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Posts tagged ‘Stock Market’

Dancing Without A Floor – “Sooner Or Later A Crash Is Coming… And It May Be Terrific”

Excerpted from John Hussman’s Weekly Market Comment,

There’s really no point in trying to convert anyone to our viewpoint. Somebody will have to hold stocks over the completion of the present cycle, and encouraging one investor to reduce risk simply means that someone else will have to bear it instead.

But for those who understand the narrative of the recent half-cycle, where our challenges have been, and how we’ve addressed them, I do encourage reviewing all risk exposures from the standpoint of the losses that have repeatedly occurred over the completion of market cycles that have reached valuations anywhere near current levels (1929, 1972, 1987, 2000, and 2007). The point is not to discourage stock holdings entirely, but rather to ensure that exposure is not so large that a steep market loss would be intolerable. It’s important to recognize that the market is not only at a point where unusually rich valuations are already in place, but also where market internals and our measures of trend uniformity have clearly deteriorated. This is the most hostile set of market conditions we identify, and it closely overlaps periods in which the stock market has been vulnerable to abrupt air-pockets, free-falls, and crashes.

As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle.

At present, however, market conditions couple valuations that are more than double pre-bubble norms (on historically reliable measures) with clear deterioration in market internals and our measures of trend uniformity. None of these factors provide support for the market here. In my view, speculators are dancing without a floor.

A final note: There is a danger in ignoring the concerns of value-conscious investors as a bubble proceeds. The danger is that the longer these concerns are “proven wrong” by further advances, the more severely they are likely to be proven correct by an even deeper loss over the completion of the cycle. Roger Babson offers a useful lesson in that regard. Babson, whose first rule of investing was to “keep speculation and investments separate,” is known not only for founding Babson College in Massachusetts, but also for a speech at the National Business Conference on September 5, 1929, at the peak of the market, saying “sooner or later a crash is coming, and it may be terrific.”

full article at source:  http://www.zerohedge.com/news/2014-10-06/dancing-without-floor-sooner-or-later-crash-coming-and-it-may-be-terrific

Algo Activity (And Manipulation) Breaks Record On Friday’s Quad Witching Debacle

Friday was an extremely volatile day with new record highs being achieved miraculously at the open only to be followed by free-fall in the market’s most-loved momentum names into the close. It seems that the quad-witching was of particular interest to the algos as Nanex notes,a new record was set for most trades in a 1-second interval. What was even more unusual was the record number of ‘unusual’ price changes that occurred in the 3 seconds before the market opened and index futures expired. “Efficient” markets indeed…

Via Nanex,

On March 21, 2014, at 15:45:00, a new record was set for most trades in 1 second in NMS stocks (NYSE, NY-ARCA, NY-MKT and Nasdaq listed stocks and ETFs – approximately 8,000 symbols). The 3rd and 4th most active seconds were also set, at 15:50:00 and 15:55:00 respectively. The 2nd most active second was set at 10:00:00 on September 1, 2011…………………

full article at source: http://www.zerohedge.com/news/2014-03-24/algo-activity-breaks-record-fridays-quad-witching-debacle

Disinformation War Still Dominates Stock Markets – Charts to watch

By: Garry_Abeshouse

Bulls–t and criminality back in 1970 was much the same as bulls–t and criminality now.

January 2014 marked the 44th anniversary of one of the biggest mistakes of my life. Back in January 1970, I was young and inexperienced as to how stock markets functioned and balked at selling on the huge profit I was making at the time. The Australian speculative boom in nickel stocks was peaking and everyone around me was saying it was going to last forever. Even the solicitor I was using at the time told me to hold on, while unbeknown to me, he was actually dumping huge quantities of one of the stocks I was holding. This was in the middle of a huge feeding frenzy of disinformation that makes up a large part of every bull trap that has ever existed. But then as now the market tone was and is changing, from one where greed and overoptimism dominate, to one where fear again regains ascendance. Bull traps have forever been defined in these terms.

As in 2008, the combination of Murdoch domination and time poor journalists ever fearful for their jobs are letting us down, as they pursue the peripheral 24 hour news cycle as an easy way out of analysing and reporting the in depth news of the year or decade. Financial economists, uncomfortable with socio-economic issues, still treating people as merely impediments to “efficient” and “free” markets – have now been increasingly discredited by the likes of Naomi Klein, Matt Taibbi and “new age” economists such as Bichler and Nitzan. But reading or listening to the mainstream media, you would never know. The longer the financial discourse is limited to the theoretical economic constructs so beloved of the financial media, the less chance we have of limiting future collateral damage to our socio-economic wellbeing…………………

full article at source:http://www.marketoracle.co.uk/Article44762.html

Extraordinarily Dangerous Stock Markets

By: Brian_Bloom

The  Federal Reserve’s Quantitative Easing has given rise to an all time low in the  money multiplier which, in turn, has a higher probability of rising than  falling. Notwithstanding the recent explosion of personal debt, Chart #5 above  shows an emerging propensity of the US public to want to save a higher  percentage of their income and/or pay down debts.  Therefore, the most likely driver of a rising  ratio will be a rise in savings relative to money stock which, in turn, will  place a downward pressure on corporate earnings.  It follows that continuation of QE by the Fed  will do nothing other than push the money multiplier ratio lower. Therefore QE  is becoming impotent as a strategy for driving the US economy. By extension, if  the savings rate continues along its early rising trend, this will likely be  accompanied by recessionary conditions which, in turn, will place a downward  pressure on Price:Earnings ratios.

There  are two unconventional analysts who have come to my attention over the years  and whose work is unique to them:

The  first is Mr. Alan Newman, who publishes a report entitled “Pictures of a Stock  Market Mania”. His latest report, dated November 5th 2013 can be  viewed here:   www.cross-currents.net/charts.htm ).

The  second is Professor Didier Sornette, who’s bio can be viewed at (http://www.er.ethz.ch/people/sornette ) and whose stock-market  relevant work is summarised on the following You-Tube of a TED Talk entitled  “How can we predict the next financial crisis?”that he gave in June 2013. http://www.ted.com/talks/didier_sornette_how_we_can_predict_the_next_financial_crisis.html

If  Professor Sornette’s model is to be believed, we can expect a significant  market peak in mid November 2013 – see chart below: (source: Casey Research)


full article at source: http://www.marketoracle.co.uk/Article43018.html

Dow Stock Market New All Time High, Exponential Inflation and Multiple Technological Revolutions

By: Nadeem_Walayat

The stock market has continued to confound the academic proponents of the the debt deflation mantra who have in perfect perma bear style been banging their heads continuously against a four year stealth bull market that has marched all the way to an new NEW All Time Closing High of DJIA 14,253.77

Many academic economists and journalists who think they are economists and salesmen will be commentating at length over the next few days by looking in their rear view mirrors to explain why the stock market has risen, despite the fact that these same people can be quickly googled be found to have repeatedly claimed over many times that the rally in the stock market was unsustainable and would imminently end.

Virtually all of the reasons put forward will be wrong as especially academic economists will find themselves floundering all over the place to explain why the stock market can trade at new all time highs whilst their economic statistics say that a triple dip recession suggests the exact opposite should be true, because the actual key drivers of the unfolding stealth bull stocks market as covered in depth in the recent Stocks Stealth Bull Market 2013 and Beyond ebook (FREE DOWNLOAD), are that general stock market indices as the Dow are geared towards oscillating around an exponential inflation mega-trend towards which stocks are leveraged, which is why they will ALWAYS converge towards and BREAK to New All Time Highs, including that the Dow level of 14,200 was the forecast conclusion of 2 years ago in the preceding Stocks Stealth Bull Market ebook of March 2011……………………….

full article at source: http://www.marketoracle.co.uk/Article39342.html

New Highs- Bull market continues

Sent into us by Val,Thanks !

by: Peter Brown

Market reached new highs yesterday. After a pull back to support the market put in a strong rally above 1500. There seems no end to the strenght of this market. Driven by a need for return and the lack of interest rates anywhere else it would seem everyone is piling into stocks. It will lead to a correction eventually but we could be a lot higher before that happens.

Today we are off to a strong start. 1498 is support and 1506 is short term target.Market is not overbought so we can go higher. If there is to be a correction it will require some fairly bad news, so Friday NFP numbers are probably the only chance. This market is a buy no question about it. Wait for the dips.

Euro is on a burner higher. 1.3500 and above. There is little on the charts and expect further gains once the stock market rally continues.

Stock Market Bottom is In, Year End Forecasts

By: Toby_Connor

In my last couple of articles I mentioned that I was waiting for the S&P to form a swing low as the first confirmation that an intermediate degree bottom had formed. That swing is going to form on the open Monday morning.

Typically the stock market will rally fairly aggressively out of one of these major intermediate bottoms, often gaining 6%-8% in the first 15-20 days. At that point the market will dip down into a half cycle low that will establish the trend line for this particular daily cycle.

Since the dollar is now on the 21st day of its daily cycle it is now overdue for a move down into a short-term low. This should drive the first half of that 6%-8% move, followed by a very short corrective move as the dollar bounces and then rolls over quickly into a another leg down.

That cycle would be due to bottom around the first of the year, and should drive the stock market generally higher until early January at which time we should get a more significant correction, probably as nervousness builds before the next earnings season.I’ve diagrammed the general directions and rough targets for what I think will unfold over the next month and a half in the chart below.

full article at source:http://www.marketoracle.co.uk/Article37621.html


Alert! September 2012 Market Crash ????????

Sent to us to-day



This analyzes is just as good as any other I have seen and comes across level-headed. I would advice all followers to hedge themselves and I would go out 1 year on the put options .For our BAC stock that is $8.calls to be sold and with the premium I would pile up on the 8 puts again one year out.

Personally I have already sold the 8 Calls and thus have a built in premium but I am waiting for the stock to get down to the $7 area to sell the puts as I am quite happy to own the BAC stock for $6 or less. I do not share this analyzes opinion as I believe we will have to wait to see a big downward movement until after the presidential elections. The Iran crisis is the joker in the pack or a European bank collapse! That would cause a collapse all right!

Good trading

Treasuries and Derivatives Blow Up? So Where Do You Go …

By Anthony Wile (Daily Bell)

Here’s some interesting news along the lines of “man bites dog.” According to a recent Reuters article, US financial advisors are actually growing leery of US Treasury bonds.

This is almost unheard of and one could certainly make a case that it is a sign of most unsettled times. Ordinarily, financial advisors, especially those in the US, are disposed to provide Treasuries for most every ill.

They are seen as repositories of value, security and liquidity – and this perspective has been preached relentlessly to the average US consumer.  And yet now we now find a much different perspective, being reported by Reuters:

It’s the newest market riddle: where do you go for safety when the traditional option could be in a bubble?

With fiscal problems in Europe once again leading to sharp drops in global stock markets, many investors are seeking out stable assets that can both protect their principal and generate an income stream to keep up with inflation.

full article at source: http://www.thedailybell.com/3883/Anthony-Wile-Treasuries-and-Derivatives-Blow-Up-So-Where-Do-You-Go

Market update OCT 2011

By: Chris_Ciovacco

As we mentioned yesterday, a fear-induced buying climax may occur in the
coming days as shorts cover and managers sitting on cash move to the “I can’t
take it anymore” stage. While a sustained break above the 1,266 to 1,276 range
on the S&P 500 would increase the odds of stocks continuing to march
higher, evidence still suggests the current move is a bear market rally that
will be fully retraced .The S&P 500 faces resistance from its 100-day and
200-day moving averages. As shown below in the chart from the 2000-2002 bear
market, these levels often bring out sellers. The first bear rally attempt in
2001 was turned back by the 100-day moving average (shown in blue). In 2011,
the 100-day current sits at 1,234.



While Chris analyzes is in broad terms what I am expecting I am never the less preparing my-self to be wrong! By this I mean I am hedged I am only trading the one stock and have been doing so now for the last year I believe that the market is probably going to test its recent lows again. My Stock is currently moving between the 10DMA and tits 20DMA and is making ready to break out up to the 100MDA.Whilst I have been accumulating the stock as it has gone down I have been buying more stock from the profit of the put insurance .(The first purchases was at 11.35 per stock and the current average is now 7.31 to stock)

This has in turn brought down the average cost of the overall stock cost to me!I have been only using small amounts up to 2000 USD per trade  and have a total of 20,000 USD invested funds so far and in spite of the capital investment on the stock I have in fact
been collecting small profits from the movement of the options  on either side as I slowly tie a noose around the stock and at some stage will be profitable no matter which way the stock goes .My overall object is to pay off my home mortgage sometime next year with this investment. If you are interested  and are in the Dublin/Wicklow area, I am
available to show how this can be done to serious investors !

Next month I hope to start a trade with Machholz feature and you can follow my progress!

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