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Van

Is the Bull Market FINALLY over?

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Personally I've found the last few sessions fascinating, mainly watching from the sidelines.

 

I've felt like a rabbit it the headlights not knowing which way to move in part. Aside from my entrenched oil play which has been an education as I've taken a big hit, I've mainly been preparing for this, but have I in truth? Didn't really go short, just sat heavy in cash, which makes me feel vulnerable to devaluation of the £.

 

Gold has held up well last few days and like a Silver I have a position, but can't easily trade it, being around 15% of my disposable liquid assets. So I can't press the button when tempted, but that proves it's not really a market position.

 

Pension pots went to gilts as I expected a crash, but can't feel smug as I still feel vulnerable there.

 

Suppose I'm sitting thinking ok, I've largely banked some good gains this year and let the markets crash, so I'll go bargain hunting with my cash pot, it still feels like I'm sat looking into those headlights though!

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THERE's a TIMEWARP in Hong Kong

...and an online forum , where some posters still think they are clever when they laugh

at Alex Jones and other "conspiracy theorists" - Here are some posts from that Time Warp:

 

DrB:

The Jokers who run the MSM should be tied to chairs and forced to watch
Alex Jones crowing like this again and again, until they scream: "I get it!"
Then... they can get fired by Donald Trump !

VIDEO:
Infowars Predicted Collapse as MSM Covered it Up - Infowars Nightly News - 08/24/2015

 

I used to ask: "Are they (the media) Lying, or Stupid?"
I think we may know the answer now: They were paid to lie... and we were stupid to believe them !

Clearly, there are some here, who are incapable of reading or responding to the points that I have made here. Instead, they invent a straw man and call all critics of authority: "conspiracy theorists." The MSM-followers then throw around "weaponized" words, and they think they job is done: Another threat to authority has been neutralized.

How well is it working for those of you who believe the MSM spin?
Are you making money? Do you feel happy, empowered, and free? How well is it working to listen to those who attack the critics of Media? Might you do better to try listening to the criticisms instead, and to learn to understand the many plots that are hatched every day, and supported by the "spin" from compliant, money-grubbing "news" factories?

 

HC:

Alex Jones is my hero (+ image of head-palm)

 

DrB:

Howard, Let me ask you: How's your stock portfolio doing? Are you making money over the past several days?
What sort of media do you pay attention to, and how useful has it been?
If the MSM is keeping you well informed, and you are happy with the political leadership you see in the world, then there is little need for Alex Jones, and other critics in the alternative media

 

HC:

(how's your stock portfolio?):

No idea, I have not bothered to look. I dont invest day to day and I'm not looking for buying opportunities so I've not even checked..

(What sort of media do you pay attention to?...)

I keep eyes open on the regular guys as well as alternative sources. Very useful in keeping me informed.

(... Alex Jones?)

There is no need for him at all - he is a loon.

 

DrB:

Okay. Thanks for answering.

Using my own research, and checking with alternative media sources that you may find no more "mainstream" than ALex Jones. I have SOLD my main home in HK earlier this year, and will be moving out into a small (downsized) property next month.

I am almost fully out of stocks (except a few residual holdings) and long cash and gold.

Let's check in with each other in 6 months, in 12 months, or later and see who is doing better in getting the ""long term investor's script" right.

Harry Dent is on

,

and he is talking about a four years downturn, and being OUT of those bubble cities like NYC, SF (and I think has has said HK is a bubble city too)

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Riggerbeautz

 

My experience has been similar to yours. I sold stocks to cash in July after a very good run since late last year. Just sat in cash during this shakeout and didn't attempt to trade.

 

I don't think this is the end of the bull. The three guys I follow in the market are Martin Armstrong, tony Caldaro and Russell Napier. Armstrong and Caldaro say it's not over for stocks but may be the end of the bond bull. Napier says something slightly different namely he expects deflation to stock markets but as a consequence of Chinese devaluation which will eventually force Us rates to rise. If this is PIV in Elliott wave terms it could go on until October?

 

As for the FTSE some miners gold and oil are crazily cheap likely to get cheaper still but if you are prepared to buy and hold could be very attractive investments over 3-5 year timeframe. That's where my attention is going although short term there is better value elsewhere.

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Hi Leviathan,

 

Being bearish has cost me quite a bit in profit terms a few years back, now I guess the upside is when it slips it saves my profit; albeit I've been too wedded to an oil play that cost me eye watering profit; the truth hurts with that one, ho hum.

