Posts Tagged ‘death cross’

Recession 2010?

Recession 2010?

Courtesy of Michael Snyder at The Economic Collapse

If you watch any mainstream news program these days, it is almost a certainty that someone will mention the word "recession" before a half hour passes.  In fact, it seems like almost everyone is either predicting that we are going into a recession, or they are warning of the need to avoid a recession or they are proclaiming that we are still in a recession.  So will the U.S. economy once again be in recession in 2010?  When you consider all the signs that are pointing that way, the evidence is compelling.  The truth is that there is bad economic news wherever you turn.  There is bad news in the housing industry.  There is bad news in the financial markets.  There is bad news in the banking system.  There is bad news coming out of Europe.  There are even signs that the bubble in China may be about to burst.  Plus, the economic impact of the Gulf of Mexico oil spill could end up being the straw (or the gigantic concrete slab) that really breaks the camel’s back.  So there are certainly a lot of pieces of news that "gloom and doom" economists can hang their hats on these days.  There is a very dark mood in world financial markets right now, and it seems like almost everyone is waiting for the other shoe to drop.  But does all of this really mean that we are looking at the start of another recession before the end of 2010?   

The truth is that nobody really knows.  Things certainly look very ominous out there.  The dark clouds are gathering and the economic winds are starting to blow in a bad direction.  The following are 24 pieces of evidence that do seem to indicate that very difficult economic times are imminent….

-U.S. Treasury yields have dropped to stunning new lows.  So why are they so low?  Well, it is because so many investors are anticipating that we are headed into a deflationary period.  In fact, many economists are warning that the fact that Treasury yields are so low is
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IS THE “DEATH CROSS” A USEFUL INDICATOR?

IS THE “DEATH CROSS” A USEFUL INDICATOR?

Skull

Courtesy of The Pragmatic Capitalist 

At the March highs we were talking about death crosses.  No, not death crosses in the S&P, but the death cross in the one equity index that has proven to be even remotely leading over the course of the last 5 years – China. Today, everyone and their mother is chattering about the death cross in the S&P 500.  Is it of any use?  Jeff Kleintop at LPL says it’s nonsense:

“While much is made of the “death cross” of the S&P 500 50-day moving average falling below the 200-day, it has actually been a buying signal during these periods in the past. A good example of this took place in 2004 when during the soft spot in the recovery the 50-day crossed below the 200-day on August 17, 2004, just as the S&P 500 had completed the low point of its soft spot pullback and embarked upon a double-digit percent gain over the next three months.”

Pierre Lapointe, a macro strategist at Brockhouse Cooper agrees:

“The death cross IS nonsense. They’re no better than a flip of a coin to predict future returns. Check out these odds: Since 1970, only 10 of the 21 occurrences actually resulted in a market pullback a month after the death cross. Three months later, the market was down only 43% of the time. With odds like this, don’t short the market. Go to a casino — you’ll have more fun.”

The S&P 500 and the U.S. equity market has not proven to be a leading indicator of much in recent years.  Many even question its discounting capabilities at all.  The moral of this story?  Don’t wait until after a 15% decline in equities to jump on some technical analysis bandwagon.  Especially one from an index that has proven to be a leading indicator of just about nothing. 


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The Death Cross: Another Sign That We Are On The Verge Of A Recession?

The Death Cross: Another Sign That We Are On The Verge Of A Recession?

Courtesy of The Economic Collapse Blog 

The Standard & Poor’s 500 50-day moving average stands poised to cross beneath the 200-day moving average.  To those in the financial industry, this is known as a "death cross", and it is a very powerful indicator that we could be entering a bearish period.  So is this yet another sign that we are on the verge of a recession?  Well, anyone who has spent much time trying to interpret financial charts will tell you how inexact that science can be.  Financial markets can be wildly unpredictable, and there is always a tremendous amount of manipulation going on behind the scenes.  However, when you add this impending death cross with all of the other signs that we could be entering a recession, there certainly seems to be reason for alarm.  The truth is that financial markets across the globe are full of fear and panic right now.  In fact, as noted in another article, the dominant force in world financial markets in 2010 is fear.  When fear rules, markets become very volatile and they can fall very quickly.  Anyone who has spent much time trying to squeeze profits out of world financial markets knows that they tend to fall much faster than they ever rise.  So are we now approaching one of those times of panic when financial markets across the world fall at breathtaking speed?

