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).

 


Tags: , , , , ,




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…
continue reading


Tags: , , , , ,




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…
continue reading


Tags: , , , , , , ,




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


Tags: , ,




 
 
 

Phil's Favorites

Legal cannabis vs. black market: Can it compete?

 

Legal cannabis vs. black market: Can it compete?

Brian Harriman, Cannabis NB president and CEO, displays some cannabis products at a Cannabis NB retail store in Fredericton, N.B., on Tuesday October 16, 2018. THE CANADIAN PRESS/Stephen MacGillivray

Courtesy of Michael J. Armstrong, Brock University

The Oct. 17 launch of legal recreational cannabis in Canada brings many challenges. Retailers are now worrying about possible product shortages or web site glitches. Governments are still debati...



more from Ilene

Zero Hedge

Philly Fed Finds Trump Tax Relief More Than Offsets Adverse Effect From Trade War

Courtesy of ZeroHedge. View original post here.

For all the concerns that Trump's trade war and tariff increases could jeopardize corporate capital spending plans, resulting in a broader economic slump, a Special Question posed by this month's Philly Fed survey found that this is not the case; in fact when taking into account Trump's tax relief/fiscal stimulus just the opposite picture emerges.

In Special Question #3 in the October Philly Fed survey, the regional Fed asks "...



more from Tyler

Digital Currencies

Blockchains won't fix internet voting security - and could make it worse

 

Blockchains won't fix internet voting security – and could make it worse

An e-ballot is less secure than one on paper. SvetaZi/Shutterstock.com

Courtesy of Ari Juels, Cornell University; Ittay Eyal, Technion - Israel Institute of Technology, and Oded Naor, ...



more from Bitcoin

Kimble Charting Solutions

Global Stock Market Indexes Flash Bearish "Look Alike" Patterns?

Courtesy of Chris Kimble.

Over the past several weeks, I’ve shared several examples of key stock market indexes and indicators hitting long-term resistance. Today, we’ll do the same… but with a much wider lens. We’ll look at 9 different stock market indexes in the developed markets that look concerning.

When a stock or market index hits resistance, it has three possibilities: 1) to break out above resistance  2) to move sideways / consolidate near resistance  3) to turn lower and pullback or correct.

In the 9-pack of charts below, we are seeing bearish “look-alike” patterns emerging. And in each case, it looks like the given markets are turning lower (point 1).

The markets considered include 6 U.S. indexes and 3 European, including the S&P 500(NYSEARCA: SPY), ...



more from Kimble C.S.

Insider Scoop

10 Stocks To Watch For October 18, 2018

Courtesy of Benzinga.

Some of the stocks that may grab investor focus today are:

  • Wall Street expects Philip Morris International Inc. (NYSE: PM) to report quarterly earnings at $1.27 per share on revenue of $7.15 billion before the opening bell. Philip Morris shares fell 0.07 percent to $84.50 in after-hours trading.
  • Analysts expect PayPal Holdings, Inc. (NASDAQ: ...


http://www.insidercow.com/ more from Insider

Chart School

Weekly Market Recap Oct 14, 2018

Courtesy of Blain.

Wednesday and Thursday finally brought some fireworks to a very complacent market.   The S&P 500 had not had a 1% move in 74 days until Wednesday’s drawdown.

Rising yields were nailed as the culprit but months of rallying eventually require some sort of shake out – whatever the catalyst.  Wednesday’s sell off was the worst day for the S&P 500 since February and the worst for the NASDAQ since June 2016.

The market losses are “a reaction from investors finally realizing we are in a higher interest-rate environment, and given the elevated level of stocks, market participants were likely looking for a reason to sell,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Higher interest rates typically bring on tighter ...



more from Chart School

ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



more from ValueWalk

Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

more from Our Members

Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



more from Biotech

Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



more from M.T.M.

OpTrader

Swing trading portfolio - week of September 11th, 2017

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 ...



more from OpTrader

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions

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...

more from David





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>