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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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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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New World Disorder: Emerging Division Between East And West Threatens To Plunge The Globe Into Chaos

New World Disorder: Emerging Division Between East And West Threatens To Plunge The Globe Into Chaos

Courtesy of Michael Snyder, the Economic Collapse

In general, over the last several decades the world has experienced an unprecedented era of peace and prosperity.  The opening up of relations with China and the "end of the Cold War" resulted in an extended period of cooperati...



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Zero Hedge

Senate Democrats Push To Triple Israel's Iron-Dome Aid To $576 Million

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

U.S. Senate Democrats included $225 million for Israel's Iron Dome rocket interception system in an emergency funding bill on Tuesday, which, as Bloomberg reports, in addition to the $351 million that’s already under discussion for Iron Dome in fiscal 2015 would bring the potential new funding to $576 million, compared with the $176 million currently requested by the Pentagon. "Iron Dome has saved countless Israeli lives," Defense Secretary Chuck Hagel told Senate Majority Leader Harry Reid in a letter dated yesterday and while the Iron Dome system is built by ...



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Chart School

S&P 500 Snapshot: Record Intraday and Closing Highs

Courtesy of Doug Short.

Key indexes around the globe are exhibiting little volatility in the wake global conflict. The Nikkei and Dow closed the day down 0.10% and 0.16%, respectively. The Eurozone's STOXX 50 was up 0.12%.

The S&P 500 took center stage for US indexes, setting new intraday and closing records despite ongoing tensions in Europe and the Middle East. The index opened higher, quickly sold off to its -0.05% intraday low and then rallied to a record intraday high, up 0.29%. After a minor lunch-hour dip, it spent the afternoon in a narrow trading range to its 0.18% gain for a record close.

The yield on the 10-year note ended the day at 2.48%, unchanged from yesterday's close. It is now only 4 bps above its interim closing low of May 28th.

Here is a 15-minute chart of the past five sessions. The S&P 500 is up 7.50% year-to-date.

...

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All About Trends

Mid-Day Update

Reminder: David 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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Insider Scoop

Relaxed Regulations Highlight Nuclear ETFs

Courtesy of Benzinga.

The Environmental Protection Agency is considering a review of its 1977 rule that limits the amount of whole-body radiation that any member of the public can be exposed to as a result of the uranium fuel cycle.

While they have not made any immediate determination to change the current level of 0.25 millisieverts per year of allowable radiation, they are reviewing the scientific data to decide if changes need to be made.

Items under review include water resource protection, spent fuel storage facilities and alternative technologie...



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Option Review

Sizable Call Spread Trades On Orexigen

A large call spread initiated on Orexigen Therapeutics, Inc. (Ticker: OREX) on Monday morning looks for shares in the name to rally approximately 30% by September expiration. The September expiration is noteworthy as the company awaits the results of the FDA’s review of its resubmitted New Drug Application (NDA) for NB32, an investigational medication being evaluated for weight loss, after the review was extended for three months back in June. The upcoming Prescription Drug User Fee Act (PDUFA) date is September 11, 2014, according to a press release issued by the company. Shares in Orexigen today are up roughly 0.40% at $5.34 as of 2:15 p.m. ET.

...

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Sabrient

Sector Detector: Bulls remain unfazed by borderline Black Swans

Courtesy of Sabrient Systems and Gradient Analytics

Despite a highly eventful week in the news, not much has changed from a stock market perspective. No doubt, investors have grown immune to the daily reports of geopolitical turmoil, including Ukraine vs. Russia for control of the eastern regions, Japan’s dispute with China over territorial waters, Sunni vs. Shiite for control of Iraq, Christians being driven out by Islamists, and other religious conflicts in places like Nigeria and Central African Republic. But last Thursday’s news of the Malaysian airliner tragically getting shot down over Ukraine, coupled with Israel’s ground incursion into Gaza, had the makings of a potential Black Swan event, which in my view is the only thing that could derail the relentless bull march higher in stocks.

Nevertheless, when it became clear that the airline...



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OpTrader

Swing trading portfolio - week of July 21st, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly. Please use your PSW user name and password to log in. (You may take a free trial here.)

#452331232 / gettyimages.com ...

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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Digital Currencies

Bitcoin Vs Gold - The Infographic

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While Marc Faber has said "I will never sell my gold," he also noted "I like the idea of Bitcoin," and the battle between the 'alternative currencies' continues. The following infographic provides a succinct illustration of the similarities and differences between gold and bitcoin.

Please include attribution to www.jmbullion.com with this graphic.

...

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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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