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Van

Is the Bull Market FINALLY over?

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SENTIMENT Check:

Does anyone else here think this trade might prove profitable?

 

A Not fully satisfactory "potential low" may be in place, thinks Tony C

- and I decided to play it (with TNA Calls) since my option order got hit

 

Here's the 5-year chart on IWM

 

IWM / Russell-2000 ... 5-yrs : 1-yr : 10d / SPX : 5-yrs : 1-yr : 10-d / TNA : 1-yr : 10d

IWM-5yr_zpsmrramk9w.gif

 

TNA-10d_zpsqvpkwyy2.gif

 

Tony C's comment on yesterday's action:

"The market opened higher today, made a slightly lower low than yesterday, then rallied to SPX 1899. After that it headed back down to make another lower low at SPX 1872. Then just as the SPX futures were about to break the overnight low the market surged into the close. We can now count five waves down from SPX 2021: 1953-1980-1909-1953-1872. With the fifth wave subdividing into five waves of its own: 1922-1935-1876-1899-1872. This entire decline could be counted as a retest as it bottomed within 5 points of the August SPX 1867 low. However, it was not exactly the finish we expected for this decline. So we are left with the possibility that the fifth wave is subdividing. Tomorrow should provide that answer. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum rose toward neutral after a positive divergence at the low. Best to your trading!"

 

> MORE: https://caldaro.wordpress.com/2015/09/29/tuesday-update-509/#comments

 

With VIX so high (26.8%), I decided not to play a rally-or-bounce with atm SPY calls. Instead, I decided to use

TNA Calls. This is similar to my recent choice to use TZA calls rather than atm SPY puts, that worked so well:

 

Compare: 09/29 : -Chg.- : -Pct.- :

SPY --- : 188.16 : +$0.11 : +0.06%
Oc187c: $05.86 :
TValue : $04.70 :
TVas% : 80.2% :
Oc182c: $09.26 :
IWM --- : 107.53 : - $0.77 : -0.71% :
TNA --- : $56.50 : - $1.17 : -2.03% :
Oc$52c $07.13 :
TValue : $02.63 :
TVas% : 36.9% :
VIX ---- : 26.8% : - $0.80 : -2.90%

SLW --- : $11.81 :
Ja$10c : $02.39 :
======

*I got a somewhat better price on the $52c ($6.25) since the order was in at that level, and got triggered near day's low,

when I was sleeping. Let's see if I have as much luck with it as I had with the TZA call trade

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Are we in the Last Rally now?

 

"I'd suggest that very hard times are just around the corner, waiting to spring upon us.

... the collapse of the financial markets which will bring great economic hardship.."

- CMJ

 

Indu-All-l2_zps1ouwxmiw.gif

 

Maybe the Bears have "called Wolf" too many times.

When the Big Bear market starts, many people won't believe it.

Many spoke about a crash this fall. We saw a decent drop, but not a crash. Stocks are rising again.

Will many people now think the market is immune to crashes, and jump in recklessly.

 

Tony Caldaro*, who has called this market very well, thinks we are in the last wave 5 rally.

I think he is targeting something like SPX-2,040 or higher, and maybe much higher.

But after that, the Big Bear arrives.

 

I hope people make some money on this "last rally", that's what it is.

But the really bad times still await us. The Big Bad wolf is still in the woods, and he is hungry

=== ===

 

*Tony Caldaro, on his blog yesterday said:

" This is the second best rally since the late-August, potential Primary IV, double bottom low at SPX 1867 to 1990. The next price obstacle for the SPX is obviously 2000, then the 2019 pivot. If the market can clear those levels, as easily as it cleared the 1956 and 1973 pivots, Primary V should indeed be underway"

==

> https://caldaro.wordpress.com/2015/10/05/monday-update-473/

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One final classic bull trap to set up the crash.. although no doubt they will initiate QE4 in an attempt to avert another crisis, in which case the USD will crash instead.

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One final classic bull trap to set up the crash.. although no doubt they will initiate QE4 in an attempt to avert another crisis, in which case the USD will crash instead.

Hmm...

 

Right.

Can you see the channels more clearly now?

 

INDU - monthly ... All-data : 10-yrs : 5-yrs : 2-yrs : 6mos / 10d

INDU-mo-Log_zpsctf9wup2.gif

 

10-year Chart : PV target : Dow: 18,600 - 18,800 ? : 6-mos-D

Indu-10yrs_zpsqri5znwr.gif

Yeah.

