I know I had many loyal readers, and I am sorry I have not been able to keep up with this blog, I enjoyed writing regularly for many years. But my business I started 4 years ago is thriving and needs most of my attention.
There are many troubling technical reasons to be concerned with the current state of the stock market.
I won't bore you with exact details, but there is so much underlying weakness in stocks BEHIND the large cap leaders to be alarming. More and more stocks are falling into their own bear markets as the major indexes were reaching new highs, that pattern has only gotten much more pervasive and worse.
They like to say you have just a few generals leading, but your army has run off leaving you to fend for yourself. Sector after sector has fallen into their own bear market....and its reaching a point on no return for the major indexes.
There is no way stock valuations make any sense with the profit expectations going forward. QE and all the tricks like ZIRP has helped only the stock market, but not the real economy maybe limping along at a 1.5- 2.0 GDP
The Transport index made its highs last November, that was 8 months ago!
Commodities are in a bear market, what's with OIL at $40???? When economies are HUMMING, so are commodities...if indeed we are consuming them to make things, build things....we need energy...something is wrong.
China.....as reported this AM on the financial channel a respected analyst Chanos stated " it's much worse than you think".....its major FUBB over their....major....and its just beginning as the govt attempts to buy stocks , whatever it takes has hastened the loss of faith.....there is NO such thing as free markets, the more THEY manipulate, the worse the repercussions
APPLE has fallen down...actually began 2 weeks ago.
Oil in a free fall USO
VIX, fear index has spiked, worth watching to see if it has broken out of long downtrend. Higher VIX means LOWER stocks.
ZIRP policy has to end sometime, now with stock weakness will the FED even raise .25% this year?
The current policy is already 5 years into CRISIS LEVELS......did we never leave the crisis?
Markets in BULL mode DO correct, so we don't have to jump to conclusions.....that said, the majority of stocks already in downtrends is not what you see in a healthy bull market.
D
Friday, August 21, 2015
Monday, May 18, 2015
Transports continue to Diverge
This action continues to be monitored, the longer it continues the more meaning it may have. In a market controlled by FED action since 2009, it is hard to envision anything but a sideways to up market. Memories are short lived.
The REAL question we WILL get an answer to EVENTUALLY is, whether the FED'S manipulation helped us DODGE a bullet, or eventually puts one right into investors' head.
Nothing is for FREE, nothing lasts forever.
D
Wednesday, March 18, 2015
FED MEETING
Everyone is fixated on the statement being issued today by the Federal Reserve. It isn't a matter of if, but when will interest rates begin to " normalize"?
The Financial crisis was back in 2008/2009, but FRD funds rate is still at zero %, crisis levels.
This fixed rate , has screwed savers and gifted investors. Hey, it was a plan, and maybe it worked to stay a worse outcome. But for every yang , there is a YANG. And we don't know yet, what the cost will be, for bailing out the worlds economies, but more so the stock markets.
I believe the market is in the progress of putting in a top, doesn't happen overnight . Underneathe the soaring Netflix and Aaple stocks, are weakness that is broadening.
D
The Financial crisis was back in 2008/2009, but FRD funds rate is still at zero %, crisis levels.
This fixed rate , has screwed savers and gifted investors. Hey, it was a plan, and maybe it worked to stay a worse outcome. But for every yang , there is a YANG. And we don't know yet, what the cost will be, for bailing out the worlds economies, but more so the stock markets.
I believe the market is in the progress of putting in a top, doesn't happen overnight . Underneathe the soaring Netflix and Aaple stocks, are weakness that is broadening.
D
Friday, March 06, 2015
Perfect Storm
I've been gone for awhile hopefully not forgotten.
These are interesting times, IMHO the ship,has sailed on making the easy money. Many stocks have already fallen off the wagon into their own downward bear trends , but these mostly go unseen by the avg investor.
Who cares that hourly wages are falling, and have made a miserable recovery 5 plus years into the zero interest rate manipulated stock market mania. At the same time, in today's report, labor costs are rising which is a bad combo for profits.
A rising US $ is bad for many US company profits , especially the multi nationals.
Unemployment rate is now down to 5.5%, and the feckless FED still has rates pegged at 0%, a CRISIS level. Are we still in a crisis?
Here lies the problem. The world's central bankers are racing each other to lower their rates and weaken their currency, in hopes of stimulating their economy. It should be that easy.
