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Stock Market Update, January 23rd, 2014.

Daily Chart January 23 2014

 

Summary: Continue to maintain a LONG/HOLD position.   

1/23/2014 – An ugly day in the market today with the Dow being down -176 points or (-1.07%) and NASDAQ down -24.13 points or (-0.57%). Please note that the divergence between the DOW and Nasdaq as it continues to increase. 

Also, note that the DOW gapped down at the open to the tune of 100 points. That “hole” is still open. If you follow my blog you know what I am going to say next. This opening must be closed before the market can gather up a sustained bear move. The market always closes its gaps. For the time being, this doesn’t change our overall market position. Even thought the DOW most likely topped on December 31st, 2013, technically speaking, the overall market trend is still up. As such, we must wait for a trading confirmation before taking a short position. 

Tomorrow I will have a much longer explanation on why my work shows the market has topped out and what you should do about it. 

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

Stock Market Update, January 23rd, 2014.

Warning: Did The Bear Market Already Start? Find Out Here

bear is coming

 

Today’s 5 Minute Podcast Covers The Following Topic: “Warning: Did The Bear Market Already Start? Find Out Here”

    • Is the bear market already here? Why? 
    • The secret structure behind the market over the next 3 years. 
    • How to make a lot of money over the next few years. 
    • What should I do now?  

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Is The Market Top In?

Daily Chart January 22 2014

Summary: Continue to maintain a LONG/HOLD position.  

1/22/2014 – ALERT.  My additional work suggests that the DOW topped out on December 31st, 2013. I will explain further over the next few days. In the meantime this doesn’t impact our trading position. We must wait for a confirmation. 

Another slow day in the market with the Dow finishing -41 points (-0.25%) while NASDAQ was up 17 points or (+0.41). This further amplifies the divergence between the indices since the start of the year and is exactly what I was talking about in my earlier updates. YTD the Dow is down -1.23% while NASDAQ is up 1.6%. While not a significant divergence it is yet another confirmation that the market is topping. Further, while the cyclical composition of the DOW might have already topped out, the cyclical composition of NASDAQ is yet to reach its point of force. As you know, the most speculative issues tend to top out last. 

The bottom line is, the market is topping here. While this doesn’t impact our existing position, we must be ready to go short at the moments notice. 

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Is The Market Top In? 

Short Sellers Are Getting Ready. Should You?

Reuters Writes: Insight: Shorts set to pounce as stocks seen pricey, Fed pulls back

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NEW YORK (Reuters) – After years of hiding under their desks, short sellers are re-emerging – slowly.

Investors who make a living betting that stock prices will fall are happy to forget 2013: The S&P 500 gained nearly 30 percent while Credit Suisse’s index of hedge funds with a dedicated short bias lost 25 percent.

Jim Chanos, president and founder of Kynikos Associates and one of the most prominent short sellers, said the market is primed for people like him and as a result he has gone out to raise capital.

“Now I think is not a bad time to be raising capital for what we do. When we got a rough going in the mid-90s, that was exactly the time to raise capital,” Chanos said, adding it was better to do this when critics viewed him as “like the village idiot and not an evil genius.”

Read The Rest Of The Article

There was a flood of similar articles over the weekend. If you have read my blog in the past, you know that I would agree.

The investment thesis for most short sellers is right on the money. After all, by most measures the market is significantly overpriced. I know the merits of any valuation work (either for individual stocks or the overall stock market) can be debated, but one thing is not. I am unable to find anything to invest in. At least for me, this is reminiscent of the 2000 and 2007 tops where the selection of undervalued stocks was nonexistent as well.

Now, we all know that the stock market has been driven up by massive credit infusion by the FED, speculation and certain factors behind my “mathematical timing work”. There is no doubt, at least based on my work, that the market is set for a significant drop here. Yet, shorts must be very careful here. Proper timing should be their number one priority.

As such, while the article galore predicting a large drop in the stock market is right on the money, I wouldn’t short “Right Now”. Based on my mathematical work the rally is not yet over and shorts should wait for a few more months or a technical confirmation before taking any meaningful short position. 

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Short Sellers Are Getting Ready. Should You? 

Why You Should Love Bear Markets

InvestWithAlex Wisdom 12

Today’s 5 Minute Podcast Covers The Following Topics: Why you should love bear markets.  

    • What makes bear markets so great.  
    • The secret behind making a large amount of money in the bear market.  
    • How bear markets can surge your investment returns. 
    • What everyone ought to know about bull and bear phases. 

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Attention: Would You Like To Know The Exact Date & Time Of The Bear Market Start? Find Out Now

True Color Image True Color Image

 

Interested in knowing the exact point (in both price and time) of the bear market start in 2014? You are in luck. Below is an excerpt from my upcoming book “Timed Value” telling you exactly when. While it was already published on this blog in November of 2013, I would like to bring your further attention to this portion of the book as it contains a useful forecast. Please note how accurate it has been since its original date of publication. 

————————————————————————— 

As mentioned earlier, the 3-DV of EF today is 12,364. If we analyze the four 3-DVs above, we will soon find out that 3 different numbers closely resemble today’s value of 12,364. They are

  • DE 14,094
  • AE 13,542
  • CE 13,873

All other 3-DVs and their derivatives either fall short or are outside the scope of our analysis. You will notice that the value AE is the closest one to our present value of 12,364. That basically means the market is not yet done moving up.  It also means that once the value AE 13,542 is reached, it is highly probable that it will mark the turning point in the stock market.

