Equities going parabolic - Is the crash near?

[vand]

AAPL, as the leading bellweather stock, encapsulates everything you need to know about this market, and indeed this economy. Yes, the did fantastic things since 2004 to revolutionize consumer electronic goods, but since the iPad they have not done anything revolutionary, just refined what they already have, same as Microsoft did 15-20 years ago. Now all their marketing is about lifestyle etc.  The technological driving forces behind the last economic cycle have all played out, and it's all getting very long in the tooth now.

 

WRT to deflation.. I will keep an open mind. True deflation only happens when there is contraction of the money supply. This is what happened in the great depression as banks went bust and they were tied to the gold standard (There is a great Milton Friedman video on YT about this). I think there will a prevelant feeling of FEAR gripping everyone, not just in the markets, but in general, and people will be very reluctant to spend money on anything non-discretionary, but perhaps that will be mistaken as deflation. It's not. 

[vand]

The US indices are bouncing back well, but IMO we are beginning to see some major divergence.

Compare US vs European indices:

 

Also notice how the rally is on declining volume. We could be setting up for another leg down in this (so-far) market correction.

[vand]

Another leg down?

Look how WEAK the FTSE is..

[oliversw5]

Ok Ill eat my hat. got it wrong on the 8000 call in the short run

[sixgun]

This is the FTSE with a Schiff Andrews medianline set (pitchfork).

If price goes through the lower parallel where price found support i would expect price to at least fall to the lower pink line. Price looks like it is rolling over - if we do not see a brisk recovery the chart looks like one heading a long way downwards

 

[vand]

There is going to be a rude awakening. The FTSE dipped below 7100 in futures market, just a mere whiff off last month's lows.. meanwhile the mainstream financial press are completely oblivious and treating it like the correction is done and dusted. 9 years of bull market means that COMPLACENCY is rife. 

 

Paul Tudor Jones is the latest to say what we all know:

https://www.cnbc.com/2018/03/01/here-are-highlights-from-paul-tudor-jones-interview-with-goldman-sachs.html

[sixgun]

Apparently he has 'bold market views'. Trump's tax cut and Congress' spending will be the cause of inflation. Hmmmm The rising stock market is inflation - it is very inflated. Crop failures will cause inflation. i like it where the media say the freezing weather is due to the 'Beast from the East'. Must be something to do with Russian hackers. Nothing to do with global cooling kicking in. i forgot any cooling is due to global warming which disappeared into the oceans. 

Nothing bold in his comments - all very obvious but the financial press are paid to miss the obvious.

The FTSE is turning over - this is a topping pattern. Price is falling down through the Andrews' fork. This could be below 6000 by June. i got some advice i should buy shares in an index fund before than happens.

[vand]

... and now just like that FTSE and DAX have made new lows. UNLIKE last month, this latest drop hasn't even made any sort of news. Complacency is stiff rife, which is why it is far from over.

[Lowlow]

Good to see some sane commentary.

I don't even talk to people about the possibilities anymore, I got tired of seeing "that look" in their eyes when you even hint that their stock portfolios are in peril.  If they even knew.  People have a complete lack of .. I won't call it imagination, but just a lack of even basic curiosity about the possibility that the market could go lower.  It's like in the U.S. when everyone assumed Clinton was going to win the Presidential election, they couldn't comprehend that she lost.  It's like Brexit, people couldn't even imagine that the UK might split off from Europe, they could not understand when it happened, they simply couldn't wrap their minds around the concept of that many people voting against "what everyone knew" was going to happen.  The stock market is no different.

... and what if it's much worse, what if all that debt finally comes home and we have real problems with basic institutions.  It almost happened in 2008 when AIG almost went to hell because of all the counter-party risk it was exposed to.  What if the things we started to fear in 2008 happen in the near future, what if FDIC insurance in America can't cover deposit account loses and we start to see "bail ins" of private banks ?  What if America credit unions start to fail ?  What if all that municipal debt goes to hell ?  What if student loan debt collapses ?  These were all real possibilities in 2008, but here 10 years later everybody thinks it was just this weird thing that happened before "getting back to normal".  NORMAL ?  REALLY ??!!?!??

... and what if that contagion spreads to the currency with a collapse in government debt obligations ?  The mind, it boggles.