Zirp has made the big players discard any caution and many have levered up large multiples to their cash holding, remember this is what the FED wants...throw caution to the wind and buy buy buy.
And this has caused an historic divergence between the 1% at the top and everyone else! nice going.
Is the weakness in gold, and the plunge in oil prices stemming from overproduction? Weak demand? Or hints of deflation.
Few months ago the Transports did not confirm the new highs in the Dow, minor in size, but diverge nonetheless.
Now the FED has signaled, it will begin raising rates in 2015, many think this summer. There seem to be a lot more headwinds for US stock prices than there have been in awhile.
The level on the SPX of 1750 I deem important support, and needs to hold.
My own personal indicator has been on a BEAR warning for months. But one additional indicator has yet to confirm.
But I think the easy money has been made ....and one at a time, they must be eyeing the exits....
D
These are interesting times, IMHO the ship,has sailed on making the easy money. Many stocks have already fallen off the wagon into their own downward bear trends , but these mostly go unseen by the avg investor.
Who cares that hourly wages are falling, and have made a miserable recovery 5 plus years into the zero interest rate manipulated stock market mania. At the same time, in today's report, labor costs are rising which is a bad combo for profits.
A rising US $ is bad for many US company profits , especially the multi nationals.
Unemployment rate is now down to 5.5%, and the feckless FED still has rates pegged at 0%, a CRISIS level. Are we still in a crisis?
Here lies the problem. The world's central bankers are racing each other to lower their rates and weaken their currency, in hopes of stimulating their economy. It should be that easy.
Zirp has made the big players discard any caution and many have levered up large multiples to their cash holding, remember this is what the FED wants...throw caution to the wind and buy buy buy.
And this has caused an historic divergence between the 1% at the top and everyone else! nice going.
Is the weakness in gold, and the plunge in oil prices stemming from overproduction? Weak demand? Or hints of deflation.
Few months ago the Transports did not confirm the new highs in the Dow, minor in size, but diverge nonetheless.
Now the FED has signaled, it will begin raising rates in 2015, many think this summer. There seem to be a lot more headwinds for US stock prices than there have been in awhile.
The level on the SPX of 1750 I deem important support, and needs to hold.
My own personal indicator has been on a BEAR warning for months. But one additional indicator has yet to confirm.
But I think the easy money has been made ....and one at a time, they must be eyeing the exits....
D
Saturday, January 03, 2015
FED SUPPORT. FOR MARKET EVAPORATES
http://www.safehaven.com/article/36258/fed-abandons-stock-markets
Adam. Hamilton does a nice job of outlining what headwinds in esters could face in 2015.
D
Adam. Hamilton does a nice job of outlining what headwinds in esters could face in 2015.
D
Sunday, November 09, 2014
CONSEQUENCES DELAYED BUT INEVITABLE
I'm all for a bull market like the next guy. But can we just have
one that is born, and lives on its own 2 feet? Or is the stock market just
doomed to rinse and repeat.....
Organic natural growth would be a lasting
one, where there is a natural balance to things and resources.
Instead we get an abomination of reality
and manipulation. EACH END (2000, 2007) to the back room guys behind the curtain
economy boom mania is an equally or more so bust and panic.
The most recent addition (2009- current) of
a false dawn, carries with it historic measures to keep the man behind the
curtain hidden, and so will follow with even greater consequences.
D
D
Sunday, November 02, 2014
DO whatever it takes
http://www.prudentbear.com/2014/10/kuroda-bubbles-and-king-dollar.html#.VFYsamK9KSM
"Importantly, the risks were deeply systemic. Policy responses were systemic. Draghi moved forward with “Do Whatever it Takes,” followed soon by open-ended QE from Bernanke and Kuroda. I never bought into the notion that Fed “money” printing was about U.S. jobs. I don’t believe Kuroda’s move Friday was about Japanese inflation. Policy responses have been akin to Benjamin Strong’s 1927 “coup de Whiskey,” but on a multi-shot global basis (with chaser). And over the past two years we’ve witnessed a 1927 to 1929-like market response, again on a globalized basis.
Predictably, throwing Trillions of “money” at a global Bubble has only exacerbated instability. Throwing Trillions of “money” at dangerously maladjusted global financial and economic “systems” will surely only worsen the addiction. I see Kuroda’s move as further evidence of global central bank desperation. Global risks have inflated profoundly since 2012."
