10/23/2015 – A positive day with the Dow Jones up 158 points (+0.91%) and the Nasdaq up 112 points (+2.27%).
I am going to go out on a limb here, at the risk of looking like a complete fool a couple of months down the road, and suggest that bears should be thanking their lucky starts. That is, for an opportunity to go short as these levels.
Before we get there, let me ask you something. What has changed between September 29th bottom and today? NOTHING FUNDAMENTAL, only investor sentiment. Where on September 29th investors were freaking out and numerous commentators were calling for an all out market crash, today it’s the opposite. Apparently, the bear market is over and we are getting ready to surge higher. Consider the following.
- Omega: August selloff in U.S. shares not end of bull market
- Don’t drink ‘Kool Aid’ behind rally: Fund manager
Yet, fundamentally speaking, we are still in the same conundrum. I continue to maintain that we are witnessing a major slow down in earnings and the US Economy. Most corporates missing and guiding lower is a clear evidence of that. Sure, some companies like Google, Amazon, etc…. are outperforming, but they are an exception, not the rule. The FED remains between the rock and a hard place. Unable to raise interest rates or stimulate the economy further.
If anything, we are getting numerous confirmations that earnings and the US Economy are falling apart.
As they say, a picture is worth a thousand words. Trust me, the bulls do not want to see these charts.
Chart #1: Hey everyone, look at all of those gaps. If you think the market won’t come back to close them, sooner or later, you are living in a fantasy land. But listen, we are all adults here. Who am I to tell you NOT to buy Amazon, Facebook, Google, etc….at today’s ridiculous valuation levels. As Citigroup suggests, “Be brave and go long”.
Chart #2: Oldie but goodie. Again, overall earnings/economy are slowing down while Shiller’s adjusted S&P ratio is at its 3rd highest level in history. Investors have paid more for stocks on two other occasions. In 1929 and 2000. But, unlike yours truly, most bulls don’t mind paying the same premium today.
Chart #3: Look at all of these non-confirmations from Russell 2000, Dow Transports and Biotech (IBB). These are just a few. There are many other. New Bull market??? Yeah, sure…..to infinity and beyond.
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. October 23rd, 2015 InvestWithAlex.com
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