7/10/2015 – A positive day with the Dow Jones up 211 points (+1.20%) and the Nasdaq up 75 points (+1.53%).
Most market participants, bulls and bears, will walk away from this week’s market action confused. Not my subscribers. The stock market continues to perform within the confines of our exact forecast. If you would like to find out what happens next, please Click Here.
So, what is the biggest fallacy in today’s stock market?
Illusion of stability and/or trust in all things “Government” (FED/ECB/IMF/EU,China, etc..). Consider the following.
Maintaining The Illusion Of Stability Now Requires Ever-Greater Extremes
Right on the mark. It appears we live in an environment where the people in power are attempting to create a one way street to prosperity. Through zero interest rates, QE, stimulus, stock market intervention, etc… What the idiots don’t understand is that they end up creating bubbles of immense proportions. Bubbles that just 10-15 years ago would have been unfathomable.
The downside is, the bigger they are the louder they pop. Make no mistake, we are getting there…… and soon.
Mohamed A. El-Erian: Don’t think China is investable
I couldn’t agree more. At least for now, China is bouncing. Just as was suggested here earlier in the week. Yet, desperate the measures taken by the Chinese Government, it is a clear sign not to touch China with a 10 foot pole. When authorities prevent people from selling while jailing short-sellers, you know it is a dire situation.
Don’t get me wrong. As I indicated earlier in the week, China might go though a massive bounce here. Maybe even a higher high. That is speculation, not investing. When government steps in like this, the end is near and you don’t want to be there. Plus, if you can’t get out when you need to, there is no point in getting in.
Russia poses ‘greatest threat’ to US national security: Dunford
Excuse my language, but I am getting really sick and tired of this Industrial Military Complex propaganda BS. What threat? How can Russia pose a threat if it is the US who is building a massive NATO presence on the Russian border. Not the other way around. If we don’t count Alaska, I think the closest Russian military outpost is 4000 miles away from the mainland. How many more f$*#ing wars will the idiots in Washington get us into before ICBMs start criss crossing the oceans?
Short Sales Are at Their Highest Level Since the Financial Crisis
I don’t think this has anything to do with short-term moves. I think this is a more structural or longer-term position. Typically, short sellers are on the “smart side” of the money. Here is what they are seeing…..
- Artificially propped up markets.
- Government interventions (they never last).
- Massive bubbles in all asset classes.
- The stock market at the third highest valuation ever. Right behind 1929 and 2000.
- Overwhelming bullish sentiment…
- Etc….
This is exactly what I am talking about in terms of “fallacy”. What you are witnessing right now is the calm before the storm. Once investors realize that the FED is not in control, you will see a rather rapid correction of 25-40%. Understandably, by the time most people realize this, it will be too late.
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. July 10th, 2015 InvestWithAlex.com
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