Posts Tagged ‘Bear market rally’

John Mauldin: “Nobody’s holding a gun to your head” on stocks

John Mauldin: “Nobody’s holding a gun to your head” on stocks

Courtesy of Edward Harrison at Credit Writedowns

John Mauldin believes we have just seen a pretty amazing trading rally aka cyclical bull/bear market rally. Stocks are more than 60% above March lows.  But many stocks are at “nosebleed” valuation levels and that makes him suspect this is not an opportune entry point for stock market investors.

He counsels utilities (like Bill Gross) or fixed income (like me).  Gold is another market I like (though the run-up of late and the violent pullback should have you concerned).

See the video below for John’s comments in full (Hat tip Barry Ritholtz).

 


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How Much Longer Can This Bear Market Rally Last?

How Much Longer Can This Bear Market Rally Last?

bear marketCourtesy of Kevin Depew at Minyanville

How long, O Lord, how long? It’s always good to remember that the stock market is not the economy. Every day I come into the office to find literally dozens of emails complaining that the market is ignoring the relentlessly bearish news flow. But that doesn’t bother me. What will bother me is when we start getting good news. Markets tend to reach exhaustion on good news, not bad. And these days it’s hard to discern between what’s merely bad and what’s actually disastrous. So, let’s take a look at what the difference between the two really is, and what it means going forward.

A recently released Societe Generale report outlined a "Worst-Case Debt Scenario," one which they believe is a very low probability. Their central scenario assumes a slow global recovery, with private debt being transferred to governments. Fair enough. We’re well on our way there.

Comparing US and Japan, albeit from SocGen’s more sanguine standpoint, there’s some reason to believe the US could feasibly accommodate a Japan-esque 200% of GDP debt burden, which would essentially double 2010′s projected 100% of GDP debt burden. The reason this might not collapse the dollar is because there are no attractive alternatives. Government debt is a global problem, and when you look at the US government debt on a comparative basis, the figures, while high, aren’t extraordinary — at least within that context. More on this momentarily.

As a brief digression, I don’t believe that all government debt is bad by definition. Some are dogmatic on that point. While I do find a framework for understanding economics through the Austrian school, the reality is that no one is going to be able to squeeze pure, free-market toothpaste back into the tube. In fact, Ron Paul’s quixotic quest to end the Federal Reserve could actually succeed… only I can promise you it would soon be replaced by a similar central bank mechanism with a different name, slightly altered agenda, and new cast members. In other words, more of the same; let’s be realistic.

Also, remember that governments worldwide have a long history of supporting failed industries only to turn around and re-privatize them at a later date. It’s the government version of the private-equity game (buy ‘em, repackage ‘em, sell…
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How Low Can We Go?

How Low Can We Go?

how low can we go?Courtesy of Charles Hugh Smith, Of Two Minds

The six-month long global stock market is losing steam, which begs the question: how low can we go?

Is this a new Bull market or just another typical Bear Market rally? Let’s look at two charts for clues.

First, read the HUGE GIANT BIG FAT DISCLAIMER below: these are the free rantings of an amateur ignoramous, etc. etc.

Before we glance at the charts, let’s ask: has anything really been fixed in the global financial markets and economy, or have all the problems just been papered over with trillions in central bank bail-outs, loan guarantees, stimulus and bogus accounting/statistical lies?

The VIX is one measure of volatility or what is sometimes called "the fear index." When confidence reigns supreme (with an emphasis on the "con") then the market players see no reason to bid up options to protect themselves from potential drops into the abyss. So when confidence is high then the VIX is low and stable:

VIX

When the wheels finally fell off the MSM/central bank fantasy that "subprime is under control" then fear sprouted wings and the VIX soared.

Judging by the VIX’s return to the low-to-mid 20s, then confidence has returned in full force and the fears of a global meltdown have vanished.

Nice, but what if nothing has really been fixed? What if market participants sniff out that everything’s just been swept under the rug? What if the $7 trillion commercial real estate market in the U.S. is about to slip into the abyss of domino defaults?

The Shanghai market’s sudden 10% drop in only two days suggests not all global players are convinced.

The MACD on the VIX is crossing at a very low level, suggesting a lengthy period of rising volatility could be upon us. The stochastic has been rising for awhile now, having made a bullish cross last month.

In sum: the VIX seems to be warning us low volatility may be giving way to higher volatility.