Further,  as of today the value EF consists of 2 input variables. Time Value of 7,742 trading hours and Price Value of 9,641 points.  Let’s further assume that based on our research we believe that March of 2014 will be the top of the bull market and/or the move EF.  This gives us an additional 80 trading days or 520 trading hours.  By adding 520 trading hours to 7,742 trading hours we get all necessary information to make an accurate estimate of the bull market top.

In addition,  we can estimate how much the market will move up between now and March of 2014. We simply adjust our 3-DV equation to look like this

SQRT (8,262^2 + X^2 ) = 13,542

When we solve the equation for X, the X = 10,730. This value represents the PRICE portion of the equation at the completion of the move.  With today’s PRICE value being at 9,641 this means the market is likely to go up another 1,089 points (10,730 – 9,641) between today and March of 2014.

DOW PROJECTION: 16,097+1,089 = 17,186 in March of 2014

Think about this for a second and how powerful this simple calculation is. If you got your lattice structure figured out and/or you know the next 3-DV move,  you can predict with 100% certainty exactly when the stock market will top out. Not only when, but exactly where. To the day and to the point. So, while everyone else is playing the guessing game of how long this bull market will continue, you know the answer well ahead of that turning point taking place.  You know that you must hold for another 4 month in order to realize the maximum gain and then simply reverse to short position to benefit from the upcoming bear market decline.  Amazing, isn’t it?

But what if the forecast above is incorrect?

As I have mention so many times before in this book, no analyst or investor should look at any forecast in absolutely certain terms.  Until the lattice structure of the market is fully understood, there is always a possibility of being wrong. Unfortunately, understanding the lattice structure of the market is outside the scope of this book.  It is too complex and dynamic to be explained in this relatively short publication. Volumes of work must be published before clarity could be obtained. Yet, any analyst willing to put in the work, should be able to determine the underlying structure. 

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

Attention: Would You Like To Know The Exact Date & Time Of The Bear Market Start? Find Out Now

How To Make A Fortune In The Upcoming Bear Market

InvestWithAlex Wisdom 9Today’s 5 Minute Podcast Covers The Following Topics and is in direct response to one of my readers questions, “What should I do to prepare for and make money in the upcoming bear market? Assuming your forecast is correct.” – Alex West 

    • What you should do to protect yourself in the upcoming bear market?
    • The best 3 options you have. 
    • How to profit substantially from the upcoming bear market. 
    • What sectors will decline the most and the secret to making a fortune during the bear markets. 

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Why The Bear Market Will Start In 2014

InvestWithAlex Wisdom 8

 

Today’s 5 Minute Podcast Covers The Following Topics. Why The Bear Market Will Start In 2014?

    • Why we are still in the bear market that started in 2000.
    • The secret behind the final leg down. 
    • Does fundamental and technical analysis confirm the bear market? 
    • When will the bear market end and how low will it go?  

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Warning: Mutual Fund Inflows Are At Pre 2000 Collapse Levels. Same Outcome?

TrimTabs reports Fund Flow Records Smashed Across the Board in 2013.

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 TrimTabs Investment Research reported today that U.S.-listed equity mutual funds and exchange-traded funds took in a record $352 billion in 2013, smashing the previous record inflow of $324 billion in 2000.  Meanwhile, U.S.-listed bond mutual funds and exchange-traded funds redeemed a record $86 billion, topping the previous record outflow of $62 billion in 1994.

“The Fed finally succeeded last year in its long-running campaign to coax fund investors to speculate,” said David Santschi, Chief Executive Officer of TrimTabs.  “The ‘great rotation’ that some market strategists long anticipated is under way.”

In a note to clients, TrimTabs explained that U.S. equity mutual funds and exchange-traded funds received $156 billion in 2013, the first inflow since 2007 and the biggest inflow since the record inflow of $274 billion in 2000.  Global equity mutual funds and exchange-traded funds received $195 billion, edging past the previous record inflow of $183 billion in 2006.

There you have it. If you have been wondering what is causing this massive rally in the stock market, wonder no more. The stocks are “Melting Up” because everyone is “Panicking Into Stocks” and exactly at the wrong time.

Please note that the funds inflow smashed the 2000 record by about $28 Billion. While not significantly higher, it confirms what we have been talking about here. Primarily, the psychological factors behind  the run up.  People/funds are taking money out of Bond Funds and rolling them into Stock Funds at record numbers.

What’s wrong with that?

Technically nothing.  People are free to do as they wish. Yet, from a historical perspective, this tends to happen late in the bull market. During the so called Blow Off Phase or the last phase of the run up.  As I have mentioned many times before, today’s market feels exactly that way. Massive speculation, psychology of the crowd pushing everyone to be in the stock market, overpriced assets, weak underlying economic base and fundamentals that are driven by nothing more than a crazy expansion of credit by the FED. That’s just a few of the reasons.

The bottom line is this. The bear market is about to start. My mathematical work clearly confirms that.  Be very careful going forward and think about getting out of stocks completely once the market confirms the reversal.  

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

Warning: Mutual Fund Inflows Are At Pre 2000 Collapse Levels. Same Outcome?