1/4/2016 – A big down day with the Dow Jones down 276 points (-1.58%) and the Nasdaq down 104 points (-2.08%).
The Dow has just suffered its worst year opening loss, at least Intraday, since 1932. And while this is yet another meaningless data point, here are some important facts that most investors continue to miss.
- Despite a mass delusion to the contrary, “buying the dip” hasn’t worked in over a year. Thus far, the Dow has put in an important top at 18,351 on May 19th. The NYSE (largest index by capitalization) hasn’t moved in over 18 months. Numerous other indices have done much worse.
- There are numerous signs and divergences suggesting the market has been distributing (not consolidating) over the last 12-18 months.
- The FED is raising interest rates.
- Global economy is slowing down.
- Q-3 forward earning guidance was lowered by 2.4%. Largest compression since 2008.
- The yield curve continues to flatten – suggesting that recession is directly ahead.
- Signs of real stress in the junk market.
- Geopolitical tensions.
- Etc…..
Combine all of the above and you begin to realize just how grim today’s environment is. Yet, that in itself doesn’t mean very much. As you very well know, markets tend to climb such walls of worry.
The best piece of evidence we have for the REAL trouble ahead is this simple chart.
Either way you twist it the market is selling at extreme valuation levels. Only 1929 and 2000 tops where higher and we all know how that ended. That is where the real picture truly begins to emerge.
That is to say, if you expect to see a bull market roar back to life in 2016, well, good luck with that.
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.January 4th, 2015 InvestWithAlex.com
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