In can see some logic in it happening that way. Would be good for USD-priced Gold

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Hedge funds suffer biggest losses since the financial crisis

August was the worst month since October 2008 for the industry
Nuclear physicists, unreported exits, and huge losses: How an $80 million hedge fund blew up in one month
On September 11, Spruce Alpha, a small hedge fund that is part of a bigger investment group, sent a short report to investors.
The letter said that the $80 million fund had lost 48% in a month, according the performance report seen by Business Insider.
There was no commentary included in the note. No explanation. Just cold hard numbers.
Hedge funds suffer worst month since October 2008
Hedge funds have suffered their biggest monthly monetary loss since the 2008 financial crisis in the wake of market turbulence that battered the portfolios of some of the industry's best known investors.
The sector as a whole lost $78 billion due to its performance in August, the worst monthly absolute fall in assets since October 2008 — the month following the collapse of Lehman Brothers — according to research by Citi.
"The only thing that seemed to work was cash. Of course that's the one thing they [the hedge funds] don't have," said Paul Brain, head of fixed income for Newton Investment Management and a former credit hedge fund manager.

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"The sector as a whole lost $78 billion due to its performance in August, the worst monthly absolute fall in assets since October 2008"

 

Hmm.

they should have been reading GEI. (haha)

Honestly, how could they have missed the big risk, well telegraphed by things like the Shemitah cycle, the Bradley model,

and the charts themselves, which got very "tired" before the drop ?

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Mike Maloney-Bond Bubble Bust Will Be Devastating

 

Here's a look at TLT ... All Data

TLT-all_zpsfc0bo8nv.gif

...

Notice a number of turns at/near year-ends.

 

It will be interesting to see if TLT goes to a high or low end of a trading range on 12/31/2015

 

A bond rally, together with a "Santa Claus" stock rally, might set markets up for a big turn in 2016

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FTSE is in serious technical trouble here, sub 6,000. The long term MAs are firmly heading down now, and that appears to be the path of least resistance.

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FTSE is in serious technical trouble here, sub 6,000. The long term MAs are firmly heading down now, and that appears to be the path of least resistance.

20 week is well under the 50 week.Not a head fake at all.

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Weinstein indicator #3 has broken down:

 

3. Internal Market Momentum

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

Long term this one works like a charm:

http://stockcharts.com/h-sc/ui?s=%24NYAD&p=D&st=2005-12-11&en=(today)&id=p43685490255

Interesting summary of the Weinstien indicator which was new to me.

 

Makes a lot of sense.I particularly like his take on being contrary ie that it only works over longer timeframes and against prevsailing themes.

 

Thanks for the heads up on the advances/decliners.

 

Personally,I think we're going down from here.Quite where I'll pick up my mining stocks,I just don't know yet.Looking back at my Anglo Am thread started sometime earlier this year and it seems impossible that the decline we've had thus far has been this quick.

 

When Next is back at £2/£3 then I might even consider buying them.

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Junk bonds have a serious warning for stocks

 

 

Why the junk bond selloff is getting very scary

Published: Dec 11, 2015


High-yield bonds have led previous big reversals in S&P 500

MW-EB083_Hallow_20151211124813_ZH.jpg?uu
Junk bonds are like the boogeyman for stock market investors.
tomiKilgore_100.png

By

TomiKilgore
Reporter

The junk bond market is looking more and more like the boogeyman for stock market investors.

The iShares iBoxx $ High Yield Corporate Bond exchange-traded fund HYG, -2.00% dropped 2% on Friday to close at the lowest price since July 17, 2009. Volume 54.1 million shares, or nearly six times the 30-day average of 9.5 million shares, according to FactSet.

See also: 5 things that show the junk bond market is in big trouble

While weakness in the junk bonds -- bonds with credit ratings below investment grade -- is nothing new, fears of meltdown have increased after high-yield mutual fund Third Avenue Focused Credit Fund TFCIX, -2.86% TFCVX, -2.70% on Thursday blocked investors from withdrawing their money amid a flood of redemption requests and reduced liquidity.

This chart shows why stock market investors should care:

MW-EB066_MHCAX__20151211104257_MG.jpg?uuFactSet

When junk bonds and stocks disagree, junk bonds tend to be right.

The MainStay High Yield Corporate Bond Fund MHCAX, -0.74% was used in the chart instead of the iShares iBoxx ETF (HYG), because HYG started trading in April 2007.