There are no sound money policies being followed by any world Central Bank, just print away so to speak and all our troubles will go away. Since 1980 with Greenspan, then Bernanke, now Yellen LOW interest rates and the new QE gambit have given us 35 years of falling interest rates, rising bond prices, worlds longest running bull market , the bond bull. Nothing lasts forever.
What eventually follows EVERY bull market is a bear market. A bear market in bonds would mean rising interest rates. For 5 years now, savers have been punished with near 0 returns on savings. Savings are discouraged, speculating is encouraged. Asset appreciation, looks and feels good has been the aim of the FED since they began easing, then injecting trillions with QE into the speculating pool.
Looks good, feels good, but a false high.
You don't get prosperity by printing money or every corner of the globe would be rocking. It would be that easy. These policies have made the inequalities around the globe even more pronounced between the upper crust and the stale bread.
Nothing comes for free and no cost, many do not care when or if the piper gets paid. But paid he will get, with more than a pound of flesh when the spring gets uncoiled. It is reaching that zenith in the law of diminishing returns. Just mention QE, throw money out of thin air, and watch the markets soar.
Nope, what me worry?
D
Saturday, October 25, 2014
How far will they go?
From Doug Noland @ prudent bear .com CBR
http://www.prudentbear.com/2014/10/more-wackoism.html#.VEuUFWK9KSM
"Seems an opportune time to revisit Fed governor Bernanke’s speech from almost 12 years ago, “Deflation: Making Sure ‘It’ Doesn't Happen Here.” Since Bernanke’s 2002 “U.S. government has a technology, called a printing press” dissertation, the Fed’s balance sheet has inflated from $800 billion to $4.5 TN. Treasury debt has inflated from about $4.5 TN to $12.6 TN. Total system marketable debt has jumped from about $30 TN to almost $60 TN. On the rate side, despite booming mortgage Credit growth, the Fed waited until June 2004 to nudge rates up 25 bps (to 1.25%). Rates didn’t make it to 4% until late 2005, just as mortgage Credit was wrapping up its fourth consecutive year of double-digit expansion.
Bernanke: “But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation. Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior). Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys… Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.”
http://www.prudentbear.com/2014/10/more-wackoism.html#.VEuUFWK9KSM
"Seems an opportune time to revisit Fed governor Bernanke’s speech from almost 12 years ago, “Deflation: Making Sure ‘It’ Doesn't Happen Here.” Since Bernanke’s 2002 “U.S. government has a technology, called a printing press” dissertation, the Fed’s balance sheet has inflated from $800 billion to $4.5 TN. Treasury debt has inflated from about $4.5 TN to $12.6 TN. Total system marketable debt has jumped from about $30 TN to almost $60 TN. On the rate side, despite booming mortgage Credit growth, the Fed waited until June 2004 to nudge rates up 25 bps (to 1.25%). Rates didn’t make it to 4% until late 2005, just as mortgage Credit was wrapping up its fourth consecutive year of double-digit expansion.
Bernanke: “But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation. Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior). Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys… Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.”
Thursday, October 23, 2014
Rally Continues
Futures are positive this morning, the snap back rally has only taken a few days to recover most of its losses from the decline. This type of fierce rally is more reminiscent of a Bear Market rally.
However, my index has reversed its long term signal, so it's either everyone in the pool again, or wait.
Long term interest rates on savings and safe money markets make it near impossible to get a return from sideline money. That's the full intent of the Federal,Reserve strategy, to get everyone in the pool.
D
However, my index has reversed its long term signal, so it's either everyone in the pool again, or wait.
Long term interest rates on savings and safe money markets make it near impossible to get a return from sideline money. That's the full intent of the Federal,Reserve strategy, to get everyone in the pool.
D
Monday, October 20, 2014
Does Bull still have a pulse?
My trusted indicator from an index point signal has gathered itself and is above the Bear line. This is a SLOW moving indicator , and as monthly chart needs time to settle itself.
With the recent rally, the initial RED signal with a breach of 90.00 was reversed. I do still believe we are in the latter phases of building THE TOP, if new highs occur, I do not expect them to greatly exceed what is in place now.
