5/26/2015- A big down day with the Dow Jones down 190 point (-1.04%) and the Nasdaq down 57 points (-1.11%)
A massive and rather rapid stock market decline is coming later 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.
The bond market continues to defy expectations. So, who is right, bulls or bears?
Let’s take a closer look.
Some very smart bond investors are betting that yields will continue to decline. Why? Because the farce that is the US Economy today is about to blow sky high. The US Economy is rolling over into an “official” recession and it is just a matter of time before the FED cuts (if they have anything to cut) and/or introduces another round of QE. Plus, a bear market in yields in not yet over. You will probably find me in this camp. On the flip side….
As the theory goes, the bond market is about to go on a rampage as yields surge and stocks collapse. Legendary bond investor Bill Gross is not shy when it comes to supporting this view. Put me down for this one as well.
So, who is right?
I believe both scenarios are correct. As a result, it becomes a matter of timing and sequencing. Here is what I believe will happen over the next 2-3 years. Based on my mathematical and timing work.
- The FED will raise interest rates just a few times this year before realizing that we are already in another recession.
- As soon as that happens they will cut back to zero and introduce QE-4.
- Yields will drop and the 10-Year Note will set a bear market bottom in yields.
- Thereafter, inflationary pressures will begin to appear in conjunctions with bond vigilantes and yields will surge higher. The bottom will be in (Bill Gross’s forecast).
- At this time the FED will be trapped and unable to do anything. Massive pain all around.
By the way, the stock market will decline either way.
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. May 26th, 2015 InvestWithAlex.com
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