Is not underway:
Does not begin at these valuations:
And can not occur under these demographic trends:
Rather, those charts collectively present the real story. This is a cyclical bull market peak (per valuations) within an ongoing secular bear that began in 2000 (per demographic trends). The inflation-adjusted SP500 and gradual downtrend in p/e valuations show the secular bear in progress. The destiny (per demographics) is single digit p/es, in line with historic normalisation and necessarily befitting the greatest mania ever. The reason the cyclical bull peak is particularly high in nominal and valuation is the speculative drive of the solar maximum, with the current peak being one solar maximum after the mania peak, as 1937 was to 1929:
Turning to the near term. We’ve seen a partial retrace of the falls, but all the evidence suggests this will now roll over and firm up the new downtrend, the new bear market. On European indices the technical breakdown is clear and the current retrace barely a blip in the downtrend so far. Germany announced negative GDP and France zero GDP yesterday.
The SP500 now stands at twin resistance and this is an obvious point for the rally to roll over.
A look under the hood shows that volume has been thin and waning each day of this rally, and the best performing sectors have been healthcare and utilities, the post-peak duo. US small caps underperformed, treasury yields made new lows and crude oil broke down yesterday – all risk-off developments. Therefore I expect bears to resume control today or Monday.
167 thoughts on “New Secular Stocks Bull”
A couple of facts:
– multinationals quoted in the us market acts globally so they are linked to global growth and global demographics trends.
– central banks are showing they can control interest rates curve so if the policies is to let inflation staying above interest rates it is very difficoult to see low valuations as they were at previuos generational lows.
– Moreover cpi calculated by government is greatly underestimated.
All this does not justify this overstretched market. But this correction has been delayed/averted by central banks and is becoming useless for who is waiting the dreamed “ten percent correction”.
Thanks Simo. My view: the solar maximum, not central banks, delivered the overstretched market, and the passing through the solar max has now put us in a bear market.
technically speaking we are testing previuos trendline breakdown and this is usual, but there is a lot of probabilities that this is a new uptrend and that new all time highs are expected… it was easy to call this rebound, market was short term oversold (specially Europe), argentina was not a big problem, there is some attention to new Draghi’s actions… Maybe Europe have topped, not US market
SPX futures above 50sma.
R2K Futures above 200sma
I’ve initiated a long position on R2K. Looking to add.
John I think that if we see a furious rally that could lead to a crash (-15% from the level that will be reached)… or if we see price under 1900 we could see 1800 (1840 at least).
If your thesis is right about solar maximum then speculation should have lost its momentum and price should start to decline (lower highs, lower lows)…
Hong Kong GDP -0.1% versus 0.9% expected
and here spx:m1 ratio
let’s be said that these are the only bullish charts. Interest rates are low but dividend yields are ultralow too.
Soros biggest bet on S&P going lower:
Some observations –
The futures show that bulls have control of the 50sma at the present time. However, I don’t expect the bear to just give it up so easily. So, I’m looking for a cash open where we are now. Then bears to try and immediately drive price below the 50sma. But by close the bulls to regain control and close out the week above the 50sma.
Just some thoughs i have going on at the moment.
Need to see bears give up their gains and hand control back to the bulls. Reclaiming the 50sma would be a good sign
market overreacted always at every deep because of SHORT SQUEEZE. There is no other explanation. Short should be banned to prevent traders destroy theirself.
50% retrace of drop from 7/16 highs
And way too many people got way too bullish
Perfect setup for further decline.
Guess we’ll see
John, I know you said a higher peak is low probability, but do you have a stop loss in place just in case?
No. I am staying short until we see the waterfall declines. Just trying to gauge the exposure: when to add more, when to take some profits.
Is spread trading like futures? Do you get margin calls? Or is it more like options?
Like rolling futures, with margin calls.
John, I am following your lead. Also holding on to the inverse ETFs and PMs without stop loss.
I think the markets are finishing up the wave b corrective move, and down we go from here.
Thanks much again for your great work. Much appreciated it.
We appear to be very overbought short term. Im hedging my SPX longs here.
Second chance peak?