A big miss from IBM today didn't paint a great picture for corporate spending, IBM is a better economic indicator than Aaple. IPAD sales are disappointing , but iPhone sales were OFF THE HOOK!
Consumer spending is 70% of the US economy, with wages stagnant that also does not bode well for the economy.
Interest rates are still being held at 0% by the Federal Reserve, even after 5 years of recovery they cannot even say when they will begin to rise.
Is this recent uptick in volatility just a short term phenom? Did we get enough correction to resume bull march upward to infinity?
We are quickly correcting oversold condition, and approaching the 200 day moving average. Let's see if it continues business as usual and what me worry.
D
With the recent rally, the initial RED signal with a breach of 90.00 was reversed. I do still believe we are in the latter phases of building THE TOP, if new highs occur, I do not expect them to greatly exceed what is in place now.
A big miss from IBM today didn't paint a great picture for corporate spending, IBM is a better economic indicator than Aaple. IPAD sales are disappointing , but iPhone sales were OFF THE HOOK!
Consumer spending is 70% of the US economy, with wages stagnant that also does not bode well for the economy.
Interest rates are still being held at 0% by the Federal Reserve, even after 5 years of recovery they cannot even say when they will begin to rise.
Is this recent uptick in volatility just a short term phenom? Did we get enough correction to resume bull march upward to infinity?
We are quickly correcting oversold condition, and approaching the 200 day moving average. Let's see if it continues business as usual and what me worry.
D
ECONOMY IS WEAKER THAN IT APPEARS
Bloomberg
What may be lost on many, is this has been great for the top 1%, who own lost of stock and who also may get stock options, which they convert and sell to you and then pay 15% tax on all the dividends.
A GULF is being created between the haves and the nots. How do you keep a credit bubble going? By expanding the bubble by ever greater quantities, and that is becoming harder to levitate.
I don't see people taking this seriously....to perhaps their own detriment at some point.
D
Underemployment worse than U.S. data suggest
Federal
Reserve policy makers are missing a key element as they assess the
health of the labor market: data that includes whether those who are
employed are overqualified for their job or would like to work more
hours.
In the midst of weakening global backdrop, investors STAY complacent and feel the Federal Reserve will continue to inflate the stock market, even after 5 years of doing so.What may be lost on many, is this has been great for the top 1%, who own lost of stock and who also may get stock options, which they convert and sell to you and then pay 15% tax on all the dividends.
A GULF is being created between the haves and the nots. How do you keep a credit bubble going? By expanding the bubble by ever greater quantities, and that is becoming harder to levitate.
I don't see people taking this seriously....to perhaps their own detriment at some point.
D
Saturday, October 18, 2014
Are new highs in the S&P 500 still possible?
I consider my indicator pretty reliable, but we still have the let the month play out , even as it has dipped into Bear territory, it is possible it doesn't end up there but back above the danger line when all is said and done.
It certainly looks like some kind of bottom is in place, and especially traders see the opportunity to catch Bears on the wrong side of trade and squeeze more pain. Friday was options expiration and always the MOST pain that can be afflicted, so be it will be. That coincided nicely with the recent decline into oversold territory.
So now we have the support that was broken and the 200 moving average above, near 1900 and that would be good area to be watching to see if it holds or if when broken the Bears freak and cover into a melt up rally.
Change is in the wind, a TOP is here or being formed with weakness underneath the overall market not seen by many. Could be buying opportunity here, could last into Xmas rally.
October did a good job living up to its reputation as the worst month of of the year.
With drop In 10 year yields, refi's perked up again. And don't forget the extra jingle lower gas prices have put into consumers pockets.
All that said, some retailers are warning of weaker Holiday spending, for some reason...
D
It certainly looks like some kind of bottom is in place, and especially traders see the opportunity to catch Bears on the wrong side of trade and squeeze more pain. Friday was options expiration and always the MOST pain that can be afflicted, so be it will be. That coincided nicely with the recent decline into oversold territory.
So now we have the support that was broken and the 200 moving average above, near 1900 and that would be good area to be watching to see if it holds or if when broken the Bears freak and cover into a melt up rally.
Change is in the wind, a TOP is here or being formed with weakness underneath the overall market not seen by many. Could be buying opportunity here, could last into Xmas rally.
October did a good job living up to its reputation as the worst month of of the year.