 

I'm a fairly simple trader, so as for people to follow, bar a passing interest in Robbie Burns, as deep down I'm a wannabe trader, I follow nobody in particular as they all seem to be wrong at some point. I used to like Schiff, Rogers and to a lesser extent Maloney regular comments when I was too in love with PM's, now I just take sound bites all over and try to do my own thing. Take on board your thoughts on the bull being far from done though, maybe they are right. Not inclined to have many long plays yet myself.

 

Agree on miners and oilers, just wonder if buy and hold can hold up at the minute, as I believe in a real " bear" everything would get trashed due to forced liquidations; seen it before. Just my thoughts.

 

Edit: the Dow just completed a massive intra day reversal, so it's a gamblers paradise out there with timing everything.

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Reuters - ‎2 hours ago‎

A strong rally on Wall Street evaporated on Tuesday and stocks ended with deep losses as concerns about China's economy outweighed lower valuations that some saw earlier as bargain

. . .

Investors cited more worries that a slowdown in China could hobble global growth, even after the country's central bank cut interest rates on Tuesday for the second time in two months. The move came after Chinese stocks slumped 8 percent on Tuesday, on top of an 8.5 percent drop on Monday.

 

SPY - 10d

SPY-10d_zpsw3cw0q0l.gif

 

DOW 2015 ... Update : 10d : 2d

Shem-15_zpsi77puhp6.gif

 

Actually, yesterday's low HELD, as shown above

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Riggers and all

 

Yep agree wholeheartedly with that if you are cautious during the bull you will most likely give less back during the bear. Good does get sold down with bad in a bear market but equally companies with lower levels of debt should do better once the bear has done its worse so I think the time is now to identify targets to buy in a broader and longer down market. Robbie Burns from memory tends to find stocks that are breaking out as his trading strategy./ This has worked well recently in the UK market with companies like Barratt's and Taylor Wimpey but whether this approach would do so well in a bear market I'm less convinced

 

The crux to me now at a macro level is will the bull continue or has the US market peaked. The Elliott wavers are focused on the size of the P4 correction. If P4 exceeds P2 then it probably isn't P4 but the end of the bull market altogether. Dr B covers this and there is more info freely available including an excellent weekly report on Tony Caldaro's website.

 

The one thing that is really troubling me ATM is why the Euro is rising not falling vs the $. I'd love to know the answer to this one - as the opposite to what should happen seems to be happening

 

Lev

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Yeh - but since 2008, the Fed's priority has been to protect the stock market.

 

The fat cats won't want to change that.

 

Already plenty of calls to rule out Sept rate hike "in order to protect investors".

 

Economic reality is only a side issue nowadays.

 

Yes, but if protecting the stock market means destroying their currency... it's a scorched earth policy.

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The bull is definitely over for me.The reflation post 2008 was based on Chinese credit expansion and for a whole host of reasons,that's come to an end.

 

Dead cat's can bounce a fair way though.

 

http://www.icis.com/blogs/chemicals-and-the-economy/2015/08/contagion-hits-financial-markets-great-unwinding-continues/

 

Hodges nails it for me.

 

'The problem is that much of the buying of oil and other commodities has been done on margin. This risks creating a vicious circle, as buying on margin with borrowed money can be a very dangerous game . The reason is the way that margin works to magnify gains, or losses, from your trades:

  • On the upside, you can invest $1m in oil futures for just $100k, if you use the standard 90% margin. If prices then go up $1/bbl, you have made a lot of money with your $100k
  • But if prices go down $1/bbl, you now have to either close your position and hand over the $900k you have lost, or put in more margin

This is what has been happening in recent days. As oil and other commodity prices have continued to fall, so the speculators have either had to sell their positions at a loss, or provide extra margin. In turn, this often meant they had to sell something else to raise the necessary funds. And all of this has to be done in a hurry, as margin calls have to be paid in full each night as the market closes.

This would be bad enough. But in addition, much of the buying of stocks has also been done on margin. This is exactly the contagion risk that concerned me a year ago, when I worried that developments in China could lead to a downturn in global financial markets:

  • “The prices for those metals and other commodities caught up in the trade would be hit first
  • Mining company shares would also be hit, as people worried their vast capacity expansions were wishful thinking
  • Investors may put 2 and 2 together and worry, as the BBC described in February, that “China Fooled the World

“Next to be hit could be other financial markets. Complacency and low interest rates have encouraged investors to borrow heavily. Each night, therefore, they might start to receive margin calls as prices for their commodity-related investments decline:

  • Some investors might decide to sell out, pushing prices further down
  • Other investors might need to raise funds by selling non-commodity related investments
  • At the same time, buyers might then immediately disappear for anything that appears to be high-risk