Here’s a chart of the Dow Jones Industrial Average:

DJIA

One fairly predictable pattern in any market chart is that price tends to oscillate between the upper and lower Bollinger band. I’ve marked this trait with small blue lines.

When markets are trending strongly, they can ride the Bollinger bands up or down. But if this is once again…
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Even Tricky Dick Thinks It Is A Bear Market Rally

Courtesy of Tyler Durden at ZH

Even Tricky Dick Thinks It Is A Bear Market Rally

Weekend humor


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Phil's Favorites

Yen For Dollar?

 

Yen For Dollar?

By The Nattering Naybob

Godzilla, 1954 - The world is beset by the appearance of monstrous creatures, but one of them may be the only one who can save humanity. Producer Tomoyuki Tanaka stated that, "The theme of the film, from the beginning, was the terror of the bomb [atomic]. Mankind had created the bomb, and now nature was going to take revenge on mankind."

Above note JPY versus USD's steady ascent with yesterday's [April 27] huge +3% post BOJ candle. Last night's +3 JPY/USD move, and a 14% move since June 8, 2015, have had an impact on Japan's ...



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ValueWalk

Jim Chanos betting against China

By Jacob Wolinsky. Originally published at ValueWalk.

Jim Chanos betting against China

Wednesday, 4 May 2016 | 12:03 PM ET

Jim Chanos, Kynikos Associates President and founder, discusses the China story, saying they’ve opened up the “credit spigots again.”

The post Jim Chanos betting against China appeared first on ValueWalk.

Sign up for Va...



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Zero Hedge

Over Half of Americans Now Believe the Voting System Is Rigged

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by AnonHQ via TheAntiMedia.org,

This American primary season has been unlike any other election in recent memory, if not United States history. Between the Donald Trump phenomenon, Sanders supporters claiming voter fraud after what seems like every single state election and candidates in rivaling parties both publicly stating that the system is rigged, one thing is clear, there is something very strange happening.

We all understand that on some level...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Global stocks are falling again (Business Insider)

Global stocks are under pressure once again and US futures point to extended losses for the stock market from Tuesday.

These 4 things could rattle the global economy (Business Insider)

After the darkness at the start to 2016, the world economy actually looks pretty good right now.

...



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Chart School

ISM Non-Manufacturing: PMI Growth Continues at Slightly Faster Rate

Courtesy of Doug Short's Advisor Perspectives.

Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 55.7 percent, up 1.2 percent from last month's seasonally adjusted 54.5 percent. Today's number came in above the Investing.com forecast of 54.7 percent.

Here is the report summary:

"The NMI® registered 55.7 percent in April, 1.2 percentage points higher than the March reading of 54.5 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index dec...



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Kimble Charting Solutions

Junk Bonds- Potential breakdown at triple resistance zone

Courtesy of Chris Kimble.

Many like to watch the price action of Junk Bonds, because they can send important messages about the strength or lack of in the stock market. Below looks at Junk Bond ETF JNK

CLICK ON CHART TO ENLARGE

As you can see, JNK looks to have created a double top in 2013 and 2014 and weakness in the sector soon followed. Once weakness really started to take place in this sector (2015), stocks didn’t have much luck moving higher.

JNK created a bullish reversal pattern (bullish wick pattern) the week of 2/5 and started turning high...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Digital Currencies

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On 'Satoshi Nakamoto'

Courtesy of ZeroHedge. View original post here.

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On ‘Satoshi Nakamoto’

By Mark O'Byrnewww.GoldCore.com 

Craig Wright, an Australian computer scientist, self-declared cyber security expert and entrepreneur, has claimed to be the creator of Bitcoin, the elusive &l...



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OpTrader

Swing trading portfolio - week of May 2nd, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

PRGO, VRX and an Overpriced Papa

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

By Ilene 

Remember this? It was Monday. PRGO is down from around $130 to under $100 since I started following it LAST WEEK. That's down almost 25% in a week, and almost 50% in the last year. So I wrote, 

"Perrigo CEO Joseph Papa leaves Perrigo (PRGO) to lead Valeant (VRX) while PRGO issues a warning about missing earnings expectations. Not surprisingly, PRGO stock plummeted today. 

Robert Ingram, Chairman of the [Valeant] Board, stated, "The Board has conducted a thorough search process and believes that Joe is the ideal leader for Valeant at this time. He has a strong shareholder orientation,...



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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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