6/18/2015 – Another positive day with the Dow Jones up 179 points (+1.00%) and the Nasdaq up 68 points (+1.34%) 

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. 

The NYSE (largest index by capitalization) hasn’t gone anywhere in close to 12 months, the Dow Transports recently confirmed short-term breakdown, Shiller’s S&P P/E ratio is at 27 (third highest in history) and VIX/VXX are scraping the bottom of their trading range.

And while fewer and fewer stocks are participating in recent rallies, there are quite a few areas that are keeping this market afloat. What are they? Speculative stocks (specs). The Nasdaq, Russell 2000 and Biotech. A few sturdy sectors are preventing a market breakdown

Is that Good or Bad? 

That depends on whom you ask. Most bulls see this a net positive, suggesting that this group provides leadership and that broader markets will follow suit. Most bears would argue that these sectors will be the last to go, and when they do, they are likely to move to the downside quite rapidly.

Unfortunately, financial history does not offer us a proper answer. Sometimes the specs lead and sometimes they follow the market. With that said, today’s overall setup is more reminiscent of 2000 top.  At that time the broader market led most specs by about 3 months.

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 18th, 2015  InvestWithAlex.com

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

Google

6/17/2015 – A positive day with the Dow Jones up 31 points (+0.17%) and the Nasdaq up 10 points (+0.20%) 

As predicted yesterday, No Matter What The FED Does, It’s Over, Fed’s statement had a little bit for everyone. Bulls, bears, financial unbelievers and day trading retirees.  Worst case scenario, god forbid, the FED will raise interest rates 50 basis points by the end of the year. That is truly terrifying.

And the best case? The Fed will either postpone the hikes further, cancel them all together or even introduce QE-4. After all, the economy is awesome.

With that in mind, I continue to maintain that the FED is now irrelevant. Trying to figure out what the FED will do next is like looking up the horse’s ass in an attempt to see its teeth.

Why is it irrelevant?

No matter what the FED does now, we cannot get out of this unscathed. The imbalances are too great, the markets are too expensive and most people are too bullish. From our vantage point, there is no scenario that ends today’s craziness in a favorable fashion.

But don’t despair just yet. It appears some bulls now believe that higher interest rates, never mind the QE, will be great for the market. Prompting it to stage a massive rally. Fund managers position for post-rate hike U.S. equity rally So, hikes or not, the outcome is singular.

Do I really have to spell out what happens when everyone is on the same of the trade, no matter the outcome, and the S&P’s P/E ratio is at 27? I hope not.

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 17th, 2015  InvestWithAlex.com

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

Why The FED Can’t Stop A Severe Bear Market  Google

6/16/2015 – An up day with the Dow Jones up 112 points (+0.63%) and the Nasdaq up 26 points (+0.51%). 

Not much is expected from the FOMC tomorrow. Well, they are expected to kick the can into September, when the Earth shattering 0.25 basis point rate hikes are “expected” to start.

Further, it is highly probable that the FED minutes will have a little bit for everyone. Bulls, bears, day trading retirees and as Jim Cramer calls them, financial unbelievers. To be more specific, that Q-1 weakness was temporary, maybe they will raise rates in July/September, maybe not, etc.. With that in mind, let’s look at the subject matter from a rational point of view.

As of today, the FED is facing the following setup.

• Massive stock market and other asset bubbles.
• Slowing economy and collapsing macro data. We are a stone throws away from an “official” recession. I can argue we are already in one.
• Zero interest rates and limited options to stimulate the economy further.

As a result, the FED has only two options.

1. Raise interest rates NOW in order to reload their recession fighting toolkit before the next recession hits. Again, we are nearly there.
2. Cancel rate hikes and eventually introduce QE4 to further “stimulate” the economy. Also known as, maintaining financial market stability. This scenario includes postponing interest rate hikes until we are in a recession.

You don’t have to be a genius to figure out which scenario the stock market is betting on. And while it would be prudent for the FED to reload now, in reality, no one really knows what they will do. I don’t think they know. 

