Tag: daily update

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The S&P Would Have To Drop 80% To…..

Daily Chart June 1 InvestWithAlex

6/1/2015 – A positive day with the Dow Jones up 29 points (+0.16%) and the Nasdaq up 13 points (+0.25%).

The S&P would have to drop 80% to recreate an environment when interest rates were this low last time.

Most bulls (most investors today) will argue that today’s high valuations are very well justified. Due to low interest rates. In fact, because interest rates are so close to zero, most stocks deserve infinite valuations. This premise is also know as, “this time is different”.

This chart brings that assumption into question.

shiller pe with rates investwithalex

Simply put, just because interest rates are low, doesn’t mean P/E multiple cannot go down. For instance, in 1941 interest rates were at around 2% (exactly where they are today) while the P/E ratio rested at 8.

If such an environment was to repeat itself today, the S&P would have to take a 66% haircut.

But wait, it gets even worse. In 1941 we were at the bottom of that particular economic cycle. The earnings have already contracted and stocks were selling at a massive discount. In fact, they were about to stage a 5 year WW2 rally.

Today, the situation is reversed. Earnings expansion is at its peak (thanks to the FED and their little QE liquidity party) and the P/E ratio has only been higher on two other occasions (1929 and 2000). In other words, for the S&P to reach 1941 levels it would have to fall 80%.

Let me put it this way.  Anyone who believes that this stock market rally will continue hasn’t studied history nor appropriate market valuation metrics. Plus and just FYI, “this time is different” is a terrible investment strategy.

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. June 1st, 2015  InvestWithAlex.com

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The S&P Would Have To Drop 80% To…..Google

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Janet Yellen’s Dirty Little Secret

Daily Chart May 28th InvestWithAlex

5/28/2015 – A down day with the Dow Jones down 37 points (-0.20%) and the Nasdaq down 10 points (-0.17%) 

John Hussman had quite a few things to say about today’s market environment. Nothing that you haven’t read here before, but it is important to compare notes.

“The Fed has now created the third financial bubble in 15 years,” he writes in his latest market commentary. “Focusing on two variables — inflation and unemployment — the Fed has missed the most important consideration: the risk to financial stability.”

That’s what happened in last decade’s housing bubble, and “this mistake will ultimately end just as tragically” both for the economy and financial markets, Hussman states.

He is absolutely right. I wrote about the same thing in Peak BubbleS??? And it cannot possibly end in any other fashion.

As for stocks, “our concerns remain extremely high due to the combination of obscene valuations and unfavorable market internals,” he explains. “While we continue to monitor the evidence for any shift, it’s important not to assume that Fed easing (or a delay of Fed rate hikes) would necessarily provoke a favorable shift in market internals, or would necessarily produce a shift back to risk-seeking.”

Don’t count on a delay in Fed rate hikes boosting stocks, Hussman says. “Examine the worst market collapses in history, and you’ll often find the Federal Reserve easing the whole time,” he writes. “Don’t fight the Fed, indeed.”

Bingo. On two fronts. I can attest that I cannot find a single undervalued company in today’s market. Not to speculate in, but an undervalued company that I would feel comfortable holding over a long period of time. Everything has been driven to exuberant valuation levels. Second, the FED might be powerless to stop the next decline. No matter what they promise or how many more QEs they bring to the table. Once perception changes, the market will overshoot to the downside. As it always does.

(***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 28th, 2015  InvestWithAlex.com

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Janet Yellen’s Dirty Little Secret Google

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What You Ought To Know About This Bull/Bear Market

Daily Chart May 27th InvestWithAlex

5/27/2015 – A positive day with the Dow Jones up 121 points (+0.67%) and the Nasdaq up 74 points (+1.47%) 

Bulls continue to proclaim that this market is climbing the wall of worry. Apparently, the world is full of “financial market unbelievers”. To be honest, I have no idea what they are talking about. Every bear I know is scared to death to touch this market on the short side. And I am not the only one seeing this. Let’s explore.

This average currently stands at 81.3%, which is one of its highest readings in years. As you can see from the accompanying chart, the stock market has declined over the past 18 months whenever the HNNSI rose to current levels.

newsletter sentiment

Considering the fact that the overall stock market (NYSE) hasn’t gone anywhere over the last 10 months, I would say that this is as bullish as it gets. However, you don’t have to look further than VIX/VXX to discover the same thing.

I have beaten this point to death over the last few weeks. Plus, I have shown that commercial interests have built a massive long position in VIX (COT Report). In anticipation of a bounce. In other words, everyone expects this bull market to continue and no one is hedging. Hmm, I wonder what happens next.

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 27th, 2015  InvestWithAlex.com

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What You Ought To Know About This Bull/Bear Market  Google

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Is This Market Bulletproof Or Drawing Its Last Breath?

Daily Chart May 22st InvestWithAlex

5/22/2015 – A negative day with the Dow Jones down 54 points (-0.30%) and the Nasdaq down 1 point (-0.03%) 

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. 

A few things to get through before our long weekend starts. 

