Bear Signs

[Lowlow]

I'm reluctant to post a market crash thread because things are so difficult to predict, and you can never know how far a market will run before it corrects, but, that said, I've been watching and waiting for this market to show clear signs it is going to correct for years.  I think we might finally be seeing those signs.  Market breadth is sickly, and that's a big one, just a few names are driving the market indices.  Metals are acting weird.  I don't know, there just feels like there is something in the air, how's that for market analysis lol.  The economy has been "asking for it" for a long time, the debt levels have exploded, we've even passed debt-to-gdp levels from 2008/2009 (by far), personal debt is back up, savings rate is in the trash again, it's all just looking very ominous.   I'm starting to look for an entry to buy PUT options against the indices.

[Lowlow]

Yield curve inverting ...

[Abyss]

I have seen this chart on Money GPS channel

https://www.youtube.com/channel/UCngq92xrmmsfEgGdfAJ6giQ

Mountain of evidence suggesting we should be entering a recession (many economies around the world are in a recession) but without participation of the US not entered into a global recession. In my humble opinion the tax revenues collected by the IRS 30% dependent upon strength of the US stock market and any massive sell off US stock markets would cause widening deficit spending another round of quantitative easing.

Question ask yourself if they can manipulate the price of PM for decades it stand to reason that other commodities and stock indexes can also be manipulated.

Already seen massive sell off US stock indexes start of the year only for the index pushed right back up surpassing the previous highs.

How long can this continue for? Asking how long is a piece of string? Hard performing Technical Analysis on daily chart patterns for Dow/Nasdaq/S&P because not behaving normally. I see nothing wrong with expressing a negative sentiment via put option on the US stock indexes but may want to express that option across multiple years to hedge your bet (you eventuality going to be right).

[sixgun]

2 hours ago, Abyss said:

Mountain of evidence suggesting we should be entering a recession (many economies around the world are in a recession) but without participation of the US not entered into a global recession.

How do you know the US isn't in a recession? The controlled propaganda outlets don't tell the truth and we have the 'official' statistics. My view is all the numbers are fake. The stock markets are very pumped up. We see PE ratios in the 100's of quite a number of stocks. Amazon is a $1 trillion company but it has never paid a dividend - it isn't actually profitable. The price is not rational. The stock price is toying with $2000 when $200 would be inflated and for a company never having paid a dividend and even now not actually profitable you could say $20 might be about right.

Employment figures are fake - inflation rates are fake - GDP numbers are fake. The establishment make out there is an economic boom. We see trade wars and currency crises in the world. Oil prices are relatively high. Interest rates are and have been climbing. The statistics put out are fake. Prices in the markets are manipulated. All that keeps it afloat is propaganda and massive QE.

Many have predicted a crash but the presence or absence has been measured by fake numbers and fake indices. i got a message from someone i know who was recently talking to a bullion dealer who said there was about 3 days worth of gold in the system - this will be available for immediate delivery. That gold is borrowed and central banks help out to give the illusion all is well. If they didn't and Joe Public, well those with the resources decided to get a tube of silver coins or go for a bit of gold then there would be widespread default. There will be default - that is inevitable. There will be excuses - a war is a useful way to paper over the cracks, declare a state of emergency, confiscate precious metal, apply currency controls and a new currency from the ashes. The Economist magazine was predicting a new currency in the guise of a phoenix from the ashes - i wonder if they had plans on a war in 2018.

[Abyss]

@sixgun

Agree with everything you saying but

• If you repeat a lie often enough, people will believe it.
• If you repeat a lie often enough, it becomes the truth.
• If you tell a lie big enough and keep repeating it, people will eventually come to believe it.
• If you repeat a lie long enough, it becomes truth
• If you repeat a lie many times, people are bound to start believing it.

Joseph Goebbels was Adolf Hitler's Propaganda Minister in Nazi Germany

https://en.wikiquote.org/wiki/Joseph_Goebbels

No recession in the US provided people in the US have faith in the system (faith maintained as long stock markets remain bullish) and the US Dollar. How long is the trust and faith going to last is the real question.

1998 The Economist Cover new world currency.

[sixgun]

@Abyss well the story is the majority of Americans are living hand to mouth - they have little in the way of emergency funds. A recession is defined as negative economic growth for 2 consecutive quarters but if the numbers are fake..... - this is why i ask how do you know there isn't a recession.

