work in the Treasury market doesn’t confirm this either. I would give this a second thought if China decides to join Russia, but such a move would be highly unlikely at this juncture.    

In short, Putin might try, but he will fail. His own economy is on the verge of a collapse and he should pay a little bit more attention to that. In fact, if the US wants to finish off Russia it should collapse the price of oil to $20-30 for about 2-3 years and you will see another 1991 type of a regime change in Russia in short order. 

FOMC Minutes Confirm Our Forecast

 yield curve investwithalex

In just released FOMC Minutes, FED Officials confirmed their dovish approach to any future interest rate increases.  According to them, “even after employment and inflation are nearly back to normal levels, short-term rates may need to stay unusually low for a while because the economy isn’t fully healthy”. 

While the market is celebrating the news for the time being, this falls in line with our overall forecast. Investors/traders must realize that the economy is running on fumes even though the interest rates are at historic lows. Further, when the economy finally rolls over into an “official” recession there is very little the FED will be able to do in order to induce further stimulus. A double whammy. 

The outcome? An upcoming bear market of 2014-2017, a severe recession, a flattening yield curve and surging gold prices. In fact, based our mathematical and timing work the bear market is just around the corner. As such, now would be a great time to protect yourself. 

MACROECONOMIC ANALYSIS:  

Ukraine/Russia/USA/EU/NATO  continue to  be the most important issue. In fact, I continue to believe things will escalate significantly over the next few weeks.  

While Ukraine interim government backed away from their 24 hour deadline on Friday, the situation remains very tense. I continue to believe the US/NATO, Ukraine’s Interim Government, Pro-Russian Movement In the East Ukraine and Russia are one spark away from reigniting this conflict and going at each other on multiple levels.  While I don’t believe NATO and Russia will get involved in a direct military conflict (for the time being), any misstep here by either side might lead to Russia invading East Ukraine. In fact, I continue to believe it is just a matter of time. Such a move by Russia will spark a number of economic sanctions (from both sides), political storm, war rhetoric and a million other unforeseen consequences.  As you can imagine, this would be incredibly unsettling for financial markets.

TECHNICAL ANALYSIS THE FOR DOW JONES:  

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. Same applies to the market action over the last two weeks. Yet, that in itself can be misleading as per our timing analysis discussion below.

Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.

Short-Term: Short-term positive trend is about to reverse. If the Dow breaks below 16,000 in the upcoming week, short-term trend will shift from positive to negative. So, while the short-term trend remains bullish for the time being, it might be misleading as per our timing analysis discussion below.  

Again, even though all 3 trends are bullish for the time being, that might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.    

MATHEMATICAL & TIMING ANALYSIS:  

First, a recap. Particularly for our new subscribers. Over the last few months we have maintained that the DOW will set a XXXX

(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).

Long-Term Overview:

XXXX

The next turning point is located at.

Date: XXXX
Price: XXXX

XXXX

Trading:

XXXX A lot of them have done incredibly well thus far and I hope you were able to benefit as well. I added my final position during the week as I have mentioned in the daily updates. XXXX

Remember, you should have an exact strategy and entry/exit points based on the forecast above. 

The list below is for your reference point. It entails my investment strategy for my own investment purposes. While you are free to follow me, please do so at your own risk. Do not take this as a trading advice. Please note, all of the positions below have been triggered.    

Stock

Entry Point ($)

Action Taken

Stop Loss @

XXXX

XXXX

Went XXXX

XXXX

XXXX

XXXX

Went XXXX

1250

XXXX

110

Went XXXX

121-123

XXXX

74

Went XXXX

80

XXXX

XXXX

Went XXXX

260

XXXX

XXXX

Went XXXX

460

XXXX

35

Went XXXX

39

XXXX

65

Went XXXX

70

XXXX

120

Went XXXX

120-130

XXXX

100

Went XXXX

108-112

XXXX

112

Went XXXX

120

Otherwise, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action. (This is continuation of our previous positioning).

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX   

If Short:  XXXX

CONCLUSION: 

An incredibly interesting week is coming up. We are now looking for our forecasts above to be confirmed over the next few trading days/weeks. I have also described what to anticipate over the next few months and exactly what you should do now. With increased volatility, multiple interference patterns and an incredibly important long-term turning points coming up over the next few months we must be very careful and risk averse here.  Those anticipating the moves and those who can time them properly will be rewarded appropriately.

Please Note: XXXX is available to our premium subscribers in our + Subscriber SectionIt’s FREE to start. 

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


Click here to subscribe to my mailing list

 

Weekly Update & Stock Market Forecast. April 12th, 2014 InvestWithAlex.com  Google

Stock Market Update. April 11th, 2014. InvestWithAlex.com

daily chart April 11 2014

Another down day with the Dow Jones down 143 points (-0.89%) and the Nasdaq down 54 points (-1.34%) 

The amount of stupidity associate with the recent market decline continues to increase unabated. From Carl Icahn’s barber being excited about this stock market to most market pundits predicting an Earth shattering decline of 5-7% before an eventual bounce. While all of that is going on the iShares Nasdaq Biotechnology (IBB) is already down over 20% while the Nasdaq is down 8.2%. Yet, all of the above is irrelevant.  One must understand where we are in the cyclical and mathematical composition of the stock market. While I have tried my best to drill that information into investor consciousness, most of it falls on deaf ears. That is to be expected, I got the same reception in 2007.

To quickly summarize,  we are still in the secular bear market that started on January 14th, 2000. Based on our mathematical and timing work this bear market will complete itself in 2017. When it does, you will see most of the gains from 2009 bottom vanish into thin air. With the 5 year cycle (1994 -2000, 2002-2007 and 2009-2014) now complete you will see a bear market initiate within a relatively short period of time. If you would be interested in learning exactly when the bear market of 2014-2017 will start(to the day) and it’s subsequent internal composition, please Click Here   

(***Please Note: 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). 

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


Click here to subscribe to my mailing list

 

Stock Market Update. April 11th, 2014. InvestWithAlex.com  Google