First, today’s stock market appears bulletproof. The US Economy is on a verge of an “official” recession (no matter what Janet Yellen says), macro data is collapsing, the FED is about to hike rates and the stock market is sitting in an overvaluation bubble. Yet, the market refuses to go down. For instance, just this week….

Manufacturing PMI – Miss/Drop. Existing Home Sales – Miss/Drop. Philly Fed – Miss/Drop. Economic Confidence – Miss/Drop

….and the stock market barely budged. This is either really good or really-really bad. David Stockman believes its latter: Stocks and bonds will ‘crash soon’

Stocks and bonds are on the verge of a catastrophic collapse. Everything is totally distorted and there is a day of reckoning coming down the pike.

While I would have to agree that everything is distorted, we WON’T have a crash here. That is not what my mathematical and timing work shows. There was a possibility of a market crash in October of 2014, but the market was able to push through. Yes, the market will go through a substantial 2 year bear leg in 2015-2017, but we will not have a rapid 20-30% decline/crash.

In fact, my work suggests that the market will drive both bulls and bears up the wall over the next two years. That is to say, we will be stuck in an environment where only the market timers will be able to make money.

Finally, bulls are hopeful that M&A activity will save this market. In a quiet stock market, whispers of an M&A wave Considering everything else, this is not a good sing. Corporate buybacks, M&A and foreign investors. All signs that the stock market is near a major top. Corporations are not different from individual investors. They tend to buy at the top and sell at the bottom. How many M&A were there at the bottom in 2008-2009? I rest my case.

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 22nd, 2015  InvestWithAlex.com

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Is This Market Bulletproof Or Drawing Its Last Breath? Google

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Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools

Daily Chart May 21st InvestWithAlex

5/21/2015 – A positive day with the Dow Jones up 2 points (+0.01%) and Nasdaq up 20 points (+0.39%)

I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..

There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.

Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.

I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not long.

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 21st, 2015  InvestWithAlex.com

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Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools Google

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Happy Birthday Mr. Market…225 Years Old!!!

Daily Chart May 19th InvestWithAlex

5/19/2015 – A mixed day with the Dow Jones up 14 points (+0.08%) and the Nasdaq down 9 points (-0.19%)

Not many people know this, but the American stock market started trading on May 19th, 1790. Exactly 225 years ago. Back then there was no Dow Jones and from what I have read, people traded stocks over a barrel. Literally.  Although I have a chart going all the way back to the point of origin. An important thing to have if you wish to figure out the rate of vibration in any given market.

And while we live in a totally different world now, one primary driver remains fully intact. Human psychology. Regardless of what the FED does, we will always have cycles of boom and bust. If anything, the FED magnifies them.

Today is a perfect example of just that.  The US Economic and macro data is collapsing, corporate earnings are decelerating and the stock market is sitting at an all time high. Margin debt is breaking out, people are not hedging and bullish sentiment is as high as it was at 2000 and 2007 tops.

Sounds like a perfect recipe for a disaster to me. Most people I talk to can’t even fathom a 10% correction here, let alone a full blown bear market leg. Yet, that is precisely what we will get later on this year. The question is, are you ready for it?

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 19th, 2015  InvestWithAlex.com

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Happy Birthday Mr. Market…225 Years Old!!!  Google

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Why Most Bulls Might Be High On Drugs….Again

Daily Chart May 15th InvestWithAlex

5/15/2015 – A mixed day with the Dow Jones up 20 points (+0.11%) and the Nasdaq down 2.5 points (-0.05%)

A massive and rather rapid stock market decline is coming later on 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. 

Despite the fact that the NYSE (largest index by capitalization) hasn’t gone anywhere since July 17th, 2014 (10 months if you can’t count), bullish spirits are running red hot. Don’t believe me? Let me show you just today’s news feed.

“We think the S&P takes out 2120 and trades up to 2200.”

“If this market was going to crater, it would have done so already. At least that’s what Jani Ziedins of the Cracked Market blog believes. Instead, he says, the smart money is holding strong, waiting for the skeptics to surrender and fuel the next leg up.”

The psychology seems to be: “I better lock in this deal while I can.” We might be seeing a similar pattern play out among corporate CEOs, who could soon choose to jump into the busy M&A game as they see borrowing rates turning higher.”

WOW!!! This much bullishness at once is making my head spin. Yet, should I dare to bring up the charts below, I get the following range of responses……

  1. Who cares…..we are in a long-term secular bull market – Hint: We are not.
  2. The US Economy is about to turn around and surge higher – Fair enough, but based on what? As I have argued before, there are no drivers to propel us forward.
  3. There are too many bears!!! – This is nonsense. Even the hardcore bears I know are scared to death to touch this market on the short side. Even most mainstream bears are suggesting that this bull market will continue.
  4. The valuations are NOT too high. – Take a look at the P/E chart below. I rest my case.
  5. The FED will backstop any and all market corrections, QE forever and other nonsense – Only a fool would make an investment decision based on the statements above. And let me tell you, there are quite a lot of fools out there.
  6. The market is consolidating as it gets ready for a breakout – I can just as easily argue that it is distributing.
  7. Etc…..