Goebbels made many comments about propaganda - his general line was propaganda should be accurate and truthful - except that doesn't get mentioned by the usual sources.

If you repeat a lie often enough, it becomes the truth. - i believe that one comes from Lenin. Wikiquotes is generally about misquoting and Goebbels where he did mention lies was usually referring to the lies the British told - the elite are still telling those lies today so it looks like he was spot on.

[Lowlow]

3 hours ago, sixgun said:

i got a message from someone i know who was recently talking to a bullion dealer who said there was about 3 days worth of gold in the system - this will be available for immediate delivery. That gold is borrowed and central banks help out to give the illusion all is well. If they didn't and Joe Public, well those with the resources decided to get a tube of silver coins or go for a bit of gold then there would be widespread default. There will be default - that is inevitable.

This has been demonstrated with silver on multiple occasions.

During the 2008 / 2009 downturn when paper silver tanked the premiums on physical remained high, and even when high premiums bullion dealers were selling out, and I mean selling out completely, for months, at least in the United States.  The usual places online were showing zero silver eagles for delivery, the mint couldn't meet demand (and rumor was that they couldn't get silver to make coins themselves), etc.  It got so bad that I remember there were people who had never traded futures asking how they could get an account so that they could try to use the contracts to take delivery on comex bars from the warehouses, something that hardly anyone ever does.  For a while there was simply no silver to be had, anywhere.  Bullion dealers were scrambling to find product to move.

[Lowlow]

6 minutes ago, Lowlow said:

This has been demonstrated with silver on multiple occasions.

During the 2008 / 2009 downturn when paper silver tanked the premiums on physical remained high, and even when high premiums bullion dealers were selling out, and I mean selling out completely, for months, at least in the United States.  The usual places online were showing zero silver eagles for delivery, the mint couldn't meet demand (and rumor was that they couldn't get silver to make coins themselves), etc.  It got so bad that I remember there were people who had never traded futures asking how they could get an account so that they could try to use the contracts to take delivery on comex bars from the warehouses, something that hardly anyone ever does.  For a while there was simply no silver to be had, anywhere.  Bullion dealers were scrambling to find product to move.

I want to add something to this - this does NOT MEAN there wasn't any silver anywhere, it just means there wasn't any silver anywhere in a form that investors wanted to purchase.  55% of silver demand is industrial, and there may have been silver ingots on pallets somewhere, or sitting at the mines in storage, I don't know, but it could not be turned into bullion rounds fast enough for delivery.  I remember one of the mints saying their people were being worked around the clock trying to make product to deliver.  I also remember PM buyers were buying silver in strange forms that they typically don't buy in when they couldn't get bullion coins, bars, and rounds anymore, buying things like silver shot, etc, basically anything made of silver on vendor websites.

[Lowlow]

Argentina, South Africa, and Turkey

Paper fire spreading ?

[Lowlow]

2 minutes ago, Lowlow said:

Argentina, South Africa, and Turkey

Paper fire spreading ?

Forgot to include India!

[vand]

Buffett indicator is again flashing an extreme warning. Canny investors would do well to heed the advice.

https://www.gurufocus.com/stock-market-valuations.php

 

Look at that 10 year expected vs actual return chart. Anyone buying stocks today will do very well just to get their money back.

[Lowlow]

5 hours ago, vand said:

Buffett indicator is again flashing an extreme warning. Canny investors would do well to heed the advice.

https://www.gurufocus.com/stock-market-valuations.php

 

Look at that 10 year expected vs actual return chart. Anyone buying stocks today will do very well just to get their money back.

Another valuation measure, the Q ratio ... this guy is selling stuff, but the chart is interesting.

 

[Lowlow]

Over a trillion $us in new debt in ONE YEAR ... I remember when the entire debt cross the 1 trillion $us threshold

[Pipers]

BIG bear squeeze happening in Gold!    

IMO  target $1250 keep an eye on this, the price may spike higher as the bears have to roll over or close the book.  

[Shinus73]

[vand]

Stocks under pressure, for sure. The FTSE is desperately trying to stay above it's Q1 low. Looking at a long term chart, all momentum is gone - it looks ready to roll over and die.