At the same time, it is a no win situation for the FED. There is no guarantee that the stock market won’t crater even if the FED introduces another round of QE while cancelling interest rate hikes. And I am not the only person who thinks that way.

• The Federal Reserve poses the biggest threat to the stock market — and the reason why will surprise you

While most are focused on the risks around a withdrawal of liquidity, we believe the biggest hit to confidence could be the opposite: if another round of US QE is necessary to prop up the economy. While the market could have a knee-jerk rally on an indication of forthcoming stimulus, we think this would likely be short-lived and could end in the red. QE fatigue is already evident: each subsequent round of QE has seen diminishing risk rallies.

Bingo. That’s how complex today’s macro economic setup is. We are at the end of this massive credit expansion cycle and there is nothing that can save this market now. Not even another round of QE. Well, unless the FED goes into a full monetization drive. But that’s entirely another matter.

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 16th, 2015  InvestWithAlex.com

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

No Matter What The FED Does, It’s Over  Google

6/10/2015 – A positive day with the Dow Jones up 234 points (1.32%) and the Nasdaq up 63 points (1.25%) 

This is anecdotal at best, but I do find the following fascinating. Over the last few days I have noticed a significant increase in “bear hate e-mails”. They typically contain one or more profanities, tell me how wrong I am and then proceed to challenge my sanity or intelligence.

As accurate as their point of view might be, here is what I find interesting. A miserly 600 point drop on the Dow is bringing out the bulls in droves. This is important and here is why. A lot of people are on margin and super bullish. Yet, they are nervous and not convinced in this market. Imagine what happens when a sell-off turns into a typical 10-20% correction. Do I smell a panic?

Now, Jeffrey Gundlach brings up an excellent point.  Borrow Infinite Amount At Negative Interest Rates

In theory, you can borrow massive amounts of money today and then use that leverage to juice up your returns. While nice in theory, it much more difficult to implement. Here is why…..

What are you going to invest in?

• The US Equity Markets? With the S&P Shiller P/E ratio being at the 3rd highest level in history (right behind 1929 and 2000 tops), any 10-20% decline can very quickly wipe you out.
• The Bond Market? At 0-2% interest rates? No, thank you. Even in arbitrage, with hedges and foreign exchange risks, it is a no win situation.
• Business Capacity? Interest rates have been low enough and for long enough for most businesses to increase their capacity to the max. That is the primary reason as to why we didn’t see an expansion in capital investment this business cycle.
• China’s bubble stock market? Yeah, good luck with that.

Just thinking out loud here. Even if I am able to borrow a Billion dollars today, I wouldn’t know what to do with it. Even if I take a massive short position at an opportune time, that carries a significant risk when borrowed money is involved.

In other words, we are at the end of this business cycle of capital expansion. There is nothing to invest in, even with FREE capital.  Sure, you can speculate with above mentioned capital, but that is a totally different conversation. There is no scenario where this ends well.

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 10th, 2015  InvestWithAlex.com

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

Bear Hate Mail, Low Interest Rates & Infinite Valuations  Google

6/8/2015- Another down day with the Dow Jones down 83 points (-0.47%) and the Nasdaq down 47 points (-0.92%) 

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. 

A number of quite important opinions about today’s stock market. Let’s take a look.

• Experts worry that ‘phony numbers’ are misleading investors

As the stock market climbs ever higher, professional investors are warning that companies are presenting misleading versions of their results that ignore a wide variety of normal costs of running a business to make it seem like they’re doing better than they really are.

We have talked about this before. BlackRock: Most Of Corporate Earnings Growth (If Any) Is Accounting Driven

I have said it before and I will say it again. Today’s distortions are so great that the FED’s Ponzi Finance makes Bernie Madoff look like a boy scout. But its more than that. Everyone is playing the same accounting game. Whether it is through low interest rates, share buybacks or outright accounting gimmicks.

While impossible to calculate, I would say that a more normalized environment would add 5 to 10 points to today’s P/E ratios. Turning an already expensive market into “are you freaking kidding me overpriced accident” waiting to happen.