When investors start scaling back, and market liquidity starts to dry up, the riskiest investments tend to get hurt first. And when money starts flowing again, and investors start feeling safe, bottom-pickers tend to look at the hardest hit sectors first.

So it’s no coincidence that when the junk bond market and the stock market diverged, it was the junk bond market that proved prescient. Read more about the junk bond market’s message for stocks.

 

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1.png

 

The VT world stock index ETF - the odds of finding a winner in the stock market, are not in favour. Stage 4.

The real economy is also affected. With petrol under £1/L we are entering strange new territory. We are in the birth pangs of a new order, and what will emerge will bring new opportunity. But until the painful process completes, probably throughout 2016 - Caution is warranted!

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Scary.

But maybe the fears are overdone.

Tony C thinks we are close to another big rally - maybe starting next week

 

DoubleLine Capital founder Jeffrey Gundlach warned Friday that an interest-rate increase by the Federal Reserve could lead to more market turmoil after this week’s massive selloff in high-yield debt.

In an interview with Reuters, Gundlach likened the selloff in high-yield debt to the 2007 financial meltdown, adding that if the Federal Reserve met Friday, it wouldn’t raise interest rates.

“People are too long credit and the credit is melting down and the stock market is whistling through the graveyard. It is so similar to 2007, it’s scary,” said Gundlach, who oversees $80 billion at the Los Angeles-based DoubleLine Capital.

Market strategists widely expect the Fed to raise interest rates for the first time in nearly a decade when it meets next week.

“I’d have to believe that if they met today that they wouldn’t raise rates... I mean, Wow. Look at the chart of [The SPDR Barclays High Yield Bond ETF] JNK, -2.01% It’s accelerating to the downside,” he said.

The rock-star fund manager said in early November that the S&P 500 wouldn’t be able to handle an interest-rate hike in December.

Read: Why the junk bond selloff is getting very scary

Investors are often willing to countenance to higher risk associated with junk bonds in return for the higher return.

The junk-bond market made headlines Friday after a mutual fund operated by Third Avenue Management blocked investors from withdrawing their money in a highly unusual move that many investors found troubling.

==

> http://www.marketwatch.com/story/high-yield-debt-meltdown-is-so-similar-to-2007-gundlach-says-2015-12-11?Link=obnetwork

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http://globaleconomicanalysis.blogspot.co.uk/2015/12/massive-collapse-in-trucking-shipments.html

Massive Collapse in Trucking Shipments Every Month Since June

'Also note that in August, September, October, and November, shipping volumes were down compared to the same month in 2011, 2012, 2013, and 2014 except for the single instance of September 2015 vs. September 2012.'

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TONY C: An Inflection Point & End to Choppiness ?

 

LONG TERM: bull market

It is interesting to note, since 1982 equities have been in a bull market 85% of the time. Yet, many are all too eager to claim a bear market when the market struggles to make new highs, or enters a downtrend. It is also interesting to note the following yearly results, year over year, since the bull market began:

2009 (+23.4%),

2010 (+12.8%),

2011 (+00.0%),

2012 (+13.4%),

2013 (+29.6%),

2014 (+11.5%), and

2015 ( - 0.6%).

Yes, 2015 is the first year over year loss. But the market would have been unchanged, like 2011, if not for the last two hours of trading on Thursday 12/31/2015.

 

spxweekly4.png?w=640&h=485

 

If one reviews the chart above they will notice that during 2011 (0%) and 2015 (-0.6%) the market experienced its Primary waves II and IV respectively. So the yearend results are quite close to what has normally occurred during this bull market. Should the market continue to perform in 2016 as it has done during this bull market, we should expect a rise of 12.8% (mean), or 13.0% (average), to SPX 2306-2310 by yearend. While we continue to see the bull market extending into year seven, its price action has provided an excellent long term stop less than 9% below the yearend SPX 2044 close. Simply put, if the SPX drops 9% from the yearend close, at any time during 2016, it has probably entered a bear market.