When I think about what could happen, and I believe will happen in my lifetime, I'm glad for silver and gold.  It is nice to hold a coin in your own hand that cannot be debased by whores and charlatans, because that's who is running this economy at the moment.  The entire world's economy is made of smoke, mirrors, bullsh#t, and the naive dreams of a populace that believes in the equity and bond markets like they are some kind of church that runs on hope and magic, the magic of printed money and the ultimate pyramid scheme.

[Lowlow]

On 2/14/2018 at 04:50, vand said:

WRT to deflation.. I will keep an open mind. True deflation only happens when there is contraction of the money supply. This is what happened in the great depression as banks went bust and they were tied to the gold standard (There is a great Milton Friedman video on YT about this). I think there will a prevelant feeling of FEAR gripping everyone, not just in the markets, but in general, and people will be very reluctant to spend money on anything non-discretionary, but perhaps that will be mistaken as deflation. It's not. 

I'm sure we'll see deflation, the same as we did in 2008, before we get serious inflation.

When the stock market crumbles it is the destruction of money.  The illusory "value" in the stock market is, to most people's minds, "money", and they base their decisions on it.  Never mind that there is no way that every AAPL share owner could sell their shares for today's price without it going to zero, they all think they have the high price in their pocket instead of the computer blip that says they own a share of AAPL.  All that stock is on the books as collateral for debt, and debt is collateral for even more debt, derivatives are collateral for yet more debt, etc, it goes in circles and piles on top of each other to create piles of "money".  Trillions upon trillions in "money".

In 2008 that started to unravel, and it could unravel completely next time.  Once the fire starts, it spreads, and burns paper in unexpected ways, jumping from pile to pile in unpredictable ways, smoldering in some places, raging in others, only to catch fire anew when the right winds blow.  That destruction is what causes deflation, because the government can't, even with its vast money printing, keep up with the destruction of all that paper.  As debts go bad, equities crash, derivatives become worthless, etc, the government can't print enough money to keep up with how fast the paper is being destroyed .. even if they literally printed trillions and handed it out to people on the street.

The world wide economy has equities, but there is more debt in the world than equities, and more real estate than debt, and more derivatives than all the world's equities, debt, real estate, money supply, and commodities combined.

[vand]

On 01/03/2018 at 09:52, vand said:

Another leg down?

Look how WEAK the FTSE is..

Stealth bear market is well underway. FTSE is Printing with a 69xx handle. Path of least resistance is DOWN.

Stock market bulls - you have been warned!! 

[SilverTanner]

1 hour ago, vand said:

Stealth bear market is well underway. FTSE is Printing with a 69xx handle. Path of least resistance is DOWN.

Stock market bulls - you have been warned!! 

I am trying NOT to buy back in?

I may buy some of the platinum ETF though as it fell through my buy point!

[Guest]

On 13/02/2018 at 21:57, RichRock said:

After the last 2 days (now 13/02/18) all I hear on the financial media is (my contrarian indicator):

‘Stocks are moving higher today, great opportunity to buy’

‘Looks like traders are buying the dip’

‘Stock market could recover this week’

‘Last week was a temporary spasm in the market’

‘Volatility subsiding, equities bouncing back’

‘Valuations are attractive’ (lol)

‘There’s a lot of green if we look across the board...’

‘We’re seeing every sector advancing’

‘Dip buying continuing, rebound rally’

‘NASDAQ actually up for the year, you shouldn’t be worried about this’

‘This is not 2007 and alphabet soup of concern. Not in that scenario at all’

NOT ONE interviewee has said ‘I would take profits here whilst we see what direction the market takes.’ or ‘We could go down heavily from here’.

Alternative media sites are saying:

‘Only the dumb money is selling’

‘The smart money bought the dip’

'You are an idiot if you are short here'

etc.

These are actual quotes I wrote down as they came through.

I heard the same flurry of info in 07/08. I am an amateur trader, no expert in financial matters, but my positions in Forex during 07/08 worked out AND I could be wrong this time. If so, then I reduce/reverse position and continue. The beauty of the market is there is a seller for every buyer.

DOW currently 24600.

My interpretation of the media:

‘Smart money is off loading their remaining positions during this bounce. Last week was the tremor before the earthquake. Equities could tank. Please hold this expanding steaming bag of **** whilst we get ourselves to the exits before it bursts and causes a panicked stampede.’