Well, the truth is that nobody knows.  Anyone who says that they can predict these things with 100 percent certainty is either a liar or they are unbelievably rich. 

But certainly the mood in the financial markets is grim.  If a death cross does happen on the S&P it is going to make things even more tense.        

For those not familiar with investing terminology, Investopedia defines a "death cross" this way….

A crossover resulting from a security’s long-term moving average breaking above its short-term moving average or support level.

In this case, the death cross would be happening on the S&P 500, which is a weighted index of the prices of 500 large-cap common stocks actively traded in the United States.  The S&P 500 is one of the most commonly used benchmarks for the overall U.S. stock market.

So how soon could we see a death cross on the S&P 500?

Well, some analysts believe that it could happen almost…
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AN INVERTED DEATH CROSS IN INVESTMENT GRADE CREDIT

AN INVERTED DEATH CROSS IN INVESTMENT GRADE CREDIT

Skull

Courtesy of The Pragmatic Capitalist 

As we’ve previously described the primary differentiating factor between this sell-off and every sell-off since March 2009 has been the action in the credit markets.  For the first time in over year we are seeing substantial deterioration across credit markets.  This has been notable in IG credit.  Spreads have started blowing out again as the sovereign debt fears raise memories of Lehman Brothers.

The action in yesterday’s market was notable due to the strong technical movement we saw in spreads.  The 50 day moving average moving upward crossed the 200 day moving average moving downward.  In a typical market this would be known as a “golden cross”, but as widening spreads are a negative indicator this is actually an inverse “death cross”.  It sounds very phony as most technical analysis chart patterns do, but this is one that is worth noting.  The crossing of the moving averages is a very rare event and generally indicates the beginning of a very strong directional trend.  We have noted similar patterns in several markets over the last few years including the golden cross in the S&P 500 in June 2009 at S&P 900 and the death cross in Chinese equities just prior to their  recent 20% decline.

From a purely simplistic technical perspective IG credit’s death cross is forecasting more difficult days ahead in the credit markets and that is certain to coincide with more difficulty in the equity markets.  Investors would be wise to take note.

IG AN INVERTED DEATH CROSS IN INVESTMENT GRADE CREDIT

(Chart Courtesy of CDR)

Source: Tim Backshall at CDR 


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Zero Hedge

2.2 Million Homes In America Still Have Negative Equity, Despite Record High Prices

Courtesy of ZeroHedge. View original post here.

As the boom in mortgage applications and refinancing activity last week would suggest, the return of interest rates toward multi-year lows this year is helping to pump more froth into the already bubblicious American housing market.

But while somebody will inevitably be left holding the bag when the bubble bursts, for now, at least, the inexorable rise in American home prices has bequeathed an outsize benefit on at least one gro...



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Phil's Favorites

Oh, the Conspiracies!

 

Scientist, technology consultant and best-selling author, David Brin explores the topic of conspiracies theories and how to avoid being sucked into them. He shares his "coping mechanism" and the questions he asks himself when evaluating stories to see where they fall on the continuum betwen total garbage, half-truths, and plausible accounts of actual events.

For David's latest posts, visit the Contrary Brin Blog. For his books and short stories, visit his website

 

...

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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble.

Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

This chart looks at the Gold Bugs Index (HUI) on a weekly basis over a couple of decades. The index has spent the majority of the past 20-year inside of rising channel (1).

The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

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Insider Scoop

Wedbush: Apple's Stock Could Gain $20-$25 From US-China Trade Deal

Courtesy of Benzinga.

The Sino-American trade dispute and near-term developments could prove to be a "major swing factor" for Apple Inc. (NASDAQ: AAPL), according to Wedbush.

The Analyst

Daniel Ives maintained an Outperform rating on Apple with an unchanged $235 pric...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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 ...



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Promotions

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

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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...

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