 

MEDIUM TERM: up/down trend remains at inflection point

 

The year 2015 was quite a choppy year, and similar to the year 2011. In both years the market rallied to bull market highs in May. Then both experienced two of the three biggest corrections of the entire bull market: Primary waves II and IV. This was followed by a Major wave 1 uptrend and Major 2 downtrend into Q4. And both years the SPX finished relatively unchanged. The only difference we can see, using OEW analysis, is that in 2011 a Major wave 3 uptrend was already confirmed heading into yearend. And, in 2015 it has yet to be confirmed. Other than that, and the depth and length of the Primary waves corrections, the two years look quite similar.

spxdaily4.png?w=640&h=485

 

From the SPX 1867 Primary IV low in August we labeled five waves up to SPX 2104. SPX 2116 was the actual high, but we counted the uptrend as a failed fifth wave: 1993-1872-2116-2019-2104. The quick two week selloff that followed, which normally occurs after failed fifth waves, took the market down to SPX 1993. After that the market rallied in an apparent three wave structure to SPX 2077, and then headed lower again. While we were expecting a retest of SPX 1993, or the 1973 pivot, the market suddenly reversed at SPX 2005. Failing to make an equal or lower low. Only the DOW met this parameter, not the NAZ/NDX either. As a result the past three weeks have been a bit difficult to track, as we have observed a rally to SPX 2077, a decline to 2005, and a rally to 2082.

 

The internal structure of the SPX 2077 rally looked impulsive until it hit 2060, then it became quite choppy as it rose to 2077 and headed lower. The recent rally, however, continues to look impulsive despite the big pullback late in the week. If it is also just another counter-trend rally we would expect SPX 1993 or even the 1973 pivot to be tested next. Hopefully 2016 will produce a market that trends again rather than the choppiness of 2015. Medium term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.

==

> https://caldaro.wordpress.com/

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Interesting point.

 

I like the Gold chart now, but it looks lonely.

I would be happier if Gold stocks and Silver were doing better alongside Gold

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Interesting point.

 

I like the Gold chart now, but it looks lonely.

I would be happier if Gold stocks and Silver were doing better alongside Gold

 

GDX & SLV very strong today. In fact, GDX has just popped its head above the 133DMA. First upside target $17?

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"Horrific start to the year for stock & oil. Market has completely shrugged off the good NF job numbers and rolled over.

It does not bode well at all for the upcoming year. FTSE has just put in its lowest weekly close since Nov 2012."

- Van

 

Old saying: "As goes January, so goes the year" - and the first week of Jan often indicates the month.

Unlike Tony C., Harry Dent is expecting an imminent and fast crash

.

Expert: 2016 As Bad As The Great Depression

Published on Jan 8, 2016

Alex Jones talks with economic expert Harry Dent about why he thinks the collapse is coming in 2016.

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Harry Dent studies demographic influences in the economy. But his recent predictions are way off the mark, according to wikipedia.

His comments should be considered with some scepticism.

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80% Stock Market Crash To Strike in 2016, Economist Warns

  • by JL Yastine / January 7, 2016

Several noted economists and distinguished investors are warning of a stock market crash.

 

Billionaire Carl Icahn, for example, recently raised a red flag on a national broadcast when he declared, “The public is walking into a trap again as they did in 2007.”

And the prophetic economist Andrew Smithers warns, “U.S. stocks are now about 80% overvalued.”

Smithers backs up his prediction using a ratio which proves that the only time in history stocks were this risky was 1929 and 1999. And we all know what happened next. Stocks fell by 89% and 50%, respectively.

Former congressman Ron Paul didn’t mince words either. He warns that the stock market’s “day of reckoning” is fast-approaching. When that day comes, he doesn’t think it’s just going to be a correction; it will be “stock market chaos.”

But there is one distinct warning that should send chills down your spine … that of James Dale Davidson. Davidson is the famed economist who correctly predicted the collapse of 1999 and 2007.

Davidson now warns, “There are three key economic indicators screaming SELL. They don’t imply that a 50% collapse is looming – it’s already at our doorstep.”

And if Davidson calls for a 50% market correction, one should pay heed.

Indeed, his predictions have been so accurate, he’s been invited to shake hands and counsel the likes of former presidents Ronald Reagan and Bill Clinton — and he’s had the good fortune to befriend and convene with George Bush Sr., Steve Forbes, Donald Trump, Margaret Thatcher, Sir Roger Douglas and even Boris Yeltsin.

 

They know that when Davidson makes a prediction, he backs it up. True to form, in a new controversial video, Davidson uses 20 unquestionable charts to prove his point that a 50% stock market crash is here.

==

> http://thesovereigninvestor.com/exclusives/80-stock-market-crash-to-strike-in-2016/?z=451506

 

Another Video

James Dale davidson economic collapse

 

Published on Oct 12, 2015

 

From the search I did, it seems he has been promoting the same Bearish message for years

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