My view is this:

The charts tell me:

Banks sell off/eventually fail.

Equities tank.

Treasuries enter bear market.

Commodities hit super bull cycle.

PM holders may have dip first, but upside hits all time highs. Unfortunately most have capitulated in last 12 months, which was the aim really.

I am holding Gold. Maybe wise, maybe foolish. Who knows?

 

All I know is this: The markets are screwed. They can continue kicking the can, but eventually they will run out of alley.

 

 

 

Well that's a surprise. /sarc. Here we are on 22/03/18,  over a month later from the above post and it seems the jawboners are now saying...

'We're not sure this is a sustained move..'

'Temporary move downwards...'

'Just a slight correction...'

'Great opportunity to buy at discount...'

'Just a knee jerk reaction to Trump tariffs..'

Above are all quotes from your friendly non biased /sarc financial channels today. (still my favourite contrarian indicators).

My chart calls bullsh*t, and all of our calls on here still stand. Check out the mother of all MONTHLY hammers on the DOW, and my (if they don't kick the can and manipulate) minimum projection for next few months.

Wouldn't be surprised to see spike up to take out stops, but could just drop.

 

 

 

 

[Pipers]

Does anyone else apart from me on here think that the FTSE could go to 5800-5500 

Or am i just way out?

 

[Pipers]

On 3/22/2018 at 20:35, RichRock said:

 

 

Well that's a surprise. /sarc. Here we are on 22/03/18,  over a month later from the above post and it seems the jawboners are now saying...

'We're not sure this is a sustained move..'

'Temporary move downwards...'

'Just a slight correction...'

'Great opportunity to buy at discount...'

'Just a knee jerk reaction to Trump tariffs..'

Above are all quotes from your friendly non biased /sarc financial channels today. (still my favourite contrarian indicators).

My chart calls bullsh*t, and all of our calls on here still stand. Check out the mother of all MONTHLY hammers on the DOW, and my (if they don't kick the can and manipulate) minimum projection for next few months.

Wouldn't be surprised to see spike up to take out stops, but could just drop.

 

 

 

 

 

@RichRock 

Do you think now you be the time to buy any stocks eg Silver/Gold miners? 

[Guest]

10 hours ago, Pipers said:

@RichRock 

Do you think now you be the time to buy any stocks eg Silver/Gold miners? 

 

11 hours ago, Pipers said:

Does anyone else apart from me on here think that the FTSE could go to 5800-5500 

Or am i just way out?

 

 

If you're looking to speculate, the only stock I would touch would be miners. First Majestic for instance. Now (IMHO) could be a good price if prepared to hold for a bit of short/mid term chop. I expect miners to do very well when the masses jump into PM's if panic hits the market. First Maj took a nice jump from $3 to $18 in a few months during 2016, but now back to $6, seems good entry point to me anywhere from here to $5.

Your FTSE 5800-5500 level matches the 50% retracement March '09 - Jan '18 @ just over 5600 area. I'm in for a drop to the 61.8 Fib @ just above 5100 zone, so you are not as far out as me.

I would say that last Thursday/Friday was just another tremor before the quake hits properly. I am patiently waiting for the bulls to be served up, medium rare, with a fine glass of red. 

 

 

 

[Lowlow]

1 hour ago, RichRock said:

I would say that last Thursday/Friday was just another tremor before the quake hits properly. I am patiently waiting for the bulls to be served up, medium rare, with a fine glass of red. 

Totally agree, and it's been a long time coming.  Most of the permabulls don't even realize that what they've actually done is mortgage their future to pay for their stock portfolio .. but they'll realize that when the bear rips their faces off and all they're left with is a mortgage, car payments, etc.  They would have never financed all of it had it not been for all the "money" they had "safely" tucked away in their stock portfolio.

It's all fun and games until you're left trying to reassure your wife that you aren't going to lose the house ...

[Bumble]

FWIW, some commentators I follow reckon that emerging markets are still comparively inexpensive, so if you are concerned that the main stock markets of the developed world are too high, but you don't wish to withdraw entirely from being invested in stocks, you could try being long emerging markets and short developed markets. Being short anything is risky, however, so don't do it unless you know what you are doing. This is not investment advice.