[vand]

FTSE's megaphone of death continues to unfold.. tested Q3 lows this morning.

I expect a bounce imminently (in fact I am betting on it), but this also has the potential to break down.

 

[vand]

Peter Schiff talk about GE in his latest podcast. 

He makes the very good point that buying high (via share buybacks) is what will drive the next bear market lower, as companies sell their stock lower. Buy high, sell low, its what losers do cycle after cycle.

 

 

[Lowlow]

17 minutes ago, vand said:

Peter Schiff talk about GE in his latest podcast. 

He makes the very good point that buying high (via share buybacks) is what will drive the next bear market lower, as companies sell their stock lower. Buy high, sell low, its what losers do cycle after cycle.

 

 

GE is a debt ridden piece of &^%$ stock that I would never own.

I mean it just is.  

They were so lucky they didn't go down in 2008 ...

[Bumble]

I don't have a particular view on whether we will see a bear market in stocks in the immediate future, but here are some additional points to bear in mind:

1. Although the US stock market is expensive, other stock markets are not, by comparison. There are still bargains to be had elsewhere. Also, the main reason the US stock market is expensive is because it is dominated by a handful of tech stocks (FAANG) that have extremely high prices.

2. Stocks are still a good source of yield. One of the reasons stocks are doing well is because investors seeking yield have been chased out of bonds and into stocks. You can get 0.5% from German government bonds, 2% from US government bonds, or 3.5% from Microsoft stock, or 5% from Shell. It is still possible to put together a basket of high quality stocks that will yield 4-6% in dividends. Unless that changes, i.e. companies can no longer afford their dividends, stocks are not overpriced.

3. Investors will not take their money out of stocks unless there is somewhere else to go. Most commentators expect bond yields to rise, and hence bond values to fall, so buying bonds would be a desperation measure, unless you are contrarian about interest rates. Buying gold is also a kind of desperation measure, because it has no yield and entails storage costs. Some commentators, such as Martin Armstrong, believe that stressed investors are likely to move into stocks, because they are safer than bonds or bank deposits.

4. The importance of stocks, particularly in the USA, to incomes, tax receipts, pension fund solvency and the general sense of well-being and prosperity is so important that the Federal Reserve is likely to intervene with interest rate cuts and money printing in the event of a substantial fall. Chairman Powell has said that he is not concerned with the stock market, but I suspect that he would become concerned if it fell sharply. The 'Fed Put' has not gone away, but the strike price is lower now.

[vand]

Q3 earnings growth was pretty in line with the market expectations, about 22-23% up from Q3 last year.

However, you have to wonder how much longer they can continue to do this. Companies have increased earnings by share buyback and by keeping costs low, much moreso than than by increasing sales. Profit margins are at record levels - that is to say that price to sales is exceedingly high. In this sense, it's a goldilocks situation, but a return to more normal margins, at least my historical levels will be catastrophic for profits. This could be as commodities and inflation pick up and/or interest rates increase. I think both will happen at the same time as we enter an inflationary recession. Stocks will face far more headwinds in the next few years than they have in the last few. 

Price-action wise, this current correction is already a more severe test of the bull trend than we had in Q1. Potential for another new leg lower cannot be ruled out at this stage, in which case the bear market scenario - and perhaps a very nasty one - should get much more serious consideration.

[vand]

On 13/11/2018 at 09:22, vand said:

Peter Schiff talk about GE in his latest podcast. 

He makes the very good point that buying high (via share buybacks) is what will drive the next bear market lower, as companies sell their stock lower. Buy high, sell low, its what losers do cycle after cycle.

 

 

Same point: https://www.marketwatch.com/story/misguided-share-buybacks-are-hollowing-out-companies-balance-sheets-and-will-lead-to-even-bigger-trouble-2018-11-20?siteid=bigcharts&dist=bigcharts

 

”share buybacks are the next subprime” 

[vand]

Yield Curve inversion is here:

https://www.cnbc.com/2018/12/04/bond-king-gundlach-says-inverted-yield-curve-means-weaker-economy.html

[KDave]

Recession incoming finally.

Just in time for Brexit too.... 

[HawkHybrid]

I don't buy the yield curve inverting thing.

sounds like more interest rate myths

 

HH