With drop In 10 year yields, refi's perked up again. And don't forget the extra jingle lower gas prices have put into consumers pockets.
All that said, some retailers are warning of weaker Holiday spending, for some reason...
D
Wednesday, October 15, 2014
Rally time?
2 stabs at the lower price range today, good chance short term the selling could be washed out.
On any rally we will pay close attention to how far it can go and where we broke strong support, should now be resistance.
If price can rise above certain levels I am watching I would have to reconsider my Bear Call. Always be open to anything, but I do have my signal. But in TA what has worked before is NO guarantee it will work again. But I a pretty confident a change has occurred.
D
On any rally we will pay close attention to how far it can go and where we broke strong support, should now be resistance.
If price can rise above certain levels I am watching I would have to reconsider my Bear Call. Always be open to anything, but I do have my signal. But in TA what has worked before is NO guarantee it will work again. But I a pretty confident a change has occurred.
D
Tuesday, October 14, 2014
Dennis Gartman gets Defensive
From cnbc.com
"After three straight days of declines in the major stock indices, it's time to rethink long positions, Dennis Gartman said Monday.
"After three straight days of declines in the major stock indices, it's time to rethink long positions, Dennis Gartman said Monday.
"You should be less long than you have been, and I think you should be demonstrably less long than you have been," the editor and publisher of The Gartman Letter said on CNBC's "Fast Money."
After a triple digit gain into mid day, going into the last half hour there has been NO conviction among buyers and they take for the exits once again, even with strong oversold condition.
Bulls have not shown resilience in the face of easy money the last 5 years, FED got your back, f the savers rally.
Sunday, October 12, 2014
Second Chance Highs In Place?
http://solarcycles.net/2014/10/12/pre-monday-update/ must read with analogues from different markets.
D
D
Thursday, October 09, 2014
RUBBER CHICKEN HAS MET THE ROAD. IS A BEAR MARKET UPON US?
Many of my long time blog readers understand my point of view, and it's more of a long term view of things. I'm not your stock picker, I've always felt my goal was to educate, enlighten and open the minds of investors so they would want to learn more and maybe be more prepared to forge their own road to financial freedom. Most don't want to spend the time it takes to gain the knowledge to assist themselves in making financial decisions. And in most cases an individuals investment decisions are made for them. Financial advisors are heard followers, they are never prepared for Bear markets.
One of my most trusted long term indicators is flashing RED, warning a Bear MARKET may be upon us. We have been through some corrections before, but is it different this time? And how can anyone know? Nothing is 100% for sure, but here is what I see and what concerns me. I know I have not been posting much lately, but 3 years ago I started my own business, and put all my efforts in supporting my family and trying to grow my business. I will not abandon this blog however, and will try to post at least once a week going forward.
Market was overdue for a correction, but the small caps seen through the RUT, have fallen For over a month. And lately the Transports have been leading the charge, you never like to see that.
Bull markets don't last forever , this one is 5 plus years old. Unless this is a Secular trend , it is long in the tooth.
Gold has fallen into a Bear mkt, and is flashing worries about Deflation, I believe this is more than just a strong dollar worry for gold.
Bond market is nearing its low in yields , showing a strong move for defense and preservation .
The FED minutes came out and sounded like easy days will continue for ever, so the market romped for triple digits. But the very next day the market gave it back, so mere words seem to also have diminishing returns.
Our markets and economy are reliant on ever larger expanding credit growth, and we are not getting enough. At some point, this game will be over, the FED and other Central Banks have fought hard against historical trends and the inevitable .
It feels better, it may be better,,but the party has been ongoing on laughing has. When the music stops, not many will be laughing.
One of my most trusted long term indicators is flashing RED, warning a Bear MARKET may be upon us. We have been through some corrections before, but is it different this time? And how can anyone know? Nothing is 100% for sure, but here is what I see and what concerns me. I know I have not been posting much lately, but 3 years ago I started my own business, and put all my efforts in supporting my family and trying to grow my business. I will not abandon this blog however, and will try to post at least once a week going forward.
Market was overdue for a correction, but the small caps seen through the RUT, have fallen For over a month. And lately the Transports have been leading the charge, you never like to see that.
Bull markets don't last forever , this one is 5 plus years old. Unless this is a Secular trend , it is long in the tooth.