[vand]

15 hours ago, Bumble said:

FWIW, some commentators I follow reckon that emerging markets are still comparively inexpensive, so if you are concerned that the main stock markets of the developed world are too high, but you don't wish to withdraw entirely from being invested in stocks, you could try being long emerging markets and short developed markets. Being short anything is risky, however, so don't do it unless you know what you are doing. This is not investment advice.

They're probably right. Even the FTSE itself isn't horrendously expensive, its really the US that is most expensive.

But the problem is that all equity markets broadly move in sync now, and the US leads everything else, so if and when it goes, everything else will follow. 

Earnings are just one measure of course, you can also look at price to book, dividend etc, and by these I think they don't look that cheap.

 

[Pipers]

On 3/27/2018 at 01:49, RichRock said:

 

 

If you're looking to speculate, the only stock I would touch would be miners. First Majestic for instance. Now (IMHO) could be a good price if prepared to hold for a bit of short/mid term chop. I expect miners to do very well when the masses jump into PM's if panic hits the market. First Maj took a nice jump from $3 to $18 in a few months during 2016, but now back to $6, seems good entry point to me anywhere from here to $5.

 

I've had a good look at FM, yes the stock price does look good but i was put off by the deal they have with wheaton on one there mines.  Wheaton ring them miners dry if i was a miner i would never do a deal with them at those rates, better walking away. 

On 3/27/2018 at 03:14, Bumble said:

FWIW, some commentators I follow reckon that emerging markets are still comparively inexpensive, so if you are concerned that the main stock markets of the developed world are too high, but you don't wish to withdraw entirely from being invested in stocks, you could try being long emerging markets and short developed markets. Being short anything is risky, however, so don't do it unless you know what you are doing. This is not investment advice.

Who do you follow on Youtube?

 

On 3/27/2018 at 18:57, vand said:

They're probably right. Even the FTSE itself isn't horrendously expensive, its really the US that is most expensive.

But the problem is that all equity markets broadly move in sync now, and the US leads everything else, so if and when it goes, everything else will follow. 

Earnings are just one measure of course, you can also look at price to book, dividend etc, and by these I think they don't look that cheap.

 

I am of the opinion the FTSE is over well priced.   Vand, is the above just your opinion which is fine or do you research and have come to this conclusion?

[vand]

@Pipers

https://www.investorschronicle.co.uk/content/download/36529/989896

https://moneyweek.com/at-above-7000-just-how-expensive-is-the-ftse-100-today/

 

[Bumble]

7 hours ago, Pipers said:

Who do you follow on Youtube?

I don't tend to use Youtube for general investment material, though I do subscribe to McAlvany Financial and CiovaccoCapital. When I referred to commentators that I follow, I'm thinking of paid subscription services, such as RealVision TV.

Youtube is good for more specific stuff though, especially on cryptocurrencies. Also, I subscibe to Kitko NEWS, MiningStockEducation, and Proven and Probable for information related to precious metals and mining.

[Lowlow]

On 3/27/2018 at 13:57, vand said:

But the problem is that all equity markets broadly move in sync now ...

One of the indicators of a sick market, and it's been happening for quite a while now.

[vand]

Another BIG selloff today in the US. The rallies are getting sold off like clockwork now. This is very different behaviour to what we have been seeing since 2009.

 DJIA looks like its going to close at new lows, which will harden the case for bear market. We are also getting into seasonal period where stocks should be strongest. There is traditionally a lot of weakness over May-Oct. If that holds true again then stocks could get smashed over the summer.

 

[Lowlow]

On 4/2/2018 at 14:15, vand said:

Another BIG selloff today in the US. The rallies are getting sold off like clockwork now. This is very different behaviour to what we have been seeing since 2009.

 DJIA looks like its going to close at new lows, which will harden the case for bear market. We are also getting into seasonal period where stocks should be strongest. There is traditionally a lot of weakness over May-Oct. If that holds true again then stocks could get smashed over the summer.

Never fight the Fed, that's a saying in the U.S.  Yet, somehow "investors" think that they can benefit from lower rates as the stock market climbs, and yet not be affected at all when the Fed starts raising rates ?  Go figure.

It's just as well, I've been wanting to get some people to build a new throne room and sew new outfits for the slave girls.  Labor will be cheaper once the crash is over and we're all Venezuela.