“A third phase of the downturn could then develop in our globally-linked electronic world:

  • These forced sellers might have to sell in more liquid markets to secure the cash they need
  • This would mean selling blue-chip shares and high-quality government bonds
  • In turn, investors who have borrowed heavily to invest in these markets would then start to receive margin calls

“The risk is therefore that major declines could then take place quite suddenly in a number of major financial markets, just as Hyman Minsky would have forecast:

“His insight was that a long period of stability eventually leads to major instability

  • This is because investors forget that higher reward equals higher risk
  • Instead, they believe that a new paradigm has developed
  • They therefore take on high levels of debt, in order to finance ever more speculative investments'

 

 

 

Although the NYSE margin data is a month old when it's published,it's been busting new highas for a few years now.Mathematically,that can't continue

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Neowave "education" - from Glen Neely

 

Wave theory is great at identifying markets near the end of their development.

In practice, one of two events must occur to confirm the end of a pattern…
1. As it is forming, the last leg of that pattern must develop a clear, well-formed, 5-wave move (an impulsion).
2. Afterward it is over, a large, violent, post-pattern price move must materialize.

Stated another way, to anticipate the end of a trend, impulsive structure is required. When impulsive structure is absent, one must unfortunately wait for violent, post-pattern price action (what I call NEoWave “confirmation”).

This year, and this month, the S&P gave us both types of confirmation. Throughout 2015, a well-formed 5-wave move (beginning in mid 2013) was visible on monthly charts that met all requirements of a 5th extension Terminal (satisfying option 1, above). That 5-wave move was the reason I kept warning S&P Forecasting and Trading customers all year that a major market top was “in the works.”

While monthly charts provided evidence of an ending bull market, weekly and daily charts lacked impulsive activity. Consequently, until such activity emerged, I would not be able predict the end of the advance using weekly or daily charts - we would be forced to wait for a violent sell-off to begin.

Last Friday, around mid day, the S&P pushed 100 points below its all-time high. That was the first “hint” daily pattern confirmation was underway. From 33 years of experience, I know when a multi-year pattern ends, the start of the new trend is hyper-violent! Therefore, any hesitation to act could be “fatal” to our trading success. That is why I immediately released an “Emergency Report” last Friday afternoon to get weekly and monthly Trading customers Short the S&P (risk was too high for daily traders). Based on Friday’s large but orderly decline, and its close near the low, I was confident “something big” was coming. Monday's 100-point collapse in the S&P instantly provided weekly pattern confirmation, which virtually assured that the 5th extension Terminal (on monthly charts) was analyzed correctly.

 

For that reason, last Friday night (on August 21, 2015), I felt confident enough to publicly state to NEoWave S&P subscribers that “THE BULL MARKET IS OVER"!

 

(by email)

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This bounce is setting up the bull trap that will confirm the death of the bull market.

Anecdotal headlines that I see on the back of yesterday's action (eg "what crises?") make me very confident that sentiment is nowhere near a bottom.

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I agree

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BEARS may be ready soon... for a performance they will like.

 

Pull up a seat, and watch it unfold

 

giphy.gif

 

Is FTSE about to lead the SPX lower (once again?) ... update

 

FTSE-vsSPX_zpsfz70kgou.gif

 

Remember this? (above)

 

FTSE-100 / UKX vs. SPY ... update

 

UKX-vsSPY_zpsbqptxsul.gif

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Commodity Bear ending?

 

Aug 31 4:14pm:

Oil prices have a long history of violent swings. But even by those standards, crude just experienced an incredibly extreme move.

More

Meantime, the Crash in stocks may have resumed

Pre-market:

S&P -31.50 / -1.60% Level 1,937.75

Dow-238.00 / -1.44% / Level16,270.00

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WENT SHORT AGAIN yesterday !

 

In case you don;t read my diary,,,

I exited my original shorts within a day or so of the Low, and Shorted again yesterday.

Because VIX was above 20%, I used Oct. calls on TZA as my vehicle this time.

 

Price--- : Origin : Trade: Extreme : 09/18 :
SPY----- : 200.18 : 202.00 : 202.89 : 199.73 :
Oct200p: $05.17 : $05.00 : $03.80 : $05.75 :
IWM ---- : 116.00 : 118.00 : 118.89 : 117.34 :
TZA ---- : $11.05 : $10.70 : $11.10 : $10.90 :
Oct$10c $01.61 : $01.06 : <$1.00 : $01.45 : I BOUGHT THESE !
VIX------ : 22.0% : 22.0% : 17.87% : 21.14% :
=======

 

IWM - etf for Russell-2000 ... 6-mos : 2-yrs : 4-yrs : 5-yrs : 10-yrs / tza-6mo / 10-days: IWM : TZA : SPY

IWM_zps46vajcva.gif

 

TZA_zps6xkcdnli.gif

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Bear markets precede economic recessions, they do not report on them.