Gold has fallen into a Bear mkt, and is flashing worries about Deflation, I believe this is more than just a strong dollar worry for gold.
Bond market is nearing its low in yields , showing a strong move for defense and preservation .
The FED minutes came out and sounded like easy days will continue for ever, so the market romped for triple digits. But the very next day the market gave it back, so mere words seem to also have diminishing returns.
Our markets and economy are reliant on ever larger expanding credit growth, and we are not getting enough. At some point, this game will be over, the FED and other Central Banks have fought hard against historical trends and the inevitable .
It feels better, it may be better,,but the party has been ongoing on laughing has. When the music stops, not many will be laughing.
Thursday, September 18, 2014
I'm All A Twitter
http://davidstockmanscontracorner.com/dot-com-bubble-2-0-lunacy-by-the-numbers/
You can't say the markets are driven by easy money, more like free money. With stocks at nose bleed all time highs, employment rocking( so they say) already reaching the FEDS targets. They cannot even change the language in their statements as to WHEN this insane ZERO RATE policy will end!
" well, if you listened to all the naysayers, you would have missed 28% gains in the last year"
That may be so, but I will repeat for the hard of hearing, if you overstay your welcome on this imaginary market not based on fundamentals, it will cut you in half.....a big WHEN the music stops.
D
You can't say the markets are driven by easy money, more like free money. With stocks at nose bleed all time highs, employment rocking( so they say) already reaching the FEDS targets. They cannot even change the language in their statements as to WHEN this insane ZERO RATE policy will end!
" well, if you listened to all the naysayers, you would have missed 28% gains in the last year"
That may be so, but I will repeat for the hard of hearing, if you overstay your welcome on this imaginary market not based on fundamentals, it will cut you in half.....a big WHEN the music stops.
D
Sunday, August 31, 2014
You can't print your way to prosperity
"Monetary policy promised way too much back in 2012. As I’ve written repeatedly, at this stage of a most spectacular and protracted Credit cycle, monetary inflation can only make things worse. Where does it end? And not for a minute do I believe the alarming rise in geopolitical risk and instability is unrelated to years of prolonged global monetary disorder. Mismanagement of the world’s reserve currency is replete with huge consequences. Mismanagement of all the world’s major currencies is a complete fiasco. " Doug Noland of prudent bear.com
Stock markets that defy gravity with Central Bank promises of forever zero interest rates and liquidity. But this mother of all trickle down tricks has not trickled down to anyone that isn't in the top 1%. So it should come as no surprise, that wages have not grown with the expense of everything else.
Volume has dried up and now there is ample evidence that there is another group of buyers who have come in to replace those who have left. And they are the Central Banks themselves. What kind of fair market system has the central banks buying s and p futures??
We already know our own Fed has bought near $4 trillion in us gov bonds, and we have the slowest, weakest recovery from Recession in the history of keeping those records.
With volatility near non existent, did you ever stop to wonder how " odd " that is? Even with world unrest, all seemingly is going unnoticed. Seemingly. Hedge Funds for the most part have done very poorly in this environment, because they are a " hedge" against volatility. But here we have none.
This period of immunity from declines will come to an end. The gaming accord of the central banks is said to end this year. I feel volatility will return in the not too distant future, and with it much lower stock prices.
At some point, there will be reversion to the mean, and the mean is nowhere in sight!
D
Stock markets that defy gravity with Central Bank promises of forever zero interest rates and liquidity. But this mother of all trickle down tricks has not trickled down to anyone that isn't in the top 1%. So it should come as no surprise, that wages have not grown with the expense of everything else.
Volume has dried up and now there is ample evidence that there is another group of buyers who have come in to replace those who have left. And they are the Central Banks themselves. What kind of fair market system has the central banks buying s and p futures??
We already know our own Fed has bought near $4 trillion in us gov bonds, and we have the slowest, weakest recovery from Recession in the history of keeping those records.
With volatility near non existent, did you ever stop to wonder how " odd " that is? Even with world unrest, all seemingly is going unnoticed. Seemingly. Hedge Funds for the most part have done very poorly in this environment, because they are a " hedge" against volatility. But here we have none.
This period of immunity from declines will come to an end. The gaming accord of the central banks is said to end this year. I feel volatility will return in the not too distant future, and with it much lower stock prices.