• U.S. Stocks on Wrong Side of History With Rate Rise in Sight

Never before has a rally in the U.S. stock market gone on this long without a Federal Reserve interest-rate increase. Expecting valuations to keep rising once one comes is asking too much, if history is any guide.

As I have suggested earlier today, the FED finds itself in an impossible situation. It is stuck in the corner. With all of the misallocations over the last 15-20 years about to come crashing down on them. They best they can hope for at this stage is debt monetization and run away inflation. But with bond prices possibly collapsing, they might not even have that option.

Interesting times ahead, that’s for sure.

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 4th, 2015  InvestWithAlex.com

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

Why Today’s Real P/E Ratio Is 5-10 Points Higher Google

6/4/2015 – A down day with the Dow Jones down 170 points (-0.94%)  and the Nasdaq down 40 points (-0.79%)

Smart money is sharing some of their best investment ideas today. Let’s take a look.

• Carl Icahn: A Matter Of Time Before Stocks Implode

In this video from a few days ago Mr. Icahn suggests…

1. The stock market will eventually decline. A severe correction is likely.
2. Junk bond spreads will explode. Just as they did in 2007-2009.

I would have to agree on both counts.

• Bill Gross: Shenzhen stocks next ‘short of a lifetime

We have talked about China’s stock market going parabolic over the last few weeks. Here is another look how crazy things are. China’s IPO Frenzy Lures $273 Billion to One Stock Offering Will this speculation bubble burst? Of course, eventually they all do.

Unfortunately, I do not have a mathematical breakdown for the Shanghai’s composite. And with 1-10% daily swings it is not a market for the faint of heart. That is to say, unless you know exactly what you are doing, it would pay to stay away from China on both the short and the long side.

• Marc Faber: We Are All On The Titanic Fighting For Musical Chairs

Mark Faber is investing in…

1. Gold and
2. 30-Year Treasury bonds.

As my analysis shows, the US Economy is about to fall into a major “official” recession. When it does, the FED will cut interest rates (if they have anything to cut) and introduce another round of QE. In such an environment gold should surge higher while yields collapse. Makes sense to me.

To summarize: Junk bonds yields should surge while treasury yields test a double bottom. Gold up, China collapses and the US equity markets take a beating. Invest accordingly.

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 4th, 2015  InvestWithAlex.com

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

Some Good Investment Ideas From “Smart Money” Google

6/3/2015 – A positive day with the Dow Jones up 66 points (+0.37%) and the Nasdaq up 23 points (+0.46%) 

Quite a few interesting things out there today. A few days ago I displayed this chart of skyrocketing margin debt and why it is yet another bearish indicator. That is to say, most investors are extremely bullish at the precise moment when they shouldn’t be.

Not everyone agrees with my assessment above. Traders are borrowing tons of money to bet on stocks … and it’s just not a big deal

“Margin debt does not, by any statistical measure, lead equity prices. They are, essentially by definition, coincident. As stock prices move higher, outstanding margin debt does as well. If and when stock prices move lower, margin debt will follow.”

While I would have to agree with the statement above, they are looking at the wrong metric. It’s not the fact that margin debt moves in tandem with the stock market, it is the fact this metric is now 33% higher than at 2000 and 2007 tops. All while the stock market hasn’t gone anywhere over the last 10 months. In other words, the market is storing a tremendous amount of fuel for a correction. And given how much margin debt is out there, any such correction can very quickly turn into a violent sell-off.

Further, I would have to agree with the following sentiment. The stock market is becoming a ‘lose-lose’ situation

Investors are in the grip of “Stockholm syndrome” because there is a trust that central bankers don’t want to hurt markets, which more or less forces investors to maintain a “risk-on” positioning, buying things like stocks and lower-rated bonds.

I couldn’t agree more. I continue to maintain that this is the worst trade out there today. The problem is, everyone is in it. By the time most investors realize the FED is not in control and cannot backstop the market, it will be too late. At least 50% of the down move will be over by that point. Oh well….

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 3rd, 2015  InvestWithAlex.com

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

Why You Shouldn’t Stop Freaking Out About Margin Debt Google