You get the idea. Call me a fool, but I have heard the exact same thing at 2000 and 2007 tops.

Historic Macro Vs Stock Market Data Divergence. 

Macro Data InvestWithAlex

Inflation Adjusted S&P. 

S&P inflation adjusted

Adjusted P/E Ratio Is Near Historic Highs (only 2000 tech top stands higher). 

PE Ratio

In other words, you don’t have to be a genius to figure out what happens next. 

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 15th, 2015  InvestWithAlex.com

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Why Most Bulls Might Be High On Drugs….Again Google

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Bull Or Bear? You Decide

Daily Chart May 14th InvestWithAlex

5/14/2015 – A positive day with the Dow Jones up 189 points (+1.05%) and the Nasdaq up 69 points (1.39%). 

As yours truly, David Stockman and Mohamed El-Erian continue to warn their followers that a big stock market decline and a severe recession are coming down the pipeline.

David Stockman: 

  • “The worldwide central bank money printing spree of the last two decades has generated massive excess capacity and mal-investment all around the planet.”
  • “What is coming, therefore, is not their father’s inflationary spiral, but an unprecedented and epochal global deflation.”
  • “So the central banks just keep printing, thereby inflating the asset bubbles worldwide. What ultimately stops today’s new style central bank credit cycle, therefore, is bursting financial bubbles. That has already happened twice this century. A third proof of the case looks to be just around the corner.”

Mohamed El-Erian: 

  • Financial markets have grown addicted to central bank easing, and that addiction could cause a heap of trouble when central banks tighten the credit spigot.
  • “It reminds me a little bit of 2007 and 2008,” when investors tried to discern when the turn would come away from easy credit conditions, El-Erian said. “I’m not so confident that I will see the turn coming, and turns tend to happen quite quickly.”

I couldn’t agree more. The only remaining question is…….are the US Equity markets currently going through a 10 month distribution or consolidation period? If distribution, the time to pay the piper may be soon at hand.

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 14th, 2015  InvestWithAlex.com

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Bull Or Bear? You Decide Google

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Are The Bears Stupid Or Something?

Daily Chart May 13th InvestWithAlex

5/13/2015 – A mixed day with the Dow Jones down 7 points(-0.04%) and the Nasdaq up 5 points (+0.11%) 

Is there a party at the Hamptons during the week? The stock market remains within the confines of its “Mind Numbing” trading range. We have had the same situation in the summer of 2014. At that time I have suggested that such a low period of volatility will result in a violent move thereafter. And so it was. Today, we are facing a very similar outcome.

A massive and rather rapid stock market decline is coming later on 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. 

At least for now, the bulls continue to point their finger at the bears and laugh.

Bears Beware: Bond Rout Puts Investors on the Wrong Side of Central Banks

The article suggests that it is suicidal to fight the majority of central banks today. As their primary concern remains inflationary stability and asset price appreciation.

And while the premise above sounds about right, the author and the money managers in question make a fatal mistake. They have create a direct correlation between zero interest rates/QE and subsequent asset price bubbles we are experiencing today.

That is a fatal assumptions because the link might not have anything to do with the reality. As I often suggest, the stock market traces out its exact mathematical points of force. It will decline when the TIME/PRICE are right. Not before nor after. That is to say, the stock market will start its decline when the time is right, no matter what the fundamental picture is and no matter what central banks are doing.

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 13th, 2015  InvestWithAlex.com

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Are The Bears Stupid Or Something?  Google

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What You Ought To Know About Investing In Today’s Market

Daily Chart May 12th InvestWithAlex

5/12/2015 – Another down day with the Dow Jones down 37 points (-0.20%) and the Nasdaq down 17 points (-0.35%). 

Over the last few weeks I have suggested that today’s short setup is about as ideal as the long setup was at 2009 bottom. Hence, short sellers should be thankful for such high prices.

Bill Gross introduces the same idea, but in the bond market Bill Gross’s ‘Short of a Lifetime’ Would Mean Armageddon (watch the video, it’s worth your time).

“It’s Just A Matter Of Time”

While the conversation in the link above has to do with zero yielding German bonds, the same line of thinking should apply to the US Treasury market. At some point “follow the FED” trade will fail and the yields will surge. And while I don’t think we are there yet, it is just a matter of time. As a result, my forecast remains, 10-Year Treasury note will see a double bottom at 1.4-1.5% over the next two years before this 30 year bull run in yields is over.

When it comes to the stock market, “short equity” setup we are facing today is about as ideal as it was at 2000 and 2007 tops. Very limited upside or risk (if any) and massive downside. In other words, long-term investors should heed the lessons of two previous market tops. And instead of trying to figure out how many more years this secular bull market has left (hint: we are still in a secular bear market that started in 2000), they should seriously consider shifting their portfolios to the short side or cash.

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 12th, 2015  InvestWithAlex.com

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What You Ought To Know About Investing In Today’s Market  Google