I keep having to explain this to people:

 

http://www.marketoracle.co.uk/Article52370.html

 

But the truth is bear markets always precede a recession--those who argue otherwise have it exactly backwards. The stock market is a forward looking indicator: it anticipates economic activity yet to come, it doesn't report on economic conditions that are occurring.

Recent history proves all recessions were preceded by bear markets. Even though the market is guilty of over anticipating a recession, it has never missed predicting one.

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Update on the Weinstein indicators:

 

1. SPY stage analysis - BEAR

2. $NYAD - BEAR

3. Internal Market Momentum - NEUTRAL

4. New highs vs New Lows - BEAR

5. World markets - BEAR

6. Lead Stock AAPL - BEAR

7. Price:Dividend ratio - BEAR

8. Herd sentiment - NEUTRAL

=

 

6 Bear

2 Neutral

 

 

 

So it looks like the major indices, after spending the last 12 months churning to marginal new highs, have finally turned down.

More importantly, the internals have begun to break down.

 

DJIA 17,200.

 

 

Discussion:

Are the Weinstein indicators saying Bull or Bear?

http://www.alltimehighstocks.com/p/weinstein-indicators-bull-bear-markets.html

 

1. SPY stage analysis: NEUTRAL (moving to bear soon?)

 

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=SPY&uf=0&type=64&size=2&sid=9864&style=320&freq=2&time=9&rand=418254556&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

2. $NYAD

http://stockcharts.com/h-sc/ui?s=$NYAD&p=W&b=5&g=0&id=p07313556463

divergence - BEAR.

 

3. Internal Market Momentum: BULL (still just)

http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&b=5&g=0&id=p50395118458

 

4. New highs vs New Lows

http://stockcharts.com/h-sc/ui?s=$NYHL&p=W&b=5&g=0&id=p77082224047

below zero - BEAR

 

5. World markets - BEAR

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=VEU&uf=0&type=64&size=2&sid=2635545&style=320&freq=2&time=9&rand=88629616&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

 

6. Lead Stock AAPL - BEAR

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=AAPL&uf=0&type=64&size=2&sid=609&style=320&freq=2&time=9&rand=556887658&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

 

7. Price:Dividend ratio - BEAR

http://www.multpl.com/s-p-500-dividend-yield/

(although I question the usefulness of this indicator nowadays)

 

8. Herd sentiment - NEUTRAL

http://www.aaii.com/sentimentsurvey

 

 

 

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Bear readings everywhere per Stan Weinstein's indicators

 

Yep - and the market agrees today too - as VW news feeds thru to global indices

 

U.S. Stock Futures arrowDown.gifS&P -27.00 / -1.38% Level 1,936.00

 

> http://money.cnn.com/data/premarket/

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Update on the Weinstein indicators:

 

1. SPY stage analysis - BEAR

2. $NYAD - BEAR

3. Internal Market Momentum - NEUTRAL

4. New highs vs New Lows - BEAR

5. World markets - BEAR

6. Lead Stock AAPL - BEAR

7. Price:Dividend ratio - BEAR

8. Herd sentiment - NEUTRAL

 

6 Bear

2 Neutral

 

Thanks for that Van.Interesting links.

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FTSE's move suggests the SPX will stay under pressure today

 

FTSE : 6,032.24 - 44.64 = 5,987.60 : - 0.74%
SPX - : 1,938.76 - ???

-0.74% : 1,924 : : if the drop matches FTSE today

FTSE vs. SPX ... 10-days

 

FTSE-vsSPX_zpseqcmuz3h.gif

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FTSE sub-6k again.

Dow is threatening to revisit the 15,xxx's

 

 

One thing about lower prices is that... they readjust expectations lower also.

 

Dow 20k, FTSE 8k.. all suddenly looks like a pipedream.

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Maybe falling earnings will be what trigger the next downleg to really set off the next bear market.

 

http://www.newsmax.com/Finance/MichaelCarr/S-P-500-Earnings-Stocks-Investors/2015/09/16/id/691764/

 

Analysts have lowered their estimates by 15 percent since the beginning of the year and 3 percent in the past three months. If current downtrends continue, we could see earnings fall by 10 percent or more by the end of 2015.

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