…a red close on friday for a change?
all four bear market signals here have broken down – doesnt mean that THEY cant push back but the bond market is telling a story no one wants to hear
R2K not confirming this move down
on what planet?????????????????????
iwm is a 1.1% reversal this morning so far from the high to yesterdays close…
I stand corrected
this is the 5 sellers and one buyer market coming up
the pig farmers have all made their money now it’s time for the slaughter
lol….the same pig they sell back and forth to each other at a higher price each time….
I am actually more bullish due to the Ukraine news. This shows a relief rally is possible. If we fell on no news, then we can say that the rally is exhausted.
we didnt fall on the news – the news is never the reason
Yes we did…look at the volume spike inline with the headlines. That move should not factor into the analysis. Thus, in my mind, we are still potentially set up for a double top. I need to see a natural drop in the market to be convinced, not random shocks like these.
the news is always a red herring
Precisely, this one time shock (and the associated move) should not affect my analysis. I want to see it move naturally to decide if the bulls are out of steam or have one more boost.
112 on iwm really has to give to avoid a gap fill bounce and 16588 on indu has to break
This is what I posted yesterday (check if you like):
“We are headed for a high on Tuesday 19th. There’s no news that can change that. Today a high and a low. Tomorrow a high. Monday a low and Tuesday the final high. Duncan is right: this is a sentiment driven market. And it has always been one. And natural forces drive sentiment. Even calling it Elliot waves won’t change a thing.”
So the high for Friday was predicted by the tides and has nothing to do with a Ukrainian conflict. And yes. Monday up again for the high on Tuesday.
No surprises so far.
It’s incredible to see ndx outperforming every day , today its advantage against dow jones is a +0,5% …
Especially since Nasdaq has a negative, nonconfirming, advance/decline line.
Andre, could you clarify – you mention Monday a low, and then you go on to say Monday up again. I understand the point that there may be a swing during the session but it is problematic trying to sort out whether you’re talking about turning points on an intraday or EOD basis. Thank you for your contributions here.
Thanks Andre. Could you please clarify your statement? You said today is a high. Does that mean intraday high as the market is selling off now and more likely will close in red.
Agreed that markets up or down due to solar cycles, not QE. But the Ukraine situation surely serves as a catalyst.
I am asking out of curiosity only as i have never based my trading decisions on your or anyone predictions. I’ve used it as a reference point for my Ewave study. I’ve found John’s work astounding and very much in line with the Ewave trend and human sentiment trend.
I’ve found the tiding approach interesting and want to learn more about it.
Gary and erick,
After a High we go down and after a low we go up. When we have a high on Friday and a low on Monday we expect the swing down to continue over the weekend. Naturally, there will be small waves in between.
After the low on Monday we need to get up or it wasn’t a low. Would it be better if I talk about tops and bottoms?
The Ukrainian issue can affect the size of the swing. But when I predict a swing without knowledge (Thursday) of the whole issue, surely there must be more to it.
Got it Andre. Thanks for your clarification and for your as always great analysis.
Ok, I’m not as clear on this as Erick, but I appreciate your responding back. I think the confusion lies in the temporal placing of all these highs and lows, i.e., intraday, daily, weekly, monthly, etc., and trying to keep all them straight.
Tomorrow I’ll try to be more clear. Fact is; there are more cycles active at any moment. But from now on I’ll skip the intraday moves so we only have one turn a day at the most.
Andre, do you run a website? I used to subscribe to an Andre and was just curious if it’s the same. tia.
No, I don’t run a web site (yet).
Andre do you (or did you) run a subscription site? I used to subscribe to one ran by an Andre and was just curious if you are the same. tia.
the reality of funny money (debt) create cyclical distortions – there is a big one upon us all…
Bulls fight back … battleground imo is who take control of the 50sma by close
This is probably now the real move as to where we go. I ignored the Ukraine shock and now it is over.
By the way, it appears folks should have followed Mr. Gross’ playbook after all 🙂
What is his playbook?
Buy his fund?