At some point, there will be reversion to the mean, and the mean is nowhere in sight!
D
Saturday, August 09, 2014
Market Oversold
The market is due for a rebound, but there has not been the type of selling that usually mark short term bottoms. The VIX has also not shown the kind of fear that would suggest a washout has occurred.
Though Fridays rebound was welcomed, I don't think this is the start of a new advance to higher highs.
Let's keep an eye on the Transports, as they have fallen faster than the Dow or SPX. Any return to new highs that doesn't bring all along would be reason for additional caution.
The same markets in California that got overheated are at it again. Partly could be due to less inventory.
Several radio ads run all day for seminars showing you how to FLIP HOUSES!!! De ja vous?
As long as interest rates remain low, that leaves little competition for stocks . I am unsure if this will remain a backstop as FED continues to back away from the QE. Usually interest rates rise in a bull market showing strength in the economy and demand for credit. And also re supplies the ammo needed to inject life into a flagging economy.
Not so this time.
Though Fridays rebound was welcomed, I don't think this is the start of a new advance to higher highs.
Let's keep an eye on the Transports, as they have fallen faster than the Dow or SPX. Any return to new highs that doesn't bring all along would be reason for additional caution.
The same markets in California that got overheated are at it again. Partly could be due to less inventory.
Several radio ads run all day for seminars showing you how to FLIP HOUSES!!! De ja vous?
As long as interest rates remain low, that leaves little competition for stocks . I am unsure if this will remain a backstop as FED continues to back away from the QE. Usually interest rates rise in a bull market showing strength in the economy and demand for credit. And also re supplies the ammo needed to inject life into a flagging economy.
Not so this time.
Sunday, August 03, 2014
IS IT TIME TO WORRY?
Has the long awaited correction finally come? Is the Bull Mkt Top in?
I am not sure if there isn't one more strong push to try to make new highs left. But I am pretty sure a correction of at least 10% has begun. August is usually not a great month for stocks historically.
As the market had made its new highs, the % of stocks following along had continue to drop. The VIX did not show any fear at the new highs, so there was plenty of complacency and there certainly was not any wall of worry to climb. No bull mkt let's all ride for free like this seems to have most of the way except at its early inception back in 2009.
My own indicators have signaled extreme caution as they have risen to new extremes, but a sell signal has not been given. Nothing is full prof, but the backdrop now has then FED backing away in its bond purchases and we are into our 5th year of zero interest rates. It is interesting the FED continues to signal this policy will continue for a long period of time even as we reach employment goals they had set out and recent GDP showed 4% robust growth. What's the worry still ?
My worry, is and has been, that continued market and interest rate manipulation will have its backlash day. And as valuations have risen to near extremes, It points to me it may be time to switch to a more defensive strategy.
I agree is does not make any sense to try and time a 10% correction! or any correction in an ongoing Bull Mkt, but when one starts to show its age, when a Bear Mkt is upon us, declines will exceed 20%.
With the FED already sitting at zero rates , I also worry when the time comes to assist the market and economy, they will be sitting there with no arrows to shoot!
D
I am not sure if there isn't one more strong push to try to make new highs left. But I am pretty sure a correction of at least 10% has begun. August is usually not a great month for stocks historically.
As the market had made its new highs, the % of stocks following along had continue to drop. The VIX did not show any fear at the new highs, so there was plenty of complacency and there certainly was not any wall of worry to climb. No bull mkt let's all ride for free like this seems to have most of the way except at its early inception back in 2009.
My own indicators have signaled extreme caution as they have risen to new extremes, but a sell signal has not been given. Nothing is full prof, but the backdrop now has then FED backing away in its bond purchases and we are into our 5th year of zero interest rates. It is interesting the FED continues to signal this policy will continue for a long period of time even as we reach employment goals they had set out and recent GDP showed 4% robust growth. What's the worry still ?
My worry, is and has been, that continued market and interest rate manipulation will have its backlash day. And as valuations have risen to near extremes, It points to me it may be time to switch to a more defensive strategy.
I agree is does not make any sense to try and time a 10% correction! or any correction in an ongoing Bull Mkt, but when one starts to show its age, when a Bear Mkt is upon us, declines will exceed 20%.
With the FED already sitting at zero rates , I also worry when the time comes to assist the market and economy, they will be sitting there with no arrows to shoot!
D
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