John, his recent playbook has been to go long bonds – he’s right in this instance. He’s not always been right, of course, we all know that.
very much appreciate your research. As a global bank risk manager, currently half NYC/half Moscow based, I can tell you that most recent European bank stress-tests leave very thin margin for error. But, probably most critical is the fact that in my view the russian govt is hell bent on proving in my opinion an insane point that russia is a great player and so that they will stop at nothing and will continue rocking the european economy boat which for will continue sending shocks that will sink it at some point IMHO. Today they have banned purchasing textiles, yesterday food from Europe. Whats next? The US is not going to stop either, I am very curious why all of a sudden Suadi’s have ramped up oil output by 25% over past month? Maybe the sun activity is the cause but the geopolitical trend is confrontational and will definitely tip europe into severe recession IMO. Anyway, just wanted to say thanks and please keep up great work!:))
One of the biggest mistakes traders would make is to be short seemingly expensive items, or long seemingly cheap ones. Both behaviors are mostly the same. Both won’t make money. But the former is especially harmful.
I believe John is short IWM which is doing just fine relatively.
As Slim, our global risk manager, can tell you, these definitive proclamations about the market are good for entertainment value but rarely anything else. Investing is a probability game and the key is sizing your bets commensurate with the confidence you have in the bet and the expected payoff.
There are times when shorting expensive items pays off very handsomely and other times when the reverse is true. The key is to appreciate you can and will be wrong (in the short run or otherwise) and to bet only as much as will ensure that if you do lose, you’ll survive to fight another day.
One definitive statement I will make and that is the market will keep you humble. I have learned that the hard way. 🙂
This is so far playing out as I thought,
a shallow short correction.
As we have rebounded sharply
some giveback would not surprise me.
The geo political situation would need
to worsen dramatically from here for
markets to go in to full scale correction mode.
Today is a perfect example, the SPX closing
barely unchanged even with negative news flow
on Ukraine, bad news, but not bad enough.
Earnings remain supportive at this stage,
and as I have mentioned many times it will be
falling earnings that herald the next bear market.
Sentiment shifts can cause corrective phases
before the arrival of the next bear.
So what is the trade? Stay long, buy puts?
A word about the trading pattern this week. It smelled like distribution. SPY moved up $2.5 of which $2.4 (96%) came as a result of net overnight gaps. Cash hours were on low volume (except Friday) and 3 of the 5 days moved lower from open to close. So prices moved up, making the charts look fine, but its the kind of trading that can precede weakness. We noted the exact same pattern at the end of March before the April swoon.
I am inclined to agree with this despite some bullish looking charts. That is exactly what the big money wants us to see,( bullish charts sbout to break higher just before they pull the pin).
Been saying it all along, look no further than the DAX for some clarity because Germany is at the heart of evrything that is going wrong and is about to go wrong.
Try as they may they can’t hide it here:
Next week should see big move down in stocks and up in gold. Most traders wait to take position only after gold’s triangle is resolved up or down but they may miss most of the move. Markets are set up for perfect storm but most are looking in back mirror of bull market that is already history.
Well the bears proved they were willing to do what it took to save the 50sma. And as it stands they have control. But i wouldnt dismiss the bulls just yet. They managed to pull price to virtually unchanged on Friday. The best result for the bulls now would be to gap up though this congestion zone (1959/60) on Sunday night. Overnight futures have helped the bull for the past year so they should take advantage of this oppotunity. I want to see SPX get to the next battlezone – 1991 next week.
In my opinion, the two riskiest indices – are telling different stories. R2K (risk off – i dumped my long after it failed to maintain the 200sma) and Nas which is near years highs.
My opinion is the next correction (after SPX2000) will come from developments from russia. Both yesterday and the downing of the passenger plane saw the market tank.
Lunar cycles and Elliot waves
Sid Norris (http://elliottwavepredictions.com/) makes an interesting point. He says the 2009 low was really the W3 bottom and QE1 intervention (inflation) disrupted the wave down. So he sets the ‘real’ low in march 2011. Now the ‘4,5 year business cycle’ will give a top in 2015.
Looking at the lunar cycle I have a different idea. The 4,5 year business cycle is really the 4.6 year lunar cycle and it turned early 2010. Remember that flash crash in 2010? Was that system manipulation by an evil HF trader? I say it was the natural impulse of the market to put in a delayed W5 low, as should have happened. But it was halted by a system-stop. So the whole cycle down was tortured by the system.
So the real/natural bottom was somewhere early 2010, a few months after the lunar cycle turned up. Counting from this low the next top should arrive end of 1014, early 2015.
This to entertain the Elliot wavers amongst us.
P.s. tomorrow the weekly update; this was an intermezzo 😉
Andre, from an Elliott Wave standpoint, I believe the 2009 low was THE crisis low for the bear market that began in 2000. Sellers capitulated, froth was finally taken out of the market, and consumers have de-leveraged. So, it does not make sense to see lower lows than the 2009 lows, and wave structure doesn’t support that view.
What history says is that when you see a capitulative low like we had in 2009 (or a crisis low, and 2009 was definitely a financial crisis), then we WILL see a bear market to test those lows, but they will not go lower than the previous lows.
Price on the S&P has already broken out to new highs from the 2007 highs…that says that we have broken out of the bearish consolidation, and now before we head higher into a bull market run, we could test that breakout to make sure it was not a false breakout.
How low can we go? It’s possible to to test the channel breakout around S&P 1,400….can it dip lower? Yes…it’s possible, sometimes you get a fakeout….that dips to lower prices and recovers quickly…but if support generally holds around 1,400 that would be a successful test.
From an Elliott Wave standpoint, waves have alternated between simple and complicated wave structures since 1974, so the last pullback in 2009 was a simple wave structure, so it’s very possible the next wave structure will be complicated, meaning complicated to trade as well, lot’s of up and down…very difficult to know when we see the bottom. To see a low, we want to see a capitulative move. Complicated wave structures are not quick, they can take many months to years.
But in looking at the astrology, 2015 is rather negative into at least mid 2015. There are charts (which I don’t have, if someone finds them please post) that have shown declines in the market while Jupiter in in Leo. A market decline can end once Jupiter changes signs. Jupiter leaves Leo in August of 2015, but a low can be seen around that time or before.
So, for all of you who don’t think that we will get a bear market and that instead we keep heading up into infinity….please go back and take a look at wave history…you will see that it’s not a matter of IF we get a bear market, it’s a matter of WHEN….
Thanks for your response. To be honest; I have put my faith in natural forces to predict the market, in particular gravity. Gravity has a strong correlation with the movements of the moon. But I like to look for confirmation in other techniques.
Sid looked at the market priced in gold. And that gives another wave structure.
The current central bank intervention around the globe (US,China,Japan) has never been seen before in human history, and certainly not when Ralph Elliot did his research.
Could it be that we need an alternative scenario that takes into account this impact?
Anyway, nice to see different views.
Allan, the DAX needs to be viewed in
the context of it’s huge % gains over
the last 2/3 years.
This week I bought selectively
where I considered sentiment to
be overly bearish, GSK, IMT, BT.A
before it went XD.
I sold some my UKDV holding yesterday
afternoon as thought the recent bounce had been
strong, got a little lucky with timing there before
the latest Ukraine news broke.
I buy without margin only, stocks that I can fully
pay for, never spread bet or trade indexes.
For me, earnings at this stage remain too strong
for waterfall declines, sharp short sentiment swings to
risk off, yes that can certainly happen.
Before BT.A went ex dividend that should have read,
not sure where the smiley face suddenly appeared from,
Great work as usual John! I’d like to add that I believe Cyclical PE 10 (Cape) is actually worse then what meets the eye. If we could mathematically unwind the $600 billion is stock buybacks over the past several years I think we would find the CAPE index closer to 30.
John, I think you and our fellow readers will find the following piece to be an interesting perspective.
The following article summerises the trigger for the upcoming correction imo.
Did you know that a major event just happened in the financial markets that we have not seen since the financial crisis of 2008? If you rely on the mainstream media for your news, you probably didn’t even hear about it. Just prior to the last stock market crash, a massive amount of money was pulled out of junk bonds. Now it is happening again. In fact, as you will read about below, the market for high yield bonds just experienced “a 6-sigma event”. But this is not the only indication that the U.S. economy could be on the verge of very hard times. Retail sales are extremely disappointing, mortgage applications are at a 14 year low and growing geopolitical storms around the world have investors spooked. For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse. Unfortunately, there are now a bunch of signs that this period of relative stability is about to end. The following are 14 reasons why the U.S. economy’s bubble of false prosperity may be about to burst…
#1 The U.S. junk bond market just experienced “a 6-sigma event” earlier this month. In other words, it is an event that is only supposed to have a chance of 1 in 500 million of happening. Billions of dollars are being pulled out of junk bonds right now, and that has some analysts wondering if a financial crash is right around the corner.
#2 The last time that we saw a junk bond rout of this magnitude was back during the financial crash of 2008. In fact, as the Telegraph recently explained, bonds usually crash before stocks do…
You are correct robbie as I and a few others have been tracking since late 2013 – https://twitter.com/InflatedTemper/status/500792669325770752/photo/1
You need to quote your sources….
Higher into 24-26 August.
I start to get questions from you. I’m pleased some of you have opened your minds to the weird notion of gravity driving markets.
I have to make some choices in what is being asked, because this is only me. I’ll focus on the forecast til mid september and 2015 will have to wait til next weekend.
First the general picture. The lunar cycles point to a high in November. So I expect one more leg up this year to complete the 4.6 year lunar cycle that ran from early 2010. So we are approaching a major turn, but it will have to wait some more.
I’ll try to be more clear now as some of you were confused by my formulation. All turns are calculated for Wallstreet.
Main trend :
Top aug 19/20 (can’t help it; the turn is in the night).
Bottom aug 26
Top sept 2 (very likely lower than the 20th top)
bottom sept 10.
Top sept 17 (very likely a higher top than the 20th).
The apo/peri cycle turns aug 24 (moon@apo) so after the 24th some more action in the markets. The sept 2 top will be lower than the aug 20 top, because of this.
This cycle turns again (moon@peri) around the sept 10 low to confirm the expectation that after the 10th we will start the recovery into november,
The minor turns I will give 1 week in advance to keep things clear.
This week complete
Bottom mon 18 (likely in early trading as the leg up needs time)
Top tue/wedn 19/20
Bottom friday 22
Top mon 25
Bottom tue 26.
Mastertiming gives 18/21/23(2x)/27/28(2x). Sofar the mastertiming turns were very close to the tidal timing. The confluence on aug 23 and 28 suggests increased volatility and fits with the turn of the apo/peri cycle on the 24th.
Astro timing (I get this from an astro site – not my own calculation- ) gives Monday/tuesday/friday as turn dates.
One little experiment I am running is to see if mastertiming is just for financial markets, or a more general universal structure for significant events. So I am collecting major events from the 20th century like the beginning and ending of 2 world wars, the San francisco quake, the JFK event, the fall of the iron curtain in Germany and so forth. Just to see if these ‘world events’ have a special meaning.
Who knows is the financial market just one aspect of reality and is there a deeper underlying law. For what it’s worth : the JFK event gives aug 23 as being significant.
Hope this helps a bit.
Andre, what is the lunar 4.6 years cycle?
Thanks, Andre. It would be interesting to see how your dates line up to other dates using other methodologies (Gann, fibonnacci, DeMark and others). I’m talking more long-term (weekly, monthly). I know there are posts about this, but the information never seems to get aggregated in a way that’s easy to follow.
Great idea. I include gann timing, astro timing en bradley dates in my analysis. If anybody else could contribute with DeMark or Fibonacci, i’d be interested.
Thanks Andre. Pl continue posting. Surprisingly pattern i follow suggest Dow top around Sep (may co-incide with alibaba IPO) and then downside up to November. your broad call is exactly inverse of that view :-).
Will be a very interesting couple of months. But I am not going to change my view 😉
Jigs … this is my view too. Run of the mill 10/15% correction. Expect bottom in Nov then traditional Xmas rally.
Btw, I dont really.follow the Dow Jones. Are you expecting a higher high in Sept?
thanks Andre. I wonder if you’d be able to share how you determine the “main trend”. tia
I used ‘main trend’ here to make some distinction between different trend levels. With the tides we see trends that run for days (5-8 days) but also swings that last one or two days.
If I give you everything I see, it will be harder to read. That’s why I am trying to separate the multi day swings – that are meant or swing traders- from the shorter swings that are meant for day traders.
John’s site was never meant for such short term views. So I guess we have to determine what trend level is the most relevant for us.
Main trend here was still short term and it comes directly from the tidal analysis combined with the short term lunar trends.
Hope this helps.
Appreciate your input Andre. But you have your dates wrong. If you think the market is solar driven or gravity, tide driven you are mistaken. Finance is a virtual environment. Therefore it is governed by other powers less romantic.
Its called apophenia.
I do think pattern-recognition can help in forecasting. But you have to ask yourself : if there are patterns or fractals, where did they come from in the first place?
I happen to believe patterns are just a reflection of underlying driving forces, like gravity.
We’ll see what this week will bring.
Correction as early as 22nd
On the net you can find a table with apogee and perigee distances in time. The trick is to take the average of those : (apo+peri)/2
This gives an average distance of the moon to earth. When you analyze this you see the ‘4.6’ year cycle. Why it is 4,6 years I don’t know; I just see it’s there. And there are shorter cycles as well.
Robert McHugh has proprietary indicators, calculated on price. His primary trend indicator is really this 4.6 year lunar trend; but he doesn’t realize this. His secundary trend indicator is the yearly lunar trend. (every year you see a high and low for the distance). The yearly low was in februari (short distance = high gravity = low in the market.) That’s when McHugh’s indicator gave a buy. Coincidence?
The major advantage of this insight is that the lunar trends are know in advance. I have a table that runs till 2100. So I can give you the trend for 2047 if you like,
Another advantage is that you don’t need to assume it’s 4.6 years; you simply read what it is. I am convinced those cycles aren’t fixed. But that’s okay; the table simply gives you the exact dates.
For exact timing of turns we need more. But I’ve seen the lunar trends correlate strongly with the market.
Whilst I think new highs are coming (SPX2000+) more cracks are appearing as the article below shows. Bulls certainly are on borrowed time but these cracks are getting bigger and makes me believe that the next high might mark a meaningful top.
I am correct in that you are predicting declines going into Friday this week. A gap lower and then panic selling on Monday? Followed by more selling into October. As per the analog.
If this doesn’t occur then you are then looking at next year for a crash scenario?
The action since 8 Aug has negated the post-second-chance positioning. First I want to see this rebound make a failure lower high, then we move to post-second-chance and look at trying to time panic selling again.
check out Bradley turn dates, he nailed the july top within a few days and reckone 2nd chance high will b around end august
Reading some of the comments above, i was looking at Dax and Stoxx50 and noticed that since January they have conformed almost exactly to the 3 peaks and domed house pattern from Lindsay. All that is missing is the last chance rally.
Gold minners …
I look at this chart and to me it’s a coin toss – price could go either way.
Substituting $NYMO in the same chart is very interesting…
“Geomagnetic storms are the magnetic changes produced by ionospheric storms, and are thus associated with conditions capable of changing the Schumann Resonance signals.”
“Trying to determine the relationships between geophysical and biological conditions can become extremely complex. The frequencies of the Schumann Resonance signals change with ionospheric conditions. These conditions change diurnally, seasonally and with variations in solar activity, which, in turn, varies with the 11-year sunspot cycle and also with the 27-29-day lunar cycle, mainly during sunspot minimum periods. Lunar tidal changes in the height and thickness of the layers could also sometimes affect the cavity dimensions and hence the Schumann’s frequencies. So can powerful ELF signals from HAARP.”
Futures up nicely. Bulls over the congestion zone but need to break Fridays high. Looking for a test of previous high SPX1991 maybe as soon as next week!
Making good progress towards SPX2000+ though.
I can’t see how you can say that the bulls are over the congestion zone given that the price is still at the bottom of the range going back to the middle of July and any move aove the 50dma will only put us slap bang in the muddle of “congestion”.
A touch of exuberance?
I do however think that considering the amount of bearish news that was around the last two weeks, if that is all that they can muster up, then that is a ptetty poor effort.
By congestion zone I meant the twin resistence zone as highlighted by John above.
We have the Fed minutes on Wednesday and meeting in Jackson Hole on Thursday and Friday. I expecting comments to be super bullish for the markets. Could get up to 1980s this week. Outside chance of testing ATH.
John, yet another ramp in the early hours. Let’s see whether the bulls can do something with it other than just another gap up and flat close?
Another distribution day perhaps?
sunset, mate super bullish as in what?
Rates can’t go lower, tappering to continue amd my best mate just came back last week after three months travelling across The States.
I have been for over 6 years now, he was last there 4 years ago and from the picture he painted I won’t be going back anytime soon.
Beggars in every single town/city he went to. Peoke begging for money at stop lights. His 11 year old niece hit up for change on more than 1 ocassion whilst walking down the street.
Yep everything is hunky dory in good ol’ US of A.
Rates CAN go lower. They’ve been lower in some countries in the past, and are going lower in Europe now (that is one of the main reasons why money has been moving from Europe into the US markets).
Mark yes rates CAN go lower, but the risk is exponential.
Why Ben Bernanke will be remembered as the man that destroyed the global economy:
Allan, markets dont need to track the economy. Eventually they do and if there and if there is a recession you can bet your bottom dollar this market will enter a bear market based on historic precedence.
I believe the SPX is headed higher over the coming weeks. IMO theres not much fuel in the tank but it should take the SPX over 2000.
sunset. No markets don’t need to track the economy, however I asked WHAT coming out of JH was going to be so bullish?
The US economy is a basket case. The only teason that companies are showing record cash and PE’s is due to the greatest share buy in history on the back of record junk bond issuance and record low interst rates.
So again, what can possibly be said that is so bullish unless it is a total fabrication?
BTW the record cash levels comes at the cost of debt that will never ever be repaid.
“hasta la vista baby”
To answer your question of what from JH will be so bullish. One word – Draghi. He speaks on Friday. If I was him and looked recently at the european indices I would be getting ready for another ‘I will do anything’ speach.
Whilst I believe the US should experience a recession soon as the FED will never be able to prevent this cycle from happening time and time again. I do not believe the US is going to prosper in coming decades. I believe the next big thing is Shale gas and the US has huge amount to use domestically and sell abroad. The issues with Russia are proving how critical it is to remove the dependency on energy from Geo political countries. Shale gas is as big as the internet was for the US economy in coming years.
Hmmmm, shale gas…..another total lie along with the bio-fuel farce.
The Great US Shale Oil and Gas Scam
(delivered by the prestigious Argonne National Lab in the US)
sunset, one last comment before I skedoodle:
“Allan, markets dont need to track the economy.”
And therein lies the whole problem. We have distorted markets(truth), real analysis, like never before in history.
I’ve said it before and I will say it again. The markets are broken.
What if the Fed minutes/Jackson Hole comments are hawkish? What sort of movement of capital into the US might that cause?
In my view US stock indices have been running on fumes since 11 June; but on low volume it only takes a whiff of fumes to cause a relatively big move. Since the 2009 start of this US stocks cyclical bull, prices have increased and retraced in a convincing Fibonacci sequence that ends at SP500=2062.
Early October (around the 5th/6th) is an important confluence of cycles in the precious metals markets (indicating a low), and also a high for SP500 in my full moon cycle.
Thanks Mark. My view broadly matches with this Oct top. Can you pl elaborate this Fib sequence target 2062?
Hi jigs – you will need to see it on a chart to decide yourself whether it is valid or not. So if you draw up a Fib trace from 666 (March 2009), and continue above current prices, you’ll see that the intervening Fib levels line up best with previous price levels when you extend the trace up to 2062. Use the 76.4 level too.
I agree there will be a push up, but. Can’t see it punching the 2000 mark. Market running on empty using up valuable fuel the last 2/3 months trying to stop this falling 5% +
Would have been better to let things run it’s natural course, US and FED are flat broke after pumping billions into the markets for the last 3 year making the 2% of the worlds population rich. I expect those lucky few are almost out by now.
Let them push it up on fumes, I will be waiting 1980 to 1995 on the SPX
Nasdaq at new yearly high. SPX to follow imho.
DAX up very strongly, weakness there was fleeting.
With the Euro area experiencing a rapid growth slowdown,
coupled with current geo political events,
any hawkishness from Yellen would be a surprise imv.
At least any unexpected hawkishness would imv.
You can make a case this is all already priced in.
With this being a Solar Peak in stocks similar to 2000 probably worth drawing some parallels to today: 30y Treasury bond started to outperform in early 2000 – check; broad indices in a multi month (9 months in 2000) topping pattern ending at geo mag low in Sep – hopeful check; market leadership by global Tech – check; angle of ascent similar for 2000 and 2014 equity bull peaks (steeper than 2007 bull peak) – check; euro and $ at important inflection points – check (just reverse of 2000); commodities at important inflection point – check (could be following fx and have reverse price moves compared to 2000;
Another place your bets. The wedge breaks higher or lower?
Look at how quckly the slo stoch has become overbought on IBB. It gave a cross last week and turn back up and already it is in overbought territory.
NDX made a new high today. Still higher highs and higher lows. This is still in an uptrend. I dont pay attention to volume but it was better than a few days ago:
Anyone here follow oil cycles and know of a good analyst in this space? TIA.
Re: $NDX; may have broken out but breadth is horrible. Only 40% of stocks are over their 50DMA and 200DMA. A few stocks moving this up can only last so long.
Thanks Alexa. I want internals to break down. IMO this is the last leg higher.
Im looking for the same thing, but it requires a lot of evaluation that I don’t see many tackle. For $NDX, use $NAA50R and $NAA200R for comparison.
For $SPX, use $SPXA50R and $SPXA200R on your charts. 75% of $SPX stocks over their 200 and 47% over their 50 at the moment. $SPX 1904 produced a tradable bottom, clearly.
John doesn’t want to hear this but it could keep going over time till stocks get to the 85-90% level again. That puts us well over 2000. Damn.
Thanks for the tips Alexa – much appreciated.
Oil cycle: http://econocasts.blogspot.ie/2014/08/20140815-xoix-cycle-model-chart.html
Oops, sorry Allan – looks like I was still typing when you were already posting.
Thanks Allan & Mark!. With global supply at all time highs and demand slowing, his projections seem in line. Funny how Saudis are ramping production now, so is the US. And now, the final CNBC push; this week Cramer to feature energy all week. Anything to try and keep the S&P up (energy is 11%).
buy signals…god help us all. oh wait – god is a fiction so I guess no help!
R2K back above 200sma … Risk on.
usd/yen cannot move any higher here as it is hitting falling triangle trend line which keeps bearish case for equities in tact so far. Biotech is retesting 2 year broken uptrend. Bearish as well.
Exited longs at target. Think sellers emerge at these levels. Entering shorts on next daily bearish close. Thanks again for the research, John. Take care.
Appreciate all the input
All good Mark.
I don’t know how long you have been following Paolo but I have been a follower for nearly two years and what I find interesting is that his DOW chart was working perfectly right up until mid 2013 when it suddenly began to diverge.
It raises some interesting questions amd I know Paolo himself is somewhat at a loss to explain how rhe DOW model just suddenly lost its predictive ability.
I think you mentioned one of these rascals earlier today – recognise any of them..?!!
More cracks … http://www.theguardian.com/business/2014/aug/15/london-house-price-boom-halted-amid-fears-interest-rate-rise
same here in the US – see more for sale signs popping up recently – based in South Florida gives insight into people start selling their second homes.
I live in London and the price of property has literally gone through the roof. Houses are easily £1m. In the past three years they have nearly doubled. I seriously worry how anyone coming out of university is ever suppose to own their property when there is no control. Problem.is the lack of housing so even a depression is unlikely to knock prices by more that 15%.
Eur/USD and Crude Oil weakness adds to bearish case analog to 2008 and 2011 (as well January of this year).
61.8% right here… http://scharts.co/VA1VNc
SPX at 1970, backtesting line that is connecting intraday lows of June 26th and July 17th. Rip your face off correction and beautiful place for reversal.
Gold should rally strong in next 24 hours.
re property…..not sure london or the southeast is relevant to global markets.
I have a number or properties which I started buying in the late 80s. The yields I get today even surprise me…..7 – 11 %.
I read in the paper how prices have rolled over 3 % in the summer but when I look on the net there is no property on offer. Uk population rising with low new builds.
RE markets; closed my bear at 1905 and will not open again until price gets above 2020.
If it falls ……..so be it.
Overnight Futures levitation begins. Dont get me wrong – I am long, but this playbook has been going on for so long. Does anyone trade in the cash market anymore?
Funny you should post this because I was going to mention how the number of articles hitting MSM postulating why investors should now disregard the naysayers and “buy the dip”, have increased markedly in the last two weeks.
Maybe a dip or doji today but thinking we close out the week at 1985 or possible new ATH depending on the FED. GL all.
Looks increasingly likely we see a double top now. Expecting the Dow to power past 17000 this week and maybe hit 17100 before we get another leg down. Looking to short around 17000 hopefully to see 16000 this time.
Ive added a small long to my exisiting long positions. With R2K getting above the 200sma and NDX going to new yearly highs I think the uptrend is